Edition 3 by Francis Toke

Diamond Bank Gasping for Breath as Key Indices Slide

hese are difficult and challenging times for Diamond Bank Plc as major operational indices slide as at the end of 2014 financial year and first quarter of 2015. The downward looking indices include Capital Adequacy Ratio (CAR), Net Interest Margin

(NIM), Profitability, Gross Earnings and Net Margin, while the bank harvested hikes in Cost to Income Ratio (CIR), Cost of Funds (CoF), Operating Expenses and Impairment Charges. According to the bank’s financial performance in the year ended December 31, 2014, the Capital Adequacy Ratio (CAR)

declined to 17.5% from 18.5% in 2013, mainly due to aggressive growth in loan portfolio as against proportionate growth in capital resources. Also, Cost of Funds (CoF) rose to 3.7% in 2014 and 3.5% in Q1:2015 from 3.1% in 2013 while the 2014 credit impairment charges rose by 13.2% to

N26.4 billion from N23.3 billion in 2013. In the same period under review, the bank’s Cost to Income Ratio (CIR) rose to 63.3% for 2014 from 59.4% in financial year 2013 (but went up to 62.0% in the first quarter of 2015. Nevertheless, it is still below the 67.8% average rate for Tier-2

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banks. Also, the 2014 Profit Before Tax (PBT) and Profit After Tax (PAT) equally declined by 12.4% and 10.7% respectively, and also in first quarter of 2015 -PBT (-9.5%) and PAT (-15.1%) joined the ranks of declining indices. According to Afrinvest Research, “a further analysis of the

operating expenses shows that substantial increase in AMCON Resolution Fund (+149.5%), professional fees (+37.4%) and personnel expenses (+13.3%) accounted for the rise in Cost to Income Ratio (CIR) in financial year 2014. Continues on PAGE 2

Monday April 27 - Sunday May 03, 2015

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Pension Industry Paid N271bn to Retirees in 2014

O QUOTE

perators in the pension industry paid out total of N271.15 billion as lump sum to retirees in 2014 under the new Contributory Pension Scheme (CPS) and an average monthly pension of N3.84 billion. In addition, another sum of N62.20 billion was paid as premium to

insurance companies to provide life annuity for 14, 784 retirees. Mrs. Chinelo Anohu-Amazu, Director-General, National Pension Commission (PenCom) told Business Journal in an Executive Chat that a total of 115,529 workers had retired as at 31 December, 2014 with 87.20 percent (100,745) of the retirees on Programmed Withdrawal, while the remaining

12.80 percent (14,784 retirees) were on Life Annuity. She said during the period, a total sum of N124.60 million and N12.41 million were paid as lump sum and average monthly pension respectively for 246 retirees on health grounds while a total sum of N67.31 billion death benefits were also paid to beneficiaries of 25,232 deceased workers in both the public and private

sectors. “The pension industry had accumulated a total of N2.54 trillion pension contributions as at the reporting period. The pension contributions contributed by the public sector stood at N1.45 trillion, representing 57.19 percent of the total, while the private sector contributed N1.09 trillion (42.81 percent),” she said. “The total value of pension

industry assets under the CPS as at 31st December, 2014, grew to N4.61 trillion from N4.06 trillion in the preceding year, with an average annual growth rate of 30 percent. This pool of pension funds is a potential platform for attaining the transformation agenda of Government in the provision of infrastructure, energy, employment and the development of the real sector of the econo-

my.” The PenCom DG also reported that membership of the CPS witnessed significant growth during the year under review, with total number of registered participants rising by 8.05 percent from 5.92 million as at 31 December, 2013 to 6.40 million as at the end of 2014. Continues on PAGE 2

Rasheed Olaoluwa MD/CEO, Bank of Industry

“A nation that wants to develop must pay attention to technology because it has been proven from the beginning of humanity that technologies control the economy.”

Pension Industry Will Invest in Infrastructure, Real Estate to Diversify Investment

Reclaiming the Identity of a Brand

L-R: Executive Vice Chairman, Nigerian Communications Commission (NCC ) Dr. Eugene Juwah and Speaker, Pan-African Students Union Parliament (ASUP), Samuel Solomon, during the presentation of Pan-African Servant Leadership Award to the EVC in Abuja recently.

Business Journal April 27 - May 03, 2015

News

www.businessjournalng.com

Diamond Bank Gasping for Breath ...

Pension Industry Paid N271bn to... Continued from PAGE 1 “Memberships from the public and private sectors were 48.37 and 51.63 percent respectively. Likewise, four (4) States of the Federation enacted laws on the CPS, making the total number of states that enacted the law on the CPS to 26.” She said the remaining 10 States are currently at the Bill Stage for the scheme implementation; just as all the 36 States of Federation are at various stages of implementation, hoping that with Enactment of the PRA 2014, the Commission will be liaising with the States to ensure their full implementation as required by law. She expressed concern over the reduction in government revenue, which suggests a risk in government liquidity and hence its ability to meet its financial obligations of pension contributions, as funding of the retirement bond redemption fund accounts for onward payment of accrued portion of retirement benefits, death claims, etc. Looking at the challenges of the new pension scheme so far, the PenCom DG said: “The greatest challenge facing the industry and which might continue to rear its head into the future is the dearth of investable instruments. The availability of such instruments will help to diversify pension funds investment and hence help to reduce risk of concentration. Another challenge rests with the lack of adequate understanding by the general public between the old pension scheme and the CPS.”

Continued from PAGE 1

Comptroller-General of Nigeria Customs Service, Abdullahi Inde Dikko (right) and Deputy Comptroller-General, Nwosu A.C decorating Machu Filibus Tete (m) with his new rank of Comptroller of Customs in Abuja.

Although Diamond’s Loan to Deposit ratio of 69.6% is low relative to the Tier-2 average of 75.3%and against the regulatory benchmark of 80.0%, we do not expect a significant growth in risk asset in 2015 based on management guidance.” On the positive angle, Diamond Bank’s total deposits rose by 23.9% to N1.6 trillion in 2014 compared to N1.3 trillion in 2013. “This represents 90.6% of total liabilities which also grew 24.9% in the same period. Consequently, ROAA and ROAE eased to 1.5% and 14.5% in 2014 from 2.2% and 23.7% in 2013 respectively, relative to Tier-2 banks average ROAA: 2.1%and ROAE: 16.9%.”

MAN Tasks New Rivers Govt on Multiple Taxation, Diversification Amaechi Okonkwo, PH

anufacturers in Rivers State have called on Governor-elect, Chief Nyesom Wike to address the issue of multiple taxation and diversify the state’s economy from its current over dependence on oil revenue. The manufacturers argue that the dwindling price of oil in the international market make it imperative for focus on agriculture, manufacturing and investments. Speaking to Business Journal in Port Harcourt, Mrs. Ekema Akpan, National Vice-President, Manufacturers Association of Nigerian (MAN) advised the

new government to take steps to encourage manufacturers by creating enabling environment for their operation. She insists that the new government must end all forms of harassment against manufacturers by way of taxation and other revenue drives. The immediate past Chairman of MAN Rivers & Bayelsa States, said the new government should develop a onestop system for tax payment so that “operators don’t have to be harassed by tax authorities over tax matters.” Akpan said: “They should harmonise taxes among the different local governments demanding one form of payment or the other. Multiple taxation must be addressed.”

She advocated partnership between the state government and organisations like MAN in the collection of tax from members, saying “through this, MAN will ensure that all necessary taxes are paid by members.” “They should communicate more with business associations. You know when you have a body you can talk to when there is a problem, you can use the association to checkmate the activities of un-cooperating members. It is easier to discuss and work with us rather than harassing our members. They should try and encourage membership because there are many undocumented businesses in Rivers State that are dodging tax payment so the few that brought out themselves they

now descend on them with heavy taxes. There are many of them that are doing businesses in their houses and are not paying taxes to government.” On how the State could mitigate the effects of the continuing dwindling oil revenue, Akpan called on the in-coming government to diversify into agriculture and gas as alternatives to oil. “Rivers State is so blessed with the best land. About 70 percent of our land is still untapped in agriculture, so they should diversify and leave oil alone. What we are seeing is a taste of what will happen in the future. Oil prices will go down because most countries are looking for alternatives to oil and you can see as a pun-

ishment in the last dispensation, America refused to buy our oil; that crashed our oil price because they found oil. UK, they have found oil in Heathrow, I understand oil and therefore why will they come to buy our oil if they also have alternatives. So, we should not rely solely on oil, we should also improve on our gas, export our gas, utilise what we have instead of flaring it away. Now, gas can become an alternative source of power but the one that is still untapped is agriculture. In Rivers State, you don’t need irrigation system to grow your crops because we have rivers everywhere. We should concentrate on our areas of advantage.”

Heritage Bank CEO Calls for Implementation of Vision 2020 SME Blueprint

he Managing Director of Heritage Bank, Mr. Ifie Sekibo has called on the federal government to ensure seamless implementation of the blueprint developed by the Vision 2020 National Technical Working Group on SMEs as an efficient strategy to fast track the process of curtailing the growing unemployment rate in the country. According to the Heritage Bank helmsman, all stakeholders in the nation’s economic sphere, especially the SME sector, must

join hands in creating and sustaining an active SME revitalisation drive through the establishment of a solid framework supported by clearly articulated government policy. “The current high rate of unemployment in the country requires all stakeholders to work together in ensuring the quick revitalisation of the SME sector as the primary source of creating jobs and fostering entrepreneurship among the youths. The Vision 2020 National Technical Working Group on SMEs has de-

veloped a blueprint for boosting SMEs and the government needs to do all within its power to bring up the fine ideas in the blueprint for implementation.” “SMEs enhance competition and entrepreneurship, and their proper development has a positive impact on innovation and productivity growth which, in turn, enhances macro-economic stability. Therefore, developing the SME sector is one urgent task that requires concerted effort from all stakeholders.” Sekibo noted that although

SMEs are a vital national economic growth engine contributing to vital economic indicators like Employment Generation and GDP with about 70% of the rural population being active in formal and informal SME sectors, a study of the sector has shown that growth possibilities are hampered seriously as significantly low number of start ups who apply for medium-longer term financing actually succeed. He attributed the main challenge facing SME promoters in the country to limited access to

appropriate capacity building opportunities and education which, in turn, lead to other growth-limiting impediments such as inadequate financial record keeping, Poor Managerial Skills, Lack of access to International Markets, inability to provide collateral and poor access to infrastructure. He advised Small and Medium Enterprises in the country to focus greatly on restructuring and innovation in order to access the unfolding opportunities for growth and development in the economic landscape.

According to him, “the Micro, Small and Medium Enterprises (MSME) Development Fund which provides an exit window for the MSME schemes and programmes currently implemented by the Central Bank is one of the new opportunities for SMEs in the country to access wholesale funding requirements. It offers a relatively more sustainable approach to the provision of credit and guaranteed advisory services to the specialized needs of the MSME sector.”

Business Journal April 27 - May 03, 2015

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

L-r: Managing Director, Shell Petroleum Development Company (SPDC) and Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor; Chairman, Nigeria Economic Summit Group (NESG), Mr. Folusho Phillips; Director General, NESG, Mr. ‘Laoye Jayeola; and former MD, SPDC, Mr. Mutiu Sunmonu, during a visit to the NESG by Shell leadership... recently.

L-R: Executive Director, Personal and Business Banking, Stanbic IBTC Bank, Mr. Obinnia Abajue; Deputy Group Managing Director, Coscharis Group, Mr. Okey Nwuke; and Executive Director, Personal Banking, Access Bank, Mr. Victor Etuokwu, at the partnership signing ceremony for the Coscharis Motors Auto Finance Scheme in Lagos.

: L-r: GM, External Relations, Nigeria LNG, Dr. Kudo Eresia-Eke; Managing Director, Mr. Babs Omotowa, and Deputy Managing Director, Mr. Isa Inuwa, during presentation of Facts Behind the Figures to media executives at Eko Hotel, Lagos.

L-R: Executive Director, Nigerian Export Promotion Council (NEPC), Mr. Segun Awolowo; Chairman, House Committee on Industries, Hon. Mohammed Onawo; Minister of Industry, Trade and Investment, Dr. Olusegun Aganga and Director General, Standard Organisation of Nigeria (SON), Dr. Joseph Odumodu, during the commissioning of SON Food Technology Labs at Lekki, Lagos.

L-R: Lagos State Governor, Babatunde Raji Fashola (SAN); Abimbola Okoya, General Manager, British American Tobacco Nigeria Foundation (BATNF); Tunji Bello, Hon. Commissioner for Environment, Lagos State at the 7th edition of the Lagos State Climate Change Summit in Lagos.

L-R: Business Development Director, Information Technology and Mobile, Samsung Electronics West Africa, Mr. Daesong Ra; Head, Business Development, Technology and Mobile, Samsung Electronics West Africa, Mr. Olumide Ojo; Managing Director, Samsung Electronics West Africa, Mr. Brovo Kim; Director, Information Technology and Mobile, Samsung Electronics West Africa, Mr. Emmanouil Revmatas; Head, Product Marketing, Information Technology and Mobile, Samsung Electronics West Africa, Ms Olajumoke Okikiolu and Samsung Electronics Brand Ambassador, Banky W at the official launch of Samsung Galaxy S6 smartphones in Lagos.

f6: L-r: Chief Executive Officer, Forte Oil Plc, Akin Akinfemiwa; Director, Christopher Adeyemi and Company Secretary, Olugbende, at the Company’s 36th Annual General Meeting in Lagos.

Chief Medical Director, Sir Yahaya Memorial Hospital in Kebbi State, Dr. Jafar Mohammed; a beneficiary of the Priceless Gift of Sight Project of First City Monument Bank (FCMB), Alhaji Umaru Abubakar; the bank’s branch Manager, Kebbi, Mr. Musa Salihu and another beneficiary, Hajia Aishatu Garba, at the community outreach programme of the Priceless Gift of Sight to provide free eye test and surgery for people suffering from cataract, a partnership between FCMB and Tulsi Chanrai Foundation, held in Birnin Kebbi, Kebbi State.

Business Journal April 27 - May 03, 2015

Editorial www.businessjournalng.com

A Word on Next Federal Cabinet

he 2015 General Elections now belongs to the history books. Regardless of the pros and cons of the polls, it is relatively over. In the course of the run up and actual casting of the votes, counting and declaration of results, hard lessons have been learnt by every stakeholder in the exercise. Now, as we await the May 29 handover to the new administration, it is important for us to put in a word on the emerging composition of the new Federal Cabinet. As expected, chieftains of the victorious All Progressives Congress (APC) are drawing up lists of potential nominees for

appointment as ministers and other portfolios. Our opinion is that the new government should look beyond party membership and affiliation in nominating persons for ministerial appointments into the future Cabinet. We believe that appointing professional politicians into core technical positions would be a great disservice, both to the government and Nigeria as a nation. There should be specific positions for politicians in the Cabinet, at least as compensation for working for the victory of the party at the polls. However, such positions should be anchored on the core competence areas of each

politician being considered for nomination. We believe that every politician is a professional in one area of activity and should be duly considered within that sector. We advise that tested technocrats should be given the opportunity to serve in the Cabinet, to bring the needed expertise and innovation to governance for the betterment of the people. The technocrats need not be card carrying members of the ruling party. All they need to make the Cabinet is professional capacity to perform. In terms of expenditure, we strongly advocate trimming down the size of the Cabinet and the number of Special

Assistants and Advisers which drain the public purse unduly. With dwindling revenue from falling price of oil in the international market, the country cannot afford a large Federal Cabinet and the attendant State Cabinets across the country that raises the level of recurrent expenditure to a frightening position. Indeed, austere times demand austere financial decisions for rational management of resources. Our nation today does not have the resources for a bloated Federal Cabinet. We need a manageable size of Cabinet that can run the country efficiently on available lean resources, without compromising competence.

Given the general optimism and expectations expressed by Nigerians towards the in-coming government, the new government must endeavour not to disappoint Nigerians, first, by nominating the wrong persons to the Cabinet, and secondly, failing to make reasonable positive impact within a given period of time in office. The new government cannot decree all the problems in the country to vanish overnight. However, it could initiate and implement decisions that could lead to better days for the citizens. Goodluck to the New Administration!

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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

PH Bureau Amaechi Okonkwo

Lagos Bureau Abraham Adewole

Head of Marketing/Advert Elvis Ebigwu

Snr. Correspondent Blessing Ikeme

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Abuja Bureau Chris Onwuka

Design Consultant Kelechi Okoro

Kaduna Bureau Haruna Mohammed

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Business Journal April 27 - May 03, 2015

Shelter www.businessjournalng.com

ShelterBox: 15 Years of Providing Emergency Shelters Worldwide

n April 15, 2015, ShelterBox celebrated its 15th birthday by looking back on some of its most diverse responses from all over the world. “The first disaster we ever responded to was an earthquake in Gujarat in 2001 where we provided ShelterBoxes full of essential aid items, such as a tent, blankets and cooking utensils, to more than 140 families. Since then, we have supported communities affected by many different disasters such as tsunamis, cyclones, floods, volcanoes and conflict.” SUCCESS STORIES ‘At Night When it Rains We Cannot Lie Down. We Just Have to Stand’ ShelterBox beneficiary Alice sitting in front of what used to be her house in Mulanje, Malawi. ShelterBox response team member Becky Maynard (UK) is currently helping to deliver shelter to communities in the district of Mulanje in Southern Malawi, following devastating flooding that first started in January. Becky shares her experiences of visiting a makeshift camp near the village of Chisamba. ‘I was awoken at four this morning by driving rain on the tin roof of the room I am staying in. Maybe the surface made it sound more ferocious than it really was but I can’t go back to sleep. All I can think about is what it must have been to live through rains like this, and so much worse, with just a flimsy shelter, or more terrifying, with nothing. Nothing to protect your children or your elderly relatives, and no idea of what help might come for you or when. ‘Although the team often works in blazing sun and sweltering conditions, the weather in Malawi can still be truly fierce, even as we draw towards the end of the rainy season. In the last week we have had periods when it has rained incessantly for 48 hours and, with the winds driving the rain into every available space, any gap in a shelter is victim to the downpour. ‘A week ago we visited a camp,

near the village of Chisamba, in the Southern Malawian district of Mulanje, which had been set up in the grounds of a school. Families whose houses had been completely destroyed by the floods in January had been living since then in makeshift shelters made out of sticks and thin plastic sheeting, sleeping at night under one of the school porches with just a blanket for protection or in the outhouses of their neighbours which themselves were cramped and leaking. ‘The plastic shelters had been badly degraded by the extreme sun and ripped by the gales; the gaps in the roofs offered little protection against the extreme conditions. One of the young women told us: ‘‘At night when it rains we cannot lie down. We just have to stand.’’ ‘One of the villagers is a widow called Alice. She isn’t sure how old she is but she had lived in her home since 1949, most recently with her three grandchildren, before it was completely destroyed by the flooding and storms.

