Category Archives: Special Reports

Some Nigerians blame government, not religious leaders, for shocking school abuses

His father had sent him to the school, famous across northern Nigeria for correcting bad behavior, because he had been getting into fights and stealing, he said.

Thirteen days later, police descended on the school in the northwestern town of Daura. It was one of at least eight raids on Islamic schools in the region over the past six weeks that local authorities say have uncovered horrific abuse. Nearly 1,500 children and young adults like Burhani were freed in those raids including 259 on Monday in the southwestern city of Ibadan.

The teenager, whose surname is being withheld because he is a minor, doesn’t want to go back to the Daura school, nor would his father send him, both told Reuters. But they said they retain deep respect for the mallam – or Islamic scholar – in charge. The scholar, Bello Abdullahi, who was arrested and faces charges including cruelty to children, “is a good person and isn’t aware of the ill treatment” by his teaching staff, said Burhani’s father, Yahaya.

Abdullahi could not be reached for comment, and authorities would not say whether he has an attorney.

As shocking as the revelations about these schools were to people in Nigeria and around the world, they have not shaken the underlying devotion of some northerners to the religious leaders who ran the raided centers, nor to the centuries-old Islamic education system from which they emerged, according to Reuters’ interviews with 17 current and former students, parents and community leaders.

Many of those interviewed blame the government of Africa’s most populous nation for failing to provide the formal education and services young people need in this impoverished region. And like Burhani and his father, they tend to attribute troubles in the raided schools to lower-level teachers, rather than to the revered mallams.

State institutions cannot meet the educational or social welfare needs of the booming, mostly Muslim population in the north, experts and child advocates say, largely because of limited and poorly distributed resources. Fewer than half the children in the region attend government primary schools, according to the latest official figures, from 2015.

Islamic schools, known locally as almajiri schools, help fill the void, enrolling an estimated 10 million students.

“If today we decide to close all of the almajiri schools … there would be an educational crisis, said Mohammed Sabo Keana of the Abuja-based nonprofit group Almajiri Child Rights Initiative, which advocates for better conditions in the centers.

The office of the presidency repeatedly declined to comment on Reuters’ findings. Officials at individual ministries responsible for overseeing the schools declined to comment or referred Reuters to other ministries that did not respond.

President Muhammadu Buhari, a Muslim, said in an Oct. 19 statement that the government would not tolerate “torture chambers” that mistreat young people.

With mental health and substance abuse programs scarce, some mallams in recent decades have offered to treat behavioral problems including drug addiction and delinquency, attracting students from across West Africa.

Each raided school had presented itself as a place of Islamic learning that also could heal unruly loved ones.

Parents pay as little as 500 naira ($1.38) a month for children to study in almajiri schools, said Sabo Keana. But some pay tens of thousands more to treat what they see as unacceptable behavior.

One father told Reuters he paid 50,000 naira ($163) in registration fees plus an additional 10,000 naira a month to send his adult son to the Daura school for drug treatment – a significant sum in a country where the average monthly wage is $163.

“The government is supposed to handle the (drug) situation, but the burden is too much for them,” said the father, who, like some others interviewed, declined to be named for fear of government retribution.

As for the now-shuttered school, he said, he’d send his son back if he could.

PILLARS OF THE COMMUNITY

Some child advocates told Reuters that the schools receive little, if any, oversight from the government.

The head of the Presidential Advisory Committee on the Elimination of Drug Abuse, Mohammed Buba Marwa, visited three schools in the months before they were raided, according to two former students and a mallam who helped at one of the centers.

One of the schools, in Kaduna, touted the event on its Facebook page, posting photos of Buba Marwa with the mallam, Salisu Hamisu, on April 15.

Also on the page were photos underscoring the respected role of the mallam in the community. He is shown officiating at weddings, appearing on local radio and receiving a certificate of recognition from the city’s football club.

