Business Journal Newspaper Vol. 001. 02 by Francis Toke

Optimism Reigns in 2015 Insurance Industry Outlook

espite falling oil prices and post-election uncertainties, the Nigerian insurance sector is looking into the future with broad optimism and confidence. Mr. Fola Daniel, Commissioner for Insurance, National Insurance Commission (NAICOM) says the industry is undergoing rapid transformation, thus requiring the strategic support of operators and other relevant stakeholders to enable the industry occupy its right-

ful position in the forefront of the financial services sector in Nigeria. “It is our in NAICOM to superintend over an insurance industry that is flourishing, financially strong and viable,” the NAICOM chief said. “We shall continue with the drive towards positive transformation and development of the Nigerian insurance market.” Mr. Edwin Igbiti, Group Managing Director/CEO, AIICO Insurance Plc, said the fact that insurance sector contrib-

utes only 0.5% of Nigeria’s overall Gross Domestic Product (GDP), at just over N300 billion implies the existence of huge opportunities for local and foreign investors. “The industry is still very far from where it wants to be. On the flip side however, this represents a big opportunity to players who decide to play the insurance game right,” he said. “This view has been vindicated by the amount of foreign investment we saw

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in the sector in 2014 – AXA and Green Oaks acquired Mansard Insurance and Union Assurance just to mention a few. Investors view emerging markets as potential areas of opportunity and Nigeria is no different.” Mr. Chike Mokwunye, Group Managing Director/CEO, Royal Exchange Plc, said the falling oil prices will adversely affect not only patronage for insurance from government establishment but other sectors of the

₦ ￡ RATE

293.09

GAINNERS ₦ € RATE

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RT BRISCOE

₦0.84k OANDO

₦18.16k

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DANGFLOUR

₦4.68k AGLEVENT

₦1.42k

economy since government spending cuts and taxes would affect economic growth negatively. “On the other hand, such policy thrust may throw open new opportunities for the insurance industry in expanding the frontiers of its business and thereby create room for the industry to underwrite businesses in neglected segments of the Nigerian economy.”

Monday April 20 - Sunday 26, 2015

OIL PRICE

Bonny Light

Brent Crude

$55.74

$63.45

US Oil Import from Nigeria Down 67%

he United States decreased its oil import from Nigeria by 67 per cent in 2014, signaling growing economic pain and sustained pressure on foreign reserves, already down to $29.3 billion as at April 15, 2015, its lowest point since 2010. Figures from the US Department of Commerce suggest that U.S. total trade in 2014 (exports plus imports) with sub-Saharan Africa (SSA) also

went down by 18 per cent to $52.1 billion compared to 2013. “In 2014, U.S. imports from SSA decreased by 32 percent, falling to $26.7 billion and representing only 1.1 percent of total U.S. imports from the world. This decrease was mostly due to a 51 percent decrease in U.S. mineral fuel and oil imports from SSA. U.S. imports from SSA originated, for the most part, from South Africa,

Nigeria, Angola, Côte d’Ivoire, and Chad,” the report says. In the same period, U.S. exports to the Economic Community of West African States (ECOWAS) reached $8.7 billion, a decrease of three percent while exports to the West African Economic and Monetary Union (WAEMU) topped $2.4 billion, an increase of nine per cent. “While U.S. exports to the world grew by 2.8 percent, ex-

ports to SSA (mostly composed of machinery and aircraft) increased by six percent, reaching $25.4 billion and accounting for only 1.6 percent of total U.S. exports to the world. The top five African destinations for U.S. products were South Africa, Nigeria, Angola, Ethiopia, and Kenya.” According to the report, “in 2014, imports from Southern African Development Community (SADC) were $16.2 billion, a decrease of 15 percent from 2013;

imports from Southern African Customs Union (SACU) were $9.3 billion, a slight decrease of 1 percent; imports from ECOWAS were $5.3 billion, a sharp decrease of 59 percent from 2013; imports from West African Economic and Monetary Union (WAEMU) were $1.3 billion, an increase of 19 percent; and imports from East African Community (EAC) were $743 million, an increase of 24 percent from 2013.” Continues on PAGE 2

Market Analysis

Nigerian Reserves at Record Low... Time to Float the Naira?

ccording to the Central Bank of Nigeria (CBN), reported levels of the Nigerian External Reserves (“the Reserves”) as at 15th of April 2015 stands at US$29.3bn - its lowest level since 2010. Worthy of note is the fact that the Reserves have been on a downward trend since the beginning of the year on the back of falling global oil prices and CBN’s resolve to defend the Naira. The Reserves has declined US$5.0bn (16.9%) in 2015 Continues on PAGE 2

IFC Invests $2bn on Power Generation in Africa

QUOTE

he International Finance Corporation (IFC), an arm of the World Bank Group, says it has mobilised and invested over $2 billion to support more than 1, 5000 megawatts of new generation capacity in Africa in the past two years. It says Africa needs to increase its power generation capacity by 7, 000 megawatts each year to meet rising demand for electricity in a continent where most people live without elec-

tricity, lamenting that such gap hinders economic growth and deters much-needed foreign investment. It says that expanding the supply of energy has become an imperative that cannot be delayed in Africa. “In the past two fiscal years alone, IFC has invested and mobilised over $2 billion in financing to support more than 1,500 megawatts of new generation capacity in Africa. Besides investing in debt and equity, we facilitate connections between viable

investment opportunities and the financiers that can support them. We take innovative approaches to our investments, supporting large, potentially transformative projects,” the IFC said. “ We also help developing countries expand the use of cutting-edge technologies, such as concentrated solar power— which uses mirrors to reflect and concentrate rays of sunlight to heat steam that power turbines. For instance, IFC helped launch Continues on PAGE 2

Aliko Dangote President/CEO, Dangote Group

“If Nigerians do not invest in their country, other people would not come. They will want to see our success story before they can come.”

L:R: Managing Director/Chief Executive Officer, Wema Bank Plc, Segun Oloketuyi; Executive Director, Market Operations and Technology, The Nigerian Stock Exchange, Mr. Adeolu Bajomo; Chairman, Board of Directors, Wema Bank Plc, Adeyinka Asekun, Executive Director, Wema Bank Plc, Ademola Adebise and Head, Legal and Regulation Division, NSE, Tinuade Awe, at the Wema Bank Facts Behind the Figures ceremony on the floor of the Exchange in Lagos.

Business Journal April 20 - 26, 2015

News

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US Oil Import from... Continued from PAGE 1 Meanwhile, the African Growth and Opportunity Act (AGOA) also reported 47 per cent drop in imports to $14.2 billion, compared to 2013, mainly due to 55 percent decrease in petroleum product imports which continued to account for the largest portion of AGOA imports with a 69 percent share of overall

AGOA imports. “However, imports of minerals and metals increased by 17 percent, imports of agricultural products increased by five per cent, and imports of textiles and apparel increased by nine percent.” The top five AGOA beneficiary countries were Angola, Nigeria, South Africa, Chad, and Gabon, followed by Kenya, Lesotho, and Republic of Congo.

Nigerian Reserves at Record Low... Continued from PAGE 1 despite CBN’s relentless effort to keep it upbeat. Further analysis showed that declines were at their highest on February 16th and 23rd at 1.2% each) - corresponding to the days after the postponement of the Nigerian 2015 General Elections (16th February) and shutdown of rDAS window (23rd February). The Reserves declined at a daily average of 0.2% before and after the official window was scrapped. Hence, rate of decline did not moderate despite the CBN’s move. According to Afrinvest Research, at current level of Reserves, the country’s Import Cover (ratio of Foreign Reserves to average monthly Import) based on our estimates can barely cover 6-months of import (International standard). While inflow to the Reserves remained impaired by lower prices of crude oil in the global market (as oil revenue accounts for approximately 90.0%of the Reserves accretion), we suspect that the Apex bank’s monetary policy committee may be moved to take a major decision on exchange rate at its next seating in May. Perhaps, taking the bull by the horns to float Nigeria’s exchange rate. Nigerian Stock Market Daily Summary and Outlook The local bourse benchmark index advanced 50bps to close at 35,005.4pts. This brings YtD return to 1.0%. Also, market capitalisation also increased N58.9bn to berth at N11.9tn. Performance of the market to-

day was driven by price appreciation in ZENITH (+2.3%), NIGERIAN BREWERIES (+1.0%) and DANGCEM (+0.5%). Market activity measured by volume and value traded however declined as both indicators decreased 56.0% and 9.3% accordingly after 315.7m units of stocks worth N3.5bn exchanged hands. Sector performance was mixed. The Banking sector index led the best performers on gains posted by FBN HOLDINGS (+3.3%) and ZENITH (+2.3%). Oil & Gas index (+0.8%) and Consumer Goods (+0.5%) indices also closed positive. Industrial Goods (-0.9%) and Insurance sector (-1.0%) indices both posted losses. Market sentiments measured by advancers/decliners ratio remained positive (1.6x) today as 28 stocks advanced against 17 decliners. RTBRISCOE (+5.0%), OANDO (5.0%), MAYBAKER(+4.9%) and CUTIX (4.8%) appreciated the most while DANGFLOUR (-4.9%), AGLEVENT(-4.7%), CONTINSURE (-4.4%) and AIICO (-4.4%) depreciated the most. We expect market sentiment to remain driven by more corporate releases. Nigerian Stock Market Weekly Summary and Outlook The NSE ASI added 20bps W-o-W as the index closed at 35,005.42pts. Market capitalisation advanced N25.7bn to N11.9tn while YtD performance remained positive at 1.0% at the close of the week. On the contrary, activity level measured by volume traded retreated 45.3%% to 1.9bn units even as value traded declined 23.0% to N19.4bn.

US Oil Import... Looking back, Mr. Tope Smart, Group Managing Director/CEO, NEM Insurance Plc, expressed delight that various reform efforts of the recent past by the National Insurance Commission (NAICOM) have impacted the industry positively and improved the image of the insurance industry significantly. He is also enthusiastic that insurance is now being given more recognition by the Federal Government and is set to play

a significant role in the Nigerian economy in the foreseeable future. “No economy can thrive without the active support of insurance. It is gratifying to note that market response to some of the big claims that happened in recent times has been quite encouraging, for instance, the Nigerian Bottling Company, Dangote etc. We must continue to do this in the overall interest of the industry.”

African Economies Drive Growth via IT Adoption

merging African economies are increasingly embracing Information Technology (IT) service solutions in a bid to support their growth initiatives. That’s according to the latest insights released by International Data Corporation (IDC), with the global advisory services firm also explaining that growing public and private sector IT spending, together with maturing and increasingly competitive business environments, are also driving IT services demand. “While each country has different requirements, there are common themes supporting the adoption of IT services in Africa,” says Lise Hagen, Research Manager for Software and IT Services at IDC South Africa. “For example, as last-mile connectivity continues to improve, Internet services are becoming more easily available over wider geographic areas at lower costs, leading to improved

IT services adoption. Demand for remains primarily focused on basic implementation and support services, but larger organisations across the continent are increasingly seeking advanced solutions such as implementation and systems integration services. Early-adopter organisations are also assessing cloud technologies – specifically software as a service (SaaS) – and Big Data analytics, which is creating significant opportunities for service providers.” IDC notes that the government vertical in Africa is becoming one of the biggest investors in ICT in general, and IT services in particular. “Governments in Nigeria, Kenya, Ghana, Botswana, and elsewhere are implementing national ICT policies that are driving the adoption of technology,” continues Hagen. “Governments are using ICT to enable service delivery, while

eGovernment and mGovernment initiatives are high on the agenda for driving etransformation and addressing issues around rapid urbanisation. The continent’s telecom, banking and finance, oil and gas, and mining verticals also present major ICT opportunities.” The IDC Insight ‘IT Services in Sub-Saharan Africa: Who’s Doing What and Why, and Opportunities for Growth includes a brief qualitative assessment of selected Sub-Saharan IT services markets. Since South Africa is the dominant ICT market on the continent, it has been excluded in order to focus on the region’s emerging economies. The analysis includes a general market assessment and refers to 12 African countries, namely Botswana, Cameroon, Ethiopia, Ghana, Kenya, Mauritius, Namibia, Nigeria, Mozambique, Tanzania, Uganda, and Zambia.

IFC Invests $2bn... Continued from PAGE 1 two landmark concentrated solar projects in South Africa in 2012 that will help diversify the country’s electricity from coalfired power.” Sub-Saharan Africa is rich in energy resources but its potential remains mostly untapped. Despite the abundance of sunlight, solar projects have been developed slowly and often inefficiently. Weak competition and high transaction costs are some of the obstacles that hamper the progress of the technology. Increasing access to power in Africa has long been of critical importance to the IFC. It says it is the leading financier of independent generation projects, having supported not only the continent’s first private distribution company, in Uganda, but also its private integrated utility, in Cameroon. IFC has recently launched an initiative to expand the market for solar power in Africa.

L.R: Director, Africa Prudential Registrars (APR) Plc, Mr. Samuel Nwanze; Managing Director/CEO, Mr. Peter O. Ashade; Chairman, Chief (Mrs.) Eniola Fadayomi; Director, Ammuna Lawan Ali; and Director, Mr. Peter Elumelu, during the APR’s Annual General Meeting held in Lagos.

INDORAMA Supports Local Firms in Nigeria Amaechi Okonkwo, PH

ndorama Eleme Petrochemical, unarguably the most successful company under the privatisation programme of the federal government has continued to thrill its 350 regular customer-companies in Nigeria with quality products and services. A recent report by Raw Materials Research and Development Council (RMRDC) shows that these companies use polymer resins produced by Indorama as raw materials for their own products which range through plastics, automobiles, pharmaceuticals, breweries and bottling to foods, beverages, paints, building materials and industrial packaging. Speaking on their relationships with Indorama, some of the customers expressed delight for the coming of Indorama into the

country and the quality of their products which they say have enhanced their production and helped them to sustain their operations. Captain Kamal Keswani, Managing Director, Petrichor Plastics, Kano said Indorama has helped his company to keep over 150 employees in its workforce. “We are a very regular customer of Indorama Eleme Petrochemicals. We are based in Kano and our company, Petrichor is a leading brand in industrial packaging. We started business eight years back, with few blow moulding machines in Kano. Over the period, we grew with better services to customers and have more the 50 machines and employing more 150 persons. With Indorama supplying our raw materials, we are able to maintain our production and keep our employees.”

Keswani said “it would be fair to state that we have enjoyed very satisfactory services from Indorama Eleme; both in terms of pro-active customer relationship and quality products of consistent specifications. Other benefits we derive include reliability, consistent supply and controlled inventory to name but a few.” For Chief Innocent Chukwuma, Chairman of Innoson Technical and Industrial Company Limited, Indorama has helped to sustain his business- a 17 -year old manufacturing outfit producing all kinds of plastics products. “We also use Indorama homo-polymer to manufacture some of our vehicle components such as as fan blades, bumpers, fenders and dashboard”, he added. He said: “We have been in the business of plastic manufacturing for about 17 years. We use to

import all our raw materials but in the past seven years, we use Indorama Eleme products for both our blowing section and the injection section. We use both co-polymer and homo-polymer.” Chukwuma said of his experience with Indorama: “I am very happy that we can now source these raw materials here in Nigeria; that is why our company is patronising Indorama Eleme Petrochemicals. I am happy to support the company because it is producing our raw materials here in Nigeria and the quality is very high and of international standard. And very importantly, their products are readily available to us. I can say that Indorama Eleme Petrochemicals has helped to sustain our production. Our company, Innoson Technical and Idustrial Limited has become one of the nation’s industrial giants with more than 1000 employees.”

Business Journal April 20 - 26, 2015

Business Events www.businessjournalng.com www.businessjournal.com.ng

L-R: Managing Director, WAPCO Operations, Mrs. Adepeju Adebayo; Managing Director/CEO, Ashaka Cement Plc, Mr. Leonard Palka and Director, Human Resources and Organisation, Lafarge Africa Plc, Mrs. Fidelia Osime, during the BusinessDay Nigeria’s Top CEO Award in Lagos.

L-R: Strategic Account Manager, MTN Nigeria, Mr. Steve Nwabuani; Managing Director, MBA Microfinance Bank, Mr. Bode Ajayi; Senior Manager, Corporate Segment, MTN Nigeria, Mr. Olutayo Egunjobi; Head of IT, Chanelle MFB, Mr. Samuel Inyang and Group BDM, MFI & Channels, CWG Plc, Mr. David Olatilo, at the MTN Xaas Forum in Lagos.

L-R: Managing Director/CEO, Afriland Properties Plc, Uzoamaka Oshogwe; Chairman, Erelu Angela Adebayo and Company Secretary/Legal Adviser, Mr. Obong Idiong, at the Annual General Meeting of Afriland Properties Plc in Lagos.

L-R: FRSC Corps Marshal, Boboye Oyeyemi, receiving a branded reflective jacket from Managing Director, Trustfund Pensions, Mrs. Helen Da-Souza as part of Corporate Social Responsibility Initiative in Abuja. With them is the Executive Director, Mr. Nasir Musa.

L-R: Zonal Head, Kano-West of First City Monument Bank (FCMB) Limited, Mr. Abdullahi Mainasara; Chairman of Beirut Road Phone Dealers Association, Kano, Alhaji Bashir Aliyu; Chairman of Excel Standards Limited, Col. Abubakar Maimalari (Rtd); Chairman of Adahama Textile and Garment Industry in Kano State, Alhaji Saidu Adahama; District Head of Tokarawa in Kano, Alhaji Yakubu Mohammed, and the Uwabuofumbia 1 of Nsukka in Anambra State, Chief Mbah Chukwuma, at the launch of FCMB Personal Business Account product in Kano.

L-R: Executive Director, Corporate and Investment Banking, Stanbic IBTC, Victor Williams; Investment Officer, Africa, Netherlands Development Finance Company (FMO), Gerrit van Kampen; Chief Executive, Stanbic IBTC Bank, Yinka Sanni; and Portfolio Analyst, Financial Institutions, Africa, FMO, Sander Verhulp during the signing ceremony for a $90 million credit facility to Stanbic IBTC by FMO in Lagos.

Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi (left); Executive Vice Chairman, North-South Power Company Limited (Shiroro), Mr. Olubunmi Peters and Head of NERC Media, Mr. Michael Faloseyi, at a news conference after the monthly meeting of NERC Chief Executive Officers in Abuja

Group Chief Executive, Oando Plc, Wale Tinubu (l), welcomes the Nigerian National Petroleum Corporation (NNPC) Group Managing Director, Dr. Joseph Dawha to the Oando exhibition stand during the recently held 2015 Nigerian Oil & Gas Conference themed “The Journey Towards Transformation” at the International Conference Centre, Abuja.

Business Journal April 20 - 26, 2015

Editorial

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The 2015 General Election

he 2015 general elections are effectively over, except for few inconclusive areas like Abia, Imo and Taraba States. And expectedly, the process of post-election litigations by defeated aspirants through election tribunals. From the build-up of the polls to the casting and the result, the elections generated the usual excitement and tension expected. The results declared by the Independent National Electoral Commission (INEC) were

generally accepted by various aspirants, despite allegations of electoral fraud from certain quarters. Another positive innovation in 2015 was the conceding of defeat by aspirants and congratulatory message to the winners. It was a marked departure from the ugly scenario of the recent past when no candidate accepted defeat in good faith and resorted to mindless violence. By and large, the 2015 general elections could be described as a success story, not minding the initial chal-

lenges of obtaining Permanent Voters Cards (PVC) by prospective voters and the contentious six-week extension by INEC, acting in conjunction with security agencies over the Boko Haram insurgency. Good lessons have been learnt by all the participants in the 2015 general elections-INEC, political parties, candidates and the electorate. Going forward, INEC must prepare on time before the 2019 elections. The gross unpreparedness the electoral

body exhibited in 2015 must not be repeated in 2019. Firstly, INEC must ensure availability of PVCs long before the next elections. The period of election is not the right time to print and distribute PVCs when the electoral body has over four years to prepare for elections. Secondly, the electoral body must critically scrutinise the capacity of some of its Resident Electoral Commissioners (REC) to determine their ability to rise above monetary inducements by unscrupulous politicians and

discharge those with political interest. Indeed, every election is an opportunity to learn and improve on the electoral system. The 2015 election was not a perfect exercise. It was a notch above the experience of the past. We urge all the participants to imbibe the positive elements of the election and move the system forward in 2019. CONGRATULATIONS NIGERIA!

Cartoon

Business Journal Newspaper is published weekly by Egelon Communication Company. Suite B2, Glory Shopping Complex, 229, Ikotun-Idimu Road, Council Bus-Stop, Idimu, Lagos. Phone: 08023088874, 07058919138. Email: business.journal@yahoo.com. Publisher/Editor-in-Chief: PRINCE COOKEY.

Publisher/Editor-in-Chief Prince Cookey 08023088874 07058919138 prince.cookey@yahoo.com

Aba Bureau Larry Akunne

Lagos Bureau Abraham Adewole

Digital Consultant Bamidele Owotoke.

Abuja Bureau Solomon Nwachukwu

Design Consultant Kelechi Okoro

Kaduna Bureau Haruna Mohammed

Logistics Consultant Godspower Cookey

PH Bureau Amaechi Okonkwo

Secretary/Admin Latifat Adedayo

Head of Marketing/Advert Elvis Ebigwu

Body of Analysts Haniel Ukpaukure Chris Okeke Ola Gam-Ikon Ademola Akinbola Muideen Ibrahim Board of Editorial Advisers Dr. Justus Uranta Engr. Titi Omo-Ettu Mr. Chike Mokwunye Mr. Chris Uwaje Mr. Gbolahan Olutayo

Business Journal April 20 - 26, 2015

Shelter

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Shelter Report 2014: Step by Step: Supporting Incremental Building Through Housing Microfinance Habitat for Humanity Habitat for Humanity has just published a report on how Housing Microfinance (HMF) can be effective when used in conjunction with incremental building: ‘In our rapidly urbanising world, decent living conditions are becoming scarce, especially in developing countries. The lack of economic opportunities in rural communities is encouraging a global urban migration, but many of the world’s cities do not have the capacity to support this influx of new inhabitants. This trend, combined with unsupportive regulatory environments, the lack of adequate housing units, and the lack of access to financing for these poor populations, has led to the creation of informal settlements in and around many of the world’s growing cities. Incremental construction is the way that these informally settled populations have adapted to the constraints of their situation. By slowly saving money under mattresses or in jars, people collect building materials to gradually expand and improve their homes. These homes are usually not constructed by trained builders, and therefore they generally are not structurally sound. Building materials may be damaged, stolen or spoiled while in storage, resulting in an effective loss of savings that could be avoided through a more formalised savings system or access to financing. Housing microfinance has the ability to support these households in this incremental building process by allowing them to purchase enough labour and building

materials to complete an element of their home that will not degrade while waiting for the next phase of construction, therefore decreasing the loss of savings. The advent of microfinance enabled large scale access to finance — and consequently economic growth — in informal sectors around the world. Similarly, housing microfinance has the ability to unlock the potential of progressive informal housing practices to increase access to safer, healthier and less impoverished living conditions for the world’s poor. By applying the principles that made

‘Harness Power of Cities to Address International Development Concerns’ The UN Under-Secretary-General and UN-Habitat Executive Director, Dr. Joan Clos, has emphasised that we will need cities to address some of the most pressing issues in international development in the post-2015 agenda, such as sustainability and climate change. Clos made the comments at the plenary session, titled A World of Local Action: Anchoring sustainability in the Post2015 Development Agenda at the ICLEI (Local Governments for Sustainability) World Congress in Seoul, South Korea. “At Habitat III [the UN Conference on Housing and Urban Development in 2016], we will aim to convince national governments that they need cities to address important development issues,” said Clos. He went on to stress the importance of empowering local authorities to enhance implementation and effectively drive development. During his visit, Clos met with Mr. Park Won-Soon, the Mayor of Seoul Metropolitan Government who presented him with honorary citizenship of his city. At the ceremony, Park said that Seoul was ready to work with UN-Habitat to share its experience in transformation with other cities.

enterprise microfinance successful to housing, policymakers, impact investors, developers, material suppliers and microfinance institutions have the ability to reshape inadequate living conditions around the world. We need to encourage market solutions such as housing microfinance for high-quality incremental building. When bundled with basic housing support services, housing microfinance, including savings, credit, remittances and insurance services, can lead to scalable, replicable and sustainable solutions.

