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How COVID-19 is driving digital transformation and what comes next

If we can meet, communicate, and have updates without going to the offices like before, what else can we do differently post-COVID?

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Reviewing 2020, the year has shown a relatable influence of forced digitization which begs the question of who or what is the largest driving force behind digital transformation in 2020?

Is it the CEOs, CTOs or COVID-19?

It may seem complex to determine, but for most organisations, especially those who have maintained traditional operations, COVID-19 may be the driving force behind the digital business and communication practices they established in 2020.

Organizations and everyday people around the globe have been faced with rapid and unprecedented changes in their daily lives. While some businesses have come close to a complete halt, others have managed to remain afloat while we await a solution to the global pandemic.

Uncertainty remains high, but uncertainty always opens the door of opportunities for organizations with deep insights. When it comes to business continuity, futuristic organizations are exploring new digital options, which is highly significant in 2020.

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These firms are thinking outside the box and identifying ways to leverage technology to remain up and running while working from home or spending limited time physically at work. This includes remote communication and collaboration, software integration and optimization, and delivering products and services digitally.

The Post-COVID effect is clear

Going forward, digital work will no longer be an option; it is a necessity that businesses must embrace.

In 2020, we saw Lagos State host its first virtual executive council meeting. It turned out to be the first of many technology-enabled solutions the public sector has been forced to embrace. Ordinarily, without COVID-19, a virtual meeting would have never been considered, as council members value physical and personal collaborations.

With the current state of the world, the only way to ensure productivity at work is to ensure job roles and duties are digitalized where possible. The value of tele-meeting is obvious; it’s safe, effective, convenient, and more efficient than physical meetings. From the comfort of their homes, council members can directly engage the authorities to discuss all aspects of COVID-19 and its local and global impact without time lost in travel and money lost on logistics.

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However, it’s not just government and private sectors that are exploring digital channels to communicate. Religious institutions are following the trend. Churches, mosques and worship centres are delivering weekly services and daily group sessions via digital live stream. While many organizations are going digital with the mindset of adapting to the short-term circumstances, most will continue to rely on the trend for a long time.

In 2021, CEOs, CTOs, business leaders, and professionals must consider that the current digital transformation is just the tip of the iceberg. As much as we remain positive that COVID-19 disruption will soon be a thing of the past, we must also learn that it has made us see how we can achieve our business objectives by doing things differently, especially with the new digital protocols and optimized communication and operations.

If we can meet, communicate, and have updates without going to the office meeting rooms which was a pre-COVID-19 way of life that required us to push through traffic to get to work, schedule meetings before getting anything done, what else can we do differently post-COVID?

Where else can we go digital?

It doesn’t matter what industry you work in, there are powerful ways you can leverage the value of technology to elevate your outcomes. From manufacturing to oil and gas, religious organisations, the education sector, and others; digitally transforming the way you work is essential for sustainability.

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Most organisations have already transitioned their digital communication. Here are a few more transformations to consider:

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  1. Going digital on revenue generation
  2. Going digital on debt collection management
  3. Going digital on procurement and logistics management
  4. Going digital on expense and budget management
  5. Going digital on cash and liquidity management
  6. Going digital on finance period closure

As we move into 2021, still with so many health-based restrictions at this time, business leaders are implored to use this period to plan and take the lead in Digital Transformation across all areas of businesses.

In my next post, I will shed more light on business in the post-COVID-19 era.

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About author

Olawale A. Kolapo (OAK) is a technology consultant with a finance background, for over a decade implementing technology solution that has helped various private and public sector organizations integrate and automate their business process. He is interested in building a digital approach to solve Africa’s business challenges.

Follow wale_kolapo 

Nairametrics frequently publishes articles from experts such as financial analysts, economists, researchers and investors. We also feature articles from guest writers and bloggers who wish to push their views and opinions through our platform.To get your articles on Nairametrics, kindly send an email to [email protected] and we will publish it within 24 hours of approval by our editorial team.

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Analysis: Lagos State 2021 budget of N1.16 trillion will be driven by aggressive taxation

To fund the 2021 budget, Lagos State says more companies will remit taxes in 2021.  

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Lagos State thrives as the economic backbone of Nigeria and with its GDP rivaling African nations, it is no surprise that what happens in Lagos, affects Nigeria in its entirety.  