The ShelterBox Team

Now nothing remains of her house except for the slight rise where its foundations stood and the vegetation that has taken over the soil. It is almost impossible for families like these to rebuild during the rainy season as they can only afford bricks made of sun-baked mud which will disintegrate in the rain before they can be hope to be built into into a home. The local roofing materials won’t have grown until July at the earliest and even these are at risk as the flooding damaged many crops and the sand that was carried up onto the fertile land has made growing crops even harder. Along with the eight other families whose homes were completely destroyed by the floods and rain, we provided Alice with a ShelterBox, which includes a tent that will keep her and her grandchildren safe and dry until they are able to start rebuilding their home with the support of their community, along with other essentials to replace their possessions that were washed away

Business Journal April 27 - May 03, 2015

Shelter

ShelterBox beneficiaries in Niger following flooding in 2012

ShelterBox beneficiary Alice, takes a first look around her ShelterBox in the storms. ‘Tonight I am back in my room and after a brief respite in the afternoon the rain is hammering on my roof again. In the last two weeks our team has provided shelter for more than 450 families and the thought of them sleeping safely in tents or under decent roofing gives me comfort as the storm continues.’ So far, our teams in Malawi have provided aid to more than 1,400 families throughout the districts of Chikwawa, Zomba and Mulanje since January this year. William and her family next to the storm drain pipe they hid in while Cyclone Pam hit the Island of Tanna in Vanuatu When Cyclone Pam hit Vanuatu last month, people across the country’s 65 inhabited islands were unprepared for the level of destruction it The Remains of the Local School after Cyclone Pam

unleashed. An estimated 90% of all buildings were completely destroyed or damaged and the storm paralysed infrastructure and communications for weeks. However, ShelterBox is working with aid organisation, CARE International on the southerly Island of Tanna to help people create temporary shelters and start the long process of rebuilding. A ShelterBox response team, made up of Jimmy Griffiths (NZ) and Paul Crudgington (UK), are helping to distribute 1,000 shelter kits, which are being shared between communities so that they have access to tools to rebuild not only their homes, but structures like schools as well. Kalib William and her family are some of the people who have received ShelterBox aid. Kalib, her husband and their four children, who are aged between two and nine years old, were planting vegetables when Cyclone Pam hit Middle Bush, Tanna. The family ran to the local school for shelter, as the building was made of concrete and an iron roof, but as they arrived, the cyclone was ripping the sheets of iron off the roof and sending them flying throughout air. Realising that they couldn’t shelter in the school, Kalib’s husband led the family to the road where they all clambered down into a storm drain pipe and waited for the cyclone to pass. Once the storm was gone, they returned to find that their house, along with all of their crops, had been destroyed. It will take another six months before their crops, their main source of food and their livelihood, will be ready again. Kalib told the team that when they went back to see how the school had fared, they were amazed by the level of destruction. While the head teacher is trying to fix the school, many of the teachers have left the area and now there are 280 students and 20 preschool children, including Kalib’s own children, without anywhere to learn. They have no idea when the school will be repaired, as the government hasn’t yet been able to visit to assess the damage. At the moment, children spend their days helping their parents to clear up the mess left behind by Cyclone Pam as they attempt to rebuild their homes again. Kalib and her husband had rebuilt their home from the remains of their former house, along with fallen leaves from their banana crops. Now though, they have been able to keep their family dry and safe from the rain with tarpaulin and other materials provided by ShelterBox. Kalib said: ‘The cyclone came to us, but all the people with good hearts have also come to help us.’ With the help of CARE International, our ShelterBox response team has been able to provide aid to more than 1,000 families in the area of Middle Bush and is now about to start working in the eastern area of White Sands. A container of aid, including additional tarpualins, blankets and mosquito nets, is also making its way to the island. The team will be using the tarpaulins to make temporary repairs to school buildings, so that young people, like Kalib’s children, will be able to continue their studies and gradually return to normal.

Business Journal April 27 - May 03, 2015

Banking www.businessjournalng.com

Does Microfinance Still Hold Promise for Reaching the Poor? STORY HIGHLIGHTS • The benefits of microcredit have been modest in field experiments, and commercial microfinance is unlikely to reach the poorest of the poor. • Subsidies will likely continue to play an important role in bringing financial services to the poorest. • Other forms of microfinance beyond microcredit, such as micro-savings and micro-insurance, can help increase financial inclusion. • Alternative delivery channels such as agent banking and mobile financial services hold promise for reducing the costs of reaching the poor. Nearly two decades ago, when the concept of microfinance as a poverty reduction tool was in its infancy, there was hope that microcredit would transform economic and social structures. With its focus on reaching the previously unbanked, microcredit was expected to bring about change at the household level, a market in developing countries that traditional financial institutions had failed to reach. Fifteen years on, the microfinance industry is estimated at $60-100 billion, with 200 million clients, but the results have been mixed. Critics cite modest benefits associated with microcredit, over indebtedness, and a trend toward commercialisation that is less focused on serving the poor. This March, the Research Department’s Policy Research Talk was given by Lead Economist, Robert Cull, who drew on a variety of data and research to examine the varied track record of microfinance institutions, and where this approach to poverty reduction might be headed. The Policy Research Talks are a monthly event held by the research department to foster a dialogue between researchers and their colleagues across the World Bank. Research Director Asli Demirguc-Kunt, who hosted the event, said that “The initial narrative around microfinance—that it was going to unleash the entrepreneurial spirit of the poor and lead to significant growth and poverty reduction—was never really all that realistic. Those with more measured expectations generally focused on consumption smoothing and risk management aspects, and also on micro-savings and micro-insurance, instead of just on credit. Nevertheless, there are a lot of questions and concerns about microfinance.” Cull summarised the findings of six experimental studies of microcredit ranging from Ethiopia to Morocco to Mexico that were the focus of a Financial Services for the Poor conference held this past February at the World Bank, with the involvement of J-Pal and CGAP; in general these studies pointed to increases in borrowing, self-employment activities, and some business investments. There were also modest reductions in wage labor supply, while the impact on consumption was mixed. However, “you don’t see anything transformational in terms of household incomes, wealth, or poverty levels,” he said. Cull drew on new data from the

From left to right: Robert Cull, Asli Demirguc-Kunt, Sebastian-A Molineus Microfinance Information eXchange (MIX), which is supported by the World Bank through the work of the Consultative Group to Assist the Poor, to provide an overview of how different microfinance providers operate in the market. MIX is the largest industry data source on the finances of microfinance institutions. On average, lenders incur higher costs in making smaller loans, and they in turn charge borrowers higher interest rates. Different types of microfinance institutions cater to different market segments, with NGOs and non-bank financial institutions targeting the poorest and banks more focused on reaching the less poor, but more commercially viable, portion of the market. “The notion that we can serve the poorest of the poor without reliance on subsidy is far-fetched at this point. We will need to make changes not only to the model but to the delivery mechanism,” he said. Cull then considered two greenfield models for expanding financial inclusion in countries in Sub-Saharan Africa: a top-down approach that uses branded retail banking networks and a bottom-up one that relies on consolidating an existing network of affiliates while adding new affiliates. Drawing on data from MIX and IFC¬ that spanned 2006-2012, he traced the evolution of these models

The notion that we can serve the poorest of the poor [using microfinance] without reliance on subsidy is far-fetched at this point. We will need to make changes not only to the model but to the delivery mechanism. Robert Cull Lead Economist, Research Department from low profitability to considerable growth and increases in the number of branches. In terms of growth and loan size, “Relative to young African microfinance institutions, they perform very well,” said Cull. “Greenfields are an effective way to reach a large number of people. They also seem to be commercially viable and sustainable. However, they are not reaching the poorest of the poor.” If these firms had to pay a market rate on their sources of funding, “very, very few microfinance institutions are profitable, from the point of view of a true opportunity cost of capital, which suggests that there is a lot of subsidy in this market still.” Infact, Cull found that the subsidy per borrower is much higher for bor-

rowers at the higher end of the loan scale, suggesting that subsidies are not pro-poor, and the per borrower subsidies for banks are higher than for NGOs. In addition, the subsidy per dollar and per borrower does not increase with the percentage of women borrowers, so subsidies are not pro-women, either. Furthermore, these subsidies decline as MFIs age but not that rapidly, indicating persistence in their allocation. In addition to subsidies, Cull suggested a variety of measures to help meet the challenge of reaching the poor and emphasised that microfinance is not just microcredit. He highlighted measures such as technological innovations like mobile banking services, offering agents as nearer points of contact,

and a better understanding of client needs including savings devices, electronic payments, and more flexible loan repayment schedules. Discussant Sebastian-A Molineus, Director of the World Bank Group’s Finance & Markets Global Practice, discussed the role of microfinance in the context of the World Bank’s goal of achieving universal financial inclusion by 2020. “There is no one-size-fits-all answer to microfinance. Indeed, there is a range of providers that are needed for full financial inclusion: banks, non-bank financial institutions, NGOs, etc.” He pointed to the Bank’s multi-tiered approach to supporting the microfinance industry: at the macro-level with legislation, regulation, and supervision; at the mesolevel with support services and infrastructure; and at the microlevel with financial service providers. Molineus also emphasised that microfinance fits within a broader framework of achieving financial inclusion—an approach that is reflected in the World Bank’s Financial Inclusion Support Framework (FISF). The FISF offers national counterparts scaled-up support in achieving their financial inclusion targets, including in MSME finance, digital payments, financial consumer protection, financial capability, financial infrastructure, and agricultural finance.

Business Journal April 27 - May 03, 2015

Banking

MSMEs: Heritage Bank Leads Campaign for Empowerment

eritage Bank has re-affirmed its business principle to empower more Micro Small and Medium Enterprises (MSMEs) in Nigeria. This statement by the bank is in addition to many of the similar small businesses it has helped financially since it began operation. This was made known recently by the Group Managing Director, Heritage Bank, Mr. Ifie Sekibo at the Round Table Discussion and MSME Success Stories, themed: ‘The Economic Outlook-What Future for MSMEs in Nigeria?, where other experts brain-stormed along with him to fashion ways forward for the Nigerian SMEs. As part of the bank’s commitment to empower the SMEs, Sekibo said led to launching of SMEs Clinic that will help small businesses address challenges associated with setting up businesses while mitigating the effect of certain decisions that may be taken. Represented by Mary Akpobome who spoke extempore during a panel discussion noted that the clinic was established as a result of the gap left by financial service providers in failing to provide fresh ideas, solution based strategies and specialized service packages to small businesses. He said although small and medium scale enterprises (SMEs) have proved to be the crucial engines of industrial growth in developing economies like Nigeria, it is necessary to create strategies that can withstand the dynamics of the changing business environment rather than focusing on funds generation. He said since the SMEs Clinic was established, many small businesses have sprung up and successfully on operation due to, not only the funding, but business advisory it freely offered, adding that financing is not the only problem SMEs face, but other necessary inputs. He enumerated business built on enduring business platform, and business model among others stand the chance to get loan from the bank. “Heritage Bank was established as part of the effort to fill the gap left by financial service providers in failing to provide fresh ideas, solution based strategies and specialized service packages to small businesses. We pay a lot of attention to SMEs “Financing is not the problem, but the other business inputs. Heritage bank has raised a lot of small businesses with SME Clinic. With it, we have built a lot of enduring organisations; we have done more that advisory than money. For us to extend loan to you to finance your business, you must have good business model”, he said. The industrial experts in the Micro, Small and Medium Enterprises (MSMEs) in the Nigeria’s real sector at occasion unanimously agreed that for the nation to have economic breakthrough as envisaged in the present dispensation of availability of investible funds from the

government, the vision of sustainability in business should be taken as paramount by the operators. The other experts from the financial institutions, business organisations and academia spoke in at the event in Lagos emphasised the relevance of booming SMEs to take the centre stage as a major driver of the economy as well as contributes immensely and filling the dollar drought gap being experienced in the country brought about by the fallen prices of crude in the international oil market. A senior lecturer, Lagos Business School, Dr. Doyin Salami, who opened the floodgate of speeches in his tagged presentation: ‘2015 Economic Outlook’ said the SME operational strategies in 2015 would be three-pronged on Election, Transition and Normalcy. Salami, said who wins the present presidential election is not the main issue but the outcome of the election. He maintained that the positive outcome would lead to the smooth transition and expected normalcy in the socio-economic of the country. He said presently, the dream of running the economy on a private-driven platform is being threatened by insecurity, uncertainty in an election year and the widening threats in communal clashes across the country. He caution against continued emphases placed on oil as major source of foreign exchange to Nigeria, but urged the government to embrace industrialization by creating policies that would help leapfrog the Nigeria’s SME sub-sector, identified as backbone of any nation, both the industrialized and unindustrialized.

Presently, there over 17 million SMEs in Nigeria H e e x pressed fear that Nigeria is under fiscal break-even threat with international crude price below $60, insisting that for “Nigeria to balance the economy and be able to pay salaries both at the federal and states levels, the price of crude should hover between $65 and $75 per barrel.” According to him, “there is a fundamental problem in 2015 and beyond if the down south movement in crude oil persists

caused by oil glut. The development has led to the 2015 budget proposal of which the recurrent expenditure must be maintained at the expense of capital expenditure. Even some states government currently cannot be able to pay their workers’ salaries. “Nigerians should no more live life as they wish but as they see it.” Lead Consult ThistlePraxix, Dr. (Mrs.) Ini Onuk who spoke on ‘MSMEs and Sustainability’ said any entrepreneur who wants to succeed must identify opportunity, be creative, daring, and risk taking. She stated that, entrepreneurs are men and women of action who are courageous, alert and sensitive to environment and possess ability to create visions concerning the business environment. She asserted that, the present high mortality rate of small business is awful to contemplate and constitute danger to the entire economic system. She said such development represents serious financial pressure on the nation’s economy as well as a waste of valuable resources. With the current lull in the business activities as a result of the 2015 election year the business owners should always consider challenging situations and be prepared to meet them preplanned strategies. She said the trend where ownership stems mainly from the fact that most SMEs are family businesses structured along sole-proprietorship or partnership is no more in vogue, but needed expansion in terms ownership and decision making. As a consequence, she argued that managerial deci-

sions here are usually at the mercy of the key owner who in most cases lacks basic managerial skills, qualities and culture to manage a business successfully. This Onuk regretted also has effects on the management structure and employees-employer relationship. SMEs should learn creative ways to manage difficult times, example the current condition occasioned by the forth coming 2015 general elections, adding that SMEs owners should always be prepared for unpredictable business situation. She said also, SMEs should be surrounded by strong support network of trusted professional contact and close relations, especially the consultants for proper advise. Lastly, she said the entrepreneur should always have a back up business plan for new products and services She concluded that there is no doubt that SMEs can be a source of development and an engine of growth as the case with Asian countries and America. She maintained that SMEs should therefore take their place in the economic policy priority of government in Nigeria. Mr. Waheed Olagunju, Executive Director, (SME) Bank of Industry who spoke impromptu as a panelist member on ‘Opportunity and Growth Strategies Available for MSME 2015’highlighted some of the hindrances to easy access to available government’s intervention funds For him, it has become clear that the lack of trained manpower and management skills constitute major challenges to survival of MSMEs the banks observed before granting loans to borrowers. He also added that inefficiency in overall business management and poor record keeping is also a major feature of most SMEs the bank put into consideration before granting loans. According to him, the general requirements for accessing loans in the development bank include having a well-articulated business model, which should have about four sections. The first and second requirements require that the BoI know the business plan the applicant offers and his / her target market. Third, the applicant must convince the bank of his/her value composition, that is, why

people should buy his /her product(s). The applicant should be able to say how he/she intends to create the value proposition, Olagunju said. Furthermore, the applicant must be able to articulate personnel requirements and identify markets for the products he/she wants to sell. He said “a lot of applications that come to BoI do not meet the standards,” while explaining why applicants need to take full advantage of the N220 billion Intervention Fund for SMEs scheme in Nigeria to improve their lives and the economy. In order to cut down on the rate at which applications are rejected and ensure that applicants’ business plans meet the standards, the development bank is also coming up with the Business Support Fund (BSF), involving individuals who themselves are experienced in finance and articulation of business plans. “The BSFs will receive applications from SMEs, look at them and then help repackage them so that by the time they get to BoI, they would have met the criteria of a bankable application.,” Olagunju said.

As part of the bank’s commitment to empower the SMEs, Sekibo said led to launching of SMEs Clinic that will help small businesses address challenges associated with setting up businesses while mitigating the effect of certain decisions that may be taken

Mr. Ifie Sekibo

Group Managing Director/CEO Heritage Bank Limited

Business Journal April 27 - May 03, 2015

Insurance Pension www.businessjournalng.com

The Challenge of Insurance Business & Regulation in Africa Fola Daniel

Mr. Fola Daniel Commissioner for Insurance National Insurance Commission

Insurers not Ready for Google Change

oogle’s major algorithm change on the 21st April will have a ‘significant’ effect on the visibility of websites in mobile search results, and the insurance industry isn’t ready, according to the latest research from specialist insurance marketing agency, The Marketing Campaign Company.

The Marketing Campaign Company analysed the websites of over 200 insurers and brokers of all sizes across both the general and health insurance industries. The results showed that almost 70 per cent of the websites analysed were not designed to work responsively on mobile devices and are likely to be adversely affected by the Google algorithm change

on the 21st April. Insurers fared slightly better than brokers, with 37 per cent of the insurer sites found to be mobile friendly compared to just 28 per cent of broker sites. Google’s update has the potential to affect businesses generating revenue via online sales or those that want to associate their brand with modern online practices.

According to a report by We Are Social, over 30 per cent of web pages are now viewed on mobile devices, a figure that is rising 39 per cent year-on-year. Whilst 62 per cent of pages are still being viewed via laptops or desktops, this number is declining 13 per cent year-onyear. “This is a serious issue for the insurance industry. Web pages are increas-

ingly being consumed on mobile devices and Google is now making a point of penalising websites that aren’t set-up for mobile visitors,” said Managing Director, James Simpson. “Our research shows that many insurer and broker sites will be hurt by this change and those that do have responsive sites can expect to see their online visibility via mobile devices improving.”

Business Journal April 27 - May 03, 2015

Insurance Pension

2015 Expected To Remain Challenging For Reinsurance: Best Special Report

.M. Best has released a new equity report focusing on the stock performance of global reinsurance companies. The report covers fourth quarter and full-year 2014 and “shows mixed results.” Best said: “For publicly traded re-

insurance companies (including the four large Europeans – Munich Re, Swiss Re, Hannover Re, SCOR) stock prices ended 2014 below the overall market, driven by the increased volatility in the stock market during the summer and fall, augmented by continued concerns over the decline in pricing for reinsurance risk. “Of the 19 publicly traded world-

wide reinsurers featured in the report (including the four top European players), only four outperformed the overall market in 2014 and four actually experienced negative returns in 2014.” Best explained that even though losses in 2014 were at a “low level,” and the reinsurance industry continued to take advantage of “favorable

Royal Exchange Provides Health Insurance, Donates Educational Materials to Pacelli School of the Blind

s part of its Corporate Social Responsibility (CSR), Royal Exchange Plc recently provided free health insurance to the staff and pupils of the Pacelli School of the Blind & Partially Sighted Children for a 1-year period at the first instance and also donated educational learning aids to the pupils of the school. Speaking during the official presentation of health insurance certificates and the educational materials to the school, the Group Managing Director, Royal Exchange Plc, Mr. Chike Mokwunye, said in Royal Exchange Plc, “one of the main objectives of our CSR is to impart knowledge and assist the less privileged in the society, whenever the need arises, and as a responsible corporate citizen, we must be willing to offer a helping hand to those in society who need the support to become better citizens tomorrow.” He further added: “As children who already are at a disadvantage due to no faults of theirs, our aim is to make sure they learn valuable vocational and educational skills which in turn would make them more capable of leading normal lives as responsible citizens who can fend for themselves and not be dependent on the larger society for any form of assistance.” Mokwunye also commended the Principal, teaching and other ancillary staff of the Pacelli School for their humanitarian efforts in ensuring the students have the best education available to them. The Principal, Rev. Sister Jane Onyeneri, (HHCJ) thanked Royal Exchange Plc for coming to the aid of the staff and more importantly, the pupils, through the provision of Writing Frames, Mobility Frames, Stylus and other recreational materials which would enhance the learning of

Chike Mekwunye MD/CEO, Royal Exchange Plc the students. In her words: “The offer of health insurance to all the pupils of the school, including the teaching and non-teaching staff is a noble gesture which will go a long way in ensuring that the students and staff are in the best of health throughout the year, while the students will also make good use of the learning and mobility tools provided by Royal Exchange.” The Royal Exchange GMD was accompanied during the presentation by Mr. Richard Borokini, Managing Director, Royal Exchange General Insurance Company and Mr. Wilson Okoh-Esene, Acting Head, Corporate Communication, Royal Exchange Plc. About Royal Exchange Plc

Royal Exchange Plc started operations in 1921 and continues to

be driven by innovation and a determination to offer services that are of exceptional value to its customers. Following the recapitalization exercise in 2007, the company was re-organised into a group structure comprising Royal Exchange Plc as the holding company and five strategic subsidiaries namely: • Royal Exchange General Insurance Company Limited (Non-Life Insurance Services) • Royal Exchange Prudential Life Plc (Life Assurance Services) • Royal Exchange Finance and Investments Limited (Financial Advisory Services) • Royal Exchange Healthcare Limited (HMO and Health Insurance) • Royal Exchange Microfinance Bank Limited (Banking Services)

reserve releases from prior years, the pricing pressures for cat business were well evident for all of 2014. “During 2014 reinsurance companies have seen cat price declines of 20 percent in some cases (more pronounced in the US),” Best explained. The renewals as of the first of January “once again reported a decline in reinsurance price between 5-15

percent depending on risk and loss experience. “The dramatic price declines in 2014 and for January 1 continued to be attributed to the lack of market-changing losses as well as increased retentions carried by ceding companies and the abundance of capital in the market,” Best concluded.