Smart Cities Will Use 1.1bn Connected Things in 2015

ncreasing global urbanisation is putting unprecedented pressure on city mayors to constantly balance the challenge of resource constraints against environmental sustainability concerns. Gartner estimates that 1.1 billion connected things will be used by Smart Cities in 2015, rising to 9.7 billion by 2020. Smart homes and smart commercial buildings will represent 45 percent of total connected things in use in 2015, due to investment and service opportunity, and Gartner estimates that this will rise to 81 percent by 2020. “Smart cities represent a great revenue opportunity for Technology and Services Providers (TSPs), but providers need to start to plan, engage and position their offerings now,” said Bettina Tratz-Ryan, Research Vice President at Gartner.

Gartner defines a Smart City as an urbanised area where multiple sectors

co-operate to achieve sustainable outcomes through the analysis of con-

textual, real-time information shared among sector-specific information and operational technology systems. “The majority of Internet of Things (IoT) spending for Smart Cities will come from the private sector. This is good news for TSPs as the private sector has shorter and more succinct procurement cycles than public sectors and cities,” said Tratz-Ryan. Residential citizens will lead the way by increasingly investing in smarthome solutions, with the number of connected things used in smart homes to surpass 1 billion units in 2017. Connected things include smart LED lighting, healthcare monitoring, smart locks and various sensors for such things as motion detection or carbon monoxide. “Homes will move from being interconnected to become informationand smart-enabled, with an integrated

services environment that not only provides value to the home, but also creates individual-driven ambience. The home will become the personal space that provides assistance or personal concierge experiences to the individual,” said Tratz-Ryan. While investment in IoT hardware is fundamental for smart cities, the real revenue opportunity for TSPs is in the services and analytics sector. “We expect that by 2020, many IoT TSPs will have grown their hardware revenues through services and software by more than 50 percent,” said Tratz-Ryan. Gartner also estimates that smart-home security and safety will represent the second-largest service market by revenue in 2017, and that by 2020, the smart healthcare and fitness market will have grown to nearly $38 billion.”

Business Journal April 20 - 26, 2015

Shelter

Shelter Afrique: Financing Affordable Housing for Africa ‘We believe that as we build houses, We build families and nations. This is our commitment to the people of Africa.’

helter Afrique is the only pan-African finance institution that exclusively supports the development of the housing and real estate sector in Africa. By meeting the needs of the continent’s rapidly growing urban population, its work has a direct and positive impact on the lives of many. A partnership of 44 African Governments, the African Development Bank (AfDB) and the Africa Reinsurance Company, Shelter Afrique builds strategic partnerships and offers a host of products and related services to support the efficient delivery of affordable housing and commercial real estate. These include project finance, institutional lending, equity investments & joint ventures, trade finance, and social housing. It also offers practical advice and technical assistance to a wide range of industry stakeholders. Core Values ‘Through our systems, way of doing business, and our culture, Shelter Afrique consistently strives to deliver superior performance and returns to shareholders and clients.’ To be able to do this, the company subscribes to the following values and principles, to ensure the delivery of high quality services to all stakeholders: Effective corporate governance, from management and the board of directors, is at the centre of all strategic actions; Strong client focus and provision of excellent services to all partners and stakeholders; Transparent and open communication with staff and partners; Confident in the ability of our people to deliver our objectives, we maintain the highest integrity and professionalism; We believe in and value teamwork a problem-solving instrument, harnessing the best each staff member can offer; Efficient administrative and risk management systems that protect the rights of our stakeholders and assets; High ethical standards that mean our transactions are transparent and uphold the best in corporate governance; Corporate social responsibility to the community, environment and vulnerable, makes us pursue innovative solutions; Total commitment to

leading player in strategic partnerships among key stakeholders for the efficient delivery of real estate and other related services in Africa. Mission Shelter Afrique continues to derive its mission from the mandate given to it by its founders to become a powerful instrument for the mobilisation of financial and technical resources deployed for funding housing development in Africa. Shelter Afrique uses its distinct presence and competitive advantage to create value-added products to enhance the development of the real estate sector. Shelter Afrique’s mission is therefore to assist both private and public sector institutions in Africa to identify, finance and implement housing and related urban infrastructure projects to achieve our goal of housing for all.

regional integration and to the ideals of Shelter Afrique as a pan-African institution Strategic Goals Shelter Afrique is a pan-African housing finance institution dedicated to providing a full suite of funding

solutions for new affordable housing projects across Africa. Over the next 5 years, we will approve financing worth over USD1billion for new housing across Africa offering unprecedented opportunities for securing capital for your project. Request for financing and partner-

ships are welcome from developers, housing corporations, mortgage providers, housing cooperatives and employers. Vision Shelter Afrique’s vision since inception has been to become the

How we achieve this: Provision and expansion of affordable and sustainable financial resources available for housing programmes; Collaborative partnerships with all stakeholders in the delivery of African housing and real estate; Adoption of management practices emphasising superior performance, teamwork and continuous improvement; Sharing of information on the best means of providing quality, affordable housing.

Business Journal April 20 - 26, 2015

Banking www.businessjournalng.com

Bitcoin: The $40bn Money Challenge for Africa’s 30m Migrant Workforce

O Tom Jackson

ver 30 million Africans live in the diaspora. They sent almost $40 billion (£26.5 billion) home in 2014, a figure that is likely to grow significantly in the coming years. While North African countries such as Morocco, Algeria and Egypt receive the most, East African countries are particularly dependent on remittances. The average per migrant is almost $1,200, representing 5% of GDP on a country-by-country average. Yet the cost of sending this money is high. The Overseas Development Institute (ODI) reports Africans in the diaspora pay an average of 12.3% to money transmitters to send $200 home, while the cost of sending money between African countries is also high. Each year, the ODI says total fees amount to $1.4 billion. Part of the reason for these high costs could be a lack of competition; Western Union and MoneyGram control 50% or more of the remittance market in most Sub-Saharan African countries. But help may be at hand from an unlikely source: digital currency, Bitcoin. Bitcoin gets a negative press in the western world, especially after the collapse of the Mt.Gox exchange and the cryptocurrency’s fluctuating value. But a number of companies are betting on Africa as the destination where it could see the biggest uptake and have the most impact. Elizabeth Rossiello, Chief Executive of Bitcoin Remittance Service, BitPesa, which allows workers overseas to send money home to Kenya and Ghana for a flat fee of 3% and says it is growing its user base by 60% monthon-month, believes the shortage of payment options in Africa make it a fertile ground in which Bitcoin can grow. “Credit cards are only available to less than 3% of the population in sub-Saharan Africa. PayPal is blocked in many countries or much more expensive in the few it is operating. Bank transfers and remittance corridors are two to three times the price as elsewhere,” she says. “So in terms of a need for a cheap, fast, functioning alternative form of payment, yes - Bitcoin does have a greater opportunity in sub-Saharan Africa.” BitPesa in Action

Timothy Stranex, Co-founder of South African Bitcoin Exchange, BitX, believes Bitcoin could be the first online payment method available to many people given the low credit card penetration, while he also expects uptake from merchants wishing to accept payments from foreign customers. “In an increasingly global world, international payments are becoming increasingly important,” he says. “Bitcoin provides a much easier way for businesses and consumers to participate in the global economy than traditional systems.” Rick Day, Co-founder of Igot, another Bitcoin Exchange recently launched in Africa, says Bitcoin is gaining popularity in Africa “slowly but surely”. Since its launch in early 2014, Igot has counted more than 200,000 transactions. “As more and more people realise the value of Bitcoin, the speed of its transaction and the low cost, they are more inclined to use it. We expect the Bitcoin industry in Africa to grow in the next six to 12 months as more entrepreneurs enter the market,” he said.

The collapse of the Mt.Gox Bitcoin Exchange left some investors wary of the crypto-currency Coining

Business Journal April 20 - 26, 2015

Banking Flexible Friend The other reason why those setting up Bitcoin businesses in Africa are hopeful the digital currency is set to go far is the fact Africans have already shown themselves willing to adopt alternative forms of moving money around. Mobile money has taken off on the continent, with figures from the Central Bank of Kenya indicating Kenyans alone transferred over $11 billion using mobile money services in the fast half of 2014. Meanwhile, Kenyan operator, Safaricom - the first operator to provide an effective platform for the technology with its M-Pesa service - estimates up to 43% of Kenya’s GDP now flows through its mobile money channels. This makes Africa the ideal place for Bitcoin to take off, according to Nikunj Handa, Chief Executive of Ghanaian Bitcoin Remittance Service, Beam, which also charges 3% for transactions. “Africans are more used to the concept of digital payments and digital cash than those in other developing continents. With the right integrations with the mobile money vendors and the mobile money software, the acquisition, liquidation and hedging of Bitcoin can be made seamless and easy for the African public to adopt,” he says. “It has also shown the role of mobile in next-generation payments. To be successful, alternative forms of

Rick Day, Igot Co-founder says he thinks Bitcoin could find supporters in the charity and NGO sector payment must truly be cheaper, faster and more convenient than existing methods,” he says. “They must also leverage mobile. Bitcoin adds to this by also removing the requirement for intermediary service providers.” Risky Business Bitcoin’s growth in Africa, as elsewhere in the world, is not without its challenges. Stranex says there is an unclear regulatory landscape and financial institutions are very risk averse when it comes to the digital currency. There are also low levels of liquidity in local Bitcoin markets, though he

feels this will change as more Bitcoin-related start-ups begin operations and more consumers start using the currency. Another concern is that the volatility of the digital currency’s price could result in a fall in the value of sums sent via Bitcoin. But the remittance companies say this risk is removed by the fact they immediately convert transfers into the currency of the recipient. Western Union and MoneyGram are the main players in the remittance field in Africa. “There is no price risk given that we settle instantly. This is our whole selling point,” says Ms Rossiello.

“Once we are sent Bitcoin, that is instantly changed into local currency and delivered locally. So the price that is shown before the transaction to the customer is the one the recipient receives.” “In Kenya, users can immediately convert from Bitcoin to the M-Pesa system, in which it is held as Kenyan shillings,” Day says. Serial Entrepreneur and SiliconCape.com Co-founder, Vinny Lingham believes the problem is not the price but rather the perception that the price is important when it is not. “Bitcoin is not a currency, it’s the world’s first openly traceable digital commodity. Any commodity can be

used as a currency, most notably gold, which fluctuates daily,” he said. “The value of Bitcoin does not lie in its use as a currency, but rather in its utility as a decentralised trusted public ledger and the applications that can be built upon it.” Technology research company, Gartner’s David Furlonger says that if Bitcoin can be a catalyst for improving remittance systems this will be a good thing for the entire economy, not just one sector. But he warns that “Bitcoins aren’t necessarily the panacea to economic development.” “Clearly, the cost of international remittance inhibits enfranchisement of a large part of emerging market populations, and digital currency developments can democratise access to the economy.” “[But] legislators need to understand the impact of unregulated movements of money and the opacity of remitter/receiver in the bitcoin ecosystem.” Furlonger points out that there are potentially “operational risks concerning data portability, money flows, payment processes, customer and business transparency that are not clearly understood in the digital era, potentially increasing threats to the overall market.” “Bitcoin is merely one protocol and one digital currency, many others exist.”

GTBank Declares Q1 2015 PBT of N32.65bn

uaranty Trust Bank plc has released its unaudited financial results for the first quarter ended March 31, 2015 to the Nigerian and London

Stock Exchanges. A review of the Q1 2015 results shows that the Bank continued on a strong growth trajectory, re-affirming its position as one of the most profitable and well managed financial institutions in Nigeria. The Bank recorded a 17% growth in Gross Earnings to N79.02 Billion, from N67.58 billion recorded in the comparative period of 2014, underpinned by strong growth in interest income and effective management of operating expenses and cost of risk.

Profit Before Tax was N32.65 billion, an increase of 17% from N28.01 billion reported in Q1 2014. The Bank reported a Q1 2015 Profit After Tax of N26.56 billion an increase of 15% over the N23.11 Billion reported in Q1 2014. The Bank closed Q1 2015 with Total Assets and Contingents of N3.15 trillion, customer deposits of N1.69 trillion and Shareholders’ Funds of N357.59 billion. The Bank’s non-performing loans improved to 3.06% from 3.40% in the comparative period of Q1 2014 whilst the loan book grew by 28% to close at N1.30 trillion in Q1 2015, from N1.02 trillion in Q1 2014. The Bank also reported a post-tax ROAE of 29.03% and ROAA of 4.39% respectively. Commenting on the financial results, Segun Agbaje, the Managing Director and Chief Executive Officer

of Guaranty Trust Bank Plc stated that “a major focus for the Bank this year is to strengthen market positions with distinctive customer propositions in chosen segments in order to deliver long-term sustainable and efficient growth as well as strong shareholder returns.” As a financial institution with a bias for industry leadership, exceptional service delivery and innovation, Guaranty Trust Bank Plc has experienced tremendous growth since its inception in Nigeria in 1990 with business outlays spanning Anglophone and Francophone countries of West Africa, East African and the United Kingdom. The Bank presently employs over 10,000 peoples in Cote d’Ivoire, Kenya, Gambia, Ghana, Liberia, Sierra Leone, Rwanda, Uganda and the United Kingdom.

Segun Agbaje Group Managing Director/CEO, GT Bank Plc

China’s International Payments System for Launch in 2015

he China International Payment System CIPS to be launched in September or October 2015, depending on the result of on-going testing procedures. “The CIPS is ready now and China has selected 20 banks to do the testing, among which 13 banks are Chinese

banks and the rest are subsidiaries of foreign banks,” said a senior banking source who is involved in the matter. “If it’s all smooth, (the launch) will be in September or October. If there is a need for a bit more time, we are still confident about (rolling it out) before the year-end,” said the source.

The system was expected to be launched in 2014 but was delayed by technical problems, with most market participants anticipating it would not come on stream before 2016. China’s yuan became one of the world’s top five payment currencies in November 2014, overtaking the Cana-

dian dollar and the Australian dollar, according to global transaction services organisation SWIFT. Global yuan payments increased by 20.3 percent in value in December compared to a year earlier, while the growth for payments across all currencies was 14.9 percent for the same pe-

riod, SWIFT said. China has accelerated the pace of yuan internationalisation in recent years. The central bank assigned 10 official yuan clearing banks last year, bringing the total number to 14 globally that can clear yuan transactions with China.

Business Journal April 20 - 26, 2015

Insurance Pension www.businessjournalng.com

Africa: Open for the Business of Insurance Presented by Corneille KAREKEZI, Group MD / CEO, Africa Re

NAICO Rebrands, Changes Name to NAIPCO

ike the saying goes, change is the only constant thing in life. Just like individuals, organisations also from time to time adopt new initiatives and processes to meet their goals and aspirations. In this light, the National Association of Insurance Correspondents (NAICO) has rebranded and has adopted a new name to reflect current realities and status. Thus, NAICO will now be known as the National Association of Insurance & Pension Correspondents (NAIPCO).

â&#x20AC;&#x2DC;The name change became necessary to accommodate our expanding responsibility, which requires that we cover Insurance and Pension Sectors, hence the need to accommodate the pension industry in our name and acronym.â&#x20AC;&#x2122; NAIPCO remain resolute and committed to contributing to the deepening of the insurance and pension industries in Nigeria. NAIPCO is made up of insurance and pension correspondents of media houses in Nigeria.

Business Journal April 20 - 26, 2015

Insurance Pension

NEM Insurance Delivers Head Office, Targets Strategic Growth

EM Insurance Plc has successfully delivered on its Head Office promise and is targeting strategic growth in the insurance industry in Nigeria. Mr. Fola Daniel, Commissioner for Insurance, National Insurance Commission (NAICOM), described the NEM House as a symbol of growth, rejuvenation and key to future accomplishment by the company. “This new Head Office is a value addition to the quest to better position NEM Insurance in the market and herald a new era of improvement on services rendered by the company, not only for its future growth, but more importantly, for the growth and development of the Nigerian insurance sector” the NAICOM chief said at the commissioning. Chief Adewale Teluwo, Chairman of NEM Insurance, said the company has continued to record impressive performance over the years. He noted that the gross premium income which was N853 million in 2006’ rose to N8.9 billion in 2013 while profit before tax which stood at a meagre N13.6 million in 2006

went up to N544 million in 2013. “In line with our commitment to put smiles on the faces of our numerous clients, total amount paid out as claims which was N192 million in 2006 increased to N3.1billion by the end of 2013.” Mr. Tope Smart, Managing Director of the company said the management sees the building not just as NEM building, but rather a way of building the minds of the public and which will ultimately lead to a better image for the industry. “No economy can thrive without the active support of insurance. Since this is the only profession we know, we must therefore do all we can to promote the image of our industry.” He beat his chest that the company put up the building without any loan of whatever nature. “We did it with our own resources, and of course this was achieved as a result of determination, financial discipline, sacrifices and denials. As we move on to the next phase of our growth agenda, we intend to collaborate with other stakeholders in order to deepen market penetration in the overall interest of the industry.”

Munich Re Posts Profit of €3.2bn for 2014

ith a consolidated result of €3.2bn in 2014, Munich Re was able to roughly maintain the high level of €3.3bn from the previous year. According to provisional calculations, in the fourth quarter 2014, it posted a profit of €0.7bn (previous year: €1.2bn). Shareholders are to participate in last year’s success through a higher dividend: subject to approval by the Supervisory Board and the Annual General Meeting, the dividend will rise to €7.75 (7.25) per share. CFO, J rg Schneider summed up the preliminary figures: “With this good result, we have once again demonstrated our robust earnings strength. It is especially pleasing that all business fields have contributed to this success again in the past year.” Schneider said: “With an increased dividend of €7.75 per share, our shareholders are receiving an attractive and also reliable return on their investment in Munich Re in comparison with

other German and international companies, and this despite strong growth in the share price in recent months.” Munich Re is also continuing its long-standing commitment to buy back shares. As part of the announced share buy-back programme running since the AGM in April 2014, Munich Re has acquired shares amounting to around €800m to date; by the next Annual General Meeting on 23 April 2015, the total value should be €1bn. In 2014, as in the previous year, the Group was exposed to very different and sometimes contrary effects. The performance of derivative financial instruments, negative currency effects and goodwill impairments owing to a re-segmentation in the ERGO field of business all had an adverse impact overall. In contrast, there was tax income derived from a re-calculation of taxes for prior years. Overall, the impact of major losses was randomly lower than expected; in property-casualty reinsurance, Munich Re was also able to release loss reserves for prior accident years.

NEM House

Global Insurers To Increase IT Spend to $100bn in 2015

DC Financial Insights reveals that global insurers will increase IT spending to almost US$101 billion in 2015, a Year-on-Year (YoY) increase of 4.4% compared to 2014, with rigorous investments in technologies to boost efficiencies and innovation. Li-May Chew, CFA, Associate Research Director, and Global Lead for IDC Financial Insights’ Worldwide Insurance Advisory Service, sees investments centering around new core applications development and management such as data warehousing, claims and policy administration systems. These replacements or refreshes are required as legacy IT systems become increasingly complex, inflexible, and archaic, to the point of negatively affecting technology integration and interoperability. Insurers are further spending on change transformation and business optimization initiatives to augment productivity and support intermediaries, as well as in knowledge management, business analytics and customer relationship management applications to

improve underwriting insights, raise customer centricity and intimacy. Also critical is the need to enhance not just the intermediated distribution channels comprised of insurance agents, brokers and bancassurance, but also newer, disintermediated digital portals of the Internet, social platforms and mobile delivery. “Global insurers need to know where and how to seek pockets of growth amidst economic uncertainty. In order to regroup and focus on sustainable, profitable growth, organizations will have to confront multiple perils – ranging from reengineering or rebuilding legacy applications, to countering mounting insurance fraud – and still ensure they are well positioned to embrace growth prospects as these present themselves.” “We expect the global insurance industry to invest more rigorously in technologies, and project global IT investments rising to almost US$101 billion this year as these support campaigns to boost efficiencies and innovation. Geo-

graphically, the emerging markets continue to shine. While cumulated spending for these nations may still be a comparatively smaller US$19 billion, this will rise at a 3-year CAGR of 6.7% between 2015 to 2018, which is double that of mature nations,” says Chew. She expects the 3-year CAGR in mature nations to be 3.1% and globally to be 3.8%. Herein, IDC Financial Insights sees especially noteworthy IT developments within the insurance sectors of the Big Five BRICS economies (of Brazil, Russia, India, China, and South Africa); Chile, Colombia, Mexico, and Argentina in LATAM; and the Southeast Asian countries such as Thailand, Indonesia, Malaysia, and the Philippines. Chew added that insurers are cognizant that strategic execution needs to be technology-enabled and are hence proactively embracing technology-driven innovation. She is thus confident that their budgets for such deployments will continue to rise alongside, and oftentimes, quicker than annual premiums growth.

Business Journal April 20 - 26, 2015

Energy

www.businessjournalng.com

The IMF Perspective:

7 Questions on Oil Price Slump Rabah Arezki and Olivier Blanchard

il prices have plunged recently, affecting everyone: producers, exporters, governments, and consumers. Overall, we see this as a shot in the arm for the global economy. Bearing in mind that our simulations do not represent a forecast of the state of the global economy, we find a gain for world GDP between 0.3 and 0.7 percent in 2015, compared to a scenario without the drop in oil prices.