Hamisu, known locally as Mallam Nigas, was arrested and charged after police said they found men and boys who had been chained, molested and beaten at the Kaduna school and a sister school in the city of Katsina.

Hamisu could not be reached for comment and authorities would not say whether he has a lawyer.

Buba Marwa, the presidential committee official, did not respond to requests for comment.

Huraira Alasan, a 50-year-old cake seller who lives near the border with Niger, said her family paid 160,000 naira ($521) to enroll her 30-year-old nephew at Hamisu’s Katsina school for drug treatment.

Hamisu told Alasan he would be healed through prayer, she said.

But when she visited one Friday she found the young man in chains, begging to be released, she told Reuters. His father later demanded that he be unshackled but kept the young man in the school.

“He wanted his son to stop taking drugs,” Alasan said.

LIFELONG SCARS

Soon after their release from the Daura school, Burhani and another student described their experiences to Reuters, providing a glimpse of students’ daily activities on the inside.

Burhani said he would wake up at 3 a.m., unable to sleep from the unbearable heat in his unventilated quarters.

Boys and men were packed 40 or 50 to a room meant for eight, said Suleiman Surajo, 25, who added that he saw neither family nor friends during more than a year at the school. He said teachers would call students to the courtyard at 6 a.m., where they would be beaten, naked, as they washed.

The beatings continued as they hopped or shuffled across the courtyard, with chains around their ankles, to fetch the wooden boards inscribed with Koranic verses that they were instructed to read, Burhani said.

Burhani and Surajo both bear scars on their backs and ankles – Burhani’s still a raw pink.

Food was meager: a ball of boiled corn flour or mashed rice in the afternoon and again in the evening.

Police have said sexual abuse was rife at the schools, though did not single Daura out. The two young men at Daura interviewed by Reuters confirmed the practice.

“Some of the teachers were having sex with the boys; I would hear it always,” Surajo said.

Masuda Rafindadi, who runs an Islamic school in Katsina, attended the school two decades ago and still bears scars that he said are from beatings there. But he said lashings were needed to correct bad behavior.

Today he beats some of his 100 students, although does not chain them, he said. He had nothing but praise for his teacher, Abdullahi.

“For the whole of our time, mallam gave us love,” he said.

Africa’s oil & gas industry poised for further growth in the wake of new resources – PwC

 

The global energy market is in an exciting phase of transition and disruption. Breakthrough technologies are unlocking significant new reserves, processing, transportation and downstream uses that were previously unviable, unknown or inaccessible. Decarbonisation driven by the environmental sustainability agenda is shifting the energy mix at an accelerating pace, which is particularly evident across North America, Asia and Europe. This seems likely to position gas ahead of coal by 2030 to become the world’s number two fuel.

Africa’s oil & gas industry holds the potential for further growth mainly driven by an increase in investor appetite and a rebound in prices. New oil & gas finds off the coast of Africa have led to an increase in investment in infrastructure, technological advances, updates in regulation and improved governance, as well as the development of new skills. These are some of the key highlights from PwC’s annual Africa oil & gas review 2019 released by PwC Africa today.

Andries Rossouw, PwC Africa Energy Utilities & Resources Leader, says, “Renewed optimism has returned to Africa’s oil & gas industry on the back of a rebound in prices and increased investor interest. The African oil & gas industry has been through some difficult and challenging years in the wake of the oil price crash. However, the industry has restructured itself and is more competitively placed in terms of efficiency and operational performance. The outlook for the industry continues to improve with oil & gas companies targeting cautious growth in areas less vulnerable to external volatility while maintaining their cost and operational margins.”

PwC’s Africa oil & gas review, 2019 analyses what has happened in the last 12 months in the oil & gas industry within the major and emerging African markets.

Globally, 2018 was a successful year in oil & gas exploration with discoveries almost doubling those made in 2017. Notwithstanding Africa’s endowment in vast natural resources, including substantial oil and gas reserves, West Africa was the only African discovery to make it onto the 2017 and 2018 top 10 lists for new discoveries.