42nd AIO Conference 2015 Set for Tunisia The 42nd African Insurance Organisation (AIO) Conference & General Assembly is set for Tunisia from May 24-27, 2015. The Theme of the conference is: African Insurance in the Face of Mass Events. In her welcome address, Mrs. Lamia Ben Mahmoud, President of the Local Committee for the Conference and Chairman of Tunisian Reinsurance Company “TUNIS RE”, said: The Tunisian Federation of Insurance Companies “FTUSA” 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. 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 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.

Wishing you a pleasant stay in Tunisia!” The AIO is the largest gathering of insurance regulators, professionals, investors and financial media from Africa, Asia, Europe and North America. The Conference and General Assembly would be jointly hosted by the Fédération Tunisiennes des Sociétés d’Assurances (FTUSA) and Société Tunisienne de Réassurance (TUNIS RE).

Business Journal April 27 - May 03, 2015

Energy

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Strategic Initiative to Double Global Energy Efficiency by 2030

ment, businesses can create jobs and supply millions of people with the tools they need to make a better life. Policymakers can do their part to remove legal and regulatory barriers that stand in the way of business innovation and investments. Civil society groups can encourage governments to make more sustainable choices and provide community-based models of energy innovation.

ith the support of the UN Industrial Development Organisation (UNIDO) a new collaboration aimed at doubling the pace of energy efficiency gains in industries around the world by bringing together governments, NGOs and businesses, was officially launched recently as part of the Sustainable Energy for All initiative (SE4All). The Industrial Energy Efficiency Accelerator Platform, convened by UNIDO, the Institute for Industrial Productivity (IIP) and The Energy and Resources Institute (TERI), is the sixth in a growing series of sectoral initiatives under the Sustainable Energy for All Global Energy Efficiency Accelerator Platform, which aims to help double the global rate of improvement of overall energy efficiency by 2030. “The new platform will work by securing commitments from both governments and industry, and by creating a collaborative network with NGOs and other international organisations to provide industry with tools, resources and best practice information,” said Pradeep Monga, Director of UNIDO’s Energy Branch. He added that the platform will support the development of energy efficiency policies; build the capacity of enterprises for the adoption of energy management systems; and offer financing solutions for both governments and enterprises; as well as sharing knowledge with industrial stakeholders. It will also help remove the barriers that are currently hampering industrial companies’ efforts to improve their energy management. Sustainable Energy for All is focused on achieving three objectives: Universal Energy Access, Renewable Energy and Energy Efficiency.

Universal Energy Access Factsheet • Renewable Energy Energy from renewable resources—wind, water, the sun, biomass and geothermal energy—is inexhaustible and clean. Renewable energy currently constitutes 15% of the global energy mix. Renewable energy products and services constitute a rapidly growing segment of the international marketplace The costs of technologies to capture that energy are rapidly falling and becoming economically competitive with fossil fuels, while reducing the risk of climate change. Investing in renewable energy creates jobs, fosters economic growth, and improves energy security for countries that lack domestic fossil fuel resources. Increasing the share of energy from renewable sources can reduce greenhouse gas emissions and local pollution; insulate countries from fuel price volatility; and improve those countries’ balance of payments. Achieving the Secretary-General’s objective of doubling that percentage by 2030 requires support from all sectors of society, including individuals. Renewable energy is becoming increasingly costcompetitive Investment in electricity from the wind, sun, waves and biomass grew to $187 billion last year, compared with $157 billion for natural gas, oil and coal.

• Universal Energy Access Sustainable energy powers opportunity. Yet 1.3 billion people—one in five globally—lack electricity to light their homes or conduct business. Sustainable development is not possible without sustainable energy Nearly 40% of the world’s population rely on wood, coal, charcoal, or animal waste to cook their food breathing in toxic smoke that causes lung disease and kills nearly two million people a year, most of them women and children. Electricity enables children to study after dark. It enables water to be pumped for crops, and foods and medicines to be refrigerated. Modern fuels for cooking and heating relieve women from the time-consum-

ing drudgery and danger of traveling long distances to gather wood. Without access to modern energy, it is not possible to achieve the Millennium Development Goals, the eight-point global agenda adopted by the United Nations in 2000— whether reducing poverty, improving women’s and children’s health, or broadening the reach of education. Energy facilitates social and economic development, offering opportunity for improved lives and economic progress.

Replacing out-dated cook-stoves and open fires with modern energy services would save the lives of 800,000 children who die each year as a result of exposure to indoor smoke. Private-sector investment is key to building and serving those markets Energy can be used to support businesses and achieve greater prosperity. A farmer who irrigates his fields can double the size of his crop,

feed his family, and earn a living. A sewing machine and a light to work from at night can enable a woman to generate extra income for her family. Without sustainable energy, we will not meet the Millennium Development Goals Greater prosperity means more disposable income and new markets for consumer goods. Through innovation in energy products and investment in deploy-

Total new investment in clean energy increased to $260 billion in 2011 Some recent scenarios estimate that renewables will contribute more to a low-carbon energy supply by 2050 than nuclear power or fossil fuels using carbon capture and storage. Hydro, geothermal and bio-energy have long been competitive where resources are available, and wind and solar are also economically attractive in many locations. If supported by strong enabling policies at the public level and robust investment from the private sector, renewable energy could supply a

Business Journal April 27 - May 03, 2015

Energy

much larger share of the world’s energy by 2030.

Renewable Energy Factsheet •Energy Efficiency Energy efficiency—getting more from our existing resources— increases global resource productivity, supports economic growth, and reduces costs for all citizens. Investing in efficiency is critical to meeting future energy demand Investing in energy efficiency creates jobs, fosters economic growth and improves energy security for countries that lack domestic fossil fuel resources. Of the three objectives of Sustainable Energy for All, improving energy efficiency has the clearest impact on saving money, improving business results, and delivering more services for consumers—better refrigerators that cost the same but use less energy; new vehicle designs that travel further on less fuel; and buildings that require less energy to heat and cool. Investing in efficiency is critical to meeting future energy demand and mitigating climate change. It reduces greenhouse gas emissions and improves productivity. By reducing energy demand, efficiency also makes renewable

energy more affordable – shrinking the size of the solar panel needed to power a lamp, for example. Moving to sustainable energy and using it efficiently makes sense in a resource constrained global economy. Many countries are already adopting efficient energy technologies and practices In Africa, the savings from energy efficiency could help make modern energy services available to those who lack it—and in more industrialised countries, investments in energy productivity can create new jobs, foster economic growth, and reduce energy costs for families and businesses. Adopting cost-effective standards for a wider range of technologies could, by 2030, reduce global projected electricity consumption by buildings and industry by 14%, avoiding roughly 1,300 mid-size power plants. Between 1990 and 2006, increased energy efficiency in the manufacturing sectors of 21 member countries of the International Energy Agency resulted in a 21% reduction of energy use per unit of output. Sharing and adopting these practices more widely among nations and industrial sectors can make energy more reliable and less expensive to homes and businesses.

Energy is the golden thread that connects economic growth, increased social equity, and an environment that allows the world to thrive.

Business Journal April 27 - May 03, 2015

Manufacturing

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Microsoft Plans Digital Transformation of Manufacturing • Smart machines and robust cloud-based data systems offer manufacturers new business opportunities. Microsoft and manufacturing customers demonstrated the possibilities at the Hannover Messe Trade Fair. Steve Minter

hat does it mean for manufacturers to have unlimited computing power? Sanjay Ravi, Managing Director, Worldwide Discrete Manufacturing at Microsoft, says manufacturers will not simply be using big data to become more efficient but to transform themselves into connected businesses that can offer customers a whole new range of services. Take Miele, the German manufacturer of high-end appliances and commercial equipment with annual sales of $3.4 billion. Miele is using Microsoft’s Azure Internet of Things platform to showcase how technology can help customers cook better meals. With this concept, consumers can browse recipes on Miele’s website and then download the cooking instructions to their oven and to their smartphone or tablet. “This assistance system incorporates temperature charts, times and the machine’s special features, such as adding steam, to create the optimum roasting, cooking or baking results,” said Dr. Eduard Sailer, Executive Director of Technical Affairs at Miele. Manufacturers traditionally have used software “systems of record” such as MES and ERP to collect and manage data, Ravi said. More recently, manufacturers have begun to use “systems of engagement” to take advantage of social media and other data to facilitate collaboration and communication. “With Industry 4.0, we are entering the era of systems of intelligence,” says Ravi. Manufacturers will take advantage of unlimited computing power in the cloud and rich data platforms to develop new business models. Microsoft’s booth at Hannover Messe showcased several examples of what the software giant calls a transformation borne of combining machines and physical processes with vast amounts of data and real-time analytical systems. KUKA AG demonstrated its Intelligent Industrial Work Assistant, a long title for one of the new breed of collaborative robots. Using Kinect hardware, IoT services and the OPC-UA communication standard, KUKA and Microsoft have enabled a machine that can work alongside humans without posing any danger. There are safe torque sensors in every axis of the robot. The robot can take on tasks that were too delicate for previous robots, such as the demonstration at Hannover Messe of threading a tube into a small hole in the back of a dishwasher. Data from

KUKA’s Intelligent Industrial Work Assistant, built with Microsoft IoT services, is a lightweight robot designed to show how robots and humans can work safely in close proximity.

Miele and Microsoft developed an internet-enabled system that programs ovens with temperature, cooking time and other recipe factors to optimize meal preparation. the robot is streamed to the cloud where workers can monitor its progress. Data is also used to spot supply chain issues and monitor quality. ThyssenKrupp Elevator sells and

maintains elevators in 150 countries. The $6.8 billion German firm maintains more than 1.1 million elevators, and these service contracts provide its largest revenue stream.

In order to improve service and its bottom line, the company worked with Microsoft and CGI to implement a system where the elevators’ sensors provide a constant stream of perfor-

mance data. The company can take this data and both spot imminent problems and develop insights into when maintenance is needed. The aim is to find problems before they occur, develop a more accurate picture of maintenance requirements and reduce the cost of maintenance while improving reliability. “I call it the ‘virtual troubleshooter,’” says Rory Smith, Director of Strategic Development for the Americas at ThyssenKrupp Elevator. “When the elevator reports that it has a problem, it sends out an error code and the three or four most probable causes of that error code. In effect, our field technician is being coached by this expert citizen.” Developing New Service Businesses The automotive industry illustrates the Industry 4.0 change, says Ravi, of manufacturers evolving from just selling manufactured products to developing relationship-based services. In the past, he says, an automaker’s top priority was to manufacture a vehicle which had high quality and high performance. Those priorities still exist, he says, but what will lead a manufacturer to win the market in the future is “the connectivity and connected experiences that they can deliver to the consumer.” That will become even more the case, he says, with the introduction of autonomous cars and more shared driving services. Ravi references Carlos Ghosn, CEO of Nissan Motor Co., who in July 2014 told the Foreign Correspondents Club of Japan that “demand is growing for in-car communications that meet or exceed the high expectations of the digital generation. Our vehicles must be as connected as the smartphones and tablets that this generation depends upon day in and day out.” The adoption of new IoT business models may occur at a much quicker pace than previous IT transformations. One reason is that the new systems can operate on top of existing IT software. “We have actually brought production capabilities into the market in months,” Ravi says. “You can get the initial successes fast.” The other reason is that this connectivity is being driven more than ever by consumer expectations. For example, Ravi noted that about 20% of vehicles today have connected capabilities. But in another 4 to 5 years, that will grow to 80%. Consumers will expect the information, entertainment and convenience these services provide. “The market is changing,” says Ravi. “Manufacturers don’t have an option.” Ravi, who has spent 20 years in the manufacturing supply chain, says the transformation of the manufacturing value chain can occur not just for big global firms but at all levels.

Business Journal April 27 - May 03, 2015

Manufacturing

Boosting Trade Capacity of Least Developed Countries

wenty four participants from Burundi, Chad, Ethiopia, Lesotho, Malawi, Mozambique, Senegal, Sudan, Swaziland, Togo and Uganda are attending a training course that aims to build the regional trade capacity of Least Developed Countries. The five-day course in the capital of Mozambique, Maputo, was organised by the United Nations Industrial Development Organisation (UNIDO) and the ISO Academy, with support from the Enhanced Integrated Framework (EIF) and the Network on Metrology, Accreditation and

Standardisation for Developing Countries (DCMAS). “Trade has long been recognised as a potential engine for growth and wealth creation. Developing countries, particularly the Least Developed Countries, continue to face supply-side capacity and trade-related infrastructure constraints which can inhibit their ability to compete on international markets. Therefore, UNIDO and its partners designed this programme to help address these challenges by training experts on how to overcome quality infrastructure related barriers,” said Bernardo Calzadilla-Sarmiento, Director of UNIDO’s Trade Capacity

Building Branch who took part in the opening of the training course. “The course includes a distance learning component that ensures all participants share a common knowledge concerning trade capacity building issues, and a residential part that offers a dynamic mixture of lectures and participatory teaching methods,” he added. During their stay in Mozambique, participants visited the National Institute of Standards and Quality (Mozambican Instituto Nacional de Normalização e Qualidade), which is supported by UNIDO’s “Private sector and quality promotion programme” implemented in Mozambique.

AFRICA-UNIDO: Partners in Industrial Development

frica has witnessed improved growth in recent years – averaging 5.5 per cent per annum. Nevertheless, poverty remains a serious challenge. This is because growth alone is not sufficient to propel broadbased development. For growth to be translated into sustained poverty reduction, greater attention needs to be placed on the quality of growth, its sustainability and spread. In this context, greater access to, acquisition and application of science, technology and innovation are critical for African countries to raise the quality of their human capital and consequently, enhance pro-poor growth. UNIDO’s Africa Programme The main challenge for development experts dealing with Africa is poverty alleviation which remains a serious issue in many parts of the continent. UNIDO’s programmes share the common objective to give people the tools, skills, education and infrastructure to pull

themselves out of poverty and create sustainable livelihoods. The African Union Commission, with UNIDO’s assistance,

has formulated the “Action Plan for the Accelerated Industrial Development of Africa (AIDA)”, a strategy which aims

to mobilise both financial and non-financial resources and increase Africa’s competitiveness with the rest of the

world. Since the Industrial Development Decade of Africa of the 1980s and 90s, and the Al-

liance for Africa’s Industrialisation (AAI) of 2003, this Action Plan is the latest far-reaching initiative endorsed by the African leaders. Another key objective of our programmes is to add value to goods for export and develop local production capacities. Overall, Africa lags behind, accounting for less than 3 per cent of global gross output, and less than 1 per cent of global manufacturing output. UNIDO responds by undertaking a range of activities to upgrade value chains, bringing a product through various phases of processing to its final market destination. Strengthening local production capacities as well as enhancing skilled work force are the central prerequisites for an effective and sustainable upgrading of value chains. UNIDO is confident that the combined actions of UNIDO, Africa’s governments and their development partners in the public and private sectors will tackle the challenges successfully, accelerate the continent’s industrial development and spread wealth among its people.

Business Journal April 27 - May 03, 2015

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Business Journal April 27 - May 03, 2015

Travel Tourism www.businessjournalng.com

Global Travel & Tourism Leaders Set Agenda for Growth

he leading global Travel & Tourism private sector and government organisations - the Global Travel Association Coalition (GTAC) - recently launched a commitment for aligned advocacy and action to harness the full potential of the sector to create jobs, drive inclusive growth and foster development. Launched at the World Travel & Tourism Council Global Summit in Madrid “Powering Travel & Tourism into the Next Decade: An Agenda for Growth and Development”, is a landmark manifesto setting forth the key areas of action necessary to ensure travel and tourism contributes to consolidate the global economic recovery, increase resource efficiency and create decent jobs and inclusive economic opportunities. The members of GTAC commit to work with a co-ordinated approach, with governments and the private sector, to advance Travel Facilitation, Infrastructure Development, Environmental Sustainability and Investment in Human Capital. The agenda’s objectives will be addressed through: • Continued research-based evidence on the value and impact of Travel and Tourism and the impact of policy shifts; • Speaking as one to promote the Agenda’s implementation and ensure Travel & Tourism can be an

effective driver of inclusive economic growth and sustainable development; and • Calling on governments to agree to national tourism policies that bring together all relevant government agencies while creating or strengthening public/private sector cooperation and public/public coordination of tourism planning and development at all levels. The Agenda lays out testimony on the conditions for these four critical issues and defines the following Calls to Action. 1. On Travel Facilitation, the GTAC Calls for: a) Policies to facilitate international Travel & Tourism and thus export growth which generates economic and social benefits globally. b) The expansion of transparent visa processes, visa waiver programmes, regional visa agreements and trusted traveller programmes as well as seamless travel procedures at borders. c) The use of new technologies to make travel more accessible, convenient, and more efficient while enhancing security. 2. On Infrastructure Development, the GTAC Calls for: a) The advancement of air, rail,

sea and road connectivity through properly designed regulatory frameworks including measures enabling market and capital access in the context of tourism, transport and trade. b) Government and private sector co-operation to capitalise on innovative and technological resources for improving and accelerating intermodal and infrastructure development. c) Setting and strengthening public/private partnerships to assure legislative and funding needs for improvements and expansion of infrastructure. 3. On Environmental Sustainabili-

ty, the GTAC Calls for: a) Interagency coordination in considering and implementing ways to protect the environment while fostering the sector’s growth and its socio-economic benefits for host communities. b) A higher level of accountability through the development of strong public/private partnerships for the measurement of tourism’s environmental impacts, and evidence-based decision making. c) Greater investment in innovation, adequate legislation and technological solutions that ensure the sustainability of the sector and

minimise adverse environmental and social impacts. 4. On Investment in Human Capital, the GTAC Calls for: a) Greater co-ordination between governments, the industry and the education sector to assess and address the needs for future talent requirements that meet the forecasted global growth of Travel & Tourism. b) The positioning of Travel & Tourism as a viable career option. c) The sharing of best practice in and development of training programmes for the sector.

