Shareholders sew CBN over cost of reforms, recoveries from Cecilia

JUNE 4 , 2012

CURRENCY BUYING CENTRAL SELLING CFA KRONER EURO POUNDS RIYAL SDR FRANC DOLLAR WAUA YEN RENMINBI

0.2744 25.6468 190.6365 236.8604 41.2623 233.0845 158.7179 154.75 233.1661 1.9809 24.2927

0.2844 25.7297 191.2525 237.6257 41.3956 233.8376 159.2308 155.25 233.9195 1.9873 24.3716

0.2944 25.8125 191.8684 238.391 41.5289 234.5907 159.7436 155.75 234.6728 1.9937 24.4505

NDICATIONS emerged, weekend, that the Central Bank of Nigeria (CBN) forced some banks to sell performing loans at a loss to Asset Management Corporation of Nigeria (AMCON) and this partly explains the huge loan loss provisioning posted by banks for the operating year ended December 31st, 2011. Meanwhile, a group of shareholders have dragged the CBN to court to compel the apex bank to disclose how much it has spent on the reform of the banking sector; the whereabouts of funds from the recovered properties as well as cash from Cecilia Ibru and how much it is paying to professionals handling cases on its behalf among other demands. The Progressive Shareholders Association of Nigeria (PSAN) is acting under the recently enacted Freedom of Information (FoI) Act. The hint that the CBN forced banks against their wish to sell performing loans to AMCON emerged at the 44th annual general meeting of First Bank Plc last week, where the Group Managing Director/Chief Executive Officer, Mr. Bisi Onasanya, explained to shareholders how the apex bank forced the bank to sell N100 billion performing loans to

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From left Vice-President, Euronet Worldwide and Managing Director for Middle East, Mr. Mohammed Abdallah; Group Managing Director/Chief Executive Officer, FirstBank of Nigeria Plc, Mr. Bisi Onasanya and Director, Business Development, Euronet Africa and Middle East, Mr. Mohammed Mackway; during the launch of FirstBank RIA Money International Transfer Services in Lagos.

Shareholders sue CBN over cost of reforms, recoveries from Cecilia *As CBN forces banks to sell performing loans at a loss to AMCON

By OMOH GABRIEL & BABAJIDE KOMOLAFE AMCON at a 10 per cent loss.

“Our headline loan growth rate of just 9.2 per cent does not take into account active switching of a substantial portion of intra-group and money market lines into corporate loans and the sale of over N100 billion of eligible performing loans to the Asset Management

Corporation of Nigeria (AMCON), including 100 per cent of our exposure to Seawolf Oilfield Services (an action driven at reducing portfolio concentration and addressing single obligor concerns).

Consequently, we recorded normalised loan growth of around 40.6 per cent year on year ”, he said while reviewing the operations of the bank in the operating year ended December 31st 2011.”

When pressed by a shareholder on

the SeaWolf Oil Services transaction, he explained that the company was doing well and that the loan was performing but the CBN insisted that the loan should be sold to AMCOM due to its size because of the possible impact on the bank and the industry if the loans become non-performing.

“So they forced us to sell the loan to AMCON and we took a haircut Continues on page 18

18 — Vanguard, MONDAY, JUNE 4, 2012

Cover Story

Youth Restiveness And Unemoployment In Nigeria: The Way Out (Part Two) THE ROOT CAUSES OF YOUTH RESTIVENES? Unemployment: nemployment is a hydra-headed monster which exists among the youth in all developing countries.

The unemployment rate in Nigeria was last reported at 23.9 percent in 2011. The National Bureau of Statistics (NBS) has put the figure of unemployed Nigerians in the first half of the year at 23.9 per cent, up from 21.1 per cent in 2010 and 19.7 per cent in 2009.

Minister for Agriculture, Dr. Akinwumi Adesina noted that Nigeria’s unemployment rate is spiralling upwards, growing at 11 per cent yearly, According to him “Youth unemployment rate is over 50 per cent. “Our unemployment rate is spiralling, driven by the wave of four Million young people entering the workforce every year with only a small fraction able to find formal employment.

The rising tide of unemployment and the fear of a bleak future among the youth in African countries have made them vulnerable to the manipulations of agents’ provocateurs”. These include aggrieved politicians, religious demagogues, and greedy multinationals that employ these youths to achieve their selfish ambitions. It is clearly evident that the absence of job opportunities in developing countries is responsible for youth restiveness with disastrous consequences.