Following the impact of the COVID-19 pandemic, Lagos State had quite naturally reduced its expectations for the year 2020. From a proposed budget of N1.169 trillion, the State reviewed it downwards by 21% to N920.5 billion – out of which it was still able to attain an overall performance of 86%.

Total revenue alone was 93% of projections and this is despite the pandemic, the additional costs of the #EndSARS protests, as well as the other disruptions that followed. As the Lagos State Commissioner for Economic Planning & Budget, Sam Egube puts it, ‘excuses build bridges to nowhere.’  

That said, a 2021 budget of N1.163 trillion is nothing short of audacious, particularly considering the revisions made to last year’s projections. Signed into law by the Governor on 31st December 2020, it was prepared to first prioritize the completion of all on-going projects in the State and then to meet a series of objectives from employment creation, increased investment in human capital development, i.e. education and healthcare, deployment of functional technology in public services, amongst others.  

While the budget succinctly themed, “Rekindled Hope” and the many proclamations of the T.H.E.M.E.S agenda are remarkable, revealing a desire to reach for more, there is ardent need to interrogate the sources that make up the budget, what they are projected to be used for, and the possible limitations between the lines.  

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Funding the budget and the debt quagmire  

The total budget of N1.163 trillion is expected to be funded from a total revenue estimate of N971.028 billion, made up of Total Internally Generated Revenue (TIGR) of N723.817 billion, capital receipts at N71.811 billion, and federal transfers at N175.400 billion.  

While the figures for Federal transfers and receipts are said to have been conservative, the breakdown assumes that a key part of the budget is expected to come from the State’s Internally Generated Revenue (IGR).  

During the official budget speech, the Commissioner of the Lagos State Ministry of Economic Planning and Budget had explained that Lagos State Internal Revenue Service (LIRS) performance is expected to increase by 30% in 2021. On one hand, systems such as simpler collection systems are being tightened to boost revenue; on the other, more companies will remit taxes with many tax holidays from 2020 taken care of in the past year.  

They also expect to harness the huge revenue-generating opportunities in the State particularly in the real estate and transportation sectors while also leveraging data to uncover available opportunities. Following the 21% revision of the past year, particularly with many of the same challenges still at the fore, the assumptions for the projected revenue can really only be proven by their delivery.   

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The deficit of N192.494 billion is projected to be funded by a combination of both internal and external loans. Now, while borrowings of N192.5 billion compared to projected IGR of N723.8 billion is relatively fair as the State is projecting to internally generate almost 4 times of its proposed borrowings, the underlying debt challenge of the nation should naturally still cause a few raised eyebrows for the additional debt – even though it is projected to be used in its totality to fund capital projects. The ongoing instability in the FX market, as well as the increasing debt burden this will pose, are some of the main points of consideration with the budget deficit financing.   

Speaking at the “Facts-Behind-The-Figures Media Roundtable,” Commissioner for the Lagos State Ministry of Economic Planning and Budget, Sam Egbe explained that most of the loans taken will be in Naira in order to protect the State from FX risks as much as possible. The Commissioner of Finance, Dr. Rabiu Olowo, had also explained that the loans to be taken are well within fiscal sustainability levels.   

He explained that “We cannot depend on our own internally generated revenue or the federal transfer that we get from the federal government if we want the kind of development that Lagos needs at this time. For this, there are two main benchmarks that we follow. We have the federal debt management office benchmark of 30% debt to revenue, and of course the World Bank benchmark which is 40%. We closed the year 2020 at 19.8% and for the year 2021. While we project about 22% debt to revenue ratio, we are still within both benchmarks.”  

The deficit financing of N192.5 billion is proposed to be raised through local capital market bonds of N100 billion, external loans of about N55 billion, and internal loans of about 37.5 billion.  

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Priority sectorial allocation  

The total expenditure for the year 2021 is broken down into capital and recurrent expenditure at N702.9335 billion and N460.587 billion respectively, a ratio of 60:40. While there could be arguments as to the sustainability of the allocations given the infrastructural gap in the State, there are a few extra-budgetary strategies for funding projects that the government put in place to bridge the gaps.  