Emirates Skywards Unveils Complimentary Miles Promotion Emirates Skywards Members to Earn Miles for a Reward Ticket to Dubai when Travelling Five Times on Selected Destinations to Asia

mirates Skywards, the award-winning frequent flyer programme of Emirates, is offering its members a complimentary return flight to Dubai when travelling five times to select destinations in Asia. Emirates Skywards members who book their travel between now and 10 October 2015 can take advantage of this complimentary miles promotion. The offer is valid for return flights to over 10 destinations, including Bangkok, Hong Kong, Kuala Lum-

pur, Shanghai, Beijing, India, Manila, Singapore, Guangzhou, Jakarta, and Seoul. Travel must be originated from either Lagos or Abuja and completed by 10th October 2015. For every five return journeys to one of the eligible destinations, members will earn enough Miles for one Economy Class saver reward ticket to Dubai. If Miles earned is less than the Miles required for a reward ticket to Dubai, additional bonus will be granted to members. Tickets may be purchased directly from Emirates or via travel agents. “By introducing this unique offer

we enable the new and existing Emirates Skywards members to reach their rewards faster and provide them with the opportunity to experience Dubai and convey the spirit of this exciting global city that is always evolving,” said (local CM). “Besides the iconic landmarks such as the Burj Al Arab, Burj Khalifa and The Dubai Mall, the emirate provides plenty more attractions and experiences – ranging from a host of desert activities, to beautiful beaches and a wealth of water sports, to a growing arts and culture scene, and amazing cuisines that

span the globe.” The offer is open to both new and existing members. Customers interested in this offer must register online at www.emirates.com and can start accruing Miles. Terms and conditions apply. With over 12 million Emirates Skywards members around the world, and multiple industry- and customer-based awards, Emirates Skywards has become the programme of choice for travellers. Since its launch in 2000, Emirates Skywards connects its members with places and their passions by

rewarding their loyalty with a wide range of privileges, travel benefits and unique experiences. Open for everyone to join, Emirates Skywards offers four tiers of membership - Blue, Silver, Gold and Platinum - with each tier providing a selection of exclusive and exciting privileges. Programme members earn Skywards Miles whenever they fly Emirates or select partner airlines, as well as when they use the programme’s designated hotels, car rentals, leisure and lifestyle partners.

Business Journal April 27 - May 03, 2015

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Business Journal April 27 - May 03, 2015

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Pension Industry Will Invest in Infrastructure, Real Estate to Diversify Investment As the new Contributory Pension Scheme (CPS) continues to celebrate its runaway successes, Mrs. Chinelo Anohu-Amazu, Director-General, National Pension Commission (PenCom) speaks on the challenges of the scheme and the way forward Review of Pension Industry in 2014 The activities in the Pension Industry were guided by the need to ensure sustainability and safety of pension funds as well as payment of retirement benefits. In the course of the year, and in line with the dynamics of the operating environment, some of the supervisory and regulatory frameworks were modified. For example, the regulation on administration of annuity and fund accounting were reviewed in the year. The year also witnessed the licensing of a Pension Fund Administrator. All these and other modest achievements recorded in the year are discussed in turn. The Pension Reform Bill 2013 was signed into law on the 15th of July 2014, which repealed the Pension Reform Act, 2004 (PRA 2004) and expanded coverage of the Contributory Pension Scheme (CPS) to the informal sector, self-employed and private organisation with less than three (3) employees. The PRA 2014 had made the participation of states and local governments mandatory. Other highlights of the PRA 2014 include further empowerment of the Commission by giving it greater role in terms of its supervisory and regulatory activities as well as enforcement

of compliance with the PRA 2014. In addition, penalties, sanctions and prosecution of offenders were broadened to serve as deterrent to pension crimes. The PRA 2014 also increased the total rate of pension contributions from 15% to 18% of employeesâ&#x20AC;&#x2122; monthly emolument (10% by the employer and 8% by employee). The Commission successfully issued a licence to a new Pension Fund Administrator (PFA), the NPF Pension Limited in 2014, which brings the total number of PFAs in Nigeria to twenty-one (21). In addition, 4 Pension Fund Custodians (PFCs); and 7 Closed Pension Fund Administrators (CPFAs) were other institutions retained under the PRA 2014 as operators of the CPS. The Scheme membership witnessed significant growth during the year under review. The total number of registered participants in the CPS increased by 8.05 percent from 5.92 million as at 31 December, 2013 to 6.40 million as at the end of 2014. Memberships from the public and private sectors were 48.37 and 51.63 percent respectively. Likewise, four (4) States of the Federation enacted laws on the CPS making the total number of states that enacted the law on the CPS to 26. The remaining ten (10) States are currently at the Bill Stage for the

Scheme Implementation. Generally, all the thirty-six (36) States of Federation are at various stages of implementation and with the Enactment of the PRA 2014, the Commission will be liaising with the States to ensure their full implementation as required by the law. In addition, membership of Closed Pension Fund Administrators (CPFAs) and Approved Existing Scheme (AES) stood at 24,365 and 40,951 respectively during the same period. Members of CPFA and AES are strictly employees of organisations issued license to manage their existing pension scheme and those granted approval to continue with their legacy schemes respectively. However, the PRA 2014 has closed new entrance into these schemes and provided that new workers of the organisations having the CPFA or AES to open RSA with PFA of their choice under CPS. The pension industry had accumulated a total of N2.54 trillion pension contributions as at the reporting period. The pension contributions contributed by the public sector stood at N1.45 trillion representing 57.19 percent of the total, while the private sector contributed N1.09 trillion (42.81 percent). The total value of pension industry assets under the CPS as at 31st

December, 2014, grew to N4.61 trillion from N4.06 trillion in the preceding year, with an average annual growth rate of 30 percent. This pool of pension funds is a potential platform for attaining the transformation agenda of Government in the provision of infrastructure, energy, employment and the development of the real sector of the economy. A total of 115,529 workers had retired as at 31 December, 2014 with 87.20 percent (100,745) of the retirees on Programmed Withdrawal, while the remaining 12.80 percent (14,784 retirees) were on Life Annuity. The industry paid a total sum of N271.15 billion as lump sum to retirees under the CPS and an average monthly pension of N3.84 billion. In addition, N62.20 billion was paid as premium to Insurance Companies to provide Life Annuity for the 14,784 retirees. During the period, a total sum of N124.60 million and N12.41 million were paid as lump sum and average monthly pension respectively for 246 retirees on health grounds. The total sum of N67.31 billion death benefits were also paid to beneficiaries of 25,232 deceased workers in both the public and private sectors.

Outlook for the Pension Industry in 2015 in the face of Falling Oil Prices It would be recalled that Nigeria is a mono-cultural economy that relies on oil as the main source of foreign exchange earnings and revenue. This suggests that Nigeria might be exposed to such macro-economic risks such as exchange rate, interest rate, increase in rate of inflation and unemployment. The reduction in oil prices implies reduction in Nigeriaâ&#x20AC;&#x2122;s foreign exchange earnings and revenue. The reduction in government revenue suggests a risk in government liquidity and hence its ability to meet its financial obligations of pension contributions, funding of the retirement bond redemption fund account for onward payment of accrued portion of retirement benefits, death claims, etc. The Naira has been devalued in the face of falling oil prices. Consequently, domestic prices of imported goods have skyrocketed with dire consequences on the rate of inflation. Given that the Nigerian economy is import dependent and most of the manufacturing companies de-

Business Journal April 27 - May 03, 2015

21 strengthening its moral suasion on the States that are yet to implement the Scheme.

Official Stand of PenCom on Deployment of Pension Funds for Development of Infrastructure/Housing The National Pension Commission (Pen Com) is committed to the development of Infrastructure andHousing in Nigeria. As part of efforts to ensure that pension funds positively impact on the social and economic development of Nigeria and its citizens, the Commission undertook the following action steps: â&#x20AC;˘ Inclusion of Infrastructure Bondsand Infrastructure Fund as an allowable Investment Instruments for Pension Fund In 2010, the Commission amended the Investment Regulation and included Infrastructure Bonds & Infrastructure Funds. Pension Fund Administrators (PFAs) are allowed to invest pension fund assets in infrastructure through Infrastructure Funds and Bonds, with maximum investment limits of 5% and 15% of total portfolio value respectively. However, as at date, there are limited Infrastructure Bonds and Funds available for pension funds to invest. As a matter of fact, only a few State Governments h ad issued Bonds for infrastructure projects in their respective States that satisfy the minimum investment requirement for pension funds.

â&#x20AC;˘ Amendments to the Pension Reform Act (PRA) 2004: Enactment of (PRA) 2014

The reduction in government revenue suggests a risk in government liquidity and hence its ability to meet its financial obligations of pension contributions, funding of the retirement bond redemption fund account for onward payment of accrued portion of retirement benefits, death claims, etc.

pending on imported inputs, cost of production will rise and prices of locally manufactured consumer goods have also risen. This would limit the extent to which these companies can create employment as well as meet their pension obligations to their employees. In view of the foregoing, J. P. Morgan had recently put Nigeria on the watch list in its global bond index rating as a result of dwindling government revenue. The concern is whether the Federal Government would be able to meet its obligation upon the maturity of the FGN bonds. This also has serious implications for pension fund investment in FGN securities. Given the above scenario, the Pension Industry is looking forward to diversifying its investment base to infrastructure bond, fund and real estate. As part of the strategies to achieve diversification, a multi-fund structure would soon be introduced to cater for the different risk appetites of contributors, while satisfying the liquidity requirements of the industry. The pension industry is strategically focusing on widening its membership base by extending coverage of the scheme to the self-employed and the informal sectors through the micro-pension plan. This is in addition to

The Pension Reform Act (PRA) 2004 was amended in July, 2014. One of the major inclusions in the PRA 2014 was the introduction of Section 89(2) which allowed a registered contributor under the Contributory Pension Scheme to apply a percentage of the pension assets in Retirement Savings Account (RSA) as equity contribution for a residential mortgage. This is a significant development, as it would accelerate the development of both the mortgage finance and housing sectors as well as make affordable housing accessible to registered contributors. On the supply side of the housing equation, the Commission had from inception made Asset/ Mortgage-Backed Securities and Real estate Investment Trusts, as allowable instruments for pension funds. These are financial instruments that can be utilized to increase the housing stock in Nigeria. However, just like in Infrastructure, there are limited numbers of such instruments in the Nigerian Capital Market. Also, in the proposed amendment to the Investment Regulation (which had recently been exposed to stakeholders for feedback comments), Mortgage Bonds have been introduced as allowable instruments for pension funds. In as much as the Commission is desirous of encouraging pension fund investments in infrastructure and housing, it will not compromise on the major objectives of pension fund investments, which are safety of the assets and maintenance of fair (real) returns on

investments. The Single Greatest Challenge Facing the Industry Today and Future The greatest challenge facing the industry and which might continue to rear its head into the future is the dearth of investable instruments. The availability of such instruments will help to diversify pension funds investment and hence help to reduce risk of concentration. Another challenge rests with the lack of adequate understanding by the general public between the old pension scheme and the CPS.

Has PenCom Done Enough to Enforce Compliance on Enrolment/remittance of Deductions from Employers? To ensure that all employers of labour comply with the provisions of the PRA 2014 with respect to joining the Contributory Pension Scheme (CPS), the Commission at its inception developed a Framework for Private Sector Compliance with the PRA 2014. The Framework covered the strategies for ensuring compliance which included public enlightenment, collaboration with regulators/professional bodies, disclosure requirements, issuance of compliance certificate and engagement of consultants. Other strategies included on-site inspection and application of a regime of sanctions. These strategies are being applied in ensuring the enrolment of employers in the CPS. The Pension Reform Act (PRA 2014) is clear on contravention of Section 11(3) of the PRA, 2014 which provides that any employer who fails to remit pension contributions within 7 working days of payment of salary shall, in addition to making the remittances already due, pay penalty of not less than two percent per month for the benefit of the RSA holder. In pursuance of this statutory responsibility of ensuring compliance with the provision of the PRA 2014, the Commission deployed an application (Risk Management Analysis System) for monitoring remittance of pension contributions by employers. The application enables the Commission to monitor the status of the monthly remittance of contribution by all employers where employees have opened Retirement Savings Account. Defaulting employers are subject to the recovery process. In addition, the Commission has in place a Framework for recovery of outstanding pension contributions with penalty from defaulting employers. The Framework, amongst others, provided for appointment of Recovery Agents (RAs). Consequently, the Commission has identified and assigned over 15,000 employers to Recovery Agents to review their records and recover any outstanding pension contributions plus penalty. The Commission also follows up on complaints from workers against their employers for failure to remit pension contributions as and when due. In the event where the employer refuses to remit the outstanding pension contributions of its employee within the time frame stipulated by the Commission, appropriate actions, including instituting legal action are taken.

Business Journal April 27 - May 03, 2015

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GT Bank Appoints Osaretin Demuren as New Chairman

uaranty Trust Bank Plc has announced the appointment of Mrs. Osaretin Afusat Demuren as the New and 6th Chairman of its Board of Directors, at the 25th Annual General Meeting of the Bank which held on Tuesday March 31st, 2015 at Oriental Hotel, Lekki-Epe expressway, Lekki, Lagos. Demuren was presented to Shareholders as a replacement for the outgoing Chairman, Mr. Egbert Imomoh, who is retiring from the Board in compliance with the Bank’s Code of Corporate Governance, which stipulates a retirement age of 70 years for Non-Executive Directors of the Bank. She joined the Bank in April, 2013

as a Non-Executive Director. She served as a member of the Board Risk Management Committee from April 2013 and became the Chairman of the Committee in July 2014. She was also a member of the Board Remuneration Committee and the Board Information Technology Strategy Committee. Demuren had a successful career with the Central Bank of Nigeria (CBN) which spanned over 33 years, during which she served as Director, Trade and Exchange Department and was deployed to serve as the Director, Human Resources Department in 2004; a position which she held until her retirement from the CBN in December 2009. She was the first female Director of the CBN. She holds a Masters’ Degree in

Promasidor Nigeria Named Best Corporate Social Responsibility Company 2014

n recognition of the enormous contributions of Promasidor Nigeria to the Isolo community of Lagos, Nigeria, the Osolo of Isolo Kingdom, the Council of Chiefs and the entire Isolo Kingdom have named Promasidor- The Best Corporate Social Responsibility Performing Company of The Year 2014. Presenting the award to Promasidor during the award ceremony at the Okota Country Club, Lagos, His Royal Majesty, Oba Kabiru Kolawole Agbabiaka described Promasidor as a pacesetter for others to follow in terms of CSR, adding that the community sees the positive impact of Promasidor every year in the areas of education, infrastructural development, health and economic empowerment among others.

The Osolo of Isolo Kingdom and his Council of Chiefs also paid a courtesy visit to Promasidor, where the Managing Director, Mr. Olivier Thiry, warmly received them. The Osolo said the purpose of his visit was to express his joy for the good relationship that exists between Promasidor and Isolo and commended the organisation for all its support for the development of the Isolo community.

Economics and Statistics from the Moscow Institute of Economics and Statistics, Moscow, and a Diploma in Russian Language and Preliminary Studies from the Kiev State University, Kiev. She is a member of many professional associations including the Society for Human Resource Management of America, Nigerian Statistical Association, Chartered Institute of Personnel Management of Nigeria and the Chartered Institute of Bankers of Nigeria. Commenting on the recent development, Segun Agbaje, Chief Executive Officer/Managing Director of Guaranty Trust Bank Plc, said that “the Bank has a well-defined succession strategy to address management vacancies as well as statutory and planned retirements.”

Emirates Ready to Launch Apple Watch App April 24

mirates, a global connector of people and places has announced the launch of its Apple Watch app come April 24, 2015. Emirates’ customers from around the globe will be able to enjoy the smart features and sleek interface of the Emirates watch app, designed to complement the Emirates iPhone app. Emirates will be the first airline in the Middle East and African region to offer an Apple Watch app. “In today’s connected world, mobile technology plays an increasingly important role in the overall travel experience of our passengers. The Apple Watch platform allows us to connect with travellers on a more personal level by providing real time information throughout their journey,” commented Alex Knigge, Senior Vice President, Digital at Emirates. “Our team developed the

Emirates watch app with modern travellers in mind, making sure this wearable technology delivers key information, with a simple glance at their wrist.” The Emirates watch app is an extension of the Emirates iPhone app; it was designed as a companion for travellers, delivering dynamic and context-specific data such as live flight status updates.

Customers with an Apple Watch and the Emirates app installed on their iPhone will benefit from the following key features: Review list of up-coming trips, Access to real time flight information, including terminal, gate number, flight status, baggage collection details; Timely notifications in case of changes like gate number or baggage belt and Compatibility with Apple Passbook .

Red Star Express Plc Partners DealDey to Enhance eCommerce Industry

n a strategic bid to constantly exceed customers’ expectations and enhance the eCommerce industry in Nigeria, Red Star Express Pl, has partnered with DealDey to take the online shopping business to greater height. Online shopping is fast gaining ground in Nigeria, taking up most conventional shopping as people, especially the elite, working class and the youth,

who run tight/ busy schedules, place their orders from the online stores at the comfort of their homes and offices, and their purchases are delivered to them. DealDey, one of the fastest growing online stores in Nigeria, has appointed Red Star Express to handle its logistics, by providing their customers with the option of picking-up their DealDey orders at over 20 Red Star Express locations nation-

wide. Some of the locations include (Apapa, Kakawa, Enugu, Akure, Jos, Lokoja, Benin City, Owerri, etc).The customers simply place their orders and have the option of selecting the closest Red Star Express location to them, and

enjoy world class service when picking up their order. Speaking on the partnership, the Managing Director of Red Star Express, Mr. Sule Bichi noted that the world is a global village, characterised by technological advancement.

“Red Star Express strongly believes in creating new opportunities to enable Nigerians enjoy products of technological advancement as their peers from developed countries. This is aimed at building stronger future and positively contributing to the economic development of our country through job creation,” Bichi stated. The Red Star Express helmsman is delighted with the part-

nership, saying the Company supports innovative solutions and initiatives that provide real value for customers. “At Red Star Express we value our customers and are configured to deliver high quality services. The collaboration with DealDey is another opportunity to provide our valued customers with unique Ecommerce services to positively impact their lives,” he added.