What follows is our attempt to answer seven key questions about the oil price decline: • What are the respective roles of demand and supply factors? Oil prices have fallen by nearly 50 percent since June, 40 percent since September (see Chart 1).[2] Metal prices, which typically react to global activity even more than oil prices, have also decreased but substantially less so than oil (see Chart 2). This casual observation suggests that factors specific to the oil market, especially supply ones could have played an important role in explaining the drop in oil prices. A closer look reinforces this conclusion. Revisions between June and December of International Energy Agency forecasts of demand combined with estimates of the short run

elasticity of oil supply, suggest that unexpected lower demand between then and now can account for only 20 to 35 percent of the price decline. On the supply side, the evidence points to a number of factors, including surprise increases in oil production. This is in part due to faster than expected recovery of Libyan oil production in September and unaffected Iraq production, despite unrest. A major factor, however, is surely the publicly announced intention of Saudi Arabia—the biggest oil producer within OPEC—not to counter the steadily increasing supply of oil from both other OPEC and non-OPEC producers, and the subsequent November decision by OPEC to maintain their collective production ceiling of 30 million barrels a day in spite of a perceived glut. The steady increase in global oil production could be seen as “the dog that didn’t bark.” In other words, oil prices had stayed relatively high

in spite of the upward trajectory in global oil production due to the perception at the time of OPEC’s induced floor price. The resulting shift by the swing producer however helped trigger a fundamental change in expectations about the future path of global oil supply, in turn explaining both the timing and magnitude of the fall in

oil prices, bringing the latter closer to the level of a competitive market equilibrium. A similarly dramatic drop took place in 1986, when Saudi Arabia voluntarily stopped being the swing producer, causing oil prices to fall from $27 to $14 per barrel, only to recover fifteen years later, in 2000. Beyond traditional demand and supply factors, some have pointed to “financialisation”—oil and other commodities considered by financial investors as a distinct asset class—and “speculation” as contributors to the price decline. We see little evidence that this is the case. According to the latest report from the International Energy Agency, oil inventories have reached their highest level in two

in particular Saudi Arabia, will be willing to cut production in the future. This in turn depends in part on the motives behind its change in strategy, and the relative importance of geopolitical and economic factors in that decision. One hypothesis is that Saudi Arabia has found it too costly, in the face of steady increases in non-OPEC supply, to be the swing producer and maintain a high price. If so, and unless the pain of lower revenues leads other OPEC producers and Russia to agree to share cuts more widely in the future, the shift in strategy is unlikely to change soon. Available projections from the same source indicate that capital expenditures will fall markedly through-

years, suggesting expectations of price increases, not price declines.

out 2017. For unconventional oil, such as shale, (which now accounts for 4 million out of a world supply of 93 million barrels a day), the breakeven prices—the oil price at which it becomes worthwhile to extract—of the main United States shale fields (Bakken, Eagle Ford and Permian) are

• How persistent is this supply shift likely to be? This depends primarily on two factors: The first is whether OPEC, and

Business Journal April 20 - 26, 2015

Energy the effect of a permanent (supply driven) decrease in the price of oil by 10 percent leads to an increase in U.S. output by about 0.2 percent. Given a supply component of the price decline of about 25% (60% of a total decline of 40%), these estimates would therefore imply an increase in output of about 0.5%.

typically below $60 per barrel (see Chart 5 which gives break-even prices

for the United States shale fields). At current prices (around $55 per barrel), Rystad Energy’s projections suggest that the level of oil production could decline but only moderately by about less than 4 percent in 2015. Rates of return will be significantly lower, however, and some highly leveraged firms that did

not hedge against lower prices are already under financial stress and have been cutting their capital expenditure and laying off significantly. On the demand side, uncertainty about global economic activity and thus the derived demand for oil remains high- the 68% confidence band for the price in 2019 ranges from $48 to $85, the 95 percent band from $38 to $115; a very wide range indeed. What are the effects likely to be on the global economy? Overall, lower oil prices due to supply shifts are good news for the global economy, obviously with major distribution effects between oil importers and oil exporters. The crucial assumptions in quantifying the effects of those supply shifts are how large and persistent we expect them to be. The first assumes that the supply shift accounts for 60 percent of the price decline reflected in futures markets. The second also assumes that the supply shift accounts for 60 percent of the price decline at the start but that the shift is partly undone over time for the reasons described above, with its contribution to the price decline going gradually to zero in 2019. The results of the simulations shown below capture only the effects of the supply component of the oil price decline (the demand driven component of the oil price decline is a symptom of slowing global economic activity rather than a cause). The oil price projection used in the simulations is based on the IMF’s price forecast, which is itself based on futures contracts. The first simulation implies an increase in global output of 0.7 percent in 2015 and 0.8 percent in 2016 relative to the baseline (the situation without the oil price drop. Not surprisingly, in the second scenario, the effect on output is smaller, of the order of 0.3 percent in 2015 and 0.4 percent in 2016. Estimates from Blanchard and Gali (2009) for example find that

• What are likely to be the effects on oil importers? There are three main channels through which a decrease in the price of oil affects oil importers. The first is the effect of the increase in real income on consumption. The second is the decrease in the cost of production of final goods, and in turn on profit and investment. The third is the effect on the rate of inflation, both headline and core. The strength of these effects varies across countries: For example, the real income effect is smaller for the United States, which now produces over half of the oil it consumes, than for the euro zone or for Japan. The real income and profit effects also depend on the energy intensity of the country: China and India remain substantially more energy intensive than advanced economies, and thus benefit more from lower energy prices. The share of oil consumption in GDP is on average 3.8 percent for the United States, compared to 5.4 percent for China and 7.5 percent for India and Indonesia. The effect on core inflation depends both on the direct effect of lower oil prices on headline inflation, and on the pass-through of oil prices to wages and other prices. The strength of the passthrough depends on real wage rigidities—the way nominal wages respond to CPI inflation—and the anchoring of inflation expectations. Our simulations reflect, to the best possible extent, these differences in energy intensity, in the proportion of oil produced at home, and in monetary policy constraints. We assume that inflation expectations are similarly anchored in the United States, the euro zone, and Japan, leading to a pass through of about 0.2, so a decrease in core inflation of 0.2 percentage points when headline inflation decreases by 1 percentage point. For example, low-income importers in the Caribbean that benefit from transfers under Venezuela’s Petrocaribe regime could face a marked reduction in transfers as Venezuela itself comes under pressure. Caucasus and central Asia oil importers are likely to experience adverse spillovers from slowing growth in their oil exporting neighbors, particularly Russia, which will reduce non-oil exports and remittances. Mashreq countries and Pakistan might also be adversely affected through a decline in non-oil exports, official transfers and remittances from the member countries of the Gulf Cooperation Council, especially over the medium -term. • What are likely to be the effects on oil exporters? The effect is, not surprisingly, negative for oil exporters. Here again, however, there are substantial differences across countries. In all countries, real income goes down, and so do profits in oil production; these are the mirror images of what happens in oil importers. But the degree to which they do, and the effect of the decline in the price of oil on GDP depends very much on their degree of dependence on oil exports, and on what proportion of revenues goes to the state.

13 Oil exports are much more concentrated across countries than oil imports. Put another way, oil exporters depend much more on oil than oil importers. To take some examples, energy accounts for 25 percent of Russia’s GDP, 70 percent of its exports, and 50 percent of federal revenues. In the Middle East, the share of oil in federal government revenue is 22.5 percent of GDP and 63.6 percent of exports for the Gulf Cooperation Council countries. In Africa, oil exports accounts for 40-50 percent of GDP for Gabon, Angola and the Republic of Congo, and 80 percent of GDP for Equatorial Guinea. Oil also accounts for 75 percent of government revenues in Angola, Republic of Congo and Equatorial Guinea. In Latin America, oil contributes respectively about 30 percent and 46.6 percent to public sector revenues, and about 55 percent and 94 percent of exports for Ecuador and Venezuela. This shows the dimension of the challenge facing these countries. In most countries, a mechanical effect of the oil price decline is likely to be a fiscal deficit. One way to illustrate the vulnerabilities of oil-exporting countries is to compute the so-called fiscal break-even prices—that is, the oil prices at which the governments of oil-exporting countries balance their budgets. The breakeven prices vary considerably across countries, but they are often very high. For Middle Eastern and Central Asian countries, the break-even prices range from $54 per barrel for Kuwait to $184 for Libya with a notable $106 for Saudi Arabia. For countries for which we do not have available data on break-even prices, budgetary oil prices (that is, the oil prices that countries assume in preparing their budget) are another way to gauge countries’ vulnerability to falling oil prices. For Africa, those budgetary oil prices have been revised down in 2015 in light of the falling prices (See Chart 10). For Latin America, the budgetary oil prices are $79.7 for Ecuador and $60 for Venezuela. Some countries are better equipped than in previous episodes to manage the adjustment. A few have put in place policy cushions such as fiscal rules and saving funds and have more credible monetary framework, which have helped decouple internal from external balances, such as Norway. But, in many, the adjustment will imply fiscal tightening, lower output, and a depreciation (harder to achieve under the fixed exchange rate regimes that characterise many oil exporters). And where expectations of inflation are not well anchored, the depreciation may lead to higher inflation. • What are the financial implications? Declines in oil prices have financial implications, directly through the effects of oil prices themselves, and indirectly through the induced adjustment of exchange rates. Lower oil prices weaken the financial position of firms in the energy sector, especially those that have borrowed in dollars, and by implication weaken the position of banks and other institutions with substantial claims on the energy sector. The proportion of energy firms with an interest coverage ratio (the ratio of cash flows to interest payments) below 2 stands at 31 percent in emerging countries, indicating that some of these companies may indeed be at risk.

Lower oil prices also typically lead to an appreciation of oil importers’ currencies, in particular the dollar, and to a depreciation of oil exporters’ currencies. The drop in oil price has contributed to an abrupt depreciation of currencies in a number of oil exporting countries including Russia and Nigeria. If sustained, the oil price slump will thus have a concentrated and material impact on those bondholders and banks with high dollar and energy sector exposures. However, the global banking system’s exposure is likely not to be large enough to cause more than a moderate increase in provisioning requirements and should be partially offset by improving credit quality in oil importing countries and sectors. • What should be the policy response of oil importers and exporters? Clearly, the appropriate policy response to falling oil prices will depend on whether the country is an oil importer or exporter. The exception is the shared opportunity provided by low oil prices to reform energy subsidies and energy taxes. The IMF has long advocated that governments use the saving from the removal of energy subsidies toward more targeted transfers.[10] Low prices provide a great opportunity to remove subsidies at less political cost. Now let’s turn to oil importing countries. In normal times, for a country in good macroeconomic health — say, no output gap, inflation is at target and current account is balanced— the advice is well honed, learned from past movements in oil prices: monetary policy should make sure that, in the face of lower headline inflation, inflation expectations remain anchored, and try to maintain stable core inflation. Whether this implies an increase or a decrease in the interest rate is ambiguous. On the one hand, higher demand calls for higher interest rates; on the other hand, keeping core inflation from declining, may call for lowering interest rates. In general, whatever the interest rate does, the improvement in the current account balance is likely to generate an exchange rate appreciation. This appreciation is natural, and desirable. One might think that the appropriate policy response for oil exporters is the same as that of oil importers, but sign reversed. Importers differ however from exporters in two important ways: first, the size of the shock faced by oil exporters as a proportion of their economy is much larger than for oil importers. Second, the contribution of oil revenues to fiscal revenues is typically much higher. Thus, in all countries, lower fiscal revenues, and the risk that prices remain low for some time, imply the need for some decrease in government spending. In countries that have accumulated substantial funds from past higher prices, allowing for larger fiscal deficits and drawing on those funds for some time is appropriate. This is even more so for exporters with fixed exchange rates, and where the real depreciation needed for adjustment may take some time to achieve. For countries without such fiscal space, and where room to increase the fiscal deficit is limited, the adjustment will be tougher. Those countries need a larger real depreciation. And they need a strong monetary framework to avoid that depreciation leads to persistently higher inflation and further depreciation. This will indeed be a challenge for a few oil exporters.

Business Journal April 20 - 26, 2015

Manufacturing www.businessjournalng.com

The Cement War

CEMENT - AFRICA PLANTS Senegal 1.5 million MTpa Zambia 1.5 million MTpa (Green-field projects) Tanzania 1.5 million MTpa South Africa 2.2 millon MTpa Congo (Brazzaville) 1.5 million MTpa Ethiopia 1.5 million MTpa Cameroun (Grinding) 1.5 million MTpa TERMINALS Ghana 3.0 million MTpa Sierra Leone 0.5 million MTpa Ivory Coast 1.0 million MTpa Liberia 0.5 million MTpa

he global supremacy for cement production is growing per second across many nations. Today, nations have come to realise the key importance of attaining domestic cement sufficiency for national development and export. In Nigeria, the Dangote Group is leading the nation’s dream for cement sufficiency and expansion in Africa. The Cement war is presented in infographics for greater appreciation. Cement Factsheet: Russia, CEE and CIS In this abridged extract from a 2014 EY report, Denis Borodenok and Evgeni Khrustalev provides an overview of the cement industry in Russia, Belarus and Kazakhstan. recent modernisation projects to increase alternative fuels storage and handling capacity at Cement Hranice in the Czech Republic. Cement Factsheet: Turkey World Cement’s December 2014 issue featured a regional report on the Turkish cement industry. This includes a handy factsheet (below), an article on energy management within the Turkish cement sector by Mahmut Selekoglu, as well as a case study by Kipas Cement and SpectraFlow Analytics Limited on the installation of online analysers for improved raw mill control. DANGOTE CEMENT Manufacturing/ Importation, Packaging & Distribution Dangote Cement is a fully integrated cement company and has projects and operations in Nigeria and 14 other African countries; Dangote Cement’s current total production capacity in Nigeria from its three existing cement plants namely Obajana (10.25MMTPA), Ibese (6.0MMTPA) and Gboko (4.0MMTPA) is 20.25MMTPA. The Obajana Cement Plant (OCP) located in Kogi State is reputed to be one of the single largest cement plants in the world with a combined capacity of 10.25MMTPA. A fourth line which will add 3.0MMTPA to the existing capacity will bring the total capacity of Obajana to 13.25MMTPA by 2015. Dangote Cement is also the biggest quoted company in West Africa and the only Nigerian company on the Forbes Global 2000 Companies. CEMENT - NIGERIA PLANTS: Obajana Cement Plc, Kogi Benue Cement Company, Benue Dangote Cement Works Ltd, Ibese Combined Capacity : 20 million Mtpa TERMINALS: Lagos Cement Terminal

Port Harcourt Cement Terminal Onne cement terminal Aliko Inland cement terminal Continental Cement terminal Combined Capacity: 9 million Mtpa

CEMENT FOCUS - OBAJANA Single largest cement plant in Africa with a capacity of 5.2 million MTpa (additional capacity of over 5 million MTpa planned) Vertical roller mills for energy, efficient grinding of raw material and clinker. Gas pipeline of approx. 90 km length for the supply of natural gas to cement plant and power plant from Ajaokuta to Obajana (capacity -96,000 cu.m /hr.) Power plant of capacity 135 mw gas / diesel based

Business Journal April 20 - 26, 2015

Manufacturing Chinese Manufacturing: To Play on Innovation, Lean Strategy in 2015

014 was tough for Chinese manufacturing companies, with labor shortages, increasing costs, excessive capacity and the slacking global economy holding back growth in all sectors. Global competition is gradually cracking down the “World Factory” position of China. Low-cost manufacturing is shifting from China to other low-cost countries, while high-end manufacturing is returning to developed countries, further hindering the development of Chinese manufacturing industry. Under this pressure, transformation has become the top priority of companies in manufacturing industry. Through product innovation, lean manufacturing, flexible production and supply chain integration based are the key trends for China manufacturing industry in 2014. Yves Wang, Senior Research Manager of IDC China, believes that Chinese manufacturing industry will be under heavy downward pressure in 2015. The sector is in the agonies of restructuring, and more difficulties will arise from company operations. In the state of “New Normal”, innovation will remain the driving force for growth. Transformation and upgrades are urgently needed, as companies move toward miniaturized, intelligent and specialized manufacturing. With the innovation accelerators such as the Internet of Things (IoT), robots and 3D printing, the 3rd-Platform technologies will be adopted in a shorter time. The “Convergence of Informatisation and Industrialisation” describes these

Wanted: 600 Million Jobs! • Economic and Social Council 2015 Integration Summit The third and final day of the 2015 ECOSOC Integration Segment closed with a high-level panel on the challenge of creating 600 million jobs over the next decade while also promoting environmental sustainability. The day also included discussions on matching education and skills to market demands, and on financing for development and partnerships for Decent Work. Finding the Opportunities: Matching Education and Skills to Market Demands The third and final day of the ECOSOC 2015 Integration Segment started with a panel focused on the various different means of building innovation and competitiveness. It explored why youth unemployment remains a major problem for all countries and how new technologies have affected education, skills and training.

trends for Chinese manufacturing industry. Within this context, IDC predicts the following for Chinese manufacturing industry in 2015: • Internet will speed up its penetration into the manufacturing industry, and Internet-enabled products will boost into an explosion in 2015 • Industrial robots replacing humans will be accelerated in 2015 • Cloud computing will safeguard the management of enterprise

supply chain • Industry 4.0 will set up the model for traditional manufacturers to build intelligent factories • The development of Internet technology will redefine the job of the Chief Information Officer • Integration of digital world and real world will continue, posing severe test on the information security of manufacturing companies • Product Lifecycle Management (PLM) will bring forth inno-

vations for Chinese manufacturing companies • Chinese manufacturing companies will expedite its steps in overseas market exploration • Servitisation of manufacturing industry will become the main trend of manufacturing companies’ transformation and upgrading • Miniaturisation and specialisation will be the new features of manufacturing companies’ development

Means of Implementation: Financing for Development and Partnerships for Decent Work The second session addressed the relationship between fiscal policy, ODA and national development strategies. Participants sought to explain which investments could generate the greatest jobs potential and how to leverage revenue from natural resources to deliver the development impacts most effectively. Wanted: 600 Million Jobs! The third and final panel brought together policy makers to discuss how the challenge of creating 600 million decent jobs in the next decade can be achieved while also promoting environmental sustainability.

Unilever Among Top 3 Employers in Nigeria

he ‘Great Place to Work’ ranking forms the world’s largest and most respected study of workplace excellence and people management practices. Unilever Nigeria has been awarded second best place to work in Nigeria under the ‘large corporates’ category of the Great Place to Work top employer rankings. This award comes on the heels of Unilever Nigeria’s emergence as overall number one employer in Nigeria on the 2014 Universum Employer Brand Rankings. The company now set its sights on a clean sweep in 2016. Commenting on the award, Unilever Nigeria’s Human Resources Director, Mrs. Tolulope Agiri said: “We are honoured to be named as the second best place to work in Nigeria. The recognition reflects Unilever’s commitment to

creating an outstanding professional and personal work experience for all employees. This achievement inspires us to raise the bar even higher to clinch the No. 1 spot next year”. Unilever’s emergence as one of the best companies to work for in Nigeria comes as no surprise. The company actively drives initiatives that promote diversity and inclusion, as well as enhance employee skills and capabilities. Furthermore, Unilever boasts unique initiatives like its ‘flexi working’ scheme which enables employees to balance work and life. Unilever has also been a leading light in the corporate sustainability movement. Inspired by the company’s purpose (To make Sustainable Living Commonplace’), Unilever has delivered impactful initiatives that have helped numerous Nigerians improve the qual-

ity of their lives. By making sustainability a strategy and operating model, Unilever offers its employees a unique opportunity to be part of the company’s initiatives that promote sustainability and create a brighter future for generations unborn. The Great Place to Work Institute’s ‘Great Place to Work’ ranking forms the world’s largest and most respected study of workplace excellence and people management practices. The ranking rates organisations based on employees’ responses to a survey which measures the level of trust in their organisation. Great Place to Work also conducts a culture audit which evaluates people management practices and workplace culture in assessed organisations.

Business Journal April 20 - 26, 2015

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Business Journal April 20 - 26, 2015

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IATA Report: 3.3bn Passengers, 641 Deaths in 2014

he 2014 global jet accident rate (measured in hull losses per 1 million flights) was 0.23, which was the lowest rate in history and the equivalent of one accident for every 4.4 million flights. This was an improvement over 2013 when the global hull loss rate stood at 0.41 (an average of one accident every 2.4 million flights) and also an improvement over the five-year rate (2009-2013) of 0.58 hull loss accidents per million flights jet. There were 12 fatal accidents involving all aircraft types in 2014 with 641 fatalities, compared with an average of 19 fatal accidents and 517 fatalities per year in the five-year period (2009-2013). “Any accident is one too many and safety is always aviation’s top priority. While aviation safety was in the headlines in 2014, the data show that flying continues to improve its safety performance,” said Tony Tyler, IATA’s Director General and CEO. MH 370 and MH 17 The year 2014 will be remembered for two extraordinary and tragic events—MH 370 and MH 17. Although the reasons for the disappearance and loss of MH 370 are unknown, it is classified as a fatal accident—one of 12 in 2014. The aviation industry has welcomed the proposal by the International Civil Aviation Organisation (ICAO) to move towards the adoption of a performance-based standard for global tracking of commercial aircraft, supported by multi-national operational assessments to evaluate impact and guide implementation. The destruction of MH 17 by anti-aircraft weaponry, however, is not included as an accident under globally-recognised accident classification criteria. The four aircraft involved in the events of 9.11 were treated in the same way. “The shooting down of MH 17 took with it 298 lives in an act of aggression that is by any measure unacceptable. Governments and industry have come together to find ways to reduce the risk of over-flying conflict zones. This includes better sharing of critical information about security risks to civil aviation. And we are calling on governments to find an international mechanism to regulate the design, manufacture and deployment of weapons with anti-aircraft capabilities,” said Tyler. “To the flying public, an air tragedy is an air tragedy, regardless of how it is classified. In 2014, we saw a reduction in the number of fatal accidents—and that would be true even if we were to include MH 17 in the total. The greatest tribute that we

can pay to those who lost their lives in aviation-related tragedies is to continue our dedication to make flying ever safer. And that is exactly what we are doing,” said Tyler. 2014 Safety by Numbers: • More than 3.3 billion people flew safely on 38.0 million flights (30.6 million by jet, 7.4 million by turboprop) • 73 accidents (all aircraft types), down from 81 in 2013 and the five-year average of 86 per year • 12 fatal accidents (all aircraft types) versus 16 in 2013 and the fiveyear average of 19 • 16% of all accidents were fatal, below the five-year average of 22% • 7 hull loss accidents involving jets compared to 12 in 2013 and the five-year average of 16 • Three fatal hull loss accidents involving jets, down from six in 2013, and the five-year average of eight • 17 hull loss accidents involving turboprops of which nine were fatal • 641 fatalities compared to 210 fatalities in 2013 and the five-year average of 517 Africa had the worst performance (14.13 hull losses per million flights) in 2014 for turboprop hull losses, which exceeded the region’s five-year rate of 9.62. There are relatively few

turboprop operations in North Asia so the single turboprop hull loss experienced in the region in 2014 caused the turboprop hull loss rate to rise to 11.28 compared to the five-year rate of. 2.41. North America also saw a deterioration in 2014 compared to the preceding five years (1.19 vs. 1.02) Safety Improvements in Sub-Saharan Africa Sub-Saharan airlines had zero jet hull loss accidents in 2014. “Safety continues to be a challenge for Africa. The fact that the region experienced no jet hull loss accidents last year is real progress, in line with the objectives of the Abuja Declaration. However, the poor performance on turboprops demonstrates that significant challenges remain. Governments in the region need to accelerate implementation of ICAO’s safety-related Standards and Recommended Practices (SARPS), according to the Universal Safety Oversight Audit Program (USOAP). As of the end of 2014, only 14 African states had achieved 60% implementation of the SARPS. Making IOSA a part of the certification process certainly will help,” said Tyler. The 27 Sub-Saharan airlines on the IOSA registry are performing more than 10 times better than non-IOSA operators in terms of all accidents (1.95 per million flights versus 19.62).

AIRLINES FINANCIAL MONITOR (February-March 2015) KEY POINTS: • Worldwide airline share prices rose 2% in March but the trend has been broadly flat in Q1, consistent with the rally in crude oil prices during the same period; • After falling more than 50% by the end of 2014, crude oil prices have rebounded to $60/bbl; • Q4 financial results show continued gains in the US and a positive turn-around in Asia Pacific; • Passenger yields in the US are starting to weaken and fares in other regions fell further, reflecting downward pressure from earlier declines in fuel related costs; • Air transport volumes continued to expand at 5-6% trend, as FTKs surged from a temporary boost to demand; • Growth in seats rebounded in February, but remains below expansion in volumes; • Air freight load factors continued sideways trend in February as passenger loads start to improve, particularly on international markets.