One of the most dramatic finds in Africa over the past decade is Mozambique’s natural gas estimated at over 180 tcf, which has already unlocked the first three large-scale LNG projects. These projects, together with project expansion phases and additional exploration have the potential to position Mozambique as the third largest LNG producer in the world after Qatar and Australia by 2030.

Hydrocarbon resources also provide growth opportunities in countries that can capitalise on the potential. Maximising the benefits from these endowments provides direct income to governments, employees, suppliers and shareholders of megaprojects.

Growth and development

Although Africa’s oil production increased slightly in 2018, the continent was unable to keep up with global output, resulting in a 0.1% drop in share. Africa’s share of global oil reserves has declined by 1% from the prior year standing at 125.3 billion bbl, amounting to 7.2% of the world’s proven reserves.

At the end of 2018, Africa is reported to have 509.6 tcf of proven gas reserves, up 4.5% from the prior year, which amounts to 7.3% of global proven reserves. Nearly 91% of African gas production continues to come from Algeria, Angola, Egypt, Libya and Nigeria, and saw an overall increase of 4.8% from last year.

An interest in Africa’s gas reserves has also led to a series of successful LNG projects resulting in a liquefaction capacity of 18% of the total global capacity.

Oil & gas discoveries

2018 was a successful year in oil & gas exploration with discoveries almost doubling those made in 2017. In both 2017 and 2018 the only top-10 major discoveries on the continent were made in West Africa. This contrasts with previous years in which substantial resources were found across the African continent.

In line with the oil price crash of 2014 to 2016, capital expenditure spends on production in Africa showed a significant decline, which continued into 2018 with a total drop in capital expenditure spend of 43% for the period 2014-2018.This could change significantly with final investment decisions made for LNG developments in Mozambique.  From 2020 capital expenditure spend is expected to increase at an annual compound growth rate (CAGR) of 4% to more than US$70bn in 2030.

The oil price

The oil price saw a notable increase throughout much of 2018, to a point where it hit a four-and-a-half year high in October 2018. However, the fourth quarter saw the oil price slump by 42%. Recent attacks in Saudi Arabia and resultant oil price spike, demonstrated the potential price volatility. Fortunately, the oil industry has remained optimistic, and African exploration spend is forecast to recover robustly over the medium term, most likely in anticipation of an upturn in the oil price.

Gas and LNG supply and demand

Globally, natural gas will continue to see growth and is expected to overtake coal by 2030 to become the world’s second leading fuel. Natural gas accounts for just under a quarter of global energy demand, of which 9.6% was supplied as LNG in 2018. The number and type of LNG market participants has dramatically increased as lower prices make imports more affordable.

The increasing regulatory drive to decarbonise is also expected to reduce the share of coal in the global energy mix and drive demand for natural gas.

Africa’s utilisation of LNG production capacity is 61% (Globally it is 85%). Africa’s LNG exports were equal to 39.7 mtpa6 in 2018, mainly coming from Nigeria, Algeria, Angola and Egypt.

Nigeria’s oil & gas sector

Nigeria is one of the oldest oil-producing countries in Africa. Oil was first discovered in Nigeria in 1956 and production began in 1958. The oil price boom of the 1970s spelled good fortune for the country transforming it from an agrarian economy to an oil-dependent economy. Since then, the Nigerian petroleum industry has evolved and this evolution provides useful lessons for other countries with oil & gas to learn including: mid and downstream segments development, regulatory complexity and uncertainty and contractual frameworks.

Focus on Mozambique

The natural gas discoveries in Mozambique since 2010 have the potential to transform the country into one of the world’s largest LNG exporters. However, the 2014–2015 slump in energy prices caused several energy giants to delay projects and this gave rise to concerns that Mozambique’s LNG developments could be held back.