Business Journal April 27 - May 03, 2015

CorporateAnalysis

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Diamond Bank Earnings:

Succumbing to Cost & Regulatory Pressures?

iamond Bank Plc recently published its audited FY: 2014 and Q1:2015 results on March 30, 2015 and April 13, 2015 respectively on the floor of the Nigerian Stock Exchange (NSE). The results show mixed performances at the top and bottom lines. We present the highlights of the FY: 2014 result, Q1:2015 and our 2015 estimates below: Profitability Wanes on Hike in Cost to Income Diamond’s gross earnings expanded 15.7% Y-o-Y to N208.4bn in FY: 2014 from N181.2bn in FY: 2013, in line with our FY: 2014 gross earnings forecast of N215.2bn (3.8% variance). We believe this top-line growth is impressive despite the Apex Bank’s unsympathetic monetary policies that constrained banks’ income. However, in Q1:2015, gross earnings eased 5.2%Y-o-Y to N50.7bn from N48.2bn in Q1:2014. Compared to peers, the Bank’s performance is fairly above those of its Tier-2 Banks (+12.9%) for FY: 2014. We note that growth in FY: 2014 gross earnings was broadly driven by expansion in non-interest income which rose 27.8% (N47.3bn in FY: 2014 vs. N37.0bn in FY: 2013) as against interest income. Further review revealed that net trading and foreign exchange income also surged significantly by 43.7% in line with the trends noticed across the sector. As against top-line growth, FY: 2014 PBT and PAT declined 12.4% and 10.7% respectively, even as Q1:2015 PBT (-9.5%) and PAT (-15.1%) followed suit. Further scrutiny of the numbers indicated net interest income grew 4.7% Y-o-Y as a result of 33.9% Y-o-Y hike in interest expense (vs. 12.6% in interest income) thereby weighing down the bottom line. Further pressure points on Diamond’s PAT include the 13.2% and 17.9% increase in impairment charges and operating expenses respectively. Consequently, ROAA and ROAE eased to 1.5% and 14.5% in FY: 2014 from 2.2% and 23.7% in FY: 2013 respectively, relative to Tier-2 Banks average ROAA: 2.1%and ROAE: 16.9%. CIR and CoF Expands, NIM Reduces Cost to Income Ratio (CIR) rose to 63.3%for FY: 2014 from 59.4%in FY: 2013 (but firmed at 62.0% in Q1:2015). Nonetheless, this is below 67.8% average for Tier-2 banks. A further analysis of the operating

tive to Tier-2 average of 1.8%. In the same vein, Total Assets also increased 27.3% Y-o-Y (N1.9tn in FY: 2014 vs. N1.5tn in FY: 2013), this remained broadly driven by growth in gross loan book whose FY: 2014 contribution increased to 56.2% relative to 53.4% in FY: 2013. Although Diamond’s Loan to Deposit ratio of 69.6% is low relative to the Tier-2 average of 75.3%and against the regulatory benchmark of 80.0%, we do not expect a significant growth in risk asset in 2015 based on management guidance. Total Deposits Maintained Double Digit Growth Diamond’s Total deposits advanced 23.9% to maintain its custom of huge deposit mobilisation. Total deposits rose to N1.6tn in FY: 2014 relative to N1.3tn in FY: 2013. This represents 90.6% of Total Liabilities which also grew 24.9% in the same period. The Bank’s Capital Adequacy Ratio (CAR) slid to 17.5% in FY: 2014 from 18.5% in previous financial year, mainly due to aggressive growth in loan book with less than proportionate increase in qualifying capital. Nonetheless, this is reasonably above the 16.0% regulatory benchmark for Systemically Important Banks (SIBs).

Uzoma Dozie

MD/CEO, Diamond Bank Plc expenses shows that substantial increase in AMCON Resolution Fund (+149.5%), professional fees (+37.4%) and personnel expenses (+13.3%) accounted for the rise in CIR in FY: 2014. We are of the opinion that Diamond may need to seek out means of increasing the efficiency of its Assets to improve its Net margin which eased to 12.2% in FY: 2014 (vs. 15.8% in FY: 2013) and 14.1% in Q1:2015

from 17.5% in Q1:2014. Also, Cost of Funds (CoF) rose to 3.7% in FY: 2014 and 3.5% in Q1:2015 from 3.1% in FY: 2013. However, this is not surprising given intense rivalry for deposits which was occasioned by Central Bank’s policy that increased CRR on private (from 12.0% to 20.0%) and public sector (from 50.0% to 75.0%) funds. Net Interest Margin (NIM) slackened to 6.7% in FY: 014 and

6.6% in Q1:2015 relative to 7.3% in FY: 2013, well below the 7.2% average for Tier-2 banks in the same period. Gross Loans and Advances Crossed the N1.0tn Mark The Bank expanded its loan book by 32.8% for FY: 2014 (N1.1tn relative to N818.0bn in FY: 2013). This remained broadly in line with trend across the banking space given the Central Bank’s contractionary stance in the face of weakening macro-economic indicators. We note that the Bank’s loan book has also crossed the N1.0tn mark compared to its Tier-2 peers. Expectedly, FY: 2014 Credit impairment charges increased 13.2% Y-o-Y (N26.4bn vs. N23.3bn in FY: 2013). Cost of Risk however eased slightly to 2.4% from 2.8% in the previous year given larger size of risk assets, yet this is high rela-

DIAMOND is Still Attractive We forecast Diamond’s Gross loan and advances to strengthen to N1.2tn (up 10% Y-o-Y) in FY: 2015. This is likely to drive gross earnings to N243. 1billion (representing 16.7% growth) on the back of stronger growth in non-interest income. Also, we anticipate moderation in CIR from 63.3% as at FY: 2014 to an average of 62.5% in the next five years. Consequently, we estimate PAT to strengthen by 23.1% Y-o-Y. Nevertheless, we forecast EPS to settle at N1.53 per share from N1.65 per share due to increase in shares outstanding resulting from rights offering issued last year. On basis of the foregoing, together with weaker economic outlook, we increase our risk free rate to 15.0% from 11.0% and country’s risk premium from 9.0% to 11.0%. Therefore, we reviewed our target price downward from previous N10.63 to N6.36 per share. The counter currently trades at N4.60 per share, this implies that the stock portends an upside potential of 38.1%. Therefore, we retain our BUY rating on the counter. Source: Afrinvest Research

Brands Marketing Advertising

Business Journal April 27 - May 03, 2015

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Reclaiming the Identity of a Brand • A Levi’s Case Study

Overview

reputation for innovation, bright ideas, excitement and enthusiasm. However, it has not always been so successful in maintaining the detailed processes necessary to ensure continued product success - hence the need for effective brand management. Brand management involves having the technical skills to create a successful brand management plan, as well as good ideas.

Levi’s is the best known jeans name on the planet. The business was founded by the Strauss family in 1875 and produced jeans for miners out of tent fabric and canvas. It then went on to make jeans from denim which is a coarse, heavy twill fabric. The jeans became popular with miners during the California goldrush and were famous for the twin rivets on the pockets. The business went from strength to strength to become one of the twentieth century’s best known global brands. During the 1980s the company branched out into a range of garments including suits, before refocusing on one of its heritage products Levi 501s in the early 1990s. A TV commercial showing Nick Kamen stripping down to his boxer shorts in a launderette boosted the sales of all jeans, not just of Levi 501s and thousands of men switched to wearing boxer shorts. The Levi Company has always had a

Weaknesses in Late 1990s By the late 1990s it was all too apparent that the brand was slipping and needed to be put back on track. Since the 1960s, success had been based on the brand’s association with youth culture. During the 1990s this association began to lose some of its vitality. While sales of the brand continued to grow, it began to suffer from declining equity. By this we mean that the perception of the brand in terms of the desired position was beginning to slip. While in the 1980s Levi’s were seen

as ‘cool, youthful, innovative and sexy’, market research revealed that this was no longer the case by the late 1990’s. Brand managers at Levi’s realised that they needed to revitalise the perception of the brand. The company had, wrongly, been emphasising its role in wholesale merchandising - i.e. selling millions of pairs of blue Levi’s to retailers and ensuring good sales volumes and profits for these retailers. However, this focus tended to ignore the consumer. Since the late 1990s Levi’s brand managers have changed the emphasis to consumer focused brand management. Brand managers recognise that their responsibility is to deliver the image of the brand both to consumers and to retailers, as well as ensuring high sales volumes and achieving retailers’ financial goals. The emphasis now is therefore less inward looking - e.g. ‘how many units have we sold?’ and more outward looking, e.g. ‘what do consumers see Levi’s as being?

The Brand Management Process Situational Analysis The first step in the brand management process was to carry out a situational analysis - i.e. a review of Levi’s standing in the market place. Detailed market research was carried out to obtain a clearer picture of market standing. This included internal areas such as whether there were too many layers of decision making in the company and whether the company was focused enough on its objective of meeting customer requirements. External factors that were examined included the range of new brands on the market, their impact on Levi’s competitiveness and also the effectiveness of retailers in promoting and selling Levi’s jeans. The situational analysis revealed that fewer retail stores were stocking Levi’s. In addition, the market research showed that consumers’ awareness of the brand was de-

clining. Comparisons of figures for Spring and Autumn of 1999 showed a reduction in the number of people in the UK who were able to identify the Levi’s brand. Also, fewer people named

Levi’s as the most recent brand of jeans that they had purchased. This decline was very small, but it still needed to be stopped. Creating a Brand Plan

Business Journal April 27 - May 03, 2015

Brands Marketing Advertising

Perception Management, Not Image Making

Haniel Ukpaukure ou have heard the term, ‘image making.’ You have also heard the nomenclature, ‘image maker.’ In a broad sense, from the layman’s understanding, the one refers to the art of burnishing the image of an organisation to give it a positive outlook in the eyes of the public, while the other is simply the title of the man or woman who does that job. Long before now, when there was very limited understanding of public relations, it was generally accepted that the term was all about ‘making’ the image of an organisation. The term was understood only from the point of view of giving the organisation a positive image, through the eyes of the media. It did not matter if the organisation, through its activities or those of its leaders, did not deserve the image it sought to sell to the public. The term itself– image making – has a negative connotation. It smacks of a deliberate effort to put a white coating on a black surface, or papering over cracks that the organisation might not want the public to see. In many cases, the job entailed telling lies to shield the truth, or outright propaganda that served a short term interest, with the consequence of a long term crisis that the organisation might not be able to manage. Image making generally centred on securing favourable mention in the media, since an organisation’s image

The first step in creating a brand plan is to identify the key objective to be worked towards. This is referred to as the desired outcome. This can be set out in a few words or a sentence expressing what you want to achieve e.g. to improve the brand presence at retail outlets. With this objective clearly defined, the key tasks needed to deliver must be identified. In other words, the brand manager needs to create a plan/strategy. In this case the strategy involved: • Carrying out the market research • Finding out in how many stores Levi’s were selling • Evaluating the current level of presence, i.e. was Levi’s happy about the existing profile in retail outlets - or was there room for improvement? Having created a plan the next step was to measure success and to use this process to drive improvements in the organisation. This measurement process has given Levi’s a much clearer focus. For example, a senior brand manager working for Levi’s might have been given the objective of opening

was measured against the type of mention it got in the media. The public relations manager was expected to be an expert in using the media to cover untruths about happenings in the organisation. In the 1980s, the public relations adviser of a multinational organisation in Nigeria found himself being expected to play the role of an image maker, because the organisation’s leaders saw his job from that perspective. An employee had just lost his life in an industrial accident. Within hours of the occurrence of the tragedy, the adviser received instructions from the organisation’s chiefs in Europe to ensure news of the death did not get out into the media. But the man did the unexpected – the very thing he was asked not to do. He invited the media, complete with photographers and television cameramen, on a tour of the factory where the accident occurred. The news of the incidence that appeared in the media was that of a careless worker who lost his life because he ignored safety instructions, including appropriate signs at designated places, to be at a place where he was not supposed to be at that time. The import of the news was that a worker died as a result of non-adherence to the safety rules and procedures that the organisation put in place, which met the best global practices. Instead of condemnation, the public relations adviser was specially invited to Europe where he was given commendation by his employers. The evolution of public relations

up 10 new stores in five key cities in Europe where there is a very strong retail sector. This process gave staff a clear outline of accountability for what had to be delivered. The performance of brand implementers and brand managers could now be reviewed against expectations. Feedback can be given on how to improve performance and a review process enables the ongoing evaluation of the strategy. The net effect of these changes is the creation of a much more effective communication process within the Levi’s organisation. Levi’s employees know where they stand and where their responsibilities lie. Creating a New Brand Mission and Strategy Given a downturn in the perception of the brand, brand managers at Levi’s came up with a new brand mission and the need to communicate this clearly to the target customer. The brand mission was: ‘to be the coolest and most profitable jeans brand’. In order to succeed in this mission it is first necessary to reclaim leadership in the denim category with

over the years has brought with it a better understanding and appreciation of what it is, and what it is not. This explains why it is rarely heard these days the description of the PR manager as an image maker, except by the few that are still ignorant of what the person does. The understanding of the role of the PR, corporate affairs or corporate communications manager, according to the variation of the title these days, as one that manages the publics’ perception of the organisation’s image, stems from the fact that the job is about perception management, not image making. The organisation engages in programmes and activities that are aimed at enhancing its corporate image, in line with its philosophy, tradition, objectives, vision and mission, etc. This is an important aspect of the process of maintaining the image that it desires. Of no less importance is the manner in which the programmes and activities are communicated to the various publics, to ensure their objectives are achieved. An organisation could be a product manufacturer, like a food-related product. It is one thing to manufacture the product, and entirely another to ensure its benefits are well communicated to the those for whom it is made, in a manner that will enhance the organisation’s corporate image. The product could offer promises to the consumer, and actually end up fulfilling those promises. But this would not be enough. There must be a deliberate effort to ensure the public’s perception of the product in

young people. Clear objectives were set for reversing the sales decline and re-building brand equity with target consumers. Creating a New Brand Strategy This brand mission enabled Levi’s to develop a plan which involves successfully bringing together three key elements i.e. the product, communications with the consumer and the way in which Levi’s products are presented in retail outlets. The marketing planning process involves gaining a clear understanding of the consumer architecture (i.e. the structure of the correct product to the correct consumer), enabling Levi’s to identify the various sectors of the jeans market. With this information carefully mapped out, it is possible to get the brand architecture right - i.e. to produce the right jeans for each segment of the market. The consumer architecture map shows the key groups of 15-34 year old consumers in Western Europe. At the top are the fashion leaders. It is through the fashion leaders that Levi’s seeks to influence the rest of

relation to the promises it offers is properly managed. We have seen in recent times how appropriate communication tools are properly deployed to manage public perception of some products. The Gulder Ultimate Search of Nigerian Breweries Plc is one example. The company has used the reality show, which has run for more than a decade now, to communicate and manage public perception of Gulder as not just a beer that is good to the taste, but one that symbolises strength, courage, character, determination and focus. There is currently a plethora of music reality shows that mobile phone companies use to communicate to the youths the fact that they can achieve their dreams if only they believe, are determined and are focused. It must be emphasised that perception management is not only about an organisation’s products, which constitute just one of the many variables that make up its corporate image. It is, in fact, about the entire image itself, whose other variables include the organisation’s integrity in terms of meeting its obligations to employees, shareholders, government, regulatory authorities and the community, through corporate social responsibility, as well as the integrity of its leaders. No matter how good or positive an organisation’s corporate image is, the effort to maintain a positive perception of that image by the different publics must be a deliberate and sustained one. It is the reason organisations spend huge

the market. Levi’s has designed various brands to appeal to different segments of the jeans market. Product innovations are then designed to appeal to and positively influence each of the relevant groupings. Finally, it is important to use retail segmentation to target Levi’s products at the consumer correctly - in other words, to get the right product to the relevant consumer shops. A high level of sophistication is required to ensure that appropriate retail outlets stock the relevant brands. This is all part of the process of successful brand management. Implementing Decisions Once brand managers have created objectives and developed the plan, the next step is to implement their decisions, i.e. to put the plan into action. Levi’s objective is to reclaim the brand. This has involved developing product innovations to excite the relevant target market - empowered young people. A recent product of this process has been the new concept of Levi’s ® Engineered Jeans™; ‘twisted jeans’.

resources on different communication tools to maintain the positive perception that it enjoys. The task of managing public perception of an organisation is not all about communication. It is, more than anything else, about sustaining the variables that constitute the corporate image. Alteration of just one of the variables is enough to change, in a negative way, perception of the organisation itself. For instance, failure by the organisation’s products at any stage to fulfill its promise to consumers could cause a damage from which it might not recover. A labour strike over wage-related issues could betray the organisation as one that does not meet its obligations to workers. The discovery that the organisation has been a tax evader could portray it as an irresponsible corporate citizen. Some misdemeanours concerning the private life of even one of the organisation’s leaders – chairman, chief executive officer, director or senior manager – is enough to affect in a negative manner, public perception of its image. Perception management is therefore a combination of sustenance of the variables that constitute an organisation’s corporate image and constant deployment of effective communication tools to maintain that image. upr.uprlimited@yahoo.com 07031687570

A large part of Levi’s advertising and promotion in 2000 is based on this product and is a symbol of youth culture. Unlike earlier Levi’s advertising which had used heroes such as Brad Pitt and Nick Kamen, the emphasis is on the product as ‘hero’. Twisted jeans rapidly won the support of young, fashionable people and are representative of Levi’s new way of thinking. Conclusion This case study has shown how Levi’s has used effective brand management planning to reclaim the brand and to turn around the fortunes of the company. This is a logical, step-by-step process which has been implemented by brand managers. The final stage in the process involves the analysis and evaluation of results. To date, company research reveals that the strategy is delivering equity for the brand which is rapidly regaining its cool and innovative status. The financial targets have also been exceeded.

Business Journal April 27 - May 03, 2015

CSR Digest

www.businessjournalng.com

CSR Impact Story: Women in Technology Academy, Kenya • Women mentor women in IT careers at Safaricom Increasing Diversity in an IT Workforce Eva Ngugi had what it takes for a technology career: a degree in business information technology, a Cisco CCNA certification, and a goal to become a network administrator. Yet, she wondered how she would overcome stereotypes that women are not network engineers in Kenya. Joanne Orech earned her bachelor’s degree of science in information technology in 2013, then pursued a CCNA as she began to apply for jobs. Then they discovered Safaricom through the WIT Academy. Kenya needs a pipeline of qualified women to compete in the global digital economy and help meet the expected shortage of 700,000 IT workers worldwide. Safaricom is a place where they can excel, but women in IT do not know about it. Half of Safaricom’s employees are women, yet they make up only 15% of the company’s IT workforce. The fact that more women did not make it through the interview process for IT jobs was a problem for the growing communications company. “Kenya is a patriarchic society,” said Jacqueline (Jaki) Mebur, Senior Co-ordinator for Planning at Safaricom. “It’s hard to find organisations like Safaricom where women are encouraged to speak out and be heard. We need to make more women in IT aware of our culture.” A Pipeline of Qualified Candidates When the company reviewed their interview process, they found that women with IT-related degrees dropped out due to lack confidence and hands-on experience. “We wanted to develop a program to support women in the workplace without changing who they are,” said Jaki. “We wanted to help them bring the qualities and values of being a woman to succeed in the workplace.” Safaricom partnered with Cisco to launch the WIT Academy. The 3-month internship inspires women to stay in IT by bringing them into the Safaricom workplace to develop hands-on skills. They meet weekly with the Cisco Connected Women employee resource organisation to learn about a range of soft skills—from working with a team to interviewing and CV writing to work/ life balance. Cisco Networking Academy instructors encouraged top students like Eva and Joanne to apply to the WIT Academy. A written application, qualifying exam, and oral assessment identified candidates with both technical skill and leadership potential. In 2014, 33 female students from universities and technical colleges across Kenya became the first WIT Academy interns. Women in the Workplace From Monday to Thursday, the women apprenticed at Safaricom,

shadowing a systems engineer to gain hands-on work and customer service experience. “When I joined the program, I thought it would be more like other internships, assisting with office work,” said Joanne Orech, “but the knowledge and skills I got exceeded my expectation. By the time the internship came to an end, I was very confident with myself and sure of what I wanted with regards with my career.” The interns work as a team to plan and implement projects for Safaricom. Interns who need to boost their IT skills receive Cisco CCNA training. Weekly meetings track their progress both mentally and emotionally.

Women with a passion for IT discover a path to careers in Kenya through the Women In Technology (WIT) Academy, a partnership between Safaricom and Cisco. The 3-month programme prepares for information technology (IT) careers through job shadowing and mentoring.