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Some of them include Private Sector Infrastructural partnerships, bespoke financing terms, and structured (also PPP) critical infrastructure as used for the blue and red rail as well as the metro broadband fibre ring. The argument is that the State can deliver more than can be captured in the budget.  

The allocation breakdown for the total N1.163 billion based on the Classification of Functions of Government (COFOG) also reveals an upward increase in Economic affairs (consisting of Agriculture, Commerce, Tourism, Art & Culture, Energy and Mineral Resources, Transportation, Infrastructure and Waterfront) from 26.55% of the budget in 2020 allocation to 29.35% at N341.4 billion in 2021.  

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This implies that opportunities could exist in these areas for Lagosians and international investors willing to produce the value the State requires to meet its objectives. While the sectorial allocation isn’t bereft of limitations as indeed it really cannot solve all the problems at the same time, major considerations should be around its successful implementation and the government’s continued transparency to Lagosians in economic happenings.   

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The Nigerian insurance sector; repositioning for efficiency

For the industry to thrive, the regulators may also need to deepen micro insurers’ activities in the Nigerian economy.

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Insurance in Nigeria, FBN Holdings Annual general Meeting, FBN General Insurance Limited CEO Bode Opadokun, FBN General Insurance Limited 2018 financial result

The Nigerian Insurance sector is critical to propelling income equality and reducing the poverty level of any society, but the industry’s performance has continued to drag amid many factors, such as; low underwriting capacity of players, lack of trust by consumers, poverty and the inadequacy of distribution infrastructure.

These factors have jointly contributed to the abysmal level of insurance penetration – the proportion of insurance business to the gross domestic product over the years.

READ: Fintech key to insurance penetration, processing of claims – LASACO MD

The Nigerian Insurance sector remains largely underdeveloped with Insurance penetration still at c.0.5% to GDP. The sector which contracted by 18.67% y/y in the Q3 GDP report released by the National Bureau of Statistics (NBS) is set for a deep recession in 2020.

The covid-19 pandemic effect has increased health, travel, and business disruption claims. These claims, coupled with underwriters’ inability to write risks in Q2 and the tapered household income should amplify the sector’s expected recession.

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READ: AXA Mansard divests from its pension and real estate ventures

In a bid to rid the sector of these known drags, the National Insurance Commission (NAICOM), the primary regulator in the industry launched its recapitalization exercise in May 2019. The plan’s proponents intend to improve the industry’s minimum paid-up capital in each business segment, thereby solving premium flight issues that have continued to plague the industry.

Following the lingering impact of coronavirus, the deadline was adjusted from June 2020 to December 2020 to implement Phase I of the project while the deadline for the second phase’s performance was moved to September 2021. Some players have called for an extension of the regulator’s deadline given the impact of Covid-19 on their businesses.

READ: FG seeks partnership with National Council of Registered Insurance Brokers, here’s why 

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However, most of the industry’s bellwethers have entirely shored-up their minimum paid-up capital to the required level. In our view, firms that are yet to meet the required capital threshold may likely lose out on the opportunities available on the supply side of the market.

Furthermore, for the industry to thrive, the regulators may also need to deepen micro insurers’ activities in the Nigerian economy.


CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

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Imposters, uniforms and our collective awe

The uniform of the Nigerian Armed Forces, Police, and other Government Security Agencies have become so powerful, that they serve as a form of identification.

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FG deploys more military troops to Lagos to secure public assets

On a bright, sunny Tuesday morning in Lagos, Col. Saki Abdullahi (not real name), got into his personal car and hurried to the bank to sort out some issues with his account and perform some transactions. He was dressed immaculately in his well ironed and starched uniform and you could see your reflection in his well-polished shoes.

As he approached the gate of the New Generation Bank in Victoria Island, one of the Security Guards beckoned on him to open his boot for the usual search. Col. Saki knew the drill and with one touch of a knob near the seat, he flicked open the boot just as the guard walking past him noticed his uniform and rank.

The Guard immediately closed the boot with the briefest of glimpses into it and signaled for his colleague to open the gate. Col. Saki found this rather curious because, on previous visits to the same bank branch, he had been subjected to more scrutiny by the guards on duty.

He parked his car and walked towards the security doors that granted access into the banking hall. He was briskly saluted by the guard and when the door appeared to disallow him entry (on account of his car keys and belt), he was still given swift access. Generally, the Staff was all super courteous and helpful and he left the bank in next to no time.