LNG will drive growth in Mozambique’s economy. Maximising the benefits from LNG will provide direct income to the government, employees, suppliers and shareholders of the megaprojects. Of equal if not higher importance, is the significant developmental potential through the associated infrastructure, industrialisation, socio-economic and capability uplift at country level.

However, expectations about the extent to which the oil & gas industry will contribute to the development of Mozambique’s citizens may be unrealistic and not consider the country’s growing revenue needs; the current low base from which the economy is developing; and that projects will overlap, creating pressure on current resources.

Looking to the future

The African oil & gas sector is moving from a cycle of stagnation in exploration, capital expenditure spend and production between 2014-2018 in the wake of the oil price crash, to a more dynamic growth phase. During the downturn the industry restructured itself for improved efficiency and performance and is fitter for this new future. Oil & gas companies are better placed now to take advantage of shifting geopolitics and trade patterns, new resource finds, a transitioning and decarbonising global energy mix, technological improvements, maturing regulatory environments and improved governance in some countries.

James Mackay, PwC Director Capital Projects & Infrastructure says, “It is critical, however, that the sector retains and builds on its strategic portfolio management, enterprise risk management, capital project delivery, capital sourcing and allocation discipline, market and customer insights and relationships and adopts new technologies and innovations to improve performance if the hard-fought wins in cost savings are to be retained. Progress in addressing corruption and improving corporate governance will also need to be urgently addressed.”

Against this backdrop, African NOCs and their partners, contractors and funders must chart a course through increasingly uncertain waters. “The future for the African oil & gas industry is exciting as well as challenging and we can look forward to the growing participation of Africa as a global consumer and supplier of energy,” Mackay concludes.

Major takeaways from President Buhari’s visit to Saudi Arabia

By: Garba Shehu

President Muhammadu Buhari’s four-day visit to the Kingdom of Saudi Arabia came to an end on Saturday. The President participated in the Future Investment Initiative, which was christened “Davos in the Desert”. Apart from attending the summit, which had a debating format for global leaders, investors and innovators to  compare notes and share ideas, President Buhari held extensive talks with the Kingdom’s rulers, King Salman bin Abdulaziz and his son, the powerful Crown Prince Mohammed bin Salman, MBS.
The Presidents meetings with the two prominent rulers marked an important upswing in relations between Nigeria and the Kingdom of Saudi Arabia.

As part of his engagements at the FII, President Buhari joined Presidents Mahamadou Issoufou of Niger Republic and Uhuru Kenyatta of Kenya in a plenary session to discuss the topic: ‘‘What’s Next for Africa? How will Investment and Trade Transform the Continent into the Next Great Economic Success Story?’’.

In his arguments, President Buhari said the vigorous implementation of key reforms by his administration in oil and gas, farming and agriculture as well as the country’s vast human resources, made mostly of “young men, women and able-bodied persons” and the country’s rich land and mineral resources eminently positions her for substantial capital inflows. He said the economy holds great promise of win-win for investors.

The President highlighted some key achievements of his administration and expressed a strong determination to use agriculture and ICT as vehicles to attain the target of lifting 100 million Nigerians out of poverty in the next ten years.

On the sidelines of the conference, President Buhari held strategic meetings with the leadership of Saudi Oil and Gas group, the country’s Sovereign Wealth Fund and Public Investment Fund, PIF. On the directive of the King, who had a meeting with the Nigerian leader to discuss friendly and strategic relations between both countries, the world’s largest oil operating company, ARAMCO came to ask the President and his team a simple question: “What can we do for you?’’

In response, President Buhari requested ARAMCO to visit Nigeria and carry out a diagnostic assessment of the Nigeria National Petroleum Corporation’s (NNPC) refineries, pipelines and other infrastructure. He wanted ARAMCO to deploy its technical expertise “to improve the efficiency of the oil and gas industry in Nigeria.”