This leaves in its trails; low productivity, intra-ethnic hostilities, unemployment, poverty, prostitution and environmental degradation.

• Exuberance: Very often, the youth are described as full of youthful exuberance. This raw energy has of late been channelled into unwholesome and socially unacceptable venture that threaten the very fabrics of the community. Also the issue of availability and accessibility of drugs in street corners which predispose the youth to abnormal behaviours when they come under their influence adds to youth restiveness.

It is also believed that some

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L-R: Group managing director, Diamond Bank Plc, Dr Alex Alex Otti exchanging views with chairman Diamond Bank Plc, Igwe Nnaemeka Achebe at the 21st annual general meeting of Diamond Bank in Lagos.

Shareholders sue CBN over cost of reforms, recoveries from Cecilia Continues from page 17 (loss) of 10 per cent. The loan was sold without recourse to First Bank”, he stated.

Meanwhile, the action by PSAN against CBN seems to be the first major test of the Freedom of Information Act. In an affidavit supporting the suit filed at the Lagos High Court on behalf of Boniface Okezie, President, Progressive Shareholders Association of Nigeria, by Barrister Chuks Nwachukwu, it said that the shareholders’ group had written to the CBN on the 26 th day of January 2012 demanding for the information but got no response from the apex bank.

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he letter to the CBN reads “We act for Mr. Boniface Okezie, the president of Progressive Shareholders Association of Nigeria, which is an association of shareholders of major quoted companies in Nigeria, including banks.

We have his instruction to request the following information from you in accordance with the provisions of the Freedom of Information Act: the cost to Central Bank of Nigeria (CBN) and the Government and people of Nigeria so far of the banking reforms instituted by the CBN and particularly; the amount of legal fees and other fees paid and to be paid to

professionals and professional bodies. How much of the amount in (a) above represents fees paid and to be paid to the firms of: Olaniwun Ajayi LP of Adunola, Plot L2, 401 Close, Banana Island, Ikoyi, Lagos, and Kola Awodein & Co of 6 th Floor UBA House, 57 Marina, Lagos. Our client observes that the two law firms mentioned above have almost completely dominated representation of CBN and its related bodies

prosecution of Cecilia Ibru, former Managing Director of Oceanic Bank Plc and how much of this sum was in the form of Commissions on the properties recovered from her? The total cash and value of properties recovered from Cecilia Ibru; the whereabouts of the money and properties recovered; what part of this cash and properties has been returned to Oceanic Bank and/or its shareholders.

“The bases for the above

What is the total sum paid to the firm of Olaniwun Ajayi LP in respect of the prosecution of Cecilia Ibru, former Managing Director of Oceanic Bank Plc and how much of this sum was in the form of Commissions on the properties recovered from her in the litigations sparked off by the reforms. The same law firms have been engaged by the CBN in other capacities such as advisers to the banks the CBN intervened in and consultants to the CBN and other related bodies and also for the criminal prosecution of the former executives of the said banks.

“What is the total sum paid to the firm of Olaniwun Ajayi LP in respect of the

request are that: It is the tax payer ’s money that is being used for the prosecution of the ex-banks’ chiefs and the reform processes.

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ur client also believes that this whole reform process has become a drain pipe on the economy benefiting only a few. We, expect your response to this request within seven days in Continues on page 26

disgruntled leaders, elders and politicians in our society resort to recruiting youth for settling scores or using them against perceived enemies.

With this trend, the activities of these youth have degenerated to outright criminality. Once these youth get mobilized for these nefarious activities they become uncontrollable and the society suffers.

• Poverty: Poverty connotes inequality and social injustice and this traumatizes the poor.

More than 70 percent of people in Nigeria are in abject poverty, living below the poverty line, and one- third survive on less than US $1 dollar a day.

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his figure includes an army of youth in urban centres in Nigeria who struggle to eke out a living by hawking chewing sticks, bottled water, handkerchiefs, belts, etc. The sales-per-day and the profit margin on such goods are so small that they can hardly live above the poverty line. Disillusioned, frustrated, and dejected, they seek an opportunity to express their anger against the state.

Scholars have overtime agreed that there is a link among poverty, loss of livelihood, inequality, and youth restiveness as evidenced by the numerous violent protests against the wielders of power in Nigeria.

• Inadequate Educational Opportunities and Resources: Quality education has a direct bearing on national prestige, greatness, and cohesion. The knowledge and skill that young people acquire help determine their degree of patriotism and contribution to national integration and progress.