Gurara Waterfalls

Business Journal April 20 - 26, 2015

19 Zenith Bank Plc: 24 Years of Service Excellence Overview

2003]; member, Tsunami Disaster Relief Committee and coordinator Nigerians United To Save Niger Republic [NUSAN]. He is the founder and Chairman of Mankind United to Support Total Education (MUSTE), a philanthropic organisation focused on providing scholarship for the less privileged, of which some of the beneficiaries are now qualified Medical Doctors, Lawyers, Engineers and many others. Jim Ovia is also the founder of the ICT Foundation for Youth Empowerment, which focuses on improving the socio-economic welfare of Nigerian Youths by inspiring and motivating them to embrace Information and Communication Technology. The initiative holds annual Youth Empowerment conferences.

Zenith Bank just released its 2014 FY result, and is performance was in line with market watchers’ expectations of excellence. There was an increased ability to generate revenue, and the momentum was sustained to the bottom line. The bank had a profit of N99.5 billion, the highest profit recorded so far in the banking industry for the 2014 financial year. Assets hit a record high of N3.76 trillion, and equity also hit N553 billion.

The Zenith Edge

Zenith Bank, as a brand, combines hardwork, due diligence and a genuine interest in the financial well being of its stakeholders. A consistent dividend payer, and a brand that employs the very best of the job market, the bank is driven by a culture of excellence and strict adherence to global best practices. The bank combines vision, skillful banking expertise, and cutting-edge technology to create products and services that anticipate and meet customers’ expectations. This enables businesses to thrive and grows wealth for customers. Humble Beginnings After 10 years performing various duties as a financial manager and executive at a wide range of institutions, Jim Ovia co-founded Zenith Bank Limited in 1990. Employing a variety of proven organic growth strategies for his organisation, Zenith Bank was built from the ground up, gaining widespread recognition from colleagues and competitors alike. In July 2004, the bank’s management orchestrated the initial public offering of Zenith Bank Plc on the Nigerian Stock Exchange. The same year, Zenith Bank Plc earned a strong, long-term credit score of AA- from Fitch Ratings, and set the stage for exponential growth of the company. Zenith Bank Today Zenith Bank currently has a shareholder base in excess of one million and is one of Nigeria’s biggest banks by tier1 capital. In 2013, the Bank listed $850 million worth of its shares at $6.80 each on the London Stock Exchange (LSE). It is headquartered in Lagos, Nigeria, and has over 500 branches and business offices in prime commercial centres in all states of the federation and the Federal Capital Territory (FCT). Zenith Bank Plc blazed the trail in digital banking in Nigeria; scoring several firsts in the deployment of Information and Communications Technology (ICT) infrastructure to create innovative products that meet the needs of its teeming customers. The bank is verifiably a leader in the deployment of various channels of banking technology, and the Zenith Brand has become synonymous with the deployment of state-of-the-art technologies in banking. Excellent Financial Performance For its most recent FY, the bank performed most impressively. Capital adequacy for the year was 20.0 per cent, and this was well above the 15 per cent minimum mandated by the Central Bank of Nigeria (CBN). For the year, the proportion of the bank’s loan that is classified reduced further to 1.8 per cent from an already low 2.9 per cent in the prior year. This is a testament of the bank’s superior recovery strategy for loans. Despite this, it was careful to make provisions for loan coverage up to 93.7

• Entrepreneurship incubation for the youths through sustained funding of institutions responsible for entrepreneurial development. • Development of the real sectors of the economy through provision of funds to industry players at competitive costs.

Jim Ovia

Peter Amangbo

per cent. These combined strategies make the bank almost invulnerable to the possibility of financial erosion of classified loans gone totally bad. Return on assets for the period under review was 3.2 per cent while return on equity was 17.9 per cent. Both were fiercely competitive in the banking industry. Net interest margin, the true test of a bank’s efficiency in its core banking operations of borrowing and lending was a commendable 65.8 per cent. And profit margin, which examines a company’s ability to squeeze as much profit as is possible from turnover was a laudable 29.8 per cent. Analysis shows that of every N100 made in revenue by the bank in 2014, N29.80 made it all the way to the profit position. Capital adequacy (%) 20.0 % of classified loans 1.8 Loan coverage (%) 93.7 Return on assets (%) 3.2 Return on equity (%) 17.9 Net interest margin (%) 65.8 Profit margin (%) 29.8 Derived from Zenith Bank’s 2014 annual reports and accounts

wealth creation for its clients. At Zenith Bank, technology is seen as an enabler and as a generator of new opportunities. The bank is forward-thinking, and benchmarks trends in technology to shape its future. The bank’s risk management system creates a blend that not only grows its customers’ businesses but also strengthens them while its credit management system stresses rational procedures and transparency. The bank’s success hinges on satisfying its customers and helping them unlock the real value of their businesses. The challenge is always to be better than anyone else; better at creating real, lasting value for customers. For example, one of Zenith Bank’s traditional lines of business is Treasury transactions. Its knowledge of the marketplace and creativity has propelled it to the forefront of trading activities in the money market, with resultant competitive advantage and tremendous value. • The bank’s strategic alliance with the various stakeholders, government and non-governmental agencies centers round institutional building and capacity development in the following areas: • Strong commitment to the support of Small and Medium Enterprises as well as development of indigenous industries.

Chairman, Zenith Bank Plc

Core Business Focus

Zenith Bank’s business focus is driven by exceptional customer services. In pursuit of this, it has created a professional environment where individuals are encouraged to display their creativity, which would translate into greater

Group MD/CEO Zenith Bank Plc

Shareholders – Dividend and Bonus History Shareholders have always been treated well at Zenith Bank. A look at the dividend history of the bank shows consistent and increasing dividend payout. Dividend per share in 2014 was 175 kobo, same as it was in 2013. In 2012, DPS was 160 kobo, higher than 95 kobo, 85 kobo and 45 kobo in the years 2011, 2010 and 2009 respectively. In 2009, shareholders got a bonus of one for every four shares previously held. Year Dividend (Kobo) Bonus 2014 175 2013 175 2012 160 2011 95 2010 85 2009 45 1 for 4

Mr. Peter Amangbo—Group MD/CEO Mr. Peter Amangbo is the Group Managing Director/CEO. Amangbo has over two decades of experience with Zenith Bank which cuts across Corporate Finance and Investment Banking, Business Development, Credit and Marketing, Financial Control and Strategic Planning as well as Operations. He was appointed to the Board of the Bank and its subsidiary companies in 2005. He was a pioneer Non Executive Director of Zenith Bank UK. Prior to joining the Banking Industry, he was a consultant with PriceWaterhouse where he covered assignments in financial services, manufacturing and General Commerce. He is an alumnus of INSEAD and a Fellow of the Institute of Chartered Accountants of Nigeria. He holds an MBA from the Warwick Business School and a B.Eng in Electrical & Electronics Engineering.

Management

Awards As a reward for excellence, the bank has over the years received several awards. In 2013, it was named as the Bank of the Year – The Banker Magazine, Best Commercial Bank in Nigeria – World Finance, Best Commercial Bank – CFI. The same year, it also was rated the Most Customer-focused Bank in Nigeria – KPMG, and Bank of the Year – BusinessDay, Hallmark and Champion Newspapers. In 2012, it was rated Biggest Bank in Nigeria and 322 in the world - The Banker Magazine, Largest Bank in Nigeria/ West Africa (by market cap.) 2011-12 African Business and 3rd Biggest Company in West Africa 2012 - Forbes & CNBC Africa.

Mr. Jim Ovia--Chairman

Ratings

One of the things that Zenith Bank has going for it is its excellent management team. Mr. Jim Ovia is the Chairman on the Bank. A co-founder and pioneer Managing Director/Chief Executive of Zenith Bank Plc, he has about three decades cognate banking experience. He is the Chairman of Visafone Communications Limited as well as a member of the Governing Council of Lagos State University, Lagos and also a member of the Board of Trustees, Redeemer’s University for Nations, Lagos. He is the promoter of the proposed University of Information and Communication Technology, Agbor, Delta State; he served on the board of American International School, Lagos [2001 -2003]. Jim Ovia has been involved in many good causes through different Non-Governmental Organisations [NGOs]. At various times, he has been first President of the Nigeria Internet Group [2001-

Zenith Bank is rated by three major credit rating agencies: Agusto & Co. (2003-2007) Aaa, Fitch Ratings (2013) B+, and Standard and Poor’s BB-/Negative/B. A credit rating is an assessment of the solvency or credit-worthiness of debtors and/or bond-issuers according to established credit review procedures. These ratings and associated research help investors analyse the credit risks associated with fixed-income securities by providing detailed information of the ability of issuers to meet their obligations.

The Future

Stakeholders always expect big things from Zenith Bank. We are of the opinion that Zenith will not disappoint in its 25th year. It would probably spend this year working on stability and strengthening operations further in order to come out with even a better result in 2015.

Business Journal April 20 - 26, 2015

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‘Mobile Insurance Will Stimulate, Improve Industry Awareness’ In this Executive Chat, Mr. Chike Mokwunye, Group Managing Director/ CEO, Royal Exchange Plc, examines the national economy and future of insurance business in Nigeria.

Review of Insurance Industry in 2014 Before doing a review of the Insurance industry in 2014, it is appropriate to first analyse the performance of the economy. 2014 demonstrated extreme contrasts between the first and second halves of the year. The first half-year ushered in a rebased economy – with data from the National Bureau of Statistics (NBS) showing a phenomenal rise in Gross Domestic Product (GDP) from $269bn in 2013 to $510bn. Oil prices peaked at US$115 per barrel and equity market capitalisation reached historic highs of N14 trillion. Clearly, at this point, it seemed Nigeria was well on course towards achieving her Vision 20:2020 target. The second half of the year turned out to be tumultuous as the economy took a severe hit from the twin shocks of global commodity price slump and liquidity volatility. The aftermath was a nose-dive in both export income and capital inflows. By year end, oil price had dropped below US$60 per barrel, market capitalisation shrank to N11.49 trillion, external reserves stood at US$34 billion, and the Naira exchange rate to the US dollar had lost a 10th of its value. In addition, there were reported slowdown in business activities as politics took centre-stage in the build up to the 2015 general elections. This translated in significant revenue shortages from oil receipts and given the undiversified nature of the economy, major decrease in foreign receipts and attendant decline in government expenditure. Consequently, there was considerable pressure on the foreign exchange reserve. In response to this, the banking regulator intervened by

increasing the Monetary Policy Rate (MPR) to 13% per annum, instituted currency devaluation of 16% from $/ N155 to $/N168 at the official window and restricted foreign exchange import demands. The spill over effect on the insurance industry was quite visible. Performance wise, insurance operators, who enjoyed a good spell from an expanding economy in the first half of the year, were faced with the challenges of withstanding on-coming economic headwinds and at the same time delivering decent returns in the latter half. Firstly, the rebasing exercise, while being good for the broader economy, shrunk insurance penetration (which measures Gross Written Premium as a proportion of GDP) from previous levels of 0.6% in 2013 to 0.4% in 2014. Secondly, the non-passage of Petroleum Industry Bill (PIB), the impact of volatile oil markets and crash in oil prices forced Oil Majors to put on hold investments in new projects during the year, thereby easing growth in a segment that contributes roughly 20% of Gross Written Premium to the industry. Renewals on the insurance protection of some major projects in the oil industry were not undertaken. Thirdly, the decrease in government revenue resulted in the inability of some government establishments to take up insurance, even compulsory insurance policies were not renewed. Fourthly, withdrawal of global funds from the domestic financial market by offshore portfolio investors caused a drop in the Nigerian Stock Exchange (NSE) All Share Index (ASI) as well as decline in market capitalisation. Similarly, the bond market was hardpressed as yields moved northwards due to weakening confidence in the

Mr. Chike Mokwunye, CEO, Group Managing Director, Royal Exchange Plc

economy, with foreign holdings of Nigerian debt falling to $8.5 billion in June 2014 from $11 billion in December 2013. For the insurance sector, all these culminated in major deterioration of investment income reported in operators’ financials during the year. That being said, we estimate that Gross Written Premium (GWP) for the year hovered within the ranges of N250 – N300bn, same levels as it did in 2013.

The Outlook for 2015 in the Face of Falling Oil Prices

2015 is forecasted to be a difficult year for the Nigerian economy. With the falling oil prices, uncertainty looms internationally for oil-exporting nations without a well-diversified revenue base. According to the World Bank’s January 2015 Commodity Markets estimates, oil prices are forecasted to play at levels of US$53 per barrel in 2015 and US$57 per barrel in 2016, down from its 2014 predictions of US$95 per barrel. This means the domestic Oil & Gas industry would most likely experience a decline in contribution to government revenue as a result of reductions in foreign earnings given our mono-product export economy and highly undiversified foreign revenue base. The scenario is posing severe fiscal challenges for the government - in terms of successfully running the economy. As such, the government is now bracing up to the challenges of anticipated revenue shortages by proposing a combination of spending cuts, tax increases on non-oil activities and driving of an aggressive revenue diversification programme with refocused

target on agriculture, energy, manufacturing, SME development etc. It is anticipated that this will adversely affect not only patronage for insurance from government establishment but other sectors of the economy since government spending cuts and taxes would affect economic growth negatively. On the other hand, such policy thrust may throw open new opportunities for the Insurance industry in expanding the frontiers of its business and thereby create room for the industry to underwrite businesses in neglected segments of the Nigerian economy. However, entry by insurance operators into these new markets would require new sets of skills, expertise for market development, products and business expansion, coupled with the right blend of policy support and incentives from government. Consequently, the impact of these opportunities from these sectors on insurance might not be felt in 2015 but in the medium to long-term. For the Oil & Gas industry, it is predicted that the continued depression of the prices of oil would negatively affect investments in the sector and would reduce its overall contribution to the insurance industry.

Long-term Strategies for Sustainable Growth of the Industry into the Future

To achieve long-term sustainable growth in the industry, insurers need to be bold, audacious and break out of the current fold and become game changers on their own rights. With this, I mean insurers should be aggressive in nurturing new markets,

developing smart new products and channels, forging the right types of partnerships needed to capitalize on emerging opportunities and drive operational efficiency. Competition in the industry has been restricted to the same customers, same products and channels. For sustainable growth in the industry, there is the urgent need for operators to change focus to the neglected majority- the informal sector, people in the rural areas engaged in agriculture, commerce, mining and other forms of economic endeavours. The rebasing of the economy has revealed the relative significance of some non-traditional sectors of the economy. We have to give those sectors the required attention. There is the need for insurers to develop products that meet their need, package these products the way they need it and employ distribution channels that appeal to the people and such channels should be cost-effective. Also, to remain relevant in the game, insurers need to think and act at same rate technology and customer expectations are changing. The era of focusing on what peers are doing and ignoring developments outside the industry is gone. Operators, regulators and government must consciously develop and implement a programme of insurance education at all levels aimed at increasing the insurance literacy level. The major stakeholders must develop and implement programmes aimed at improving the integrity and trust level in the industry.

The Impact of Growing Foreign Investment in Local Operators/Prospects for Mergers

Business Journal April 20 - 26, 2015

majority – the informal sector; people in the rural areas engaged in various forms of economic activities, people who cannot take up insurance now because of their religious beliefs etc. these are mostly low income people. Takaful/Micro-insurance represents that class of insurance that would serve these segment of the population. This type of low-cost insurance covers life, health, crops and property of the most vulnerable and poor people. It also provides social protection to victims of natural disasters such as flooding and drought. Coincidently, a large proportion of the Nigerian population is within this low income bracket with only limited possibilities to build financial reserves to protect themselves against illness, accidents, or property loss or damage. So, Takaful/Micro-insurance would play a major role in protecting the society’s poorest members. Aggressive and successful implementation of Takaful/Micro-insurance would help the country to achieve a higher insurance penetration thereby deepening the industry.

The major stakeholders must develop and implement programmes aimed at improving the integrity and trust level in the industry.

Has the Government Done Enough to Grow/Support the Industry?

and Acquisitions

Typically, foreign investments play a major role as stimulus for growth in developing economies. For Nigeria in particular, it is important as it deals with two major obstacles – namely: addressing the shortage of financial resources within the industry and bolstering the transfer of new knowledge and technology. I would embrace and support foreign investments for the industry provided that it boosts industry capitalisation, increases scale, engenders global best practices, and stimulates knowledge transfer and innovation amongst players. Currently, the industry is fragmented, with majority of the players operating sub-optimally. This creates room for mergers and acquisitions. Such mergers and acquisitions should however not be regulatory induced but should evolve out of business need.

How far has Mobile Insurance, Technology Impacted on the Industry?

The impact of mobile technology on the insurance industry in Nigeria is still too early to judge. However, we believe that the industry is now gradually moving towards the ‘insurance is bought, not sold’ paradigm. Operators are waking up to the realisation that empowering consumers to make informed decisions is one of the key success factors in growing their businesses and market share. This is because the modern customer prefers to research options from independent and unbiased sources and make proactive buying decisions. Technology provides consumers the avenue to share and discuss their past buying, claims and customer service incidences with a vast network of socially connected and trusted people. This has made the industry operators become more conscious of the need to improve service delivery.

In addition, the proliferation of smart phones, iPads and other versatile mobile devices, provides consumers with the flexibility of deciding how they want to transact, when they want, where they want and on which preferred channel of choice. Unfortunately, we do not have access to figures that have a clear idea as to the extent mobile insurance and technology have impacted on the industry from the point of view of volume of sales and level of insurance penetration. It may be important to point out two facts that may have impacted the use of technology and mobile devices for distribution. Firstly, the technology –savvy population are mostly the youth/young people who as at present do not have the economic power and may not actually buy insurance because there is a technology platform through which they can make such purchases. Secondly, insurance is not like fast moving products that people buy because they need it, rather, you have to convince people to buy insurance due to the low level of insurance literacy. These two factors would have affected the level of patronage for mobile insurance. However, mobile insurance has contributed in improving the level of awareness about the industry and this pool of young people who are technology savvy represents the industry’s future customers. Consequently, industry operators must continue to invest in distribution channels powered by technology since it is more efficient and cost effective in the long-run. With technology, we can reach a larger number of customer and at a lower cost.

Takaful/Micro-insurance: Do they represent the Future of the Industry?

In my earlier submission, I had talked about the need for the industry to change focus to the neglected

Over the years, changes in government policies and regulations have led to incessant stripping of lucrative businesses controlled by local insurance operators in favour of government agencies. Typical examples were the National Health Insurance Act, 1999 which transferred a traditional part of life insurance business to the Health Maintenance Organisations (HMOs) and the Pension Reform Act, 2004, which transferred pension business from insurance firms to Pension Fund Administrators and Pension Fund Custodians. In addition, the repealing of the Workmen’s Compensation Act of 1948 and substantial amendment of the Nigeria Social Insurance Trust Fund Act of 1993 also brought government into the business of offering workmen’s compensation as a type of social insurance service to the Nigerian working class population, thereby stripping that business line from the insurance industry. Suffice to mention, government’s lack of interest/support and unwillingness to enforce the compulsory insurance regulations. There has been no strict enforcement of Third Party Motor Vehicle Insurance, Occupiers Liability insurance, Builders’ Liability insurance, Group Life Insurance and Professional Indemnity for Medical professionals. It is important here to mention that operators and the regulator, National Insurance Commission (NAICOM), cannot enforce the compulsory insurance since they do not control means of coercion. It is the responsibility of government to enforce the laws of the land. On a positive note, the federal government appears to be retracing its steps as it took a bold initiative to drive insurance growth in the country in 2014. This bold commitment came to the fore with the hosting of a National Insurance Summit in Abuja, in December 2014 (the first of its kind). For Nigeria to unlock its insurance sector growth, government must first

and foremost push for insurance advocacy and awareness building amongst its citizenry and next, drive for enforcement of all existing insurance regulations as part of its national agenda. Sadly, in Nigeria, government’s lack of support and/or suppression of the insurance industry have downplayed its role as an efficient wealth or savings accumulator causing a dearth of longterm capital in the economy. We should also remember that this is an election year and the government may not settle down to business till the last quarter of the year. Government should be particularly interested in the insurance sector because it (i.e. government) benefits directly from insurance through reduction in social spend.

What is the SINGLE biggest Challenge Facing the Insurance Industry Today?

In my opinion, the single largest challenge facing the industry is the low level of insurance literacy existing amongst the populace. This explains why we have the current penetration ratio of 0.4% and also exposes why according to Oxford Business Group Journal, only 2.25 million Nigerians have any sort of insurance policy in the country. The fact remains that majority of the population still depend heavily on levels of social insurance, depending on traditional/cultural safety nets i.e. family, churches, social clubs etc as a means of survival upon the incidence of a loss either to life or property – this should not be the case if they had formal insurance. This is true for both the educated and uneducated. To develop the insurance industry, efforts must be made towards increasing insurance education. The success of measures aimed at improving insurance penetration would largely depend on the level of national advocacy and public enlightenment created by stakeholders in reshaping the public perception of the industry and of insurance education. Without this, insurance cannot be readily embraced by its citizens and the industry will not experience much growth.

Insurance Road-map for the Next Administration in the Country

Clearly, from recent events, one would be tempted to say that the next administration’s objective will be to stimulate economic growth through diversification of revenue away from volatile crude oil markets. Such revenue diversification pro-

gramme should encompass a robust risk management strategy to ensure, that from the onset, risks are factored in as a critical driver of growth, that it is properly analysed and managed in same vein. In essence, government would need to involve insurers by bringing them on board to underwrite a larger proportion of the nation’s risk in the full length of its transformational exercise. This can only occur if the right sets of incentives, structures and policy framework are entrenched to encourage full participation by local risk providers. A typical case can be made from the government’s Agricultural Transformation Programme (ATAP) which has as a mandate the transformation of agriculture from a mere social development initiative to a commercially viable endeavour. While a laudable scheme, implicitly lacking in it is a workable structure is tangible incentives to drive the participation of private-sector insurance operators in underwriting agric risks on behalf of the farmers. In a sense, this has slowed down the level of progress being made as agric business remains one of the most volatile enterprises to engage in and a seemingly non-existent agric insurance structure makes it less attractive for new entrants to play in this market segment. The government should partner with the regulator (NAICOM) and operator to consciously develop and implement programme of insurance education and strictly enforce the compulsory insurance regulation.

What is the Game Plan of Royal Exchange Plc in 2015

The insurance marketplace is transforming, creating opportunities as well as challenges for all. In 2015, the game plan for Royal Exchange would be quite simple - Differentiate ourselves from Competition by breaking out of the fold. In clear terms, we do not see the wisdom in ploughing tirelessly in same old terrains expecting different results or returns. Our focus would be on achieving long-term sustainable growth for our company through the broadening of our revenue base – by extension deepening our business and product mix. This somewhat mirrors the present aspirations of government to embrace economic diversification as a more sustainable approach in the management of the nation’s economy. We are therefore setting our sights higher onto newer and possibly more rewarding business horizons. As statistics shows, the insurance industry only offers a penetration ratio of 0.4% to GDP, so there is enough room for market development and business growth for those operators who dare to be Bold and Audacious. This could either be in terms of deepening tentacles in already existing traditional risk markets or branching out unto newer frontier markets i.e. retail, energy, agriculture, etc. Crucial to our objectives would be the need to leverage on technology to drive operational efficiency, innovations and channels development. These would be the key drivers we would be working on within the year and hopefully the benefits of such efforts would manifest over the medium to long-term in terms of revenue growth and a more robust bottom-line. We believe over time, the intention will be to create the right type of momentum to power our growth initiatives beyond 2015.