The company’s Chairman, Yassir Al-Rumayyan, who doubles as the head of the PIF, expressed the company’s determination to promote business investment through the use of modern technology across the energy sector in Nigeria. For those who know, the head of the Saudi PIF has the capacity to invest five billion dollars in a country within a month.

The President instructed the Minister of State, Petroleum Resources, Timipre Sylva, Minister of Industry, Trade and Investment, Niyi Adebayo and GMD of NNPC, Mele Kyari to work with the Saudi Arabian investment company to expedite action on modalities for collaboration and actualization of the aspirations of the leaders.

Another meeting of great significance, which was almost missed due to scheduling difficulties, but eventually took place because of  strong interest on both sides was between the United States team to the FII and President Buhari.
The American Treasury Secretary, Steven Mnuchin, who was accompanied by Brent Macintosh, Under Secretary of the Treasury for International Affairs and Marshall Billingslea, Assistant Secretary for Terrorist Financing in the United States Treasury Department, were on their way to the airport but they had explored an opportunity to meet with President Buhari no matter how short. They turned back to meet with the President when a space was found in his schedule, albeit late evening.
At an hour when most members of his delegation had retired to their accommodations after a long day of meetings, President Buhari hosted the U S team, with the Minister of State, Petroleum  and GMD of NNPC.

Mnuchin briefed President Buhari on ongoing efforts to return looted funds including the USD 300million (N108 billion) traced to former Head of State, Gen. Sani Abacha. The Treasury Secretary also raised possibility of the U S investing in Nigeria under the new United States International Development Finance Corporation (USIDFC), which provides $60 billion for investments in developing nations.

Whether this is a response to the Russia-Africa summit in Sochi, as argued by some critics matters less to President Buhari. For him, anyone who has money and shows a willingness to help Nigeria overcome her infrastructure deficit is welcome. The President told the Americans that Nigeria will leverage on the U.S facility to address current challenges confronting her power sector as well as general upgrade of infrastructure. President Buhari thanked the U.S government for supporting Nigeria’s anti-terrorism efforts.

For the Nigerian President and his delegation, the game changer in all of the engagements was the iconic meeting with the Crown Prince, Prince Mohammed Ibn Salman who, in a special gesture and company of two others, entered the President’s suite in Ritz Carton. The Prince had offered to visit the President, instead of receiving him.

He had the same question as ARAMCO, “Your Excellency, what can we do to assist Nigeria?’’  Prince Mohammed Ibn Salman said Nigeria was already destined to be one of the top 20 economies of the world. “Saudi Arabia is eager to support Nigeria and we want to be a part of Nigeria’s journey to the top 20 economies of the world,’’ he added.

The Kingdom of Saudi Arabia, which had last month announced its interest to invest USD 100 billion in India, revealed that it had so far invested 40 billion dollars in India, 10 billion dollars in Pakistan and 20 billion dollars in Indonesia. According to Prince Mohammed Ibn Salman: “We are willing to do the same in Nigeria, given the favourable business environment.” President Buhari gave an instant and firm commitment for the partnership.

Both leaders reviewed the historically strong and friendly relations between the two countries and looked at ways through which it can be formalized. President Buhari and Prince Mohammed Ibn Salman, also known as MBS, agreed to set up a joint Saudi-Nigeria Strategic Council. This Council will be made up of government officials and businessmen from both countries and the areas of focus are: economic growth and development, investments in oil and non-oil sectors, and security cooperation.

The Saudi-Nigeria Strategic Council will hold meetings twice every year. The leaders of both nations will meet at least once a year to examine progress made on decisions reached by the joint council, and take decisions on strategically important issues.

President Buhari and Prince Mohammed Ibn Salman instructed that the first assignment for the council, which is to be in place within two months, will be to establish a legal and operational framework that will facilitate investments. They also discussed regional and international developments, and in particular issues in oil and gas, and challenges of international terrorism. On oil and OPEC, Prince Mohammed Ibn Salman requested that Nigeria should stay within the quota in production.