Eva quickly proved her expertise to her sponsor and eventually worked solo on integrations at client sites. She said: “It gave me an extra boost of confidence in my abilities as a female engineer working under the Customer Integration Team.” Woman-to-Woman Communications On Fridays, the interns meet with members of Cisco Connected Women via the Cisco TelePresence solution. Cisco women from Germany, the United Kingdom, Belgium, Spain and other parts of the world mentor the women in effective leadership, work/life balance, and interview skills. “They show us that the struggles we face are the same everywhere,” said Jaki. “Most working women have families and careers. They have to stretch themselves thin.” “The sessions were about interpersonal skill development, which are key in the workplace,” recalls Eva. “They were seemingly basic lessons, yet very important to the development of character and behaviour especially because of the different personalities in the place of work.” The Next Generation of IT Worker The majority of interns returned to university to complete their degrees with newfound confidence. One of the top students in the first group, Wendy Akola Ombima, believes the program will help her find employment after she graduates in 2015: “My confidence levels have clearly escalated, my organization skills have improved for the better, and I am definitely much better at communicating with persons at different ranks.” The 6 women who had completed their degrees became Safaricom employees or launched their IT careers with other companies. “The aim is not only to increase the number of women employed in technology for Safaricom,” said Jaki, “but also in other companies in the industry.” “Before the program I was not so confident with myself,” said Joanne, now providing IT core banking system support as an employee of Jamii Bora Bank Limited. “Just one week after the internship, I went for an interview and I aced it. My CV was polished as well thanks to the training I got on CV writing. The internship is the best thing that has ever happened to me.” After she completed the internship, Eva successfully interviewed with 3 companies and accepted a position as a Network Operations Center engineer at Equity Bank, a leading bank in Kenya. She is pursuing her MBA in management information systems. One day, she envisions leading the technology department in a large organisation with a beautiful family. She says: “Who says I can’t have it all?

ThePovertyGap

Business Journal April 27 - May 03, 2015

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Financing the Future of Development: The Multilateral Partnership

y September, the world probably will have a new set of ambitious development targets, such as ending extreme poverty and hunger by 2030. In December, leaders will come together to agree on a way forward to tackle climate change. At the Spring Meetings of the IMF/World Bank Group, UN Secretary-General Ban Ki-moon, heads of development banks, and government ministers discussed these goals and a critical issue: how to raise the trillion or more dollars a year needed to finance them. Achieving the sustainable development goals, as they are known, will require a “transformational vision that combines all potential sources of financing,” including official development assistance (currently $135 billion), public and private sources of funds, said the Development Committee in a communiqué at the close of the meetings. The options include addressing illicit financial flows and seeking effective ways to promote and encourage private finance and investment and coordinated action on global issues. Success in achieving the goals will take more than money, however. It will require a “global change of mindsets, approaches, and accountabilities to reflect and transform the new reality of a developing world with highly varied country contexts,” said the World Bank Group, IMF, and other multilateral development banks in a joint statement. “We’re committed to tackling health, sanitation, gender equality, climate, pollution, and other issues,” said World Bank Group President Jim Yong Kim at a rally against poverty Saturday on the National Mall. “We’ll unlock private sector investment. We’ll set our ambitions much, much higher – meaning that we’ll aim to mobilise not just billions of dollars to end extreme poverty. Instead, we’ll mobilise trillions of dollars. One billion people want an opportunity for a better life. They will continue to insist that they have an equal chance at a better life for themselves and their children. They’re counting on us.” The Development Committee said it welcomed “innovative solutions to global challenges” and encouraged the World Bank Group to “enhance its support on infrastructure development and financing, including an enabling environment to mobilise private long-term

L-R: UN Chief, Ban Ki-Moon; President of Guinea, Alpha Conde; World Bank President, Jim Yong Kim and Liberian President, Ellen Johnson Sirleaf at the Development Meeting in Washington, D.C., United States.

finance for commercially-viable projects, and strengthening public and private partnerships, including through the recently approved Global Infrastructure Facility.” It called on the Bank Group and IMF to help countries build resilience to adverse shocks and to help countries hit hard by falling export receipts, tax revenues, or remittances, and to advise on energy pricing and the use of clean energy. The committee commended the Bank Group’s commitment to “mainstream low-carbon development and Disaster Risk Management while maintaining focus on its poverty eradication mandate” and encouraged the Bank to work toward a successful climate change agreement at the 21st Conference of the Parties of UNFCCC in Paris. “We take note of the WBG and IMF work on appropriate market-based solutions and energy policy reforms,” the committee said. The committee also welcomed a new Global Financing Facility in Support of Every Woman Every

One billion people want an opportunity for a better life. They will continue to insist that they have an equal chance at a better life for themselves and their children. Jim Yong Kim World Bank Group President

Child to be launched in Addis Ababa in July. “We also note the importance of addressing hunger and malnutrition.” A new fund, the Power of Nutrition, aims to unlock $1 billion to help millions of children get proper nutrition and reach their full potential. The independent fund is supported by Children’s Investment Fund Foundation, UBS Optimus

Foundation, the UK’s Department for International Development, UNICEF, and the World Bank Group, and is open to private and public investors. The Bank Group and faith-based organisations joined forces on the goal of ending extreme poverty by 2030. More than 30 leaders jointly drafted a “moral imperative” statement pledging to use their

voices and influence to help achieve the goal; several took part in an event ahead of the meetings, The Power of Faith to Help End Extreme Poverty. The Bank Group pledged to enable as many as 1 billion financially excluded adults to gain access to a transaction account and hosted an event at which chief executives from major oil companies and senior government officials from several oil-producing countries committed, for the first time, to ending the practice of routine gas flaring at oil production sites by 2030 at the latest. The Development Committee is a ministerial-level forum of the World Bank Group and the International Monetary Fund for intergovernmental consensus-building on development issues. Known formally as the Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries, it was established in 1974.

Business Journal April 27 - May 03, 2015

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Ebola: $1bn Recovery Plan for Guinea, Liberia, Sierra Leone

ith the Ebola outbreak waning but not yet over, the three most affected countries must now find ways to rebuild their economies and strengthen their health systems to try to prevent another health crisis in the future. To that end, the presidents of Guinea, Liberia, and Sierra Leone came to the World Bank on April 17 to ask for help funding an $8 billion, 10-year recovery plan for the three countries, with $4 billion needed over the next four years to accelerate recovery. More than $1 billion was pledged by the end of a high-level meeting at the start of the World Bank Group -IMF Spring Meetings – including $650 million from the World Bank Group. The three presidents described the ordeal of the past year as Ebola struck amid a sharp decline in global prices for their exports. Their health systems collapsed; contractors, consultants, and investors left their countries; farms and markets ceased; trade and travel contracted; fiscal balances weakened; and revenue declined, said Liberia President Ellen Johnson Sirleaf. “The challenge quickly became a national and sub-national crisis of unprecedented proportions,” said Sirleaf. Added Sierra Leone President Ernest Bai Koroma: “We have to address the issues of getting our economies back on their feet. We will have to address the issues of the vulnerable people, the survivors, the orphans that have been left as a result of the Ebola. We have to get our schools back to normalcy and address the issues of the teenage pregnancy that have been as a result of Ebola, and all of these need resources.” “Ebola is like a war in our countries,” said Guinea President Alpha Condé. “We want to thank you for all you have done, but we want to ask you to do more, to come up with more resources. … We would like to leave here with new hope.” A new report finds that Sierra Leone is now facing a severe recession with the potential for an unprecedented negative 23.5% growth rate in 2015. Liberia is gradually returning to normalcy, with a projected GDP growth rate of 3% in 2015, higher than in 2014 though still well below pre-Ebola estimates of 6.8%. Guinea’s econ-

tary-General Ban Ki-moon, International Monetary Fund Managing Director Christine Lagarde, government ministers and officials from several countries, and leaders of organisations. Besides $650 million from the Bank Group, additional pledges came from the African Development Bank ($300 million); Japan ($28 million), the Netherlands, and Russia. These contributions are in addition to $5.7 billion from international donors for Ebola response, much of which is now flowing into recovery efforts as the epidemic wanes. The Bank Group has committed a total of $1.62 billion. Many other donors, such as France; Germany; the Global Fund to Fight AIDS, Tuberculosis and Malaria; and Gavi, the Vaccine Alliance also indicated they are making resources available for recovery and development in the three countries and the region.

omy continues to stagnate, with a projected growth of -0.2% for 2015 compared to the pre-Ebola rate of 4.3%. “Even as we focus on getting

to zero cases, we must also work together to jump-start investments in recovery in all three countries,” said World Bank Group President Jim Yong Kim. “The extent of the

recovery of these three countries is a test for all of us.” Kim said he was encouraged by the show of support at the meeting attended by United Nations Secre-

The UN will host a pledging conference to raise money for the recovery of the three countries July 10 in New York.

Business Journal April 27 - May 03, 2015

ICT

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Global Devices Shipments to Grow 2.8% in 2015

orldwide combined shipments of devices (PCs, tablets, ultra-mobiles and mobile phones) are estimated to reach 2.5 billion units in 2015, an increase of 2.8 percent over 2014 according to Gartner. In spending terms, the global computing devices market (PCs and ultra-mobiles) is on pace to reach $226 billion, a 7.2 percent decline in current U.S. dollars. Stripping out the impact of exchange-rate movements (constant U.S. dollars), the global computing devices spending will decrease 3.1 percent in 2015. The global PC market is on pace to total 306 million units in 2015, a 2.4 percent decrease over 2014.

“The fall in PC purchases is primarily due to expected price increases by vendors in Europe and other regions, which is forced by local currency depreciation against the dollar,” said Ranjit Atwal, Research Director at Gartner. “The currency squeeze is forcing PC vendors to increase their prices in order to remain profitable and, as result, it is suppressing purchases. We expect businesses will delay purchases of new PCs, and consumers will delay or ‘de-feature’ their purchases. However, this reduction in purchasing is not a downturn; it is a reshaping of the market driven by currency.” The mobile phone market, the largest and most profitable segment of the global device market, is expected to total 1.9 billion units and grow 3.5 percent in 2015. The presence

of cheaper smartphones will continue to appeal to consumers, and counter the need to increase prices. Mobile phone pricing has been increasing over the last few years driven by a rising premium-phone average selling price, but now will remain flat or slightly down as the smartphone market reaches saturation over the next few years. “Consumers will continue to prioritise spending on phones over

PCs and tablets in 2015,” said Roberta Cozza, Research Director at Gartner. Worldwide ultra-mobile shipments, which include tablets and clamshells, are on pace to total 237 million units in 2015, a 4.3 percent increase over 2014.

“Following rapid growth, the current mature consumer installed base for tablets is comparable to that of notebooks,” said Ms. Cozza. “Not only is the tablet segment nearing saturation in mature markets, but the

Middle East, Africa Tablet Market Churn Out 26% Performance in Q4

Ofcom Research: 4G Significantly Outperforms 3G Networks

he Middle East and Africa (MEA) tablet market recorded robust year-on-year growth in the final quarter of 2014, with holiday purchases and aggressive end-of-year promotions spurring a particularly strong performance in the consumer segment. The latest figures released by the International Data Corporation (IDC) show that the overall MEA tablet market grew 26.1% year-on-year in Q4 2014 to total 4.43 million units, with the activities of several Far East manufacturers spurring significant annual growth in shipments of Android (33%) and Windows (131%) tablets. “The telco channel experienced its highest ever rate of growth during the final quarter of 2014,” says Victoria Mendes, a Research Analyst at IDC Middle East, Africa, and Turkey. “There are a couple of reasons behind this growth – in South Africa, Vodacom, one of

the biggest telecom operators in the country, introduced its own tablet and shipped approximately 170,000 units during the quarter, while in Turkey, local vendor Casper shipped around 100,000 tablets through the telco channel.” Year-on-year growth of 16% saw Samsung continue as the leading vendor in MEA, with the Korean giant shipping a total of 886,000 units to the region in Q4 2014. And despite suffering a decline of 11%, Apple retained second place in the market, with shipments totaling 580,000 units. Lenovo remained in third position, but with year-on-year unit growth of 100% and volumes totaling 572,000 units for the quarter, the vendor is extremely likely to overtake Apple at some point during 2015. Asus maintained its fourth position despite shipments falling 7% to 206,000 units, while Turkish vendor, Casper increased its shipments 80% to 180,000

units on the back of strong growth in the consumer and education segments. “Moving forward, the MEA tablet market is expected to see a significant slowdown in growth,” says Fouad Charakla, a Research Manager at IDC Middle East, Africa, and Turkey. “This has become particularly evident since the start of the new year, with the MEA market set to experience its first ever quarter-on-quarter decline in Q1 2015 amid intensifying competition from smartphones and phablets. Nevertheless, the MEA tablet market is still forecast to post double-digit growth for 2015 as a whole, while other regions around the world will experience much bigger slowdowns or even declines. The consumer segment will remain the major contributor to this growth, but we also expect to see a huge contribution from the commercial segment in 2015, with education deals being a major driver.”

he UK’s telecoms regulator, Ofcom has published research into 4G and 3G mobile broadband performance. Overall, 4G networks performed much better than 3G networks in five sample towns and cities tested Edinburgh, Leeds, London, Newcastle and Poole/Bournemouth - where both 4G and 3G networks have been rolled out. In these areas, 4G networks delivered an average download speed of 14.7Mbit/s (compared with 5.9Mbit/s on 3G) and took 0.72 seconds to load a web page (compared with 1.04 seconds on 3G). The research, which collected 120,000 test samples on smartphones, also highlighted variations in performance between the UK’s network operators - EE, O2, Three and Vodafone - across four key measures: EE delivered the fastest average 4G download speed (18.6Mbit/s). Overall, 97% of

test samples across EE, O2, Three and Vodafone provided 4G download speeds above 2Mbit/s, typically sufficient to support high capacity video services. Three was the quickest on average for web browsing over 4G (an average of 0.63 seconds to load a web page). EE delivered the fastest average upload speed of 17.6Mbit/s. Latency was more consistent than the other measures across the 4G networks tested (an average of 53.1 milliseconds). Ofcom’s research provides a snapshot of how 4G and 3G networks performed for EE, O2, Three and Vodafone in the five towns and cities between October and December 2014. The report is intended to provide information that can help consumers understand how 4G and 3G mobile networks perform and support consumers in choosing a service that best suits their needs.

influx of hybrids and phablets will compete directly with tablets in emerging markets.” Gartner analysts expect that an increasing percentage of users of high-end Android devices will move to iOS. “Android vendors at the high end are finding it hard to differentiate and add value beyond technology and features,” said Ms. Cozza. “Furthermore, Apple’s brand clout and ecosystem - alongside the new largescreen iPhone models - are strong alternatives.” “We also estimate that, despite Apple’s premium price tags, the iOS base replacement cycle that started in the fourth quarter of 2014 with the larger iPhones will carry on into 2015,” said Ms. Cozza.

The findings are also expected to encourage providers to improve their performance. Mobile Coverage The mobile market is changing rapidly as mobile operators continue to invest in and expand their networks. Coverage for 3G mobile varied between operators in March 2015, ranging from 90% to 98% of homes and businesses. For the same period, coverage of 4G varied between 53% and 81%. Claudio Pollack, Ofcom’s Consumer and Content Group Director, said: “People are increasingly connected, communicating and sharing content on their mobiles when out and about. “4G is delivering a significantly enhanced mobile experience and, as these services roll out across the UK, our research will support consumers when choosing the right mobile package for their needs.”

Business Journal April 27 - May 03, 2015

Non Oil

Sector

Digest

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Economic Diversification, Non-oil Export Growth Back on the Front Burner

A Roberts Orya

peaceful outcome of the 2015 presidential election was the desire of the generality of Nigerians and the international community. Thankfully, we got it; and more. President Goodluck Jonathan converted his loss of the election to something remarkably positive for the country and for his legacy. His concession of defeat and early call to congratulate General Muhammadu Buhari, who emerged as President-elect, is surely an indelible mark in our strides to entrenching a democratic culture in Nigeria. It also serves as a needed point of reference for Africa, where a number of elections are lined up for this year. Structural Transformation The latest general election cycle coincided with a period of serious slump in the price of crude oil at the international market. From trading at well over $100 per barrel a year ago, the Nigerian grade Brent Crude now trades below $60 a barrel. This has translated to revenue shock for the government. The slump in the price of oil has also repressed foreign reserves. In line with its responsibility for financial stability, the Central Bank of Nigeria (CBN) has had to regularly draw down on the reserves to defend the local currency. It is therefore evident that, while we deservedly celebrate the peaceful outcome of the election, we are confronted with the harsh economic realities imposed by lower oil prices. However, this immediate challenge advises on the path for long-term economic management. One area of policy consensus in the management of the Nigerian economy is the need to deepen economic diversification and accelerate on nonoil export growth. While we can no longer correctly describe the Nigerian economy as “monolithic” because the data from the rebased Gross Domestic Product (GDP) last year shows it is not, further gains in diversifying the economy is required; and widening the Nigerian export market beyond oil is crucial. Since Nigeria returned to civil rule in 1999, this prognosis has informed the thrust of economic policy. For instance, areas where the government had previously invested exclusively, like telecommunication was opened up for private investment in 2001. President Jonathan has now removed the policy bottlenecks to private investment in the power and agriculture sectors.With the policy path already charted, what is now needed is more depth and width in sectoral

impacts. The Nigerian Export – Import Bank (NEXIM Bank), in playing its role as the official Trade Policy Bank of the Federal Government, holds out the Manufacturing, Agro-processing, Solid Minerals and Services (which we encapsulate by our MASS Agenda) as the sectors that will help the country make a lot of progress on the twin-objectives of economic diversification and non-oil export growth. With the imminent government transition, it is fitting to discuss how these sectors can help the agenda for structural transformation of the economy and widening the base of external trade. This I start in earnest with the manufacturing sector. Africa Exemplification According to United Nations Conference on Trade and Development (UNCTAD), the contribution of Africa’s manufacturing to GDP grew from 6.3 percent in 1970 to peak at 15.3 percent in 1990. Since then, Africa’s manufacturing-to-GDP ratio has been on a decline; it fell to 10.5 percent in 2008. Africa’s premier manufacturing economy, South Africa, saw its industrial sector decline from 20.9 percent of GDP in 1994 to 12 percent in 2013. Even with recent advances in manufacturing in a few African countries including Nigeria, the contribution of manufacturing to total domestic production on the average has yet to match the pre-1990 peak. Nigeria’s manufacturing sector expanded to 6.8 percent of GDP in 2013, according to the revised data which Nigerian Bureau of Statistics (NBS) released following the latest rebasing of the GDP. As Africa’s manufacturing sector was declining, industrial production in China and other emerging Asian economies was accelerating. Asia’s export-led industrialisation model basically stifled Africa’s domestic manufacturing as cheaper imports from China flooded the local markets and replaced locally manufactured products in Africa. The Nigerian textile industry virtually disappeared for this reason. As the substitution and replacement of Africa’s manufactured products with Chinese imports was intensifying, Africa’s commodity trade was expanding. This combination foisted the structural rigidity that has become the key feature of African economies. In effect, a pattern of trade emerged in which Africa began to trade its primary goods mainly outside the continent while also sourcing its consumer goods from outside. This is in contradiction to the scenario in the 1970s when Nigeria produced a number of items including pharmaceutical drugs, cosmetic products, building materials, textiles, home tools and plastics for domestic consumption.