Business Journal April 20 - 26, 2015

ICT

‘ICT Regulations Must Restrict Excessive Foreign Consumption, Encourage Local Content’ One of the leading lights in the Nigerian ICT space, Mr. Chris Uwaje, known as ‘The Oracle’ in the industry evaluates the nation’s progress in ICT and unveils a roadmap for sustainable growth

nalysis of the current National ICT Landscape informs that our ICT strategy is heavily dependent on external/foreign idea, innovation and creativity making us Technology clueless and conspicuous consumer Nation! Therefore, currently, our IT strategy and mission are: • Heavily Consumer oriented and critically foreign/import dependent (excessive capital flight) • Does not inspire and support indigenous large scale innovation and creativity. • Currently not concerned about the poor state of ICT in Education with respect to IT Infrastructure, Curriculum, Teachers’ Intensive Training and Capacity Building • Does not promote competitive knowledge clusters and reward merit • Strategy does not challenge innovators and is not stakeholders inclusive - It may therefore be assumed and rightly summarised that large pool of creative minds are outside the national ICT decision making process? • Nigeria’s ICT Landscape is grossly under-funded and Telecommunications Centric! • Finally, it advocates the notion of making ICT resident in Industry rather than in the Education Domain.

Chris Uwaje -The Oracle Global IT Trends in 2015 • The Internet and in particular, the Internet on Mobile Devices will be the greatest battlefield of the global ICT Ecosystem in 2015. With this emerging massive opportunities, Africa can earn immense benefits if she gets it right by promoting and protecting (yes protecting: by not leaving everything to chance - that is, to the so-called Market Forces ) her Local Content Development and Intellectual Property Right to compete in the emerging global Olympiad • The Social Media space and activities will expand and stakeholders demand will increase beyond our collective imagination and capacities - amidst global population surge and content security. • Consequently, with more than 700million Mobile Phone Users in Africa and over 200 million connected to the Internet: a. Africa’s brain-drain statistics will increase exponentially as young Africans seek ways to migrate overseas at all cost - translating to:’ many of them dying before they get their’! b. Unless we completely retool our local Skills and Content Model, power-up our ICT Ecosystem and Intensity the establishment of massive Knowledge Innovation Hubs for Outsourcing, BPO and Off-shouring with capability to create critical mass of world-class skilled employment for both the high skilled and low skilled support workforce. • Softwareisation of Things

(SoT) (my origination) will intensify, as the development of Embedded Systems Improve. @2015, IPv6 diffusion will improve as more organisations push to migrate from Internet Protocol version 4 (IPv4) to IPv6 - leading to more Innovations and creative Business expansion. Indeed, 20 years from now, 50% of the global work space (employment/ deployment process) will be taken over by Machines/Robotics based on statistics on the emerging forces of Artificial Intelligence! • Massive (Big) Data and Information Storage issues will increase the demand for secured Data Centres and Cloud facilities Across Africa - especially for e-Government, Financial Services, Education and Entertainment process data and critical Information. On this issue: I seriously advise African Governments for now, to first of all MASTER SMALL DATA planning, structures, organisation and control and beware of clandestine offers and the hypes around the Cloudy BIG Data”!. • Cybersecurity: Consequently, due to the massive deployment of trillions of cheep sensors and transistors to enable IPv6-based Internet of Things (IoT), the Cyberspace will be crowed with Cybersharks positioning to make a super-kill in Cyberspace - at e-Health, e-Government, e-Education, e-Payments and Transaction, e-Business and at many Social Media levels. • One thing is definite: In 21st Century, we are going to

witness and experience a National Cyber-hijack within nations - The real Cyber War: Electronically shutting-down of Nuclear Plants, Central bank, Central Aviation, the Internet Gateway, Financial Hubs, Television, Social Media and Cable Entertainment to the home, etc. will be affected! • The most sort-after workforce in 2015 (all through 2017) will be Cybersecurity Team Protectors, Cloud Engineers and Data Analytics – all with core Software Background. • 2015 is perhaps the long-awaited year for Software-Nigeria to finally emerge at both National and World Stages. e-Education, e-Learning and Distant Learning Solutions will increase as the world Population swells upwards beyond the current 9billion Approx.. Demand for Software Solutions - especially Mobile Software and e-Security Solutions will increase. The Good News is that Africa should and can take advantage of this opportunity to secure her Digital Innovation future. Way Forward For Nigeria/ Africa • Make ICT Education mandatory for all Nigerian Children of school age. Reconstruct the National IT Policy by establishing a “National ICT Framework Bill, as the core foundation and super-layers for Nigeria’s ICT Road-map and strategic focus for national development and global competitiveness. This framework

will create the required Bills/Acts that can fortify and fuel investment, creativity, Innovation, employment and sustain constructive Regulations • Institutional Framework: Informed by the current scenario in Cyberspace, there is need to establish the Office of: The Information Technology General of the Federation. (ITGF) • Encourage and promote ICT Regulations that reduces excessive foreign consumption and consciously prioritise Local IT Content and Intellectual Property Rights. • Transform NYSC into a National ICT Emergency Training Camp • Retool the National ICT Curriculum and massive re-training for IT Lecturers and ICT Teachers at all levels (From Kindergarten to University) • Make Software Engineering and Development as National IT Strategy and establish National Software Engineering Institutes • Intensify the implementation of the National Broadband Plan and establish at least 10 Information Technology Knowledge Parks in 2015 • Ensure that IT Professionals, Practitioners and Experts are represented at all Board levels in Government. • Create a Special IT Knowledge Bank for Innovation and Promote National IT Research Development and Mobile Innovation Competition • Fund a standing International ICT Exhibition Framework for West Africa in Nigeria - to be sustained for the next 10 years

Business Journal April 20 - 26, 2015

CorporateAnalysis www.businessjournalng.com

GTBank: Resilient Earnings, Sound Strategy Chris Okeke

T Bank Plc is one of the blue chips that just churned out impressive fundamentals for the 2014 full year (FY).The bank retained its leading position and has apparently accelerated on all cylinders and (CAMELS) parameters for assessing performance. In the 2014 FY fundamentals, GTBank it would appear, may have achieved its set target of maintaining loan growth of 15 to 20 per cent and sustained its commitment to improved returns to shareholders with Return on Equity (ROE) surging more than 25 percent. The bank also has remained in the forefront as industry leader in Cost to Income Ratio (CIR) which it has managed to keep below 45 percent in the out-gone year. Driven by this achievement, the bank’s outlook is already pointing towards sustainability, stability and organic growth. It has already finalised plans to increase its foreign subsidiaries’ contribution to PBT to 10 per cent by 2016. It also plans to achieve income growth through business development in existing subsidiaries and entry into target countries. Even with visibility in 8 countries within Africa alone, the bank maintains it is not pursuing a Pan-African expansion strategy. Sounds interesting? Last year, according to its FY result, revenue generation was indeed robust as deposit was up 14.4 per cent to N1.649 trillion against the N1.443 trillion achieved the 2013 financial year. The trend ordinarily is that any growth in customer’s deposits should translate into a spike in interest income and gross earnings as well as profitability. Figures in the 2014 statement shows that the bank benefited from this mantra. Management of the bank attributed the 14.4 percentage spike in deposits to increased cost of funding from the CBN’s hike in CRR, market liquidity and rising cost of deposits which necessitated strong competition and enhanced marketing drive for cheap but quality deposits. Apart from the spike in deposits, the bank reved up asset base to N2.356 trillion, accounting for a substantial percentage of the banking industry asset base. The N2.356 trillion is about 12 per cent better than the N2.103 trillion recorded in the 2013 financial year. Buoyed by this achievement, the bank’s earnings for the year ended December 31, 2014 was jerked up N278.6 billion from N242.66 billion. What this implies is that surging asset base had helped the bank achieve a meteoric growth in earnings. Net Interest Income increased by 4 per cent YOY to N142.39 billion from prior year’s N137 billion while operating income was also up by 11.2 percentage points to N210.8 billion against the N189.6 billion achieved within the corresponding period of 2013. Management attributed this steep growth to increase in income from financial guarantees, gains in income from e-business and card related transactions on its growing retail customer base. The bank also stated that the growth in income was driven by 19.65 percentage growth in income from loans and advances while interest income growth was largely attributed to loan growth as

yields stayed stable through most of the year. In tandem with this growth profile, Profit Before Tax was up 8.7 per cent to about N116.39 billion about N9.30 billion more than what was achieved prior year of N107.09 billion, creating a leeway for Profit After Tax to soar 9.6 per cent to N98.69 billion from N90.02 billion. The bank’s enviable performance was also evident in the manner it managed its risks assets. In this respect, customer loans and advances was up by over N200 billion, an increase of about 27.1 percent to N1.281trillion YOY from N1.008 trillion of the 2013 financial year. Key balance sheet ratios indicate that GTBank recorded a Return on Average Equity (ROAE) post tax of 27.93 per cent against the 29.32 per cent, and Return on Average Asset (ROAA) post tax of 4.43 per cent against 4.69 per cent of previous year. Net interest margin dropped significantly to 8.10 per cent from 8.87per cent of 2013. The bank’s Non-Performing Loans (NPL) ratio also declined significantly to 3.15 per cent from 3.58 per cent while liquidity ratio at 40.07 per cent was about 3 per cent worst than the 50.31 per cent of the corresponding period of 2013. With this performance, investors of the bank have been provided a platform to continue to enjoy a company that has taken deliberate mea-

The bank’s enviable performance was also evident in the manner it managed its risks assets. In this respect, customer loans and advances was up by over N200 billion, an increase of about 27.1 percent to N1.281trillion YOY from N1.008 trillion of the 2013 financial year.

sures to improve on its risk assets quality. The bank also intends to sustain and even surpass the trend it has developed over the years in growing margins and dividend payment. But more reassuring is the fact that management was able to grow Loan to Deposit Ratio (LDR) to 77.67 percent higher than 69.87 percent for the year under review. Going forward, the bank has mapped out strategies that would bring expenses under control as it has always done. To cap it up, the bank’s Capital Adequacy Ratio at 23.91 percent was well above the Basel 11 requirement of 20 percent. Commenting on the results, Segun Agbaje, Managing Director and CEO of Guaranty Trust Bank Plc stated that the Bank’s financial performance in 2014 attests to the inherent soundness of its strategy and resilience of its earnings. According to him, “we remain committed to maximising shareholder value and delivering superior and sustainable returns. Our objective is to remain a leading player in the financial services sector whilst expanding our franchise in select, high growth African markets where we believe we have a competitive advantage.”

Brands Marketing Advertising

Business Journal April 20 - 26, 2015

www.businessjournalng.com

Procter & Gamble: Delivering Everyday Value to Customers Worldwide The Power of Purpose Companies like P&G are a force in the world. Its market capitalisation is greater than the GDP of many countries, and it markets its products in more than 180 countries. With this stature comes both responsibility and opportunity. Its responsibility is to be an ethical corporate citizen—but its opportunity is something far greater, and is embodied in its Purpose. P&G’s Purpose Statement articulates a common goal that inspires us daily:

They might never have met had they not married sisters – Olivia and Elizabeth Norris – whose father convinced them to become business partners and In 1837, a humble but bold new enterprise called Procter & Gamble was born. What began as a small, family-oriented soap and candle company grew and thrived, inspired by P&G’s Purpose of providing products and services of superior quality and value. Our simple purpose has enabled us to become one of the world’s leading consumer products companies – and will continue to guide us as we seek to improve lives now and for generations to come.

Our Purpose We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper. The Power Behind P&G’s Purpose The simple, inspiring way to think about this is that P&G brands serve nearly 5 billion of the more than seven billion people on the planet today. Before P&G can serve the world’s remaining consumers profitably, we can reach them altruistically. We can improve their lives in ways that enable them to thrive, to increase their quality of living and, over time, to join the population of consumers we serve with P&G brands. Through our social responsibility programs, initiatives such as P&G Children’s Safe Drinking Water and Pampers 1 Pack = 1 Vaccine are examples of how we are improving the lives of millions of people every day. Our shared Purpose attracts and unites an extraordinary group of people, P&Gers, around the world—the most diverse workforce in P&G history. Together, we represent more than 140 nationalities. Our recruiting and development philosophy to “build from within” fosters a strong culture of trust and shared experiences. Our diversity, our shared culture and our

Our Heritage in Nigeria P&G started in Nigeria in 1992 with the acquisition of the Richardson Vicks manufacturing plant in Ibadan by Procter and Gamble. Local production of Vicks and Always began in 1993 and Pampers in 1994. P&G is now a leading consumer packaged goods company in Nigeria, reaching almost 6 million Nigerian households daily. Our innovative brands touch and improve the lives of people all across Nigeria. With cumulative investments in millions of dollars, and a new stateof the art Pampers plant under construction in Ogun State, P&G is now expanding across West Africa with a vision of making Nigeria a major production centre.

P & G Nigeria Brands unified Purpose are the defining elements that enable P&G to touch lives and improve life every day Our Heritage Our purpose from the beginning P&G was founded in the US in 1837

by two men who met by chance. William Procter and James Gamble were from England and Ireland respectively and were on separate journeys through the United States when the challenges of travel led both of them to Cincinnati.

Pampers is the world’s top-selling brand of baby nappies. For more than 40 years, Pampers has been helping to improve life for babies, toddlers, and the parents who care for them through a complete line of diapers, training pants, and wipes designed for every stage of baby’s development.

Ariel helped to transform the world of washing, and innovation has been a core part of its life ever since. Ariel contains unique enzymes and polymers that remove tough stains even more effectively in just ONE WASH, which ordinary detergents can’t remove even after two washes. With Ariel’s “ONE WASH” promise, you can be certain you are making a smart choice! Ariel is available in the following convenient pack sizes: 30g, 78g, 250g, 500g, 1kg and 2kg.

Business Journal April 20 - 26, 2015

25 two exciting perfumes; lemon fresh and Active fresh and gives the 3 in 1 benefits of cleaning your clothes leaving them fresh smelling even after wash, all at an affordable price. Bonux cleans your clothes…Gives you savings

Vicks has three products (Vicks Blue, Vicks Lemon Plus and Vicks Apple Plus) to solve your nose and throat irritations. Vicks Blue contains extra Menthol which will clear your nose and throat faster. Vicks Lemon plus and Vicks Apple plus both contains Menthol and Vitamin C. 5 drops of Vicks a day provides the daily recommended Vitamin C required for a healthy lifestyle. Vicks is sold in shops all over Nigeria both in packs and drops.

Bon u x deterg e n t comes in

Fairy dishwashing liquid is finally in Nigeria! Fairy is so concentrated that just one powerful drop will last long enough to get the job done.

Duracell is the world’s leading manufacturer of high-performance alkaline batteries. Our products serve as the heart of devices that keep people connected, protect their families, entertain them, and simplify their increasingly mobile lifestyles. Trusted everywhere, Duracell has been meeting the power needs of people around the world for more than 40 years.

Ambi-Pur is an innovative range of fragrances for your home that are inspired by scents of the world.

Since its introduction in 1984, Always has made a woman’s period a more positive, happier experience. Always, the world’s leader in feminine protection is dedicated to helping women embrace womanhood posi-

tively—from the very beginning of puberty through their adult lives. Always has a wide range of menstrual pads designed to fit different body types, period flows and preferences. And we all know, the better the fit, the better the protection.

Oral-B brand is a worldwide leader in the brushing market. Oral-B continuously strives to work closely with the dental professionals to deliver high quality products. Oral-B Pro-Health Toothpaste was developed by dentists and is proven to prevent the 8 most common oral health problems at the same time: Tooth holes, bad breath, gum problems, tooth sensitivity, stains, bacteria deposits, tartar, and enamel erosion. Oral-B manual and power toothbrushes are used by more dentists than any other brand in the U.S. and worldwide.

Gillette® has been at the heart of men’s grooming for over 100 years.

Each day, more than 600 million men around the world trust their faces and skin to Gillette’s innovative razors and shaving products. This commitment to giving men the very best is carried into our line of personal care products. All designed for the unique needs of men – helping them to look, feel and be their best every day.

Safeguard is P&G’s largest Global Personal Care brand. Safeguard partners with leading health organisations across the world such including the Africa Medical Association. Safeguard Soap was launched in Nigeria November 2011and is fast becoming the preferred germ protection soap for the entire family. It provides Double Protection against germs for up to 12 hours after use and removes millions of germs in a single wash.

Do You Really Need a Consultant? Haniel Ukpaukure

he argument as to whether or not an organisation with a well-staffed and well-equipped public relations department still needs the services of an outside consultant may never cease, well, as long as organisations exist, or, should we say, as long as life itself exists. Why bother about a consultant who may not be found when needed most, and whose cost you may not be able to contend with, especially against the background of other competing and more pressing needs? This argument comes to the front burner as organisations look for ways to cut costs and increase the bottom-line. Cutting costs may mean increasing attention to capacity building, with the aim of providing, in-house, the same services for which the organisation spends huge sums to obtain from outside. It is the only way to remain afloat in a sea of competition that gets stiffer by the day, in an environment where the cost of doing business has continued to maintain an upward spiral. It shouldn’t be difficult to argue against retention of a consultant, if the numerous advantages of having an in-house PR department are taken into consideration. Firstly, the in-house practitioner is a bona fide employee whose loyalty to the organisation can never be in doubt. He has every reason to be loyal, and not do anything to undermine

the organisation’s integrity, interests and existence. The organisation is his only source of livelihood. He is therefore likely to give his all, indeed, die on the job, to ensure the success of the organisation, since it is the only guarantee he will continue to put food on the table. Secondly, the in-house practitioner is the custodian of the organisation’s history, philosophy, culture and objectives. He works nearly twenty-four-seven to uphold them, since they form the core essence of his job. The third advantage of an in-house staff is the fact that he is always available and can be reached anywhere on the planet, especially in time of crisis. But it’s not all a basket of advantages. The flip side of an in-house PR man is that he is expected to be a jack of all trades, with the obvious consequence of being a master of none. Not being a superman, the possibility that he would be knowledgeable about all the aspects of public relations is almost non-existent. Yet, that is what the organisation expects him to do – know all. Public Relations is about telling the truth, nothing else. But in most cases, the in-house man finds himself having to choose between telling the truth that might cost him his job and telling a lie to keep his job, which could hurt the organisation in the long run. Who is the employee that would look his chief executive officer in the face to tell him that the stories he hears about his escapades in clubhouses could damage the image of the organisation if they found their way into the gossip magazines or social

media? He tries as much as he can to ensure the unpalatable information he gets about his boss does not get to him, and prays nothing untoward happens, since he would be called upon to fix the damage. Is this where the external consultant comes in? Yes. As his name implies, he is a consultant, meaning that he possesses the skill that the in-house staff my not possess. There is a high probability he may not attempt to be a jack of all trades. He chooses a few niche areas in which he has competencies, and attempts to deliver the best. He has access to the best and most sophisticated equipment, and invests on the latest technology to ensure he delivers world-class services that can be expected from a consultant. Many years of handling similar public relations projects for diverse clients makes him a specialist and gives him the competence that organisations may not find in-house. What’s more, it is not difficult for him to learn from the mistake of one client while solving a problem for another. It all adds up to why his cost is usually higher. But despite the cost, it almost always happens that organisations get value for their money, that is, those that are ready to spare no expense to get the best. The consultant owes no allegiance to the chief executive officer of the organisation he is working for, if it means protecting his job at the expense of his integrity. The one that is worth his onions would not think for a minute about turning his back on the organisation if his professional

opinion would not be respected, even if it is not what the organisation’s leaders want to hear. He has no reason to tell the management what they want to hear, if he knows it to be a lie, because the integrity he has built over the years means more to him than the money. Do we still have consultants in this mould? They are very few. The advantage of retaining the services of an external consultant also comes with disadvantages. One, the organisation cannot vouch for his loyalty, for, it is just one of the clients he works for. There is no guarantee he will not use information obtained from client A to solve a problem for client B, and in some worse cases, both clients may operate in the same industry. He cannot be trusted to be morally above board in matters like this. The consultant is an itinerant service provider. An organisation might need his attention most at the same time he is giving his attention to another client in another environment. In time of crisis, the organisation could be left holding the short end of the stick if the in-house staff does not have the skill to handle the crisis. What is the way out? For organisations that can afford the expense, it is best to retain the services of an outside consultant, no matter the competence of those inside. This would create the synergistic competence that is needed to achieve the PR objectives of the organisation. The organisation benefits from the competence and skill of the consultant who must use the deep knowledge

of the PR Department about the organisation to achieve set goals. The foregoing is, however, dependent upon the relationship that exists between the consultant and the PR Department. In a situation in which the two parties work with mutual suspicion and distrust, the organisation may find itself not achieving its objectives and, in extreme cases, paying a heavy cost, image-wise. Cases like this arise when there is envy on the part of the in-house staff, which may come about from the feeling that he makes substantial contributions to the achievement of set objectives or, in some cases, does all the work, while the consultant takes the money and gets all the attention – the Biblical prophet that is without honour at home. But despite a few factors that could discourage it, experience has shown that it is always to an organisation’s advantage to engage the services of a consultant, even if it has a PR Department. The bigger the organisation, the wider its publics and therefore, the greater the need for an outside consultant. The way to ensure the purpose of hiring a consultant is achieved is by defining his roles very clearly, as opposed to the ones played by the staff, in order to avoid unnecessary clashes that could cost the organisation its image and reputation.

upr.uprlimited@yahoo.com 07031687570

CSR Digest

Business Journal April 20 - 26, 2015

www.businessjournalng.com

Nestle: Creating Shared Values for Sustainability Creating Shared Value: The Nestle Story Creating Shared Value is the basic way we do business, which states that in order to create long-term value for shareholders, we have to create value for society. But we cannot be either environmentally sustainable or create shared value for shareholders and society if we fail to comply with our Business Principles. This involves compliance with national laws and relevant conventions, as well as our own regulations, which often go beyond our legal obligations. For example, we support the Universal Declaration of Human Rights (UDHR), which stands at the basis of the UN Global Compact’s Human Rights Principles, and our CEO Paul Bulcke signed the UN Global Compact CEO Statement for the 60th Anniversary of the UDHR. Our strong support for the UN Global Compact, and our detailed commitments to the Fundamental Conventions of the International Labour Organisation (ILO) or other relevant instruments, are laid out in our Nestlé Corporate Business Principles and related policy documents, and their application is verified through our CARE programme and our internal Corporate Group Auditors. Beyond that, how we do business is based on sustainability – ensuring that our activities preserve the environment for future generations. In line with the Brundtland Commission’s definition, sustainable development to Nestlé means “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. At the same time, Creating Shared Value goes beyond compliance and sustainability. Any business that thinks long term and follows sound business principles creates value for shareholders and for society through its activities eg. in terms of jobs for workers, taxes to support public services and economic activity in general. But Creating Shared Value goes one step further. A company consciously identifies areas of focus, where: a) shareholders’ and society’s interests strongly intersect, and b) where value creation can be optimised for both. As a result, the company invests resources, both in terms of talent and capital, in those areas where the potential for joint value creation is the greatest, and seeks collaborative action with relevant stakeholders in society. At Nestlé, we have analysed our value chain and determined that the areas of greatest potential for joint value optimisation with society are Nutrition, Water and Rural Development. These activities are core to our business strategy and vital to the

three key focus areas of our Creating Shared Value framework. Agricultural food production will, according to the FAO, need to increase by 70–80% by 2050 to meet the demands of a growing

The Maggi Caravan welfare of the people in the countries where we operate. Nestle’s Cooking Caravans in Africa Our Maggi brand has gone on the road to provide nutrition expertise and healthy eating tips in Central and West Africa. Cocoa is high on Nestlé’s agenda. Clearly, to grow its chocolate business, the Company needs to make sure that the supply is there in the future. The Central and West Africa Region supplies 70% of the cocoa produced in the world, and Ivory Coast alone suppliesThe Water Agenda Water is Life Our long-term success depends on the water resources that supply our business operations and support the livelihoods of suppliers and consumers, which is why water is one of the

Water is Life

global population. Food production requires water yet its availability to farmers is increasingly threatened due to overuse today and further by climate change policies (biofuel), population growth and urbanisation in the years to come, so we need to implement good management practices and find new ways to reduce risks. If no new policies are introduced, the OECD projects that almost half the world’s population (47%) will be living under severe water stress by 2030. Many climate change impacts – melting ice, rising sea levels, more frequent and severe droughts and floods – are felt through water and the food industry is more exposed to climate change than most, because its key raw materials are sourced from nature and closely linked with the environment. A lack of water, combined with changing climate patterns, will impact vegetation distribution, abundance and yields, so we need to implement good management practices and find new ways to reduce risks. Good water quality in the areas surrounding our plants has direct benefits for our business, society and the environment, so we treat all our water in wastewater treatment plants. We prefer to use municipal wastewater plants to ensure we return only cleaned water back into the environment, but where these are insufficient, we invest in our own on-site facilities (approximately 222 to date, including our latest in Tema, Ghana). In many countries, Nestlé was the first company to set up such facilities, which have raised local expectations and standards, led to new policies and stricter regulations over time and given Nestlé a competitive advantage. The 2020 Commitment We’ve made 38 commitments that we aim to meet by 2020 or earlier, to support our long-term goal of Creating Shared Value. Explore the interactive graphic to find out how we’re doing.