President Buhari and the Crown Prince shared the view that with the collapse of ISIS in Iraq and Syria, the next frontier for terrorism is the Sahel region, with both leaders agreeing that the problem had grown beyond the region, and needed global leaders to come together and deal with it. Prince Mohammed Ibn Salman said he was ready to lead a global awareness campaign on the issue.

At the end of the meeting, the Crown Prince, who needed to be fully assured of the commitment from Nigeria asked another question: “Should we tell the public?’’ To which President Buhari answered, “Yes!”

Members of the Nigerian delegation, made up of the Governors of Borno, Prof. Babagana Umara Zulum, Katsina, Aminu Bello Masari and Kebbi State, Atiku Abubakar Bagudu and Ministers of Communication and Digital Economy, Isa Alli Pantami, Minister of State, Petroleum, Timipre Sylva, Minister of Foreign Affairs, Geoffrey Onyeama and Minister of Industry, Trade And Investment, Adeniyi Adebayo engaged business leaders with varied interests and pulled off, in many instances, potentially important deals.
Adebayo’s engagement with various Investment Funds including Asma Capital funded by Saudi Pension Fund, Saudi Investment Agency as well as Sultan of Brunei and Kingdom of Bahrain are among prospective and noteworthy ones.

President Buhari’s trip has ushered in a new age of strategic cooperation between Nigeria and Saudi Arabia, pushing relations to an upward trajectory that promotes cooperation in investment, trade, security and Intelligence and counter terrorism.

Garba Shehu is the Senior Special Assistant to the President on Media & Publicity.

Brand growth: Like Konga, like Redeemed Church; there’s always a store near you

By Joseph Okoghenun

Konga backdrop

 I see a growing similarity between The Redeemed Christian Church of God (RCCG), one of Nigeria’s biggest Pentecostal churches, and Konga, Nigeria’s foremost composite e-commerce giant in their mode of operations.

In Nigeria today, there is hardly any street where one cannot find a branch of RCCG. The church has become ubiquitous. In Christendom, RCCG certainly has no rival in terms of spread, and no one has ever dared to compete with the Pastor Enoch Adeboye led-church in that regard. The strategy has certainly worked for the religious body.

Interestingly, Konga seems to be following the same strategy. In its seven years of existence, Konga has expanded the scope of the e-commerce operations in Nigeria with its retail roll-out strategy. As disclosed by the company, Konga currently has over 31 retail stores. Indeed, it is hard to miss the attractive Konga fuchsia colour dotting the landscape with its rapidly growing stores – a factor which now makes every fuchsia-painted building appear like a Konga store.

This is also the strength of the RCCG brand equity. Every beautifully constructed house of worship is now assumed an RCCG church, if not closely scrutinized.

Due to the nature of my job, I have the privilege of travelling to various states in Nigeria every month to engage customers in this trying times. It is rather unbelievable the massive spread of the Konga retail store. Whether it is in Warri, Kano, Uyo, Asaba or Ibadan, just to mention a few, you cannot miss the imposing colour and signage, thereby leaving one wondering what their strategy is.

Last Monday, I had a challenge with my laptop and I asked my neighbour who is an IT expert where I could buy a reasonably priced HP laptop in Lagos. He volunteered a number of places, including the smart Computer Village in Ikeja, Lagos, but advised that before I finally buy, I should check prices on Konga as he was sure Konga had the best prices.

I did as my neighbour advised. I went to the Konga Online Marketplace App, which I had installed on my phone to check for the price and specifications of the available HP laptops.

After checking the price range and functionalities of the various HP brands available, I settled for the HP Spectre, which is a perfect device for me, especially considering the nature of my work. Thereafter, I needed to cross-check the price with what was obtainable in Computer Village. Hence, I put calls through to some of the contacts in Computer Village my neighbour had given to me.