Between 2000 and 2004, about 30 percent of Nigerian youth between 10 and 24 were not enrolled in secondary school (Population Reference Bureau, 2006). Perhaps the prohibitive cost of acquiring education is responsible. The after effect of this situation is that thousands of young people roam the streets in cities in Nigeria.

Those who manage to complete secondary school have no opportunities for tertiary education.

Vanguard, MONDAY, JUNE 4, 2012 — 19

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resident Goodluck Jonathan on Tuesday stirred the hornet nest with his Democracy day broadcast. He raised fundamental issues of the economy, some of which are mere wishes as usual with Nigeria leaders. He said “We must use our population to create markets for what we produce. We must grow local, buy local and eat local. To promote this, I have directed that all official functions of government serve local foods, especially our local rice and cassava bread and other foods.

In the State House, I am faithfully keeping to my promise of eating cassava bread and local rice.”

Yes, Nigeria has a huge population that could to the real sector given current constitute a big market, but out efforts being made to de-risk of the 160 million Nigerians the industry and get banks to alive today, official figures put lend to the real economy 112 million as poor. It is the because, a bank would only purchasing power in the lend if it was satisfied with the hands of the individual, the risk criteria. Investors any disposable income, that where in the world look for constitute a market. A large environment where there is proportion of the adult and certainty, enduring economic youth population are policies and standard rules unemployed; yes, the market that are not changed over potential is here but not night as in Nigeria and where realistically the way the they can perm the risk president wants us to see it. associated in a given project Rice and cassava farming in or investment.

Nigeria today is constrained by access to finance and the ormally, before any small holding nature of the foreign investor farmers as well as the commits his capital into a traditional technology applied project, he will want to be to farming. Besides, the land assured that there shall be tenure system and its stability in the investment availability make commercial regime. That is to say, the farming a mirage. whole or key aspects of the The expectation was that the agreement will be respected president’s speech would have by the host state and that the identified out-of- the-box rules of the game will not be innovative technology options changed unilaterally. The that would add significant foreign investor needs such an value for smallholder farmers assurance not only as a means in agriculture by reducing Goodluck Jonathan of ensuring that he realises the inefficiencies in the value chains, especially the harvest in Nigeria there is no sanctity and post-harvest value chain of contract and property rights elements. The roadmap to are not clearly defined.

Investors are not worried about transforming the economy is Most foreign investors see the lack of infrastructure as is massive investment, local or this as the most inhibiting foreign. always claimed by those who factor that scares away would The key driver in President be investors. They are not explain away the Nigeria Goodluck Jonathan’s worried about f the lack of situation. Shell, Mobil, Chevron, transformation agenda is infrastructure as is always investment in agriculture. This claimed by those who explain MTN, UACN and others know too is why the Ministries of away the Nigeria situation. well the infra structural deficiency Commerce and Industry were Shell, Mobil, Chevron, MTN, in the country, yet they invested merged to form Ministry of UACN and others know too Trade and Investment. While well the infra structural and are reaping the benefits. it is important to seek to attract deficiency in the country, yet foreign direct investment into they invested and are reaping the country, creating the the benefits. blamed for the confusion and expected benefits for his ministry and Presidential The truth is that both local controversy that have trailed shareholders, but also to directives to buy Nigeria and and foreign investors are wary their concession pacts. convince other sponsors of the eat Nigeria menus are no baits of investing in Nigeria Fagbemi who manages project that the project will for foreign investors to want because the state and its Maevis said “We are here generate enough capital to pay to come to Nigeria. agents have no respect for under what you will refer to off their loans and meet their property rights and sanctity of as PPP project in which we supply requirements. These lobally, investors are contract. They are worried that deploy assets that are objectives may only be realised interested in places if they invest in Nigeria their required to keep the if the terms of the investment where their return on investment can be taken over operations of FAAN at agreement are respected by the investments is high. Nigeria by the state. Contracts have internationally acceptable host state. Hence, for that certainly qualifies as investors been breached with impunity standard”. reason, the principle of have found out that they reap by federal and states agents sanctity of contract is regarded higher benefits if they invest and servants who out rightly f the government is as one of the most important in Nigeria. The few that have disregard or disobey courts serious on its legal concepts in the done so, despite the orders. Bi-Courtney Aviation transformation agenda, it investment process. challenges of infrastructure, Service Limited and Maevis should have given the The President dream of a have found this to be true. Yet, Nigeria Limited are two infrastructure concession transformed economy will be Nigeria is not a haven to examples of the major commission the opportunity to largely illusory except foreign investors. There must concessionaires in the aviation midwife projects that will fast agriculture is seen as a be reasons why they shy away sector with complaints on tract the nation’s economy. business that is private sector from Nigeria. Many investors breach of contracts. The two The Central Bank in one of its driven and one that can out there who speak privately companies have said the monetary policy committee generate wealth and create to Nigerians at investment Federal Airport Authority of said that banks were not meaningful jobs. What ever fora are quick to point out that Nigeria (FAAN) is to be usually disposed to lending reforms are being carried out