ThePovertyGap

Business Journal April 20 - 26, 2015

www.businessjournalng.com

The Power of Faith to End Extreme Poverty by 2030 • “Ending Extreme Poverty: A Moral and Spiritual Imperative”

ver 30 leaders from major world religions and heads of global faith-based organisations launched a clarion call to action to end extreme poverty by 2030, a goal shared by the World Bank Group. Ending Extreme Poverty: A Moral and Spiritual Imperative notes that remarkable progress has been made in reducing extreme poverty. Over 25 years, the world has gone from nearly 2 billion people to fewer than 1 billion living in extreme poverty. Now, for the first time in human history, there exists both the capacity and moral responsibility to ensure that no one has to live in extreme poverty’s grip. “We have ample evidence from the World Bank Group and others showing that we can now end extreme poverty within fifteen years,” the Moral Imperative statement notes. “In 2015, our governments will be deciding upon a new global sustainable development agenda that has the potential to build on our shared values to finish the urgent task of ending extreme poverty.” “We in the faith community embrace this moral imperative because we share the belief that the moral test of our society is how the weakest and most vulnerable are faring. Our sacred texts also call us to combat injustice and uplift the poorest in our midst.” The Moral Imperative statement seeks to generate the necessary

social and political will by inspiring greater commitments from others to join in this cause, tapping into many of the shared convictions and beliefs that unify the world’s major religions around the call and responsibility to combat poverty. The announcement today from global faith leaders arose from the

World Bank’s “Faith Based and Religious Leaders Roundtable” held on February 18, the first high-level meeting between World Bank Group President Jim Yong Kim and faith leaders. Ruth Messinger, President of American Jewish World Service (AJWS), said “AJWS is deeply gratified to

endorse the joint Moral Imperative statement because as an organization motivated by the Jewish commitment to justice, rooted in Jewish values and Jewish historical experience, we are committed to realizing human rights and ending poverty in the developing world.” Endorsers are committed to

galvanising greater commitment and action from within the faith community globally and across every sector to end extreme poverty. David Beckmann, President of Bread for the World, noted: “Now that it has become clear that it is feasible to end extreme poverty, faith communities are committing ourselves to ramp up our advocacy and build a movement that will translate this possibility into political commitment. The unprecedented progress that the world is making against hunger and poverty is an example of our loving God moving in the contemporary world, and God is inviting us all to get with the program.” World Bank Group President Jim Yong Kim responded to the launch of this moral imperative, stating, “Faith leaders and the World Bank Group share a common goal – to realise a world free of extreme poverty in just 15 years. The moral imperative can help drive the movement to end poverty by 2030 by inspiring large communities to act now and to advocate for governments to do the same. These commitments from religious leaders come at just the right time – their actions can help hundreds of millions of people lift themselves out of poverty. The statement closes by framing the imperative in stark terms: “Poverty’s imprisonment of more than a billion men, women and children must end. Now is the time to boldly act to free the next generation from extreme poverty’s grip.”

Football Against Poverty Didier Drogba , Ronaldo, Zidane in 12th Annual Match Against Poverty DROGBA, RONALDO AND ZIDANE AT THE MATCH AGAINST POVERTY IN 2012 Football superstar and Chelsea striker Didier Drogba joined a star-studded array of international active and retired players for the 12th Annual Match Against Poverty which will took place on 20 April at the Geoffroy-Guichard Stadium in Saint-Etienne, France. Didier Drogba, who like Ronaldo and Zinédine Zidane is also a UNDP Goodwill Ambassador, teamed up with the other football stars for a match against an AS St-Etienne All Stars team to help boost Ebola recovery efforts. Two thirds of the match proceeds will support UNDP’s work in the hardest-hit countries of Guinea, Liberia

and Sierra Leone, helping them to build back better from the epidemic. The remaining third will go to the Club’s Association “ASSE Coeur-Vert”, asd which supports social projects in Saint-Etienne. “I am honoured to support the people of the three countries who are trying to get through the devastation caused by the Ebola epidemic”, said Drogba, “and I encourage everyone to pull together to end this crisis, and to prevent it ever happening again.” The Ivorian football legend joins the friendly match for the second time. “I am also thrilled to be with Ronaldo, Zidane and all the other players to make a difference in the fight against Ebola.” The players confirmed up to now in the “Drogba, Ronaldo, Zidane, & Friends” team are: Cafu, Clarence Seedorf, Edwin van der Sar, Éric

Abidal, Christian Karembeu, Youri Djorkaeff and Fabien Barthez. Former and current St. Etienne players will comprise the St Etienne All Stars team. Thirteen players have confirmed up to now: Alex, Jérémie Janot, Pascal Feindouno, Dominique Rocheteau, Lionel Potillon, ubomír Morav ík, Laurent Paganelli, Bjorn Kvarme, Efstathios Tavlaridis, Sébastien Perez, Stéphane Pédron, Julien Sablé and Laurent Batlles. AS St Etienne’s Coach, Christophe Galtier will coach the team. Pierluigi Collina, the legendary six-time World Referee winner, will referee the Match. The match, which was televised globally, was supported by football’s governing body, the Fédération Internationale de Football Association (FIFA) and organised in partnership with the Union des Associations Européennes de Football (UEFA).

Business Journal April 20 - 26, 2015

Health Care

The Global Immunisation Campaign for Global Health

he World Immunisation Week, which will be held from 24-30 April 2015, will signal a renewed global, regional, and national effort to accelerate action to increase awareness and demand for immunisation by communities, and improve vaccination delivery services. This year’s campaign focuses on closing the immunisation gap and reaching equity in immunisation levels as outlined in the Global Vaccine Action Plan (GVAP). The Plan - endorsed by the 194 Member States of the World Health Assembly in May 2012 is a framework to prevent millions of deaths by 2020 through universal access to vaccines for people in all communities. The GVAP aims to: • Strengthen routine immunisation to meet vaccination coverage targets; • Accelerate control of vaccine-preventable diseases with polio eradication as the first milestone; • Introduce new and improved vaccines; and • Spur research and development for the next generation of vaccines and technologies.

• Limited resources; • Competing health priorities; • Poor management of health systems; and • Inadequate monitoring and supervision. In 2013, an estimated 21.8 million infants worldwide were not reached with routine immunization services, of whom nearly half live in 3 countries: India, Nigeria and Pakistan. Priority needs to be given to strengthening routine vaccination globally, especially in the countries that are home to the highest number of unvaccinated children. Particular efforts are needed to reach the underserved, especially those in remote areas, in deprived urban settings, in fragile states and strife-torn regions. The WHO Response WHO is working with countries and partners to improve global vaccination coverage, including through these initiatives adopted by the World Health Assembly in May 2012. The Global Vaccine Action Plan The Global Vaccine Action Plan (GVAP) is a roadmap to prevent

65 countries 65 countries must reach 90% national vaccination coverage with DTP3 by 2015. 16% of children are not being immunised against measles. 24 countries must eliminate maternal and neonatal tetanus by end-2015 The Immunisation Factsheet & Coverage Key Facts • Immunisation prevents illness, disability and death from vaccine-preventable diseases including cervical cancer, diphtheria, hepatitis B, measles, mumps, pertussis, pneumonia, polio, rotavirus diarrhoea, rubella and tetanus. • Global vaccination coverage is holding steady. • Immunization currently averts an estimated 2 to 3 million deaths every year. • But an estimated 21.8 million infants worldwide are still missing out on basic vaccines. Overview Immunisation averts an estimated 2 to 3 million deaths every year from diphtheria, tetanus, pertussis (whooping cough), and measles. Global vaccination coverage—the proportion of the world’s children who receive recommended vaccines—has remained steady for the past few years. During 2013, about 84% (112 million) of infants worldwide received 3 doses of diphtheria-tetanus-pertussis (DTP3) vaccine, protecting them against infectious diseases that can

cause serious illness and disability or be fatal. By 2013, 129 countries had reached at least 90% coverage of DTP3 vaccine. Global Immunisation Coverage 2013 Haemophilus influenzae type b (Hib) causes meningitis and pneumonia. Hib vaccine had been introduced in 189 countries by the end of 2013. Global coverage with 3 doses of Hib vaccine is estimated at 52%. There is great variation between regions. In the Americas, coverage is estimated at 90%, while it is only 18% and 27% in the Western Pacific and South-East Asia Regions respectively. Hepatitis B is a viral infection that attacks the liver. Hepatitis B vaccine for infants had been introduced nationwide in 183 countries by the end of 2013. Global coverage with 3 doses of hepatitis B vaccine is estimated at 81% and is as high as 92% in the Western Pacific. Human papillomavirus — the most common viral infection of the reproductive tract—can cause cervical cancer, and other types of cancer and genital warts in both men and women. Human papillomavirus vaccine was introduced in 55 countries by the end of 2013. Measles is a highly contagious disease caused by a virus, which usually results in a high fever and rash, and can lead to blindness, encephalitis or death. By the end of 2013, 84% of children had received 1 dose of measles vaccine by their second birthday, and 148 countries

had included a second dose as part of routine immunization. Meningitis A is an infection that can cause severe brain damage and is often deadly. By the end of 2013—3 years after its introduction—more than 150 million people in African countries affected by the disease had been vaccinated with MenAfriVac, a vaccine developed by WHO and PATH. Mumps is a highly contagious virus that causes painful swelling at the side of the face under the ears (the parotid glands), fever, headache and muscle aches. It can lead to viral meningitis. Mumps vaccine had been introduced nationwide in 120 countries by the end of 2013. Pneumococcal diseases include pneumonia, meningitis and febrile bacteraemia, as well as otitis media, sinusitis and bronchitis. Pneumococcal vaccine had been introduced in 103 countries by the end of 2013, and global coverage was estimated at 25%. Polio is a highly infectious viral disease that can cause irreversible paralysis. In 2013, 84% of infants around the world received 3 doses of polio vaccine. Targeted for global eradication, polio has been stopped in all countries save 3—Afghanistan, Nigeria and Pakistan. Polio-free countries have been infected by imported virus, and all countries—especially those experiencing conflict and instability—remain at risk until polio is fully eradicated. Rotaviruses are the most common cause of severe diarrhoeal disease

in young children throughout the world. Rotavirus vaccine was introduced in 52 countries by the end of 2013, and global coverage was estimated at 14%. Rubella is a viral disease which is usually mild in children, but infection during early pregnancy may cause fetal death or congenital rubella syndrome, which can lead to defects of the brain, heart, eyes and ears. Rubella vaccine was introduced nationwide in 137 countries by the end of 2013. Tetanus is caused by a bacterium which grows in the absence of oxygen, e.g. in dirty wounds or in the umbilical cord if it is not kept clean. It produces a toxin which can cause serious complications or death. The vaccine to prevent maternal and neonatal tetanus had been introduced in 103 countries by the end of 2013. An estimated 82% of newborns were protected through immunisation. Maternal and neonatal tetanus persist as public health problems in 25 countries, mainly in Africa and Asia. Yellow fever is an acute viral haemorrhagic disease transmitted by infected mosquitoes. As of 2013, yellow fever vaccine had been introduced in routine infant immunisation programmes in 35 of the 44 countries and territories at risk for yellow fever in Africa and the Americas and coverage was estimated at 41%. Key Challenges Despite improvements in global vaccine coverage during the past decade, there continue to be regional and local disparities resulting from:

millions of deaths through more equitable access to vaccines. Countries are aiming to achieve vaccination coverage of 90% nationally and 80% in every district by 2020. While the GVAP should accelerate control of all vaccine-preventable diseases, polio eradication is set as the first milestone. It also aims to spur research and development for the next generation of vaccines. The plan was developed by multiple stakeholders—UN agencies, governments, global agencies, development partners, health professionals, academics, manufacturers and civil society. WHO is leading efforts to support regions and countries as they adapt the GVAP for implementation. At the World Health Assembly in 2014, Member States discussed progress towards the GVAP goals and highlighted issues that must be addressed if they are to be achieved: • Sustainable access to vaccines—especially newer vaccines—at affordable prices for all countries; • Technology transfer to facilitate local manufacture of vaccines as a means of ensuring vaccine security; • Improved data quality including through the use of new technologies like electronic registries; • Risk communication and management to address misinformation on immunization and its impact on vaccination coverage; and • Evidence reviews and economic analysis for informed decision-making based on local priorities and needs.

Business Journal April 20 - 26, 2015

Special Report

The 42nd AIO Conference & General Assembly 2015

TUNISIA 2015 Special Report on Leading Insurance & Reinsurance Companies in Nigeria We have the pleasure to invite Insurance & Reinsurance Firms in Nigeria to participate in the Special Report: Leading Insurance & Reinsurance Companies in Nigeria for the 42nd AIO Conference and General Assembly slated for May 24-27, 2015 in Tunis, Tunisia. The AIO is the largest gathering of insurance regulators, professionals, investors and financial media from Africa, Asia, Europe and North America. THEME “African Insurance in the Face of Mass Events” The Conference and General Assembly will be jointly hosted by the Fédération Tunisiennes des Sociétés d’Assurances (FTUSA) and Société Tunisienne de Réassurance (TUNIS RE).

Welcome Address by President of the Local Organising Committee

The conference will be organised under the auspices of the African Insurance Organisation “AIO”. This conference presents a good opportunity for a valuable exchange of ideas and experiences in order to support

Requirements for Participation

SA” and Tunisian Reinsurance Company “TUNIS RE” are honored to host the 42nd AIO Conference and General Assembly from 24th to 27th May in Gammarth, Tunisia.

• Corporate Profile • Current Annual Report (quoted companies) • Corporate Photograph of MD/CEO • Advert Support

Lamia Ben Mahmoud Chairperson, 42nd AIO Organising Committee

The Tunisian Federation of Insurance Companies “FTU-

geria to International Audience • Opportunity for Firms to Market Services to Global MarMrs. Lamia Ben Mahmoud ket President of the Local Com• Enhance Corporate & mittee Brand Image of Participating Chairman of the Tunisian Rein- Firms among Global Operators surance Company “TUNIS RE” • Opportunity for Professional Networking & Business Engagement • Opportunity to Attract Foreign Investment/Players into the Nigerian Market Wishing you a pleasant stay in Tunisia!

business exchange between the different partners of our industry. On behalf of all members of the Organising Committee, we would like to welcome you to Gammarth.

Objectives of Special Report The objectives of the Special Report include:

• Showcase Leading Insurance & Reinsurance Firms in Ni-

DEADLINE: Thursday, April 30, 2015. For further enquiries and participation, pls call 08023088874, 07058919138 or email business.journal@ yahoo.com.

Business Journal April 20 - 26, 2015

Non Oil

Sector

Digest

www.businessjournalng.com

The KPMG Nigerian Mining Sector Brief 2014 With the return to democracy in 1999, the need to diversify the revenue base of Nigeria became paramount. A new national focus and strategy on mining evolved such that in 2007, the Nigerian Minerals and Mining Act (the Act) was enacted to revitalise the Nigerian mining industry.

igeria is endowed with vast reserves of solid minerals, including, but not limited to, precious metals, stones and industrial minerals. The country was a major exporter of tin, columbite and coal in the early 1970s. However, activities in this sector nose-dived considerably when crude oil production began to take the centre stage, and became a major source of foreign exchange for the country. With the return to democracy in 1999, the need to diversify the revenue base of the country became paramount. A new national focus and strategy on mining evolved such that in 2007, the Nigerian Minerals and Mining Act (the Act) was enacted to revitalise the Nigerian mining industry. There are over 40 different types of minerals spread across the country, including gold, barite, bentonite, limestone, coal, bitumen, iron ore, tantalite / columbite, lead/zinc, barites, gemstones, granite, marble, gypsum, talc, iron ore, lead, lithium, silver, etc. However, not all the minerals are available in commercial quantities. As part of the strategies to reform the sector, the Ministry of Mines and Steel Development (MMSD)1 has identified seven (7) strategic minerals, namely, Coal, Bitumen, Limestone, Iron Ore, Barites, Gold and Lead/Zinc for priority development as further discussed below: Coal Nigerian coal has been found suitable for boiler fuel, production of high caloric gas, domestic heating, briquettes, formed coke and the manufacture of a wide range of chemicals including waxes, resins, adhesives and dyes. Coal can be found in the central, middle-east and south east regions of the country (Anambra, Kogi, Benue and Enugu States). A reasonable estimate in these regions is put at a total of 396 million metric tonnes, while the unproven reserves are estimated to be in the region of 1,134 million tonnes. Bitumen In Nigeria, bitumen typically occurs both on the surface and sub-surface. The estimated probable reserves of bitumen in Ondo State (South-Eest region of Nigeria) is 16 billion barrels, while that of tarsands and heavy oil is estimated at 42 billion barrels. The probable reserve of bitumen and heavy oil in the entire tarsand belt is expected to double the reserves in Ondo State. The bitumen belt has been marked out into six (6) blocks with an average of 600 sq km each, four of which have been sold to investors. The remaining two blocks are to be placed for bidding in future. Limestone The largest and purest deposits of lime stone are found in the south-west and middle belt regions of the country. Limestone in the south west region of Nigeria has been estimated at 31 million tones. Most limestone mining activities are mainly for cement production.

mining investors can meet their power needs by engaging independent power producers for captive generation and supply of energy to the mines. Furthermore, access roads will ultimately improve with ongoing investments by the Federal and State Governments in road infrastructure. The on-going rehabilitation of the rail lines will also facilitate product evacuation across the country for export. • Security: The Niger Delta area of the country is now a peaceful region following the success of the on-going amnesty programme and law reform aimed at granting equity in petroleum companies to the host communities. The Federal Government security agencies are equipped to respond appropriately to social conflicts as and when they arise. Security concerns are, therefore, not of the magnitude that should discourage investors in the Nigerian mining sector. However, investors are well advised to have a robust corporate social responsibility programme to address the needs of their host communities.

ings for other metals.

Iron Ore Iron ore deposits have been found in various locations in Nigeria, but mainly in the north-central, north-east and south-east regions. Iron ore deposits in Nigeria typically occur in the following forms: hematite, magnetite, metasedimentary, bands of ferruginos quartzites, sedimentary ores, limonite, maghemite, goethite and siderite. Below are some of the notable iron ore deposits in central Nigeria: S/N Deposit Area Estimated Reserves (million tons) 1 Itakpe 310 2 Ajabanoko 60 3 Agbado-okudu 60 4 Tajimi 20 5 Anomaly K-3 30 6 Anomaly K-2 20 7 Ochokochoko 12 8 Agbaja 370.5

Barites In a survey carried out by the Nigerian Geological Survey Agency, proven reserves for Benue and Nassarawa States (central region of Nigeria) have been estimated at 111,000 tonnes while the estimated probable (unproven) reserves across the country, where mining is considered viable, is estimated at 21,123,913 metric tonnes Barites is suitable for glass, paint, and paper making. Also, it is used in petroleum well drilling. Lead-Zinc Lead-Zinc ores are usually found together. They are often associated with copper and silver. Lead-Zinc is found along the northeast and southwest

Gold Gold is associated with the northwest, central and southwest regions of Nigeria, although there are smaller occurrences beyond these major areas. The preliminary exploration and identification of deposits which is still ongoing has confirmed ten sites to be holding reserves of over 50,000 ounces2 of high quality gold. Till date, over 30 licences have been issued to cooperative societies and companies for mining of gold in the country. Most of the concessions are still at the exploration stage.

There are over 40 different types of minerals spread across the country, including gold, barite, bentonite, limestone, coal, bitumen, iron ore, tantalite / columbite, lead/zinc, barites, gemstones, granite, marble, gypsum, talc, iron ore, lead, lithium, silver, etc. trending belt. They occur in commercial quantities in the northeast and central region of Nigeria. The estimated reserve is well over 100,000 tonnes of lead and 80,000 tonnes of zinc. Leadzinc ores are used in the production of batteries, electrical cables, solders glass and even protective coat-

Challenges in the Nigerian Mining Industry The major challenges faced by the industry can be categorised into the following heads: • Project Funding: Due to the long period of inactivity and the slow implementation of the Federal Government’s reform agenda in the sector, multinational corporations have been reluctant to fund major mining projects in the country. However, the progress made in the regulatory reform, so far, is expected to stimulate activities by new investors in the sector. • Infrastructure Development: A major challenge to the development of the sector is the infrastructural imbalance within Nigeria, particularly, adequate electricity supply, and access roads to sites of mineral deposits. However, the ongoing privatisation of the national utility and reform of the power sector started in 2005 are stimuli for private investment in the sector. As capacity increases with new investments in the generation, transmission and distribution sectors, the shortages currently being experienced will be overcome. Meanwhile,

• Illegal Mining and Community Challenges: There are pockets of Illegal mining activities in some of the regions, with the attendant risks and community challenges. However, with the enactment of the Mining Act, foreign investors with the necessary permits and licences are guaranteed unfettered operation of their legitimate business in the country. Recent Updates in Nigerian Mining Sector Issuance of the roadmap for the development of the solid minerals and metals sector The Ministry of Mines and Steel Development (MMSD) released a road map for the development of the solid minerals and metals sector in 2012. The roadmap was designed to take full advantage of the rise in commodity prices and to facilitate a private sector/ investor-led mining sector growth. Some of the policy thrust of the mining sector (in the roadmap) includes: • Transparancy in granting of mining titles • Development of required infrastructural facilities • Investment in proper and adequate geo-science data • Facilitate local production of industrial raw materials resulting in substantial import substitution in the medium and long-term • Substantial job creation • Promotion of modern and sustainable mining practices • Increasing the sectors contribution to the country’s gross domestic product by 5% in 2015. The roadmap also details the action plans/programmes for the development of the sector, as well as performance targets. These action plans are divided into short-term plans (January to December 2012), mediumterm plans (January 2013 to December 2014) and long-term programmes (January 2015 to December 2020).