A lot of the products were also exported to other West African countries. The anticipation of progression into processing of several agricultural produce including groundnut, cocoa and cotton became the basis for brighter prospects of the Nigerian manufacturing sector. Unfortunately, this was not realised. Domestic Policy Support As inward trade affected the performance of Africa’s manufacturing sector after 1990, so will the return of manufacturing reshape how African countries will trade, going forward. The essential feature of that change would be increased intra-Africa trade. But the outset of this would be domestic import substitution. In Nigeria, manufacturers would have to be supported by the government more deliberately to serve the domestic market and also export. According to UNCTAD, the Import Substitution Industrialisation (ISI) model that grew the share of manufacturing to African GDP in the 1970s could not be sustained because most of the domestic firms failed to be globally competitive even as they also required high foreign exchange to import intermediate inputs and capital goods. These pitfalls can be avoided by increasing productivity of domestic firms and opening up of trade channels among African countries. But it is my view that government cannot provide too much of the support for increasing the productivity and hence competitiveness of the Nigerian manufacturing sector. In the period of our manufacturing hiatus, a lot of advancement has occurred in industrial production in the international environment. This poses uphill tasks for a beginner in the local environment today. Few of these challenges, among others are: • One-low-quality manufactures are giving way to high quality products in line with unification of consumer tastes. • Two, global manufacturers have amassed a lot of capital which continues to provide them the advantages of scale and price. • And, three, capital and innovation have become sesame twins; the combination is a challenge to nascent manufacturers. One can exemplify the likelihood of convergence of these risks in a single manufacturing operation. A few years ago, we celebrated the birth of a locally manufactured computer brand by one of Nigeria’s most dynamic entrepreneurs. But today, rapid changes in the global ICT industry and a fast rate of adoption of new innovative variants of computer devices may have seen to the quick decline of the Nigerian brand. In this scenario, the option we have is for government to invest more in science and technology education

and also provide support for the private sector in investing in R&D. Going by the market experience of the little-elaborated case study, it becomes quite clear that government patronage of indigenous manufactured brands, important as it is, is not going to be enough to support locally manufactured products. Except the process of innovation is supported, all the other measures will prove inadequate. In terms of financing commercial operations, Nigerian manufacturers have often complained about their inability to access funding for their businesses. Very often, this is expressed with regard to financing restriction posed by high costs of credit offered by commercial banks. Implicit in this, however, is the absence of some varieties in available funding sources and the lack of scale in the existing ones. While a number of the options like private equity, venture capital and equity and debt capital are in the sphere of the private sector (local or international), the government can provide additional options through state-promoted development finance institutions. With specific regard to manufacturing for export, NEXIM Bank functions by Statute as one of the globally recognised Export Credit Agencies (ECAs) like US Exim. The difference would be scale of interventions. It is in this regard that current efforts to supply scale to the local development finance space is in the right direction and should be sustained. ECAs are important because when they help local manufacturers to identify and/or access markets abroad, they strengthen domestic production; thereby preserving and growing local jobs. Export market exposure to local manufacturers can accelerate adoption of quality improvement and best practices that are critical to business success and continuity. It is facing reality to assert that government cannot single-handedly plug the financing gap and provide all the other forms of assistance that are needed to expand the manufacturing base. However, to attract commercial and development assistance from other quarters, government has an important role in providing a stable macro-economic environment. The good news is that, again, this has been one other important target of government economic policies in Nigeria well over the last decade. In the most, Nigeria has provided the needed macro-economic stability; and inflation has been in single digit. Except on two major occasions that external volatility in the price of oil had induced threats of financial instability (during the 2008 – 2009 global financial crisis and the current episode in which over-supply and slow demand growth has crashed the price of oil), the country has been a stable

financial market. The basis of future macro-economic stability of Nigeria is well-founded in the progress we have made overtime and the positive market performances it has engendered. NEXIM Bank and Trade Infrastructure Since NEXIM Bank holds out the manufacturing sector as the key lever of improved Nigerian trade in non-oil merchandise, we have looked at how to help address non-tariff bottlenecks in West and Central African sub-regions. NEXIM Bank is currently facilitating the setting-up of a shipping line that will provide direct maritime links with countries of the two sub-regions that have been Nigeria’s traditional trading partners. Our innovative intervention in this area entails helping to organise private sector investors and operators in West and Central Africa, in collaboration with Federation of West African Chambers of Commerce and Industry (FEWACCI), Transimex S.A. of Cameroun and other institutional stakeholdersto pool resources to solve a common challenge in expanding intra/inter-regional trade. The soon-tobe-launched shipping company will provide direct maritime links to countries in the sub-regions which will drastically reduce freight and other logistical costs to shipping within the sub regions. Aside from this, there is a wider need for infrastructural development to support production and market access across NEXIM’s identified “MASS” sectors. From physical infrastructure and energy to soft infrastructure including R&D and policy innovations, there is a wide scope for support of government efforts by entities in the private and social spaces, and those outside of government’s core bureaucracy. Conclusion The benefit of sustainable job creation through investment in and support of the Nigerian manufacturing sector is immense. What might pose the biggest challenge is market access. But Nigeria has the numbers. With an estimated population of more than 170 million largely youthful population, there is a good basis for investment in manufacturing in Nigeria. It is not coincidental that Africa’s richest man, Nigeria’s Aliko Dangote, operates a manufacturing group. His phenomenal success serves as a validation of how the domestic consumer market can serve as the springboard for access to the wider African and global markets. Roberts Orya is Managing Director / Chief Executive Officer, Nigerian Export – Import Bank

Business Journal April 27 - May 03, 2015

Analysis

Ola Gam-Ikon 08066481111 olagamola@gmail.com

www.businessjournalng.com

An Industry Roadmap for Next Commissioner for Insurance

onsidering the contests Nigeria has experienced to have candidates elected into political offices this year, I would sometimes wish that other offices, though professional but equally political, undergo such contests involving manifesto-based campaigns and broad consultation with stakeholders. More than the just concluded elections, the emergence of a new Commissioner for Insurance (CFI) and helmsman of National Insurance Commission (NAICOM) through appointment by the President matters and should matter for many Nigerians. This is because the Nigerian insurance industry bears the promise of employment to increasing number of young job seekers, the opportunity of long term investible funds as we enhance our infrastructural base and the hope for improvement in the management of the emergent risks associated with decisions concerning our national economy. It would therefore have been exciting to see and hear persons interested in the office of CFI express their views on topical issues in insurance and their plans and programmes for the industry during their tenure. That office has become too important for someone to be quietly moved in, especially when it is a 4-year tenure with the option for re-appointment! The CFI serves the broader Nigerian economy and represents the Country internationally, hence should not be viewed as a position that only deals with industry operators as it has been over the past years. Insurance can earn its rightful place as a key aspect of our national economic engine, if the next CFI has, firstly, the mindset of a Regulator and then understands the developmental nature of insurance.

Simply put, the insurance industry is confronted by critical challenges which require very bold decisions and an integrated plan of action to safeguard the nascent efforts by the out-going CFI to put the industry on its next growth path. The critical challenges I will like an interested candidate for the position of CFI to speak about are: • Promoting Insurance Education To address the public apathy towards insurance, the next CFI must be in the forefront of educating Nigerians about insurance, using a well-articulated multi-year communication plan which will be anchored on active participation in the areas that Nigerians readily show up namely: Entertainment, Sports and Social Media. Visits to prominent persons and places across Nigeria will secure the acceptance and approval of the public and surely the conversations on insurance will heighten. The next CFI should not get burdened by internal issues at NAICOM where there are very capable hands as Deputy Commissioners to handle them. He should rather identify with the efforts of some Nigerian entrepreneurs and their benefactors with a view to engaging the next generation both in terms of seeking career opportunities and investing in the industry. You can imagine the impetus such promotional campaigns will give serious operators to engage the markets and rack up the policies while more Nigerians will willingly subscribe to insurance. This is how some of the recent developments like introduction of Micro-insurance and Takaful (Islamic Insurance) will be deepened. Insurance must be indeed for all of us! On this I will like to have the views of any interested person in the posi-

tion of the CFI. • Amending/Updating the Governing Laws The progress made by the out-going CFI to get the amendments signed into law must be concluded while renewed efforts must be made to ease the process of amending and updating the governing laws. Though, I have always believed that so much could have been achieved with the current status of the law, so I expect the next CFI to start from where he/ she meets it, work with it and address what the law permits while seeking the new reviews. The relationship with the supervising Ministry –Federal Ministry of Finance must improve to the extent that the National Assembly will put insurance on its priority list of economic issues. The CFI must earn greater respect of the Finance Minister to the extent of being recommended for inclusion in the National Economic Management Team set up by the President. As part of the updating of the law, in my view, the insurance eggheads should seriously consider encouraging persons with other professional certification and leadership acumen to serve as Chief Executive Officers of Insurance Companies (not Brokerage Firms yet) rather than wait for the implosion that may occur in the next few years. It is unthinkable that while the business world has settled with the idea of successful CEOs crossing from automobile industry to food and IT to lead them successfully, the Nigerian insurance industry is stuck with insisting that only professionals with insurance certification will hold the position of CEO at insurance companies. I believe the growth-to-its-potential for the insurance industry in Nigeria rests on

this issue. Little wonder the position of Chairman in some insurance companies have again become active because of this issue and NAICOM knows that the CEOs at such companies are not in charge. So the next CFI must take a serious view of this as he/she seeks to update the laws. The other painful issue is that of sanctioning insurance operators who fail to meet minimum operational conditions. In the past 5-6 years, not a few insurance companies have been operating from an insolvent position, incepting new businesses and struggling to honour their obligations to policyholders and employees. These companies have encouraged rate-cutting because the bigger ones are afraid of losing transactions to them and claim settlement process remain fraught with disappointments in spite of the introduction of Service Level Agreements to check such unprofessional and illegal practices. What could be the reasons for the next CFI to tolerate such misdemeanours as the out-going CFI has done and giving reason that the insurance industry will lose public confidence and the positive gains recorded especially, with the enforcement of the “No Premium, No Cover” regime. It will be interesting to take the views of potential appointees to the office of CFI on these issues and more. • Expanding NAICOM Operational Presence NAICOM is readily compared to CBN by many industry watchers but we know that the similarity stops at being the Regulator of an industry. So while CBN can afford to be sparsely present, operationally, across the country, except for its Currency Centres, NAICOM needs to be seen in ev-

ery State. This is because of the peculiar position of insurance which is not as accepted as banking and the need to engage the public more as expressed in the first challenge. Indeed, NAICOM should lean more on the experience of FIRS which has been transformed into a friendly agency of Government on an issue of tax which many Nigerians had abhorred. The real issue is, even with serious investment of time and resources in enlightening the public about insurance, NAICOM needs to be easily accessible so members of the public can bring feedback and enquiries that will strengthen the engagement. NAICOM should consider having desks at Points of Sale for insurance including Vehicle Licensing Offices and the Ports to guide and inform the public on the spot, thus giving more confidence to the process and also directly debarring touting and fake documentation. The Commission must do more work with the Consumer Protection Council and the Insurance Consumers Association of Nigeria across the States where it will be located to ensure that public complaints are not kept until complainants can reach Abuja or get online. Far too many Nigerians that need insurance are yet to get online. It is my conviction that the insurance industry is indeed the next BIG thing but it will only happen when we take some breakthrough steps as mentioned here. The insurance industry can boost the employment efforts of Government and can provide a better sense of personal finance to save many great dreams as we know Nigerians have. We await the next Nigerian Commissioner for Insurance!

DOMINANT TRAIT ANALYSIS (D.T.A):

An Effective Tool for Understanding Different Behavioural Patterns of People PART ONE

Management Ayo Adekunle 08023321669, 08032227047; ayominio@yahoo.com.

orld population statistics show that there are about 6 billion people in the world. It is curiously interesting and probably startling to know that of these staggering world population figure, no two persons are the same, not even twins. The closest exception to this claim is the issue of Siamese twins, yet even they, except for physical semblance, are not the same attitudinally and behaviorally. In life, the greatest influence on us is our temperament. Temperament is the nature of a person or an animal as shown in the way they behave or react to situations or people. In the street sense, it is our inner personality composition, made up of our inner qualities,

which are displayed in the way we behave, deeply rooted in our attitude. It affects virtually everything we do: our actions and reactions to issues, events, circumstances, our sleeping habits, our eating, our views on issues, etc. Temperaments are combinations of inherited traits from our parents – i.e. we are born with them. These traits build up to mould our individual personality style peculiar to everyone, and situation. Personality is total pattern of our characteristic ways of thinking, feeling and behaving that constitute our individual distinctive methods of relating to our environment. Our parents’ genes (chromosomes) are transferred at conception point – like “microchips” – to us.

These profoundly influence our behaviours, reactions, etc. When we behave, our temperament transforms into an obvious, seeable or readable disposition which, depending on its constancy of such disposition, becomes dominant in our life. When there is an abiding consistence in our behaviour, it assumes a dominant status; when it is seen only occasionally, it is said to have a minor status, and when it is rarely put up, it is said to be accidental. We know our own traits or temperaments, as well as those of others, if only we take time to study them, and if we understand the careful application of the Johari Vista Analysis (J.V.A), we are able to seemingly know people more than they know themselves, and thus can

predict them and their behaviors beyond their imagination. It is believed that these traits live in us in the emotional centre (often called the heart) and they combine with other human characteristics to produce our psychological makeup. Most of us are more conscious of the heart’s expression than we are of its functions. As earlier said, our temperaments are majorly responsible for our actions, reactions, emotional responses and everything we do, say, think etc. When they are latent, they remain as hidden traits, and as mind expressions, for which there is no art to read on the face, to paraphrase William Shakespeare’s words. Most people don’t know that their temperaments have extremely powerful influence

on their behaviours. And when we try to be what we never really are, or will be (unless we undergo a “spiritual surgery or re-birth”) then we are only trying to conflict with our natural selves, which often leads to our being messed up emotionally, and in our interpersonal relationships. As against Tim La Haye’s comparatively complex analysis of the classification of people based on their dispositions in his book: Why People Act the way they do, this write-up, is a simpler, easier-to-understand groupings of people. I have therefore, tried to generate six distinct classifications of people, irrespective of class, race, age, sex, etc. namely: Continues NEXT WEEK

Business Journal April 27 - May 03, 2015

Books Arts Culture www.businessjournalng.com

World Copyright Day

orld Book and Copyright Day is an opportunity to recognise the power of books to change our lives for the better and to support books and those who produce them. As global symbols of social progress, books – learning and reading -- have become targets for those who denigrate culture and education, who reject dialogue and tolerance. In recent months, we have seen attacks on children at school and the public burning of books. In this context, our duty is clear – we must redouble efforts to promote the book, the pen, the computer, along with all forms of reading and writing, in order to fight illiteracy and poverty, to build sustainable societies, to strengthen the foundations of peace. UNESCO is leading the fight against illiteracy, to be included as a crucial ingredient of the Sustainable Development Goals to follow 2015. Literacy is the door to knowledge, essential to individual self-esteem and empowerment. Books, in all forms, play an essential role here. With 175 million adolescents in the world -– mostly girls and young

women -- unable to read a single sentence, UNESCO is committed to

The UNESCO Creative Cities of Literature

o you have what it takes to become a UNESCO City of Literature? The following list of criteria and characteristics serves as a guide for cities interested in joining the network as a City of Literature: • Quality, quantity and diversity of editorial initiatives and publishing houses; • Quality and quantity of educational programmes focusing on domestic or foreign literature in primary and secondary schools as well as universities; • Urban environment in which literature, drama and/or poetry play an integral role;

• Experience in hosting literary events and festivals aiming at promoting domestic and foreign literature; • Libraries, bookstores and public or private cultural centres dedicated to the preservation, promotion and dissemination of domestic and foreign literature; • Active effort by the publishing sector to translate literary works from diverse national languages and foreign literature; • Active involvement of media, including new media, in promoting literature and strengthening the market for literary products

harnessing information and communication technologies, especially

mobile technology, to support literacy and to reach the unreached with quality learning. Books are invaluable platforms for freedom of expression and the free flow of information – these are essential for all societies today. The future of the book as a cultural object is inseparable from the role of culture

in promoting more inclusive and sustainable pathways to development. Through its Convention on the Protection and Promotion of the Diversity of Cultural Expressions, which celebrates its 10th anniversary this year, UNESCO is seeking to promote reading among young people and marginalised groups. We are working with the International Publishers Association, the International Booksellers’ Federation and the International Federation of Library Associations and Institutions to support careers in publishing, bookshops, libraries and schools. This is the spirit guiding Incheon, Republic of Korea, which has been designated World Book Capital 2015, in recognition of its programme to promote reading among people and underprivileged sections of the population. This designation takes effect on World Book and Copyright Day and will be celebrated with participants from the previous title-holder, Port Harcourt, Nigeria. With Incheon and the entire international community, let us join together to celebrate books as the embodiment of creativity, the desire to share ideas and knowledge, to inspire understanding, dialogue and tolerance. This is UNESCO’s message on World Book and Copyright Day. Message from Ms Irina Bokova, Director-General of UNESCO on the occasion of the World Book and Copyright Day

Incheon (Republic of Korea): World Book Capital 2015

he city of Incheon (Republic of Korea) was named World Book Capital for the year 2015 by an international committee of experts representing the book industry and UNESCO that met on 16 July, 2014 at the Organisation’s Headquarters. The Selection Committee retained the candidature of the city of Incheon on account of the quality of its programme and the impact it will have on improving the promotion of books and reading by all stakeholders involved in the publishing sector, as well as access to printed and digital publishing for the citizens of Incheon and the Korean

Peninsula according to the selection committee. While welcoming the great number and quality of the applications received by UNESCO for the title of World Book Capital 2015, the Director-General of UNESCO, Irina Bokova, endorsed the Committee’s decision to designate Incheon World Book Capital for the year 2015. Each year, UNESCO and the international organisations representing the three major sectors of the book industry—the International Publishers Association (IPA), International Booksellers Federation (IBF) and the International Federation of Library Associations and Institutions (IFLA)—select the World Book

Capital for a one-year period, effective 23 April. This initiative complements the celebration of World Book and Copyright Day, and represents a collaborative undertaking by key stakeholders in the publishing industry and cities to promote books and literacy. Incheon is the 15th city to be designated World Book Capital following Madrid (2001), Alexandria (2002), New Delhi (2003), Antwerp (2004), Montreal (2005), Turin (2006), Bogota (2007), Amsterdam (2008), Beirut (2009), Ljubljana (2010), Buenos Aires (2011), Yerevan (2012), Bangkok (2013) and Port Harcourt (2014).

Business Journal April 27 - May 03, 2015

Maritime www.businessjournalng.com

Business Journal April 27 - May 03, 2015

Automobile www.businessjournalng.com

LEXUS: Strategic New Design for ES Sedan

exus has unveiled the next version of its best-selling car, the ES sedan, in Shanghai, not in the U.S., with a look that falls right in line with the rest of its models. That means the bold -- some might say outlandish -- hourglass-shaped grille. “Our development concept was ‘Take the ES to the next level of elegance and progressive luxury,’” said Toshio Asahi, Chief Engineer for the ES redesign, in a statement. “We’re confident that the new Lexus ES will be a leader in its class and attract a lot of attention.” Besides the unmistakable look of its grille, the new ES has new headlights and LED daytime running lights. There is a new steering wheel and a larger touch screen in the center console. Lexus says it has given the car a stiffer body. Some things won’t change: In the U.S., the luxury sedan will continue being equipped with 3.5-liter V-6 engine and a gas-electric hybrid.

China Bans Sexy Female Models at Shanghai Auto Show

here are many sexy models at the Shanghai Auto Show now underway, but they are new cars clad in sheet metal -- not attractive women in skimpy outfits. Models in sexy and barely-there costumes, common at many auto shows around the world, have been banned in Shanghai this year, part of a morality crackdown by President Xi Jinping. Instead, the Associated Press reports that women showing off cars this year fall more under the cute, rather than sexy, heading -- “dancers and fresh-faced young women holding tablet computers.” The government lately has been trying to control prostitution, online pornography and racy TV programming. The change in the policy regarding female models at the big auto show was announced in February. Xi, according to profile of him in The New Yorker this month, is repulsed by excesses, whether it’s commercialisation and corruption or “moral evils” like drugs and prostitution. As the feminist movement progressed, auto-show models were in strong retreat in the U.S. Rarely were they seen. But lately, they have made a comeback. They are sometimes called derisively called “booth babes,” women and

sometimes men who stand next to cars and pose for photos. And they have been

common in foreign shows, like in Tokyo and Europe.