Nigeria needs value added production, not import substitution

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in the sector must be targeted at private investors. Import substituting policy has never worked in Nigeria. The nation must begin to pursue valued added production in every sector of the economy. This is the true path to economic transformation.

BRIEFS Nigeria FX reserves at 21month high

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igeria’s foreign exchange reserves rose to a 21-month high of $37.64 billion by May 28 and were up 3 per cent from a month earlier, the latest figures from the central bank showed. Nigeria’s foreign exchange reserves stood at $36.52 billion at the end of April and $32.08 billion a year ago. They have not been this high since Aug. 19, 2010, when they stood at $37.67 billion. The central bank attributed the increase to the rise in capital flows from offshore investors and favourable oil prices in the international market.

FIDA recommends gender-based banking for rural women

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he International Federation of Women Lawyers (FIDA) has recommended gender based banking as a means of encouraging rural women to participate more in economic activities in the country.

FIDA’s National President Hauwa Shekarau told the News Agency of Nigeria (NAN) in Abuja on Thursday that rural women were usually faced with difficulty while trying to seek business loans.

Shekarau said that rural women needed encouragement from the banking sector through the reduction of requirements for opening bank accounts and seeking bank loans. She said, “Women are a driving force in the economy, but their access to finance is still far too small.

“Gender based banking should be encouraged to address stringent account opening conditions, which currently exist.”

20 — Vanguard, MONDAY, JUNE 4, 2012

Business & Economy BRIEFS World Bank urges Africa to manage gas wealth

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ast African countries that have made major gas discoveries need to set up institutional frameworks to manage their new-found wealth effectively and use it to diversify their economies, a senior World Bank official said. The east African coastline is fast becoming a major energy hub with significant discoveries of gas and oil in Mozambique, Tanzania, Uganda and most recently Kenya.

The Washington-based development lender said Tanzania, east Africa’s second-biggest economy, is expected to see an increase in revenue of up to $3 billion a year following major offshore gas discoveries in the country.

“The discoveries will have a massive impact. If I take the case of Tanzania, once the gas project is in place, we expect around $2-$3 billion of revenue a year,” newly appointed World Bank vice president for Africa, Makhtar Diop, told Reuters in an interview.

"Nigeria bills threaten CBN's role"

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wo bills being proposed in Nigeria’s parliament that would give legislators powers to vet the central bank’s budget and appoint its board are a serious menace to the bank’s independence if passed, its governor told Reuters. Analysts see the central bank as one of Nigeria’s few reformist institutions in an oil state plagued by corruption.

Governor Lamido Sanusi argues that the central bank’s independence from political interference is crucial for the macroeconomic stability of Africa’s second biggest economy. “We think this bill will ultimately undermine the autonomy and independence of the central bank, and potentially confidence in the economy and the financial system,” Sanusi told Reuters by phone from an African Development Bank conference in Tanzania on Thursday. One bill was tabled in the senate in an extraordinary session on Monday. The bank shall cause its budget to be submitted to the National Assembly,” a copy obtained by Reuters on Thursday says.

FG moves to enhance SGBs’ access to local, Int markets T

he Federal Government is set to improve the Small and Growing Businesses’ access to both local and international markets in its drive to boost the growth and development of the sector.

The Minister of Trade and Investment, Mr. Olusegun Aganga, disclosed this during the Market Access Interactive Session organised by the Enterprise Development Centre of the Pan- African University in collaboration with Etisalat Nigeria, in Abuja.

Aganga said, “One of the major challenges that have curtailed the growth of operators of SGBs in Nigeria is access to competitive markets both locally, regionally and globally and several deliberate interventions in the past have not had any significant and sustainable impact.