Business Journal April 20 - 26, 2015

Analysis

Ola Gam-Ikon 08066481111 olagamola@gmail.com

www.businessjournalng.com

The Uninsured Vs The Insurance-less Among Us

any Nigerians entered the New Year with anxiety and prayers over their lives and properties, especially because the elections were expected to come with violence that would lead to losses and damages. This seems normal. Some decided to take the abnormal step to take up insurance, having become more informed and aware of the positive developments in the insurance sector, and are already enjoying a less anxious life even if they would not feel secured. Such insurances are of personal nature namely: Life, Health, Pensions, Mortgage, Children Education and Motor (mostly Third Party). Unknown to most of us, insurance, which is basically the tool that helps us better manage the risks we live with, has now been put in a means (phone) that anyone can buy and it is available for as low as N20. Reputable insurers known to target organisations and governments are now quite keen to get you and me on their policyholders’ (customers’) database with increasing-

ly incentivised product offerings. And importantly, their claims settlement process is becoming less stressful. One is tempted to ask: Is it the turn of insurance? May be! However, the industry players know that there is yet a lot of work to do to transform, shift and engage the minds of Nigerians, mostly diehards, who ‘see, hear and speak no evil’ when it comes to insurance. We live and work with them. We have been discussing their insurance needs with them for decades but they would rather spend their earnings to replace and repair any asset damaged or lost except the human lives. They do not have insurance of any form, yet we have not stopped sending updates to them with a view to changing their position on insurance. They are, simply, uninsured! Interestingly, these ones do not tell others about their position and therefore do not discourage others from taking up insurance. This is because most people, inadvertently, believe they are too successful and prosperous to be insured. Yes, they are prosperous; they own

properties in the best parts of Lagos, Abuja and other major Nigerian cities. The banks, stockbrokers, lawyers and property consultants also banter with them regularly until something goes amiss when they are ill prepared. And the source of prosperity becomes weak leading to some real challenging times. Subsequently, we do not get to hear much about them and their businesses. Could insurance have saved them from the threat and probable demise? Yes. The uninsured as you would also have concluded are persons and organisations that can afford to do (take up and pay for) insurance but refuse to because they usually believe they have enough not to need insurance! Could it also be that such people keep more cash at home than in the banks? And buy properties more directly from landowners than through property consultants? Commonly, the uninsured transmit their non-believing nature to their heirs and successors who bear and share the stories when we meet them. The uninsured are hard to break as insurance players have discovered and

do not count them as immediate opportunity even as the image of insurance is lifted up. More attention is turned to the Insurance-less among us who constitute the greater population of Nigeria. They are found within the unstructured informal segment of our economy and are more exposed to the risks we live with, thus needing more protection through insurance yet lacking any knowledge of the subject as a potent tool for risk management. Sadly, we do not visit them as much as the uninsured, so they hardly know us and we do not know them. They are ready to participate in the broader economy and be counted as contributors to the development of a new Nigeria. Despite the positive changes that the National Insurance Commission (NAICOM) has recorded, these Insurance-less Nigerians are far from engaged towards insurance and seek more education about the subject and business. Some have expressed interest to know about it, however, the points of exchanging such knowledge are not

readily available, at least not on the platforms that they connect and chat, not to mention the physical locations. Visits to most insurance companies by the Insurance-less Nigerians are rebuffed by the Security Guard at the entrance or Receptionist as they are easily asked “Do you have an appointment with her?” The Insurance-less Nigerians seek to be engaged but the insurance industry is yet eyeing the juicy insurance deals and taking a rather gradual step towards engagement. My hope is that this will not be a case of ‘when I was ready, you were not ready’! The conversations and actions regarding micro-insurance and Takaful (Islamic insurance) are welcome developments that should, expectedly, address the issues associated with engaging the Insurance-less Nigerians. Now, I believe insurance operators have it; that is, the knowledge of the uninsured that they spend countless hours chasing and the Insurance-less amongst us that actually need their services.

ENTREPRENEURSHIP WITH MUIDEEN ADEBAYO IBRAHIM

t is on this premise that I want to admonish my ardent entrepreneurs’ readers on various techniques or strategies of how to finance businesses. It is quite unfortunate that in this part of the world, the major challenge confronting entrepreneurs is finance. Capital is inadequate and not readily available. The question is how can you expand or start your business when confronted with paucity of funds? It is on record that insufficient funds had killed a lot of businesses in the past whilst great ideas could not see the light of the day due to paucity of funds as well. There are various sources of finance, some of which are; Self Savings, Bootstrapping, Profit of the Business, 3Fs (Family, Friends and Fools), Suppliers and Trade Credit, Commercial Banks, Government Loan Program Grants such as [You Win Programme, National Poverty Eradication Programme (NAPEP), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Private or Angel Investors, Venture Capitalist,

There is a Chinese proverb which says that it is better to teach a child how to fish than to always give the child fish. Microfinance Banks, Private Equity placements, Public Equity Offerings and Leasing amongst others]. It is pertinent to note that for anybody to take you and your business venture serious, you must have been running the business or you have a fantastic business idea backed up with a well laid-out Business Plan. From experience, financial providers often like to see that the business has been running very well- that it is tested and trusted before they can show keen interest. Not only that, you must ensure that you have a Bank Account where you lodge proceeds because your Bank Statement might be requested for in order to see the in-flow and out-flow so as to take an informed decision on whether or not to finance or support your business. Keep the necessary books of accounts and registers. This will enable the financial providers to have trust and confidence in your business. Not only that, it portrays that you are an organised manager of resources (human and financials). It is also imperative to inform small

It is pertinent to note that for anybody to take you and your business venture serious, you must have been running the business or you have a fantastic business idea backed up with a well laidout Business Plan.

business owners that it is better to start small and grow big. Not only that, always think BIG and document your GOALS! However, ensure that your Goals conform to goals setting test that is: you have SMARTER goals vis-à-vis; Your Goals must be Specific, Measurable, Attainable, Time Bound, not only that, Evaluate your goals in order to ascertain whether or not you are on track and Revise your goals always. Other strategies you can use in order to reduce cost or overhead and have personal funds for expansion are; share office or operate from your apartment initially if you cannot afford an office rent, buy used office furniture. Note that today’s big global brands started from humble background. Who says your own business cannot be a global brand. Other ways you can use to reduce cost is to use sales representatives rather than employ permanent sales representatives. Aside from the foregoing, use free public relations opportunities rather than paid advert. Not only that, push your customers hard for prompt

payment. What you also need to do is what I call the 6Ps; Passion, Persistency, Perseverance, Patience, Positive Mindedness and Prayer. I will also like to admonish that you should Never Give Up! A lot of companies that are now global brands also went through ups and downs but their founders persevered. Most especially, with respect to funds raising in order to expand their businesses. So who says you too cannot raise the adequate capital or funds to expand your business. Just press on and keep thinking outside the box and be positive minded at all times. You would be surprised that success shall be yours. See you at the top! It is well! Muideen Adebayo Ibrahim is the Founder and CEO of LIBRA CONSULTING and can be reached via: Muideenibrahim2004@yahoo.com or 08037221517 (sms only).

Business Journal April 20 - 26, 2015

Books Arts Culture www.businessjournalng.com

Deutsche Welle: In dialogue with Africa

ews, analysis and fascinating reports: for people on the African continent, Germany’s international broadcaster Deutsche Welle (DW) is an important source of information. Deutsche Welle offers its listeners, viewers and internet users in Sub-Saharan Africa independent information and in-depth analysis of current events in Amharic, English, French, Hausa, Kiswahili and Portuguese. It conveys German and European viewpoints and serves as a platform for dialogue and exchange.

Welle Hausa” studio(© Deutsche Enlarge imageIn the” Deutsche Welle)DW’s Hausa programming is aimed at information seekers in western Africa, south of theSahel region, particularly in northern Nigeria and Niger. The Hausa radio program is particularly popular. Every week, it reaches 37 percent of DW’s target audiences inNigeria. The reporting in Hausa centers on issues in Africa, with particular emphasis on Nigeria and Niger. Radio magazines on health (Lafiya Jari), the environment (Mutum da Duni-

Literary Kolkata: A Guide to India’s First City of Books Anuradha Sengupta

oadside tea shack owners will talk at length on important writers of the day and rickshaw pullers adorn the backs of their vehicles with the names of writers. Literary fever peaks here with the arrival of the year’s most awaited event -- the Boi Mela (Kolkata Book Fair). It’s the world’s largest non-trade book fair (for the general public

instead of wholesalers) with approximately 1.5 million in attendance. This year’s Boi Mela ran from January 28-February 8 -- writers and bibilophiles from all corners of the country and the world literarily descended on the city. In addition to the book fair, Kolkata has countless havens for book lovers -- some shops are part of big chains, some are tiny independent operations hidden in alleys, some fall somewhere between big and tiny.

Poetry

Coat of Arms Patriots call, a voyage entreat humanity care falls, Triumph embrace a glorious call homage base stands tall A pattern true soldiers battling power strides hail Fortitude sojourn lives challenges rail wide quail Honesty dignity divergence shadows turning wheel Turbulence bits bites a vengeance politics strives fast and real Locust crusts freedom, labour pines slowly on trees Varsity ethic breeze slow chide to

order discipline flees Pledge loyalty linger patterns for growth splendor Lavish literacy paramount capital foreseen a native endure Nigeria flames of honor service plight human homage found Gazing indigenes cluster bright fair bending legacy grounds Appoint vision stride true justice punitive too! Behold! New Nigeria bakes; so why can’t you? ---Julie Omeike

yarsa) and the economy (Ciniki da Masana’antu) are the most successful shows. Education also continues to be a main focus in Hausa programming. Learning by Ear, an award-winning educational program for listeners between the ages of 12 and 20 in Africa, examines the challenges that today’s young Africans face and offers practical advice. DW Hausa broadcasts three radio shows - a total of 150 minutes of programming - per day. Shows run from 7:30 a.m. to 8 a.m., from 2 p.m. to 3

p.m. and from 7 p.m. to 8 p.m. local Nigerian time. Listeners can receive the programs via satellite (SES-5) as well as on shortwave. Individual magazines as well as the Learning by Ear series are also rebroadcast by DW’s local partner stations, which include Freedom Radio, Bauchi Radio Corporation and Voice of Nigeria. Nigeria is home to a large and growing mobile phone market. As such, Deutsche Welle began cooperating with local mobile providers this year to make episodes of Learning by Ear available as audio on demand. In

Nigeria, the service can be accessed via the mobile provider Airtel Nigeria: users simply have to dial the short code 51525 to listen to episodes on their mobile phone. In December 2013, DW Hausa celebrated 50 years on air. With its multimedia content, its close cooperation with regional partners and the work of the DW Akademie, Deutsche Welle aims to continue its success story in the region and to continue to be a reliable partner in dialogue with its listeners, viewers and users in Nigeria.

Call for Screen Writers Nigeria

cript Junction is a new screenwriting programme to connect UK and Nigerian writers. The programme has been designed by British Council in collaboration with the UK National Film & TV School (NFTS), the Nigerian Film Institute (NFI), the Edinburgh International Film Festival (EIFF) and the Africa International Film Festival (AFRIFF). The project aims to bring together, inspire and motivate a cohort of contemporary screenwriters to explore, develop and create screenplays through a range of high quality workshops, mentoring and development programme delivered by top industry professionals. Visiting industry guests will also speak to the participants. The project will explore UK/ Nigerian film trends, cinematic identity and the current marketplace, through structured co-tutoring with

screenwriting tutors from both film schools and visiting industry guests. Who can apply? The programme is designed for writers who are early in their professional careers (not for student level writers) who have already written at least one feature-length film script. This call is to identify six Nigerian writers to participate in the project. Scripts can be of any genre and do not need any specific Nigerian or UK ties. Timelines The programme will run from June to November 2016, with two workshops. The selected writers will attend a five-day workshop in June during the Edinburgh International Film Festival and a second five-day workshop at the African International Film Festival in Calabar, Nigeria in November 2015. At AFRIFF, participants will also pitch their projects to an industry

panel. Flights (including visas), accommodation and meals will be provided to participants. How to apply To apply, writers will need to submit: • 1 past feature-length film script as a writing sample (60-120 pages) • Short treatment/proposal of new film idea that will be written during Script Junction (up to 1000 words) • 1 covering letter (up to 400 words) explaining why you would like to be part of the programme. • Please include your full name, phone number and email address. Applications need to be submitted, in one attachment, via email by Midnight 20 April 2015, to arts.nigeria@ng.britishcouncil.org Script Junction is part of the British Council’s UK NG 2015 / 2016 season

Lagos Film Society Presents STIGMA (MOVIE PREMIERE)

TIGMA (dir. Dagogo Diminas. Nigeria/Germany/South Africa; 2013) tells the story of a mother and daughter (Ibiso and Vanessa) who contract HIV due to the kind of job they do as traditional midwifes in a village. Ibiso and Vanessa are quickly ostracized to die by family members and the community. Ibiso cannot stand the stigma, loneliness, and financial constraints, she gives up

finally and dies. But Vanessa chooses to fight stigmatisation, and rejection and triumphs over death. Because she finds somebody who stands by her side. The film is not just a drama about ignorance and the consequences of carelessness but also about the power to overcome desperate situations in life, to burst one’s bonds and finally to be what you want to

be. STIGMA stars Jackie Appiah and Hilda Dokubo in its lead roles. In collaboration with Lagos Film Society and Nigerian Film Corporation. Date: 25th April 2015 Venue: Old Film Unit, Nigerian Film Corporation (BESIDE VON), Obalende RD, Ikoyi, Lagos Time: 4PM FREE ENTRY!

Business Journal April 20 - 26, 2015

Maritime

Business Journal April 20 - 26, 2015

Automobile

Production Begins on 1-on-1 Dodge Vipers

The Viper offers different paint and stripe colors, a bunch of aero kits, sets of wheels and other customisable options. PHOTO BY DODGE

odge has just launched its new custom Viper configurator online at driveSRT.com/Viper. The site will let prospective buyers customise their snake with literally millions of options and color combos. Mostly colour combos.

Back in January, Dodge told us about its plans to offer the Viper GT Custom. Options include 8,000 hand-painted colors, 24,000 hand-painted racing stripes, 11 wheel options, 16 interior trims, seven aero packages, three brake packages, four suspension setups and a handful of standalone options.

Dodge says that brings the number of total combinations to more than 25 million. Site visitors can sit virtually inside their new cars, exploring interior options and designing their personalised instrument panel badge with the customers’ chosen name. Users can share their designs on

social media, while a PDF of the image, as well as technical information, can be downloaded. Buyers even get a 1:18-scale model of their personal Viper. The offer is only for customers, not for dealers, and Dodge will only build one of each combination. Of course, with 25 million or so to

choose from, a simple hue change would probably be enough. The non-customisable 2015 Viper starts at $84,995, while the GTC starts at $94,995. Dealers are taking orders now; production has just begun at the company’s Conner Avenue Assembly Plant in Detroit.

2015: Not a Bad Year for Toyota Prius The system’s combined 134 net system horsepower feels even stronger to the driver due to the unique way the system combines the torque of the gasoline engine and electric motor.

The Toyota Prius Three has 1.8L hybrid engine paired with a continuously variable transmission. PHOTO BY TOYOTA

Business Journal April 20 - 26, 2015

Obituary

Celebration of Corporate Death

Nigeria Airways: Murdered in Cold Blood 12 Years Ago by Government!

Part 1

Obasanjo

Chris Aligbe

his is the story of a national titan, who offered service to the nation for over 40 years. In these years, in keeping with the social responsibility philosophy of its establishment, “WT” (Whisky Tango), as it was fondly recognised in the global aviation circle, flew daily sorties in addition to scheduled operations to advance the aspirations of a new nation. Between 1960 – 1975, Nigeria Airways announced, publicised and projected the image of a new independent black African nation. From Europe to America, from Africa to Middle/Near East, the Nigerian flag flew on WT. It not only brought pride to the nation and its people, but also raised their profile globally at a time when very few nations of the world were in the global air space. Between 1975 and 1985, at the height of the struggle for African liberation when Nigeria’s vibrant foreign policy and role made her a frontline-state in the struggle against apartheid, WT was one of the sharpest instruments of our foreign policy. From Angola to Mozambique and Tanzania, the erstwhile national carrier carried out supportive operations to re-enforce Nigeria’s role in the liberation struggle. Between 1985 and 2000, it operated flights to Australia, New Zealand, America, China and Africa carrying Nigerian sports men and women for Commonwealth, Olympic and All-African Games as well as FIFA World Cup. It flew rescue flights for stranded and injured Pilgrims back from Israel and Jeddah. For over three decades, like a colossus, it bestrode the nation’s aviation industry, connecting cities and towns across the country, West and East Coasts of Africa. This is the story of Nigeria Airways (WT) that built a very firm foundation for the vast and highly reputable technical manpower upon which the nation’s aviation industry rests even up till now. This is the story of a national carrier that was sacrificed at the altar of ego, personal interest and inordinate ambition and aspirations of those who desired, not only to create their own airline but also plunder the vast properties of an airline whose assets were three times its liabilities at the time of its liquidation. The story is one of a sad commentary on the Nigerian nation. In May 2003, at the valedictory meeting of the Federal Executive

Council, marking the end of the first term of the Obasanjo administration, against the usual traditions of such end-term meetings which normally would be for reflections, banters and well wishing, two memos of far-reaching consequences were tabled for deliberation. The first of the twin memos was for the liquidation of the then national carrier “Nigeria Airways” and the second was for the floatation of a replacement national carrier named “Nigerian Global”. It was the then Minister of Aviation, Dr. Kema Chikwe, who, certain of a return, still as Aviation Minister in Obasanjo’s second term, pushed the memos for FEC’s approval. The timing was very strategic because all Ministers were already “psychologically away” from the affairs of government as they no longer had any stake. Their tenure had ended and so, they no longer had any interest or obligation to Nigerians except very few of them who were absolutely sure they would be in the second term team or “Legacy” politicians who, in or out of government, believed they owe the society some obligations. This was the setting when Chikwe presented her twin memos. The first was for the liquidation of Nigeria Airways. The memo contained over 18-point justification for the action sought. Accounts of eye-witnesses who were at the Council Chamber, in their narratives gave insight of the proceedings of that fateful day. The justifying points were mostly outright untruth, others half-truth while about only four of them could pass as facts. Dr. Chikwe diligently and flawlessly presented her memo after which the President asked for comments. Surprisingly, there was no single response. The general silence, to Obasanjo, was consent and he then

Kema Chikwe affirmed the Council’s decision to liquidate the national carrier. The second memo for the floatation of “Nigerian Global” was equally eloquently presented by Chikwe. But the passivity which attended the first memo was not to be, as Ciroma and Danjuma vehemently rejected her argument. Obasanjo tried to reinforce the minister’s position but when he turned to Atiku for concurrence, the game changed. Atiku, who throughout the arguments had bent his head to the table in seeming resignation, raised up his head and said, “it was better to leave the issue to the National Council on Privatisation [NCP]. At this point, other ministers found their voices as they, in unison supported Atiku. So Nigeria Airways was liquidated without any replacement. Brief as it reads, Kema’s liquidation memo was just the culmination of a carefully designed and executed process which started in the year 2000. In the first Cabinet re-shuffle Obasanjo carried out, Chikwe was brought from Transport to Aviation where she took over from late Olusegun Agagu. As at the time she assumed office in 2000, Nigeria Airways, though debt-stricken, was

breathing some fresh air from its Joint-Venture with British Airways on the Lagos-London route. The Joint-Venture, put in place by Jani Ibrahim, probably the sharpest and most business-minded Chief Executive that ever ran Nigeria Airways, was earning net revenue of N100 million monthly which was enough to pay salaries and pension. More critically, the Privatisation Programme of Nigeria Airways which was being handled by International Finance Corporation (IFC), an agency of the World Bank, had advanced to a reasonable stage. The 147-page document prepared by IFC had been presented to the BPE, NCP and the Presidency and had been approved. It was also approved by the Aviation Steering Committee (ASTRIC), first under Agagu, then under Chikwe. Everything appeared to be going on well until Chikwe terminated the Joint-Venture with British Airways. In truth, Chikwe cannot be wholly blamed for this termination. Rather, much of the blame should go to the then Managing Director of Nigeria Airways, Yomi Jones, who took over from Jani Ibrahim. Jones was the Lufthansa General Sales Manager for Nigeria and West Africa as at the time the Joint Venture between Nigeria Airways and British Airways came into being. He was openly very critical of the Joint Venture, which he felt impacted on Lufthansa market share. On assumption of duty, Jones showed unhidden determination to annul the JV which he hated with a passion. He did not seem to understand that the JV was the cash-cow of the beleaguered airline in spite all counsels. For though, Jones was impeccably honest and straight and did not understand the language of illicit incentive or corruption, he was too simple and inadequately exposed to the complexities of an airline man-

agement, more so in a country like ours where “outside managers” were the de facto CEOs of Nigeria Airways. Thus, his appointment signaled the beginning of the down-turn in the fortunes of the ill-fated Nigeria Airways, at the onset of this democratic dispensation. By 2001, Chikwe had sought and got approval for a facility of $30 million from the Cairo-based Afrexim Bank for the revamping of the sick airline. But before she could process it, the IFC, BPE and NCP raised serious objections to the President on the grounds that it would further increase Nigeria Airways liability and make it unattractive to investors. More so, as the privatisation document already approved stated clearly that no facility above $2 miilion should be sought for the airline-in-privatisation. The blocking of this facility was the beginning of the end. The Minister felt sorely abused (and resolved) that, since IFC, BPE and NCP stopped her from acting on Nigeria Airways, a major Parastatal under her because of privatisation, “that she would scuffle the entire privatisation process by ensuring there will not be any airline to privatise.” From that moment, Chikwe set out to undermine all the factors laid out in the IFC document to guarantee successful privatisation of the then National Carrier. These included, but not limited to, exclusivity on five key routes for the new airline that will come out of the privatisation, retention of the staff of Nigeria Airways, particularly the highly trained technical and flight crew and engineers, retention of single designation on BASA, guided Open Skies with the US as well as single entry point, into Nigeria by foreign airlines. The IFC, in Page 78 of its report, states, inter alia, “further liberalisation on Lagos-London, at this point in the development of the Nigeria air transport market would essentially reduce the prospects for orderly development of the national aviation sector, put Nigeria at a competitive disadvantage…; increase Nigerian travellers’ reliance on foreign carriers, reduce Nigerian air transport contribution to the GDP and realistically eliminate two direct potential investors in Nigerian air transport sector – British Airways and Virgin Atlantic.” In Pages 109, 110 and 111, IFC further gave a deft analysis of the consequences of Liquidation, some To be continued NEXT WEEK Chris Aligbe Former GM, Public Affairs--Nigeria Airways