Images of 2015 Shanghai Auto Show

Business Journal April 27 - May 03, 2015

Obituary

Celebration of Corporate Death

Nigeria Airways: Murdered in Cold Blood 12 Years Ago by Government! Part 2

www.businessjournalng.com

Obasanjo

Chris Aligbe continued from LAST WEEK

n Pages 109, 110 and 111, IFC further gave a deft analysis of the consequences of Liquidation, some of which include: (i) Less likelihood of strong national carrier from “survival of the fittest local strategy; (ii) Disorderly development of air transport market: increases of financial cost from collapse of several domestic carrier; (iii) Great likelihood of worsening safety records in Nigeria; (iv) Increased reliance on foreign carriers, among others. (v) Nigeria would most unlikely not develop into a regional hub. All these warnings were ignored as the Minister, with the approval from President Obasanjo, introduced dual designation on the Lagos-London route, approved multiple entry points for foreign airlines, sacked over 1000 staff of Nigeria Airways including Pilots and Engineers, thus increasing pension liabilities, rejected, along with the MD, the British Airways generous offer to assist Nigeria Airways, pro bono, with one of its DC10s and a cash aid of £1million. As all these played out, some sycophants alleged to President Obasanjo that his Vice, Atiku Abubakar was planning to buy Nigeria Airways through BPE and IFC and that the only way to stop him was to allow Chikwe to go on with her plans. This prompted the President to adopt the strategy of approving two contradictory Memos on same issues, one for NCP under the VP and the other for the Minister. There are at least three such Memos on record. This pitched the VP/El-Rufai against the Minister and created a conflict that led Atiku to threaten resignation as Chairman of NCP. Further to this, El-Rufai engaged Chikwe in a media war. The exchange became so embarrassing that Obasanjo officially instructed El-Rufai to stop all actions on Nigeria Airways and allow the Minister to execute her plans. All these came on the heels of a comprehensive report by the NCP to the President in which it listed over eight actions of the Minister which undermined the smooth privatisation of Nigeria Airways amongst them; the Open Skies with USA, dual designation on the London route,

aviation policy inconsistency and, multiple Ministerial Committees on Nigeria Airways. The NCP sought the President’s reversal of these actions or his approval for “immediate liquidation of Nigeria Airways as recommended by IFC and endorsed by PBE as the last resort.” But the resolved President had no respect for NCP any more and paid no heed to the complaints. Frustrated by these developments, on March 15, 2001, IFC addressed a two-page letter to Dr. Kema Chikwe as Hon. Minister of Aviation, in which it made a four-point complaint on how the Ministry had impaired their work and concluded that “…it may be best if we simply part as friends.” Thus, IFC withdrew and the $450,000 paid by the country for this otherwise, forward looking endeavour became a national loss. From then on, the Minister set out with her agenda of replacing Nigeria Airways. First was “Air Nigeria”, a concept “stolen” from Capt Mohammed Joji in his privatisation effort 1991-1992 as Managing Director of Nigeria Airways. Chikwe’s Air Nigeria had two international “fraudsters” who claimed to have worked with Singapore Airline as arrowheads. They came in without a dime but were immediately handed documents of choice properties of Nigeria Airways to use as collateral to raise funds from Nigerian banks. The public outcry that visited this charade led to a Public Hearing by the Awaal Tukur- led House Committee on Aviation. In an outstanding investigation, Awaal had contacted Singapore Airline which denied ever knowing the two fraudsters. He also found out that the SPV for Air Nigeria had only one British Pound as paid

Kema Chikwe capital. It was also discovered, that, guided by the Minister, the then NCAA had shamefully issued an AOC to a non-existent Air Nigeria. The Public Hearing put an end to this fraud. Next, was the contraption called “Nigeria Global”, whose Memo was thrown out at the Valedictory Meeting of May, 2003, thanks to Ciroma, Danjuma and Atiku. This time, the Minister had been counseled that unless it liquidated Nigeria Airways, she could not possibly float a replacement. This attempt was still-born inspite of the fact that two weeks before the general elections of 2003, the Minister had chartered a rickety wide-body aircraft, on which a sticker of “Nigeria

Global” was pasted; directed NCAA to approve a technical landing for it in Lagos which it did. Then she organised the media on the day of the “flight of fraud” to announce and welcome Nigeria’s new national carrier – “Nigeria Global” on its “maiden flight”. The next day, the media was awash with the news “Enter Nigeria Global” that never would be. Now back to the valedictory meeting. Unfortunately or fortunately, Chikwe did not return as a Minister in the second dispensation and therefore did not participate or mediate in the second phase of what she had set in motion – the plundering of Nigeria Airways properties scattered over Nigeria, West Coast and Europe. The bazaar that followed for

those who know is heart-rending. Every estate of the realm – Executive, Legislative at both Federal and State levels as well as the Bar and the Bench, the military and private businesses, churches and institutions were involved. Properties worth N6 billion, N2 billion and N1billion were all sold below one billion Naira while properties worth over N200 million were sold off for between N50 million and N60 million. Because of the kind of people involved, the records and its ignoble history remain frozen sine die in an act of conspiratorial silence. And so, our dear WT died. And with it died, so far, over 250 former staff waiting for yet unpaid benefits. Captains Shewu, Azikie, Okorodudu, Ekong and officers like Rindams are representatives of the pack who are resting in peace with WT. Maybe, the liquidator, Mr. Barbinghton Ashaye, who joined the departed after unleashing terror on the residences of sitting Nigeria Airways staff assisted by a detachment of MOPOL and hired Area Boys, following a go-ahead by the ruling of Justice Ada, is also where WT is resting. Who knows-given the incredible extent of God’s mercies? Today, our nation bleeds profusely, the families of ex-staff of Nigeria Airways bleed from unpaid pension and benefits-all because of the actions of a two-some-a President and his Minister. Today, capital flight from the aviation sector is meteoric due to non-existence of a national carrier or a strong flag carrier, the expected regional hub in Lagos is nowhere near, foreign airlines are now our hope of travelling, domestic airlines have collapsed. All these were predicted by IFC 12 years ago. Those who inflicted the nation with these snowballing calamities are all living and walking in high places. This is our country; the Nigeria of our dream. Adieu WT, as we mourn you, 12 years after, your spirit keeps marching on as you hang on our nation’s neck like an incubus that does not go away. Adieu, Adieu, Adieu, WT. Chris Aligbe Former GM, Public Affairs--Nigeria Airways kandimuwa@yahoo.com

Business Journal April 27 - May 03, 2015

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How Fortune Ran Out for Nigeria’s Goodluck Jonathan Ben Simon

igerian President Goodluck Jonathan makes a declaration in front of supporters at a ceremony in Abuja on November 11, 2014 Goodluck Jonathan’s rise to the top of the pile in Nigeria’s ruthless political world has been described as accidental -- a matter of good luck. But the amazing run of coincidence and chance that brought the son of a canoe-maker to the Presidential Villa in the capital, Abuja, seems to have come to an end. The 57-year-old southern Christian -- the first Head of State from the oil-producing Niger Delta -- was thrust into the presidency in 2010 following the death of his predecessor, Umaru Musa Yar’Adua, a Muslim from the North. The mild-mannered Jonathan, often seen with his trademark fedora traditionally worn by Niger Delta natives, is from a family of boat makers. He became a zoology lecturer and worked on environmental issues before entering politics in 1998. “I personally call him the accidental president. It was chance, good luck,” said Adewale Maja-Pearce, a Lagos-based Writer and Contributing Columnist for the New York Times. “He was plucked from obscurity because he was considered pliable.” Right Place, Right Time As for his distinctive name, his late father was quoted as saying in a biography of the president that he “called him Goodluck because although life was hard for me when he was born, I had this feeling that this boy would bring me good luck.” His mother, Eunice, said although she had a history of lengthy labour in childbirth stretching for several days, Goodluck was born in record time. Fortune certainly seems to have favoured Jonathan as he grew older. An unconfirmed report has long circulated in local media that Jonathan, elected assistant senior prefect at his secondary school, grabbed the top post when the head prefect was expelled. His rise to the top was similarly fortuitous; becoming governor of his native Bayelsa State in 2005 after

his predecessor was impeached over money-laundering charges in Britain. The night he was nominated by his People’s Democratic Party (PDP) as Yar’Adua’s running mate before 2007 polls, many Nigerians had never heard of Jonathan. In one of the US diplomatic cables obtained by WikiLeaks, Jonathan purportedly acknowledged his inexperience in a meeting with the US Ambassador while he served as Acting President during Yar’Adua’s illness. “I was not chosen to be Vice-President because I had good political experience,” Jonathan said. “There were a lot more qualified people around to be Vice-President.” A magazine once described the

Nigerian leader as “hardly a man to set the pulse racing.”

“I think he (Jonathan) meant to do well... but it seems there was never clarity in his head of where he wanted Nigeria to be.”

Lack of Clarity Though always calm in public, Jonathan headed a nation plagued by a range of crises. Nigeria is consistently ranked as one of the world’s most corrupt nations and the North is wracked by the brutal Boko Haram Islamist insurgency. The main opposition, All Progressives Congress had made Jonathan’s perceived failure to tackle both problems a central plank of its campaign. Jonathan earned praise however for staffing his cabinet with internationally-regarded technocrats, notably ex-World Bank Managing Director

Ngozi Okonjo-Iweala, who was his finance minister. But despite living in Africa’s top oil producer, most of the country’s 173 million people live on less than $2 a day and only receive a paltry supply of electricity. Jonathan was accused of failing to take on such endemic problems. “He has always said ‘Oh yes, we will take care of that,’” said Pat Utomi, a Professor at Lagos Business School and prominent political commentator. “I think he meant to do well... but it seems there was never clarity in his head of where he wanted Nigeria to be.”

Business Journal April 27 - May 03, 2015

DiplomaticZone

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What’s Behind the Xenophobic Attacks in South Africa?

outh African troops deployed as part of a new government effort to stop deadly anti-immigrant violence. Their first target: the Johannesburg suburb of Jeppestown, where xenophobic violence broke out. South African Police raided a Jeppestown hostel while troops secured the perimeter.

Earlier, Defense Minister Nosiviwe Mapisa-Nqakula announced the plan to deploy an undisclosed number of troops to areas where police are spread too thin while trying to curb deadly attacks against immigrants. “This intervention is not an indictment on the police. ... We are coming in because they need that support,” she said after visiting Johannesburg’s Alexandra township, one area where

mobs have attacked immigrants from other African nations and looted their shops -- ostensibly based on the belief that immigrants are taking South Africans’ jobs. Seven people have been killed in recent violence against poorer immigrants, many from South Africa’s neighbors. Much of this month’s violence happened in the Port City of Durban,

where at least two foreigners and three South Africans were killed after mobs with machetes attacked immigrant shops. Thousands of people took temporary shelter at refugee centers or police stations as a result, according to aid group Gift of the Givers. Similar violence happened late last week in Johannesburg, where immigrant-owned shops were looted

or destroyed. The attacks came as residents accused immigrants of taking their jobs and committing crimes. The unemployment rate in South Africa is 25%, according to government figures. The United Nations said the attacks began in March after a labor dispute between citizens and foreign workers.

Xenophobic Attacks Caught on Camera

Sports

Business Journal April 27 - May 03, 2015

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Real Madrid tops Football Rich List for 10th Straight Year Story highlights • Real Madrid tops Deloitte’s annual Money League for the club with the highest revenue • Manchester United surpasses Barcelona and Bayern Munich to move into second spot • List is dominated by English football with all 20 Premier League clubs in the world’s top 40 Can anybody stop Real Madrid, on the football pitch and off it? For the 10th year running, European champion, Real Madrid is the world’s richest club in the annual Football Money League published by accountants Deloitte, with a revenue of $639 million. Money clearly talks in European football with the combined revenues of the top 20 clubs in the rich list rising by a staggering 14% over the last year to $7 billion. All of the top five clubs for the 2013-14 financial year saw their revenue surpass the $500-million mark for the first time on a list dominated by the English Premier League, home to five of this year’s top 10 and eight of the 20-strong list. As a result of the latest Premier League broadcast rights deal, all of its teams have made it into the world’s top 40 highest-earning clubs. This year is the 18th running of Deloitte’s Money League, which has been dominated by Real for a decade, although Manchester United catapulted past both Barcelona ($563.5 million) and Bayern Munich ($566.8 million) to move into second place with revenues of $602.3 million, a hike in revenue of some $110 million. Remarkable Growth United has been below par on the pitch in recent times, under former manager David Moyes and his successor Louis van Gaal, but figures show an 83% growth in commercial revenue over the last three years. That said, United is expected to slide in next year’s Money League having missed out on Champions League revenues in this current season. Of the clubs on the list only United’s “noisy neighbors” Manchester City -- as Alex Ferguson once described them -- enjoyed a greater spike in year-on-year revenue, with

a $114 million rise from 2012-13 to cement their place in sixth on the list. “The growth experienced within the top 20 has been remarkable,” said Dan Jones, Partner in the Sports Business Group at Deloitte. “Commercial and broadcast revenues are now more important than ever to clubs to enable them to compete financially and put the best talent on the pitch. “This has led to further dominance from the ‘big five’ European leagues -- England, Germany, Spain, Italy and France -- this year, with just Turkey’s

Galatasaray making it in from outside of those countries. “Winning the Champions League for an unprecedented 10th time and staying at the top of the Money League made 2013-14 the year of the ‘Doble Décima’ for Real Madrid. “The club’s continued success on the field is complemented by its financial strength and their accomplishment emphasizes their position as the most successful European club side of all time. However, their commercial supremacy is being challenged by Manchester United among

others.” Barcelona’s revenue plateaued last year, seeing them drop from second spot behind arch-rival Real to fourth below Manchester United and Bayern. Paris Saint-Germain completes the top five while Juventus, in 10th, is the only side from Italy’s Serie A to make the top 10, with Premier League sides Chelsea, Arsenal and Liverpool rounding off the top clubs in seventh, eighth and ninth respectively in revenue terms.

Winning the Champions League for an unprecedented 10th time and staying at the top of the Money League made 201314 the year of the ‘Doble Décima’ for Real Madrid

Business Journal April 27 - May 03, 2015

April 27 - May 03, 2015

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

“Less than 50 per cent of Nigerians are metered (for electricity). How do you collect your money? The commercial losses are huge and unfortunately, somebody has to pay for it. And unfortunately, it is those that are paying that are penalised to pay for those who are not paying. That’s why we are moving to prepaid meters.” Prof. Chinedu Nebo Minister of Power

The Bloody News from South Africa When apartheid ended in 1994, the ANC promised to make black South Africans richer (Black Economic Empowerment). The lot of poorer blacks, however, has not improved much. Many are frozen out of the workplace altogether. The unemployment rate among blacks is 28.5%, compared with 5.6% for whites. If those who want work but have given up looking for it are included, the jobless rate is a whopping 41.6% for blacks compared with 7.5% for whites. The Economist, April 27, 2013

he above scenario clearly underscores the root causes of the bloody news and photographs emanating lately from South Africa—poverty and unemployment. The xenophobic attack on immigrants residing in South Africa was not an expression of hatred on fellow Africans by the perpetrators. Rather, it was an expression of deprivation, hopelessness and anger at a system that has stubbornly refused to change their lives positively--21 years after the curtain was drawn on the apartheid experiment. It was also a definite message to fellow Africans who flock to South Africa in search of an elusive Dream of Instant Wealth that ‘All That Glitters in SA is not Gold.” More importantly, it was a moral indictment on the government of other African nations whose citizens run to SA for better life, that the failure of governance at home was simply pushing their young population to violent death in foreign lands. The Numbers Speak What prompted the xenophobic attacks did not happen overnight. It was the culmination of bottled up tensions and emotional poverty of many years, leading to sudden out-pouring of violence against non-indigenes. The numbers are there to speak through the graphs. From education to income levels to employment, the average black man or woman in South Africa sits comfortably at the bottom of the pile. In a competitive capitalist society, lack of education leads to low-level employment, which leads to low-level income and invariably leads to poverty of the mindless form—Vicious Cycle of Poverty. It takes more than fairy tales and empowerment initiatives to break the poverty iron cycle. Twenty-one years (21) after the end of apartheid, the poor, black townships have not disappeared and do not look

Looking back, l saw frustration and hopelessness running through their weary faces. One told me that coming to SA was a great mistake-if only he could raise enough funds to purchase a flight ticket back home, he sighed. We really need to ask this question: what the hell is driving young Nigerian men to South Africa? To acquire education? Get rich quick? Fancy of going abroad? Escaping from the troubles in Nigeria? Really, it is difficult to understand why able-bodied young Nigerians should spend so much to travel to South Africa to hawk second-hand clothings for a living-very difficult to understand indeed. As l admonish South Africa to incorporate its black population into the development agenda, l equally admonish Nigeria to create an enabling work and living conditions in the country to stem the tide of our countrymen running abroad to seek better living and career conditions.

like they would soon vanish. They remain there as a breeding ground for crime, drugs and prostitution from the helpless rungs of the poorest of the poor. Change the Narrative Black Rule in South Africa must impact blacks positively and redress the dark numbers. Yes, it would not happen by the stroke of a pen but the rulers must fashion out and religiously implement a long-term Plan of Action to identify and gradually address the root causes of the dangerous widening socio-economic gaps in their society. • First is Education. With little access to affordable education, millions of forgotten blacks in South Africa eke out miserable living by working as domestic servants to affluent whites and few wealthy black folks for peanuts and daily bread. Indeed, the

kind of work and wages that robs a man of his dignity and position in society. • Create Jobs. For those that struggled through hunger and hardships to go through school, being in the labour market for too long, on the basis of skin colour creates a sense of rejection and dejection. Create jobs! • Encourage them to Dream. Waiting on the system for succour does not always produce the right result. Encourage them to dream beautiful dreams. Entrepreneurship is the road to personal fulfillment, regardless of education. The most successful entrepreneurs are not necessarily the most educated. Accordingly, waiting on the rulers to remember you might either take forever or they might not remember you at all. The message is simple: Take your future in your own hands.

The Nigerian Connection In May 2006, l attended a conference in Cape Town. As usual, delegates from Nigeria were eager to spot a Nigerian restaurant for that special home dish away from home. Our search took us to the railway station in the Cape Town suburb. Beyond the Ogbono and Egusi soups and Eba, something else struck me: the number of young Nigerians hawking second-hand clothings and fancy wares by the rail station. Of course, what we call ‘bend down select’ in Lagos. And just outside Tambo International Airport in Johannesburg, l met another group of young Nigerians also hawking cheap watches sourced from unknown sources. Their accent and language quickly gave them away as Nigerians.

Back to the Violence The xenophobic attacks are condemnable. There is no rational justification for violence. There is no sensible excuse for killing innocent people. And reprisal attacks will only harm the innocent and inflame the situation. Calm heads must prevail. South Africa, Nigeria and other members of the international community have rightly condemned the attacks. The next road should lead to solution of the root causes of the violence to avoid another round of violence in yet another couple of years. Honour to the Victims I mourn the helpless victims--helpless in the face of violent death in broad daylight. As they walk through the unknown path to their creator, l salute their courage and sacrifice towards a better South Africa and Africa! Goodnight Great Folks!

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