“Therefore, a new impetus must be generated to expand the market horizon of the SBGs in Nigeria.” He noted the deliberate usage of SGBs as opposed to SMEs, saying, “Please note the deliberate use of SGBs as opposed to SMEs. This is because for SMEs, the mentality, from now on, has to change from ‘just starting’, to starting and growing businesses. This event is one of those new strategies for confronting this fundamental challenge.”

According to him, the theme of the interactive session, ‘Facilitating Market Access for Small and Growing Businesses’ is aimed at keying the SGBs into the value chain of Large Enterprises for the purpose of empowering and strengthening them to be in the best position to create employment, generate wealth and reduce poverty in Nigeria.

“Specifically, the session is aimed at creating market access for credible SGBs in Nigeria, bridging the gap between Large Enterprises and SGBs, fostering networking and partnership opportunities, enabling local content development and participation in various sectors of the Nigerian economy by SGBs, and creating a platform for structured networking between SBGs, among others,” the minister noted.

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e further said that the strategy for job creation in most developed economies was based on the SME sector, adding that the Federal Government had therefore

developed a new strategy, policy and programmes document, which was still in the consultation process.

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ganga explained that the event was a platform expected to bring together SGBs and LEs for the purpose of networking, exchanging ideas, starting relationships and creating opportunities for mutual benefits, among others.

“The significance of SGBs for growth, productivity and

competitiveness of the economies of developing countries is unquestionable,” he stressed. He added that, with this interactive session, Nigeria had reached another milestone in the collective effort at achieving a conducive environment for SGBs to operate profitably and sustainably.

According to the DirectorGeneral, Small and Medium Enterprises Development Agency of Nigeria, Alhaji Umar Nadada, the programme

will give a platform for matchmaking and outsourcing of SMEs in the country. He explained that every aspect of SME was an area that would make Nigeria a peaceful and developed country.

“Interlocking, which is the purpose of this event is the best way to achieve a greater result in the SME sector,” Nadada said. He urged other service providers to take advantage of the opportunity in order to fully develop networking among the SMEs.

Sales Director; all of Nigerian Breweries Plc and Mr Dan Esiekpe, MD, Goldberg Creative Agency during the re-launch of Goldberg Beer in Ibadan, Oyo State.

Inefficient power sector bane of private investment, national devt

BY PROVIDENCE OBUH

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oor performances of the power sector has been a significant barrier to private investment and to the overall development and economic growth of this nation, says Comrade Wakili Tijani, Deputy President/Chairman, NonAcademic Staff Union (NASU) Research and Projects Trade Group Council.

Tijani made this statement , while x-raying the challenges in almost all the sectors of the economy during the NASU Research and Projects Trade Group Council Meeting hosted by the Institute of Chartered Accountants of Nigeria (ICAN) Lagos Chapter.

According to him, “It has been on record; Nigeria has one of the most problematic electricity sectors in the world, with an estimated installed capacity of 8644 mega watts (MW) and available capacity of only 3200 MW, to cater for the needs of

the entire population.”

He pointed out that recently, the Minister of power, Prof.

Barth. Nnaji ordered an investigation into the causes of continuous epileptic power supply, especially after his announcement that Kainji power supply plant which was earlier shut down to avoid its total collapse has begun operation.

Continuing, he said, “on the overall, no Nigerian can boast of four hours electricity supply per day. Nigerians expect improvement in supply, but rather, supply continues to deteriorate making Nigerians to sleep in perpetual darkness.”

Speaking on Rail transport system, he noted that there is need to revive the railway transport in the country, as this will further generate jobs, ease the burden on Nigeria’s bad roads and save live that are unduly terminated daily by these bad roads “Nigeria, in those good old

days, used to take pride in the railway network, the largest on the continent at independence.

However, the Nigerian railways have been comatose in the last three decades. Years of neglect and lack of investments have severely hampered the capacity of the rail network to act as a mass transit vehicle.

“Therefore promoting rail transport means promoting employment opportunities for our army of unemployed youths. State governments should in turn develop their own light rail system within and outside their states.”

In his address, NASU ICAN Branch Chairman, Com. Wole Bodunde lamented that there are reports of billions of naira spent on improving food in a country where grass can grow out of cracks in a concrete floor, stating that trillions of naira are spent on refined crude imports and allied products that can be available if the crude is processed here.

Vanguard, MONDAY, JUNE 4, 2012 — 21

Business & Economy

L-R: Alh. Kabir Mohammed,Vice President, ICAN; Mr. Doyin Owolabi, 48th ICAN President, Chidi Ajaegbu, 1st Deputy Vice President, ICAN and Prof. Francis Ojaide, Immediate Past President, ICAN, during the Investiture of the 48th ICAN President in Lagos.