Surprisingly, the prices I got from them all were far higher than what I got from Konga. Considering that I needed to endure heavy traffic in various parts of Lagos to get to Computer Village amidst my busy schedule, I did not think twice before settling for Konga to place the order. In the comfort of my bedroom, I placed the order before I went out.  Since I knew that my movement wouldn’t be certain on that Monday and I would be attending a series of meetings, I directed that the laptop should be dropped at the Konga retail store located at Third Roundabout on Lekki-Epe Express Way, Ikate, Lekki Phase 2, Lagos, close to where I live, for onward pick up.

Throughout that day, I was too busy to have time to pick up the laptop. On Tuesday, I went to the Konga retail store. Since the store was opened this year, Tuesday was the first time I was using it. When I went to pick up the HP laptop on Tuesday, I was pleasantly impressed by the courteous service I received from the attendants at the store, and the aesthetical layout of the place.

Further raising my impressions was the fact that all my attempts to give the attendants a tip for their wonderful service was politely rejected. In fact, they informed me that the practice was against the company policy. I was really impressed by what I saw and observed.

Curiously, I also noticed that the store is located in a strategic place not far off from a branch of RCCG. I don’t know whether this is also a deliberate strategy by the new Konga owners to have some of their stores located close to branches of the biggest Pentecostal church in Nigeria. As a matter of fact, the Konga store located at Redemption Crescent, Gbagada, is adjacent to a branch of RCCG. The affinity between the two brands is becoming too glaring for anyone not to notice.

My visit to Konga store also afforded me the opportunity to meet with the Konga CEO, Prince Nnamdi Ekeh for the first time. Unassuming and smart, the young Prince Nnamdi was entering the store while I and other customers were about leaving the place. As soon as he entered, he greeted all of us warmly and asked about our welfare. I replied in the affirmative, but enquired if we had met before.

Beaming with a huge smile, Prince Nnamdi humbly replied in the negative, but explained that as the CEO of Konga, it was his responsibility to see that the welfare of Konga customers was taken care of always.

I was really marveled by the simplicity of the young CEO that I decided to exchange contacts with him. Surprise is an understatement when I later received a call from Prince Nnamdi that evening, asking whether I got home safely and how I was enjoying my new HP laptop.

I was marvelled by his sincerity of purpose so much that I wondered whether he is also a pastor in RCCG – the brand I assume Konga is imitating in their retail rollout. I had to scan through the CEO’s profile on the internet.

Subsequently, I got to know that Prince Nnamdi’s life has been all about e-commerce. He was just 23 when he founded Yudala – a bold and ambitious e-commerce outpost, which later merged operations with Konga in 2018. In fact, I got to know that Konga imbibed its retail store strategy from Yudala, which pioneered the model in the global e-commerce sector.

The merger, no doubt, has re-positioned Konga from a business, operational and quality service delivery standpoint, with cutting-edge efficiency to drive the company’s operations, including its retail stores.

The relevance of expanding the Konga brick-and mortar presence in the manner of RCCG cannot be understated. Despite the marginal growth of e-commerce since the turn of the decade in Nigeria, the market has faced significant challenges. These include poor road infrastructure, delivery and inconsistent addressing system which have encumbered a number of players. Anybody who has worked in the logistics sector of our economy as I have done will understand the point being made here.

Although the RCCG may not have encountered such challenges with its every-street-branch operational model, it is apparent that this model remains the best for reaching many more potential shoppers in our clime, as Konga model has shown.

For instance, how do you deliver a product to remote areas where there are no roads or traceable addresses? But a nearby retail store, which doubles as a pick-up centre, will solve such challenges, as it has done for Konga. The foregoing appears the reason Konga is following in the RCCG’s footsteps.