On the drive back to his office, he had a call and he hesitated as he could not find his hands-free device, but the person on the other line was not someone he could ignore his call. So, he picked and put the phone to his ears and began a conversation. He got to a point and had to slow down in traffic. A Lagos State Traffic Official (LASTMA) who got in front of his car and attempted to stop him because he was on the phone and driving, took one look at him and moved on.

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Then it dawned on him that the reason the LASTMA Official did not bother to approach him was the same reason the guards and bank staff were so nice to him. He was in his Army uniform and in Nigeria that confers a special status and privilege on the wearer.

All over the World, members of the Armed Forces, Police, and other Uniformed Government Security are accorded some form of respect and privilege. It is an unwritten rule borne out of respect for the sacrifices that they make daily for the rest of the citizenry to enjoy the most basic freedoms and security. These privileges however do not in any way place uniformed personnel above the laws of the land or above the rest of the civil populace.

The unbridled privileges and rights that years of Military rule have inadvertently conferred on Uniformed Personnel have created a class of citizens that cannot be questioned and led to a growing army of Impostors, fakes, and impersonating Uniformed Officers of the Law.

In Nigeria, it is a normal sight to see men of the Armed Forces beating up and molesting citizens for daring to wear camouflage clothing on the Streets, as this is deemed as an attempt to impersonate a member of the Armed Forces. Curiously, these outfits are readily available online, and wearing them in other parts of the developed world is not considered a crime or impersonation.

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Section 110 (1) of the Criminal Code makes it unlawful for any person who is not serving in any of the Armed Forces in Nigeria to wear the uniform of the Armed Forces or any part of the uniform of such Forces, or any dress having the appearance or bearing any of the Regimental or other distinctive marks of such uniforms. Camouflage is a part of the military uniform and so it falls under this law.

So, the basic reason for outlawing the wearing of camouflage amongst civilians is security, but if we look at countries with the strongest armies in the world and the prevalence of citizens being allowed to wear camouflage and other dress articles associated with the military, we also notice crimes committed do not have a correlation with the wearing of uniforms. So, the real issue is not the uniform itself, but the access, privilege, power, and rights it confers on the wearer.

Just this past week, it was widely reported that 2 suspects were nabbed by the Oyo State western Security Network codenamed, Amotekun for producing and selling fake Amotekun uniforms. This was after 6 persons were arrested while posing as members of the Corps. Amotekun has launched just over a year ago on January 9, 2020, and already criminal groups are making counterfeit versions of its uniforms. So, you ask yourself, why would anyone want to buy counterfeit versions of Amotekun uniforms if not that they believe it’s a means to access power and riches that they would otherwise not be able to get if they were in civilian dress.

While growing up in Lagos in the early ’80s, uniformed personnel boarded public transportation and were exempted from paying fares. This was done as a form of respect and appreciation (especially after the Civil War), but the sight of uniformed personnel wearing just an article of clothing in the uniform e.g., the Cap, T-Shirt or Pants on a weekend private outing just to avoid paying their fare has become embarrassing. Once Commercial Drivers put uniformed personnel in the front seat of their vehicle, they are emboldened to break all the traffic rules including driving against traffic (One Way Driving).

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The uniform of the Nigerian Armed Forces, Police, and other Government Security Agencies have become so powerful, that they serve as a form of identification. You are not allowed to request to see the identification card of anyone in uniform, to do so can lead to physical intimidation.

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The Military High Command has done its best in recent years to improve military and civilian interaction and to create lines of communication for the civil populace to report incidents of misconduct. These actions have led to a manifest improvement in the civility of interactions between the two sides.

During the last nationwide #EndSARS protests, an Airforce Officer was lauded by all for the manner he was able to calm down the protesters and ensured there was no destruction of property and no loss of lives.

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As we continue on the journey of nationhood, we have to decide as a people what form our respect and the privileges, we accord our men and women in uniform should take.

As we mark Armed Forces Remembrance Day and the sacrifices of our Fallen Heroes, we owe it a duty to discuss how we honor them, while maintaining the rule of law across the board and the dignity of the rest of the civil populace.

‘Long live the Armed Forces, Long Live The Federal Republic of Nigeria’

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