CBN cashless policy benchmarks Nigeria’s economy in Africa –MasterCard

BY PROVIDENCE OBUH

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asterCard Worldwide has said that the Central Bank of Nigeria’s (CBN) Cash-less Nigeria initiative will set the standard for economies across Africa and globally.

According to a report made available to Vanguard by Mastercard's, Country Manager, West Africa, Mrs Omokehinde Ojomuyide, said, “The decision to change the way that Nigerian citizens conduct their payments behaviour is a brave one, and the CBN is blazing the trail ahead of its African counterparts in its commitment to reduce the amount of cash circulating in the economy.

“Cash is expensive to print, secure and distribute, it reduces the transparency of an economy, and it can negatively impact the government’s focus, which in turn reduces government’s ability to deliver services to its citizens “Businesses that depend on cash transactions cannot grow their customer base beyond the individuals who can visit them in person to deliver cash payments. Similarly, they are limited to purchasing raw materials from suppliers to whom they can physically hand their payment. When a business is geared for electronic payments, it can grow its customer base – and its resource pool – far beyond the limitations of its immediate geographic area.”

“Many business owners

seek the short term gains of a cash business, but in the long term, a dependence on cash prevents the enduring growth and the exponential success that is the goal of every committed entrepreneur.”

Ojomuyide pointed out that the key partners in the success of the cash-less initiative are the financial sector, consumers and businesses.

To this end he said, “These stakeholders are the cogs around which the wheels of growth and development in Nigeria turn, and MasterCard hasput strategic initiatives in place for each stakeholder in order to support the CBN in its quest to drive the development and modernization of the Nigerian payment system.”

Continued, she said, “MasterCard has a shared objective with the CBN, in that our global vision is of a world beyond cash. We believe that with a pioneering initiative like Cash-less Nigeria in place, the country will soon reach a tipping point where innovative electronic payment systems will leapfrog the historical systems that have hindered economic growth historically.”

On the other hand, Associate Vice President, Account Management for West African Business, MasterCard Worldwide, Mr. Kamil Olufowobi said “At times it was really difficult to avoid using cash, however, where I was able to avoid using cash, I enjoyed the convenience and security that came with making purchases with a MasterCard payment card. The experience was a valuable one – and I will continue to work on reducing my use of cash in my day to day transactions.”

Olufowobi further stated, “We remain unwavering in our commitment to support the Central Bank of Nigeria in its drive to significantly reduce the use of cash in the country’s economy. We look forward to working with Nigerian banks and retailers to facilitate the reduction of cash within their payment systems by offering innovative, safe and convenient payment alternatives to their customers.”

FG will release forbearance package to stockbrokers, says Finance Minister

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inance Minister Ngozie Okonjo-Iweala says the Federal Government will release a forbearance package to stockbrokers as part of measures to stimulate confidence in the Nigerian capital market and increase liquidity. The minister said this at the Annual General Meeting (AGM) of the African Development Bank (ADB) in Arusha, Tanzania.

The Nigerian capital market since the onset of the global financial depression in 2008 to March 2012 lost N4.6 trillion due mainly to the effects of banking consolidation and investors loss of confidence.

In the same, estimated debt overhang, arising from margin loans incurred by stockbrokers also stood at about N300 million. OkonjoIweala said that while government, through the Assets Management Corporation of Nigeria (AMCON), had intervened

successfully and safe guarded the banks, the request for forbearance package by the stockbrokers would also be granted.

“We are working on the forbearance; we have now agreed on it, and that we are going to implement it. We are having discussions about how to do it. Must remember that we don’t want any moral hazard, we don’t want those stockbrokers who did the right thing to think that they are not appreciated or that they have been neglected. So we must honour them too by looking at the type of forbearance to be accorded to the stockbrokers who are having difficulty. But there would be forbearance and there would be some conditions attached to that and we would spell that out.”

The minister, however, did not disclose when the forbearance package would be released to the stockbrokers, but assured that “the nation’s capital market will rebound”.

According to her, while it appears that it is taking government a long period, “our commitment is to make sure that we provide sustainable policy guidelines for growth and wealth creation for both the investors and stockbrokers”. Stakeholders in the capital market had in the two years insisted that forbearance remains the only financial instrument needed to re-stimulate market confidence and provide liquidity at the Nigerian stock exchange.