 

 

 

 

China’s proposed digital currency more about policing than progress

Chinese central bank chief Yi Gang

China’s central bank has revealed few specifics of its Digital Currency Electronic Payment (DCEP) project, one that’s been five years in the making, though more details have trickled out over the past few weeks in the bank’s presentations on the subject.

Akin to Facebook’s proposed Libra digital currency and other cryptocurrencies such as bitcoin, the DCEP will be powered partially by blockchain technology and dispersed through digital wallets.

What sets it somewhat apart, however, are features that allow the central bank to track the movement of the currency and even supervise transactions.

The digital currency’s design seemingly provides Beijing with unprecedented oversight over money flows, giving Chinese authorities a degree of control over their economy that most central banks do not have.

The main motivation behind the project, market observers say, is China’s desire to protect its capital borders in the face of fears that newer global payment systems and advanced technology could facilitate illegal cash flows.

“There’s a consensus around the world among central bank governors and governments at large that they want to have control of money and money supply and the seigniorage that comes along with it,” said Keyu Jin, professor of economics at the London School of Economics on the sidelines of a forum in Singapore.

“But over-obsessive control and governance is probably more unique to China than anything else.”

So far, Beijing has sent mixed messages on how soon the digital currency will be launched.

The head of the Chinese central bank’s digital currency research institute, Mu Changchun, told a public forum in August that it was “almost ready”. However, in September, Chinese central bank chief Yi Gang said there was no timetable for its roll out and that it still needed to meet requirements, such as anti-money laundering.

Authorities have, however, made no bones about their disapproval of Facebook’s Libra, labeling it a threat to the sovereignty of China and other emerging economies and insisting that digital currencies should only be issued by governments and central banks.

Mu hinted at these fears and desire to preserve control in his lectures. “Just imagine, if we acquiesce, that yuan can be converted into Libra, there will definitely be a massive currency exchange, triggering yuan depreciation.”

The People’s Bank of China (PBOC) did not immediately reply to Reuters questions on its digital currency plans.

SUPERVISION, LITTLE ANONYMITY

More than 50 patents filed by the PBOC and Mu’s comments indicate that the PBOC plans to distribute the digital currency through commercial banks, much like how it does currently with physical yuan.

It will thereafter follow a model familiar to most users of systems such as Apple Pay and Chinese payment system Alipay, requiring commercial banks to distribute the cash via digital wallets that can be downloaded on phones.

But unlike physical cash, one patent filed shows that the bank is exploring a tracking system that would make the digital currency’s movements traceable between transactions and people.

Mu said the DCEP also would strike a balance between allowing anonymous payments and “classified supervision” to prevent illegal activity such as money-laundering, with authorities able to monitor such instances via big data recognition.

As an example, Mu said, telephone fraud tended to be characterized by large, fragmented sums of money suddenly being deposited into one bank account for a short while before swiftly scattering and disappearing into multiple bank accounts.

“Once we analyze these transactions, use big data and data mining technology and conduct identity comparisons, we will be able to find the culprits.”

ROAD FORWARD

So far, there has been little public reaction in a country already used to weak privacy protections and a high degree of government digital surveillance of its people.

The few public discussions on Chinese social media platforms such as Weibo have expressed mixed views, with some saying that it could prevent corruption. However, one user asked: “What will happen to my freedom to build wealth, my secrets and safety?”

A Union Pay official told Reuters that the PBOC was likely to have to overcome resistance from parties such as lenders thanks to its potential to revamp the existing banking system.

“Theoretically, with digital currency, you could do away with bank accounts,” he said. “The launch is more about politics than technology.”

Despite the uncertainty over its launch, the lectures by Mu and subsequent revelations have heightened anticipation in China and globally.

“The PBOC has been studying the DCEP for five or six years, and I believe it has reached a level of maturity,” Huang Qifan, vice chairman of Beijing-backed think tank China Center for International Economic Exchange, told a finance forum on Monday.

“China will likely be the first country in the world to issue sovereign digital currency.”

REUTERS