Business Journal April 20 - 26, 2015

Political Economy www.businessjournalng.com

The 5 Things Buhari Should Do if Nigeria Elects Him President Tolu Ogunlesi

o one is sure what the outcome of the Nigerian elections will be. In recent days the state-bystate projections have multiplied, occupying the front pages of major Nigerian newspapers. The opposition believes that had the elections held as originally scheduled, in February, before a controversial postponement, General Muhammadu Buhari would have won comfortably over president Goodluck Jonathan. But six weeks, in politics, is an eternity. Since the postponement the momentum has swung away from Buhari’s All Progressives Congress, towards the ruling Peoples Democratic Party. What is unclear is the extent to which the gap between the two parties – if indeed there was any – has narrowed. There is understandable nervousness regarding these elections, never before now, it seems, have the stakes been this high. If the election takes place as planned (there are a number of court cases that appear aimed at scuttling it) and is not attended by a stalemate, and Buhari is declared winner by the electoral commission, here are five things the new President should – or will have to – do: . Apologise Thirty years ago Buhari and his deputy, the late Tunde Idiagbon, ran the country as stern, unsmiling, bordering-on-ruthless military generals. They jailed hundreds of politicians (a good number of them unfairly; such was the blanket nature of the clampdown), muzzled the press, retroactively instituted the death sentence for drug trafficking (resulting in the execution of three convicted persons), and generally presided over an increasingly stifling atmosphere. While they may have had good intentions – cleaning up in the wake of a corrupt and inept set of politicians – and while it is important to understand that a dictatorship, by its very nature, requires dictatorial action, I still think that Buhari owes some people, or groups of persons, an apology; a symbolic action to turn the page on a past that was as marked by error as it was by its idealism. People like Adeyemi Adefulu and Tinuoye Shoneyin, who insist the Buhari regime unjustly treated him – even while taking their place on a growing list of Buhari victims who have since forgiven him and are now championing his candidacy. Shoneyin’s daughter Lola, a writer, is even on Buhari’s campaign team and has written on this. Adefulu says: “I [would] still like Buhari to vocalize an apology and offer some succour to people like me whom his government brutalized in the past. It is the least he can do. To do so is not weakness. Indeed, it is

Buhari strength to admit the mistakes of the past and to promote national reconciliation.” Assert There will be hundreds of appointments to be made, starting May 29 – ministers, special advisers, senior special assistants, special assistants, ambassadors, members of governing boards for tens of federal government bodies, possibly even new leadership for the military and police. Much of the attention will be on his choice of chief of staff, finance and petroleum ministers, and his economic management team. In his book, The Sixteen ‘Sins’ of General Muhammadu Buhari, Tam David-West, Buhari’s minister of petroleum during his days as military head of state, and an enduring supporter, says his appointment as a minister came as a surprise; based purely on his resume and his reputation. While Buhari’s pedigree suggests that in making his key appointments merit will stubbornly trump political pressure, it is important to note that he is also now, in his most recent incarnation as presidential candidate of a motley coalition of politicians, a much more pragmatic player than ever before. Nigerians will also be expecting him to provide moral authority and hands-on leadership to the team. He has himself hinted, in a recent letter to Nigerians, of his desire to ensure

“the Federal Executive Council, which has been turned to a weekly session of contract bazaar, will concentrate on its principal function of policy making.” Assess Four years of $100 plus per oil barrel prices have come to an end, and Nigeria hasn’t got very much to show for it; understandable when you consider that the last four years have been awash with stories of dodgy oil deals and large-scale oil bunkering. Buhari’s first task will be to assess just how bad things are. (We already have an idea, Nigeria is expected to earn, this year, only two thirds of what it earned in oil revenues last year). In recent speeches Buhari has repeatedly hinted at drawing a line between past and present, by which he means restricting his anti-corruption clampdown to infractions that occur on his watch as president and not those that preceded him. This seemingly mollifying stance is likely to have arisen on account of the frenzy with which the ruling party has sought to portray him as being still as obsessed with sending perceived opponents to jail as he was three decades ago. As a civilian President he will probably realise that he has to decide, on a case-by-case basis, where that line-drawing will apply, and where it will not. Finally, Nigerians deserve, within Buhari’s first hundred days in office, a

State of the Nation Address, in which he will provide an honest and detailed view of the country’s financial situation. Articulate The entire system of government communication requires overhauling. Currently it’s divided among several officials, including a minister of information, a special adviser to the president on media, and any number of presidential assistants and special assistants assigned to specific functions like “social media”, “new media” and “public affairs. The result is an alarming incoherence, visible every time you open a newspaper, or your Twitter feed. As president Buhari should immediately take steps to streamline government communications, and create a unified, hierarchical structure in which all roles and responsibilities are clarified. He may also want to consider creating a central management team for government communications, similar in intent and style to the one former president Obasanjo created for the economy. Attack Boko Haram has in the last few years proven to be the ultimate disciplinarian of the Nigerian state. If elected, Buhari should take immediate steps to shore up the confidence and capacity of the Nigerian military. His opponents have worked hard at

labeling him an Islamic fundamentalist, an apologist for Sharia Islamic law, and even a Boko Haram sympathiser. On the strength of available evidence – including testimonials, and his record as Head of State – the allegations are implausible. In his book Honour For Sale, Debo Bashorun, one-time Nigerian presidential spokesperson (during the regime of military dictator Ibrahim Babangida, who overthrew Buhari in August 1985) suggests that Babangida, not Buhari, was the one who tolerated religious fundamentalism. Bashorun writes of the “sudden re-emergence” during Babangida’s time, of “self-proclaimed clerics and Islamic fundamentalists whose nocturnal and divisive activities had earlier been effectively curtailed during the Buhari/Idiagbon administration.” As head of state Buhari showed little mercy or tolerance towards religious extremists or militant challengers of the Nigerian state whether they were Chadian bandits laying siege to the northeast at that time Boko Haram, or the rump of the Maitatsine sect, a 1980s precursor of Boko Haram. A similar approach to Boko Haram will be required. NB: This piece was written two days before the March 28, 2015 Presidential Election.

Business Journal April 20 - 26, 2015

DiplomaticZone

www.businessjournalng.com

Australia Awards Postgraduate Scholarships to 18 Nigerians Eighteen Nigerian professionals were among 200 people from 22 African countries selected to take up Australia Awards Scholarships at Masters and PhD level at Australian universities from January 2015. Six recipients from Cameroon and two from The Gambia were also selected. Australia’s High Commissioner to Nigeria, HE Jonathan Richardson, hosted a high profile reception for the 2015

Australia Awards Scholarship recipients from Nigeria to celebrate their selection and bid them farewell. “The Australian Government wants to see highly educated, talented professionals contributing to the development of Nigeria and beyond. The Australia Awards provide the training and skills necessary to make this a reality and I want to wish every recipient travelling to Australia the best of luck in their studies” he said.

The Australia Awards programmes offers postgraduate training opportunities across Africa in areas where Australia is recognised as having world-leading expertise, including agriculture and food security, mining and natural resource management, and public policy. The Australia Alumni Association of Nigeria was officially launched in July 2014.

The Australian High Commissioner to Nigeria, Jonathan Richardson with the 18 Australia Scholarship Awards recipients from Nigeria at the farewell reception he hosted in their honour.

German Embassy: Donation for Rickets Project in Northern Nigeria

India-Nigeria:

Pragmatic Political & Economic Relations Political Relations Relations between Nigeria and India have traditionally been warm and friendly. India established its diplomatic mission in Nigeria in 1958 and that was two years before Nigeria gained its independent in 1960. Both countries have been in the forefront of the international struggle against colonialism and apartheid and have closely collaborated in various international fora. Bilateral Trade The bilateral trade between India and Nigeria in 2013-14 increased by 2.5% to US$16.98 billion, mainly due to large crude oil import by India. India’s exports to Nigeria have grown gradually during the last few years - from US$ 1.08 billion in 2007-08 to US$2.66 billion in 2013-14. During 2013-14, our imports, mainly consisting of petroleum and crude products, stood at US$14.31 billion as against US$13.82 billion registered in 2012-13. India’s Rice exports to Nigeria declined from US$339 million in 2012-13 to US$78 million in 2013-14 due to steep increase in import duty coupled with enhanced local production of rice. Nigeria is India’s largest trading partner in Africa and India is the largest trading partner of Nigeria globally. Indian-owned companies employ largest number of employees in Nigeria after the Federal Government of Nigeria. The trade statistics since 2007-08 is given below: Oil Trade: Nigeria has become one of the main sources of crude for India. India imports around 8% to 12% of its crude requirements from Nigeria. In recent times, India has become the largest importer of Nigerian crude oil.

India has become the largest importer of Nigerian crude oil.

Bank (AfDB) meeting in Kigali, Rwanda.

EXIM Bank LOC: During his visit to Nigeria in October 2007, the then Prime Minister Dr. Manmohan Singh announced Line of Credit (LOC) worth US$100 million to the Government of Nigeria. The US$100 million is marked for three power projects in the states of (i) Enugu - US$ 40 million, (ii) Cross River- US$30 million and Kaduna - US$30 million. EXIM Bank of India signed the agreement with Nigerian Government on May 22, 2014 on the sidelines of Africa Development

Consular Relations About 40,000 Nigerians obtained Indian visas during 2013. The main reasons for visiting India are medical treatment and business. Number of Nigerian students going to Indian tertiary institutions is also on rise. Many Indian football clubs have Nigerian professional players. Oil Trade: Nigeria has become one of the main sources of crude for India. India imports around 8% to 12% of its crude requirements from Nigeria. In recent times,

Air Services There are no direct air services between India and Nigeria. Air travel between India and Nigeria involve transit travel at Dubai, Addis Ababa, Nairobi, Cairo, Doha, Frankfurt or London. Indian Community The Indian community in Nigeria is estimated to be about 35,000 persons - about 25,000 Indian nationals and about 10,000 Persons of Indian origin holding other nationalities.

Economic Activities & Projects Over a hundred companies are currently operating in Nigeria that are owned and/or operated by Indian or Persons of Indian origin. Prominent among them being BhartiAirtel, Indorama, Olam International (now Singapore registered), Tata, Bajaj Auto, Birla Group, Kirloskar, Mahindra, Ashok Leyland, NIIT, ApTech, New India Assurance, Bhushan Steel, KEC, Skipper Nigeria, Dabur, Godrej and Primus Super-speciality Hospital besides 15 prominent companies in Nigerian Power Sector. NEXIM Bank LOC: During his visit to Nigeria in October 2007, the then Prime Minister Dr. Manmohan Singh announced Line of Credit (LOC) worth US$100 million to the Government of Nigeria. The US$100 million is marked for three power projects in the states of (i) Enugu - US$ 40 million, (ii) Cross River- US$30 million and Kaduna - US$30 million. EXIM Bank of India signed the agreement with Nigerian Government on May 22, 2014 on the sidelines of Africa Development Bank (AfDB) meeting in Kigali, Rwanda. Air Services There are no direct air services between India and Nigeria. Air travel between India and Nigeria involve transit travel at Dubai, Addis Ababa, Nairobi, Cairo, Doha, Frankfurt or London. Indian Community The Indian community in Nigeria is estimated to be about 35,000 persons - about 25,000 Indian nationals and about 10,000 Persons of Indian origin holding other nationalities.

his donation had been sourced for by the Kolping Family Waldbüttelbrunn in Germany. The project “Hope for the Village Child” helps children suffering from rickets and whose feet or legs are crooked. The project has been managed by Sister Rita Schwarzenberg for many years. She has lived in Nigeria for over 30 years. The Kolping Family Waldbüttelbrunn is well appreciated for the donation. This has also made a valuable contribution to German-Nigerian friendship. The Kolping Society of Germany is a Catholic social organisation with more than 250,000 members in over 2,600 Kolping Families nationwide. It is part of the International Kolping Society and the Kolping Society of Europe. The organisation is named after the Catholic priest Adolph Kolping, who founded journeymen’s associations in the 19th century to combat the plight of young journeymen during the Industrial Revolution.

South Africa: Immigration Services for Non-South Africans Monday – Friday from 08h00 to 15h00 Visitor’s Visa Requirements: • Application Form BI84 fully completed in black ink only. • Two (2) passport size photographs. • A valid passport (validity of at least 30 days after the intended stay). • Copy of passport data page as well as copies of existing visa and previously issued visas. • Self-introduction letter with physical address and phone number. • Introduction letter from an employer, signed with contact details (physical address and landline/mobile numbers). • Verifiable hotel reservation/booking. • Original and copy of vaccination certificate (Yellow fever card) duly completed by a hospital/doctor/Travel Clinic. • Proof of financial status (six (6) months bank state-

ments) or financial support letter from employer with six (6) months bank statements. • Birth certificate and letter of consent from parents for minors/children travelling. • Marriage Certificate where applicable and if the intended stay will be for more than 90 days. • Verifiable flight booking. • Non-refundable Visa Fee of N8,600.00. • Non-refundable service fee of N9,000.00.

Sports

Business Journal April 20 - 26, 2015

Afcon 2015: The Five Lessons from Africa Cup of Nations

Piers Edwards he 2015 Africa Cup of Nations came to a dramatic end when Ivory Coast sealed a dramatic 9-8 victory over Ghana on penalties. The win brought to an end a 22-year drought for Ivory Coast, and capped a tournament that was moved at the last minute and almost over-shadowed by violence. But what did we learn? Here are 5 Key Lessons from the 2015 tournament. 1. Ivory Coast have finally ditched their chokers tag After losing in the 2006 and 2012 finals (and limited displays at the past three World Cups), Ivory Coast had been accused of lacking mettle. But anyone who saw how they responded to adversity in te final - converting five penalties when a miss at any stage would have lost the cup - may reconsider. Ghana did little wrong in the final but this was a fully-deserved success for the Elephants, who have finally won again despite the departure of several members of their “golden generation” - including Didier Drogba, Didier Zokora, and Emmanuel Eboue. Many of the old guard were on the field in Bata - with Kolo Toure, Tiake Siene and goalkeeper-turned hero Boubacar Barr all appearing at a seventh Nations Cup. The parallels with their sole previous success, in 1992, were uncanny. At the final, the Ivorians played Ghana, the game ended 0-0, there was a marathon shoot-out (22 at final, 24 in 1992) and the goalkeeper was the hero (in 1992, Alain Gouamene was also at a seventh Nations Cup).

Ivory Coast took the Africa Cup of Nations trophy after a goalless draw led to penalties were attacked with various missiles and had to shelter on the pitch. One of the crowd control ideas in particular left a great deal to be desired.

them. In fact, they simply whooped and cheered. But what prompted the violence? Although the local enthusiasm for

Equatorial Guinea really were going to win the competition - and once this narrative didn’t pan out, the ugly recriminations began.

2. You can organise a Nations Cup in just two months The Confederation of African Football (CAF) had spent nearly three years preparing for a 2015 Nations Cup in Morocco when the North Africans effectively pulled the plug in November over fears Ebola would spread to the country. That left little over two months to find a new host. With few forthcoming because of continuing Ebola concerns, CAF asked Equatorial Guinea, who had co-hosted in 2012, to step in. They duly obliged and despite widespread doubts - especially once the condition of the new venues, Ebebiyin and Mongomo first came to light somehow managed to pull it off. There were some problems, with teams lamenting the poor accommodation - some hotels flooded, others with dangerous wiring - but by and large, Equatorial Guinea turned the finals into an improbable success. Hicham El Amrani, General Secretary of CAF, called the turnaround “miraculous - nothing short of that.” 3. Using a helicopter to clear a stadium does not work Surprised? The semi-final between hosts Equatorial Guinea and Ghana, at the Estadio de Malabo, was marred by violence from the home fans. Ghana supporters

Ghana’s Christian Atsu (left) vies with Guinea’s Kevin Constant in the quarter-final A helicopter was flown just 10 metres above fans, but failed to disperse

beer is considerable, the anger seemed to stem from the genuine belief that

4. You can change your coach

and squad at the last minute Nothing about Equatorial Guinea’s run to the semi-finals made any sense. A little over two weeks before the finals, they changed their coach bringing in Argentina’s Esteban Becker, who promptly altered a third of the squad. Some of his new charges had not played a match for six months prior to the first week of January, but he rallied the band of lower division footballers to make the semi-finals at only their second Nations Cup. The manner of their quarter-final win over Tunisia still leaves a sour taste in the mouth. Referee Rajindraparsah Seechurn’s decision to award the hosts the most contentious of stoppage time penalties kept Equatorial Guinea in the competition, but brought accusations of cheating from the Tunisians. 5. Christian Atsu should be playing more at Everton The Ghanaian winger, who scored one of the goals of the tournament in the quarter-final victory over Guinea, was named Player of the Tournament after a series of bright displays. His performances belied his failure to make an impact at Everton, where he is on loan from parent club, Chelsea. Ivory Coast’s Gervinho knows what it is like to underwhelm in the Premier League but he was a joy to watch, constantly zooming past players as he relentlessly drove forward when in possession.

Business Journal April 20 - 26, 2015

April 20 - 26, 2015

TheLantern

“

Africa needs to scale-up productivity so agriculture contributes to the health and prosperity of the poor women and men living in rural areas. In other words, agriculture must generate enough and diverse food to eliminate hunger, and enough income to eliminate poverty.” Kanayo Nwanze IFAD President

PRINCE COOKEY 0802 308 8874 prince.cookey@yahoo.com.

BANKING

A Tale of Three Regimes Since 2004 to date, the banking sector and Central Bank of Nigeria (CBN) have welcomed three different Governors of three different governing styles. In essence, Chukwuma Soludo, Lamido Sanusi and Godwin Emefiele represent three dimensional regimes in one critical sector-Banking.

or those that lived through the Central Bank of Nigeria (CBN) regimes of Professor Chukwuma Soludo and Mallam Lamido Sanusi, it was always a difficult act to objectively locate the successes and failures of both administrations in terms of curing the banking sector of its endless Ebola diseases and building strong bricks for sustainable future growth. The reason being that you either loved one intensely to over-trumpet his pet achievements in office and overlook the obvious shortcomings or you loathed the other with such intensity to brand him colossal failure without reservation. It was a time when emotion ruled the hearts and minds of men rather than factual reasoning. Yet-some held on to reason, but many failed the emotional test. In the matter of Soludo and Sanusi, there was no room for siddon look (due apologies to the late Cicero of Etsako, Chief Bola Ige). Yes-you must love one lovingly and despise the other rudely-such was the atmosphere that pervaded the era of both regimes.

The Soludo Years

In 2004, Soludo mounted the stage as CBN Governor through the blessing of the Olusegun Obasanjo administration. His policy mantra was Banking Consolidation via N25 billion capital base for banks. The key objective was to strengthen the balance sheet and capacity of Nigerian banks to underwrite big ticket transactions and in the process, energise sustainable growth of the national economy. However, a silent plank of the policy was to prune the number of banks operating in the country then from a record 89 operators to more manageable but stronger entities. Like every public policy, the unintended consequence was large-scale retrenchment in the banking sector arising from forced reduction in the number of Deposit Money Banks (DMBs) from 89 to 24. And like everything Nigerian, the controversies erupted on the basis of two latent questions:

Soludo Must every bank write big ticket transactions? And secondly, must every bank operate with N25 billion capital base? By the time Soludo left office in early June 2009, his regime was known for ONE major issue: Banking Consolidation.

Enter Lamido Sanusi

The exit of Soludo gave rise to the emergence of Mallam Sanusi Lamido Sanusi as CBN Governor. In early 2009, Sanusi called a press conference in Lagos and announced the sack of the management of Intercontinental Bank Plc, Oceanic Bank Plc, Bank PHB, Fin Bank, Union Bank of Nigeria, Afribank Plc etc. The banking sector quaked to its foundation-Welcome to Big Bang! As kudos and bewilderment visited his earth-shaking policy, Sanusi insisted his action was based on joint audit examination conducted on the victim-banks by examiners from the CBN and NDIC at two different periods. To his admirers, Sanusi was the Hero of Our Time. To his critics, he was nothing but a Regulator from Hell. And in a typical Nigerian fashion, the conspiracy theories took over the airwaves and printed pages. Again, the unintended question was: what happened to the Soludo Banking Consolidation magic touted as the divine path for Nigerian banks? As expected, the naysayers to the banking consolidation reveled in the beauty of the mo-

Emefiele

Sanusi ment-‘we said so’ became their mantra. For Sanusi, the sky was blue as more converts joined his Corporate Governance Crusade by the day, dumping to the dustbin, the opposing views of critics. Indeed, not even the resounding voices of lawyers to the deposed MDs that their clients were denied the opportunity of sighting and responding to the report of the CBN/NDIC examiners upon which they were sacked could sway the Sanusi lovers. ‘Don’t mind them, they were as guilty as charged’ became the sing-song of the Sanusi boys and girls. And when one of the deposed MDs, Cecilia Ibru was eventually convicted and jailed, the Sanusi regime was made. However, not long after, the sky suddenly turned red for Sanusi when he embarked on a voyage of ‘illegal’ disclosures against the Jonathan administration on alleged mission billions of Dollars at NNPC. And by the time his regime was truncated before its Final Hour in early 2014, the Sanusi regime succeeded in entrenching the tenets of Corporate Governance in our psyche.

The Soludo/Sanusi Nexus

Some analysts in the market have wondered what a regulatory nexus between the Tactical Policy of Soludo and Big Bang Style of Sanusi could have meant for the CBN as an entity, the

banking sector and the larger economy. A case of what might have been- a dream ticket?

Looking Back & Forward

Both Soludo and Sanusi were heroes and victims of a diseased banking sector- a sector that suffers from eternal scourge of man-made incurable Ebola Virus Disease (EVD). Both made their marks in their chosen areas of policy concentration (Banking Consolidation and Corporate Governance) respectively, but left unanswered questions behind as humans they were. For Soludo, pruning down the 89 existing banks via Banking Consolidation before the advent of the global financial meltdown was a policy masterpiece that strengthened the banking system to effectively withstand the vagaries of the meltdown and stock market crash. For Sanusi, enforcing and entrenching the Code of Corporate Governance in the banking system provided regulatory safeguard for the future of the financial system. On the downside, the Sanusi Big Bang was not a tribute to Soludo. How come the banks operated freely on deadly high level of non-performing loans for so long under the nose of the Prof.? For Sanusi, his endless controversies were damaging the health of the same financial system he swore to and was

working to advance-a case of one step forward, two steps backward. However, one recurring decimal of both regimes were high levels of fraud in the banking sector. As hard as they tried, none of them succeeded in extinguishing the raging fire of fraud in the financial industry. For instance, the NDIC noted in its 2012 Annual Report that Deposit Money Banks (DMBs) reported 3, 380 fraud cases involving over N17.97 billion with expected losses of N4.52 billion in 2012. This was a rise of 10.9% over fraud-related losses of N4.072 billion in 2011. Accordingly, the Rise, Fall and Rise of fraud cases in banks simply indicate that neither the Soludo Banking Consolidation nor the Sanusi Corporate Governance could cure the banking industry of its light fingers. Like life itself, the banking sector will always have problems and challenges, regardless of the name and face of the regulator. Today, we can collectively commend and condemn the two regimes for their good gestures and shortcomings respectively while in office. But we cannot but eulogise the zeal, zest and patriotic spirit behind tier different visions for the banking sector.

The Godwin Emefiele Era

The unceremonious exit of Sanusi opened the door for the

emergence of Godwin Emefiele as CBN Governor. Today, almost One Year in office, the market is still searching for the true face of Emefiele. But what is true is that Emefiele ascended the CBN throne at a very difficult and trying moment for the Nigerian economy. He is facing multiple challenges on multiple points: The free fall in oil prices, depletion of foreign reserves, depreciation of the Naira, projected drop in GDP growth for 2015, rise in inflation and lately, political and economic uncertainties arising from the 2015 general elections. In essence, Emefiele could be remembered in his First One Year in Office as Crisis Manager. However, the banks can at best stand on his commitment not to cause the death of any bank during his tenure. He made it clear thus: “I don’t want to leave a legacy of somebody who killed a bank. It is very simple. All I need to do is to ban them from the forex market from one week and there is going to be a run on the bank. But my responsibility today is to create financial system stability by ensuring that we support the banking and financial system so as to grow the economy. I will try as much as possible not to suspend a bank, but we would try as much as possible to try to make them do the right thing. ” While we wait anxiously for the true face of the Emefiele regime to emerge, we hope not to wait for too long.

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