Mr Emeka Madubuike, Chairman of the Association of Stockbroking firms, had told NAN earlier that forbearance was the oil needed to compliment the new trading regulations introduced by the regulatory authorities. According to Madubuike, stockbroking has become an endangered profession after the near collapse of capital market.

BRIEFS New Basel rules to impact SA policy

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ew global liquidity requirements do not suggest a need to change South Africa’s monetary policy implementation framework but will have an impact on monetary policy and interest rates, Reserve Bank Deputy Governor Daniel Mminele said. “The ... requirements may result in South African banks reducing their lending, and therefore the availability of credit to the real economy,” Mminele said in a speech posted on the Bank’s website. This will most certainly have negative consequences for economic growth and employment creation, which will further reduce available savings.”

PHCN CEOs responsible for inefficiency in power sector A committee set up to look into metering and electricity supply in Nigeria has faulted chief executive officers of PHCN for the “inefficiency and lack of accountability in the sector.’’

The committee was set up by the Nigerian Electricity Regulatory Commission (NERC) in December, 2011. Presenting the committee’s report to NERC in Abuja on Wednesday, the chairman, Mr Bamidele Aturu, said: “the committee discovered that less than 50 per cent of the registered customers in the Nigerian electricity sector are metered.

“And this has led to the prevalent practice of arbitrary charges based on unscientific estimation of electricity consumed by customers. Distribution Companies responsible for distributing electricity to consumers in order to meet up with their overhead costs in an environment of inefficiency and dwindling supply of electricity, have to use estimation to ensure they make more profits.’’ Aturu said that customers captured in the records of electricity suppliers was 5,172,979 which represented 18.7 per cent of the nation’s total households of 28,900,492 by 2006 of National Bureau of Statistics report.

22 — Vanguard, MONDAY, JUNE 4, 2012

Banking & Finance BRIEFS Six banks partner Glo on mobile banking AINSTREET Bank Lim ited and five other banks have sealed up a partnership with Glo to lend greater depth to the on-going campaign for a cashless society through the provision of seamless mobile banking services to their customers. Last week Thursday the six banks banded with the telecom giants, Glo, to roll out the Quick Teller Mobile Banking product (QTM) at the corporate head office of Glo in Victoria Island, Lagos.

Speaking at the formal presentation of the product, the Executive Director of Glo, Mr. Adewale Shongowawa explained that the launch of the Quick Teller Mobile banking (QTM) product was Glo’s response to the cashless society policy of the Federal Government even though the company had been working on its mobile banking solution long before the CBN policy came on stream. According to him, the company hopes to leverage on the combined strength of the partnering banks and its enormous network of outlets across the country to make banking services easier to access for all Glo customers who run an account with the partner banks.

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Access Bank retains “Big Tick” award CCESS Bank’s globally acclaimed responsible business programme combating HIV/AIDS, Tuberculosis and Malaria has retained its ‘Big Tick’ status in Business in Community’s (BITC) Awards for Excellence for the second year running. The ‘Big Tick’ award is the first level of award available to entrants of national Awards for Excellence which commends the best examples of business as a force for good.

The Bank received the re-accreditation for contribution to sustainability through innovation at the BITC 2012 Awards for Excellence gala dinner held in the United Kingdom recently. The award underscores the Bank’s continuous efforts at promoting the doctrine of responsible business practices through initiatives and programmes that address economic, social and environmental challenges. The BITC award for excellence is one of the most credible and established independent corporate responsibility awards that recognize and celebrate organizations that have demonstrated innovation, creativity and sustained commitment to corporate social responsibility.

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FIRS grants tax exemption to banks’ holding companies *As First Bank pay 80k dividend

By BABAJIDE KOMOLAFE

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EDERAL Inland Revenue Service (FIRS) has granted tax exemption to bank holding companies to avoid the incidence of double taxation.

Meanwhile, Shareholders of First Bank of Nigeria (FBN) have approved dividend of 80 kobo per share for the operating year ended December st 31 2012.

Addressing shareholders at th the 44 annual general meeting of the Bank , Group Managing Director/Chief Executive of the Bank, Mr. Bisi Onasanya disclosed that the formation of a bank holding company, which would serve as parent company to the bank and all its subsidiaries was slowed down by the need to get tax exemption for bank holding companies so that the holding companies would not pay tax on profit for which the subsidiaries have already paid.

He said, “We have kick started the process. The good news is that the FIRS has released operating circular to clear the issue of double taxation. We are awaiting the Ministry of Finance to officially gazette it. Already we drafted a Scheme of Arrangement for SEC and CBN’s approval.

Thereafter, we will hold AGM later in the year to seek your approval. We are following due process and we are clearly on course,” he said.

At the meeting, the shareholders also endorsed the plan by the management to set up a HoldCo in line with Central Bank of Nigeria (CBN) directive. Onasanya said the board had decided on a new structure before the CBN directive, stating that the development would benefit the shareholders.

He said that the management decided not to sell off the subsidiaries as they were doing well and could contribute positively to the HoldCo bottom line. He said the bank was following due process to register the new company, noting that shareholders will exchange one for one share in the new holding company.

According to the President, Nigerian Shareholders Solidarity Association (NSSA), Mr. Timothy Adesiyan, the shareholders are impressed with the way the bank is be-

ing run, stating that the impressive result posted for the year end was a testimony that the bank was on the right track. He noted that with the impressive 2012 first quarter result released by the bank recently, the shareholders would reap higher dividend in this year end.

In his contribution, General Secretary, Independent Shareholders Association of Nigeria (ISAN), Mr. Adebayo Adeleke, lauded the prudent

nature the bank is being run, stating that the performance at the key financial indices was laudable.

In his words:” Our bank has not only been regenerated but also rejuvenated. The board and management must be commended for this. We are also impressed with the dividend paid to us. We believe it could be better.”

On his part, a shareholder, Nonah Awoh, while expressing satisfaction with the result

posted, he expressed dissatisfaction over the performance of the bank’ shares on the trading floor of the Nigeria Stock Exchange (NSE), advising the management to put on hold further issuance of bonus shares to shareholders.

The financial results of the bank shows that the Group’s balance sheet increased by 32 per cent for the year. Total assets were N2.8 trillion and total assets and contingents were over N4.4 trillion.

L-R: Vice-President, Euronet Worldwide and Managing Director for Middle East, Mr. Mohammed Abdallah; Group Managing Director/Chief Executive Officer, FirstBank of Nigeria Plc, Mr. Bisi Onasanya and Director, Business Development, Euronet Africa and Middle East, Mr. Mohammed Mackway; during the launch of FirstBank RIA Money International Transfer Services in Lagos…recently.

ICAN to present Whistle Blowers' bill to National Assembly

By PROVIDENCE OBUH

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HE Institute of Chartered Accountants of Nigeria (ICAN) said it would prepare and present a Whistleblower’s Bill to the National Assembly for consideration and passage as part of its contributions to the fight against corruption.

Newly elected President of the Institute, Mr. Adedoyin Owolabi, said this in his inaugural speech during his th Investiture as the 48 ICAN President at the Institutes.

“Criminals are now becoming more ingenious and scientific in their approaches to fraud and related crimes. As professionals, we must be many steps ahead of them such that criminals are precluded from benefiting from their crimes.

“Thus, as we step up our strategic capacity building efforts in the areas of Investigations, Digital Audit, Fraud and Forensic Accounting, we will continue to partner with other professional bodies and agencies of government to rid the nation of corruption, sharp and unethical practices.

As professionals, we will continue to walk our talk by proactively delivering on our mandate as the conscience of the nation. Pursuant to this, we would, during the year, prepare and present a Whistleblower’s Bill to the National Assembly for consideration and passage as part of our contributions to the fight against corruption.

“We would step up aggressive campaigns to enforce compliance with subsisting legislations designed to promote accountability in govern-

ance like the Nigerian Extractive Industries Transparency Initiative (NEITI) Act 2007, the Fiscal Responsibility Act 2007, the Public Procurement Act 2007, Freedom of Information Act 2011, Financial Reporting Council (FRC) of Nigeria Act 2011, Money Laundering (Prohibition) Act, 2011, etc. “We intend to be actively involved and indeed, be on the driving seat of the process for the renaissance of our nation’s value systems. We will continue to expose ethical compromises and sanction deviants whose conduct, which, if not checked, can demean and bring the hardearned and towering goodwill/image of the Accountancy Profession to disrepute. As professionals, we must stand up and be counted on the side of equity and justice both in words and in actions.”

Vanguard, MONDAY, JUNE 4, 2012 — 23

Banking & Finance riod in 2011.

Similarly, the group’s total assets during the review period grew moderately to N996.7 billion from N939 recorded in 2011.

Other positive growth indices include the deposit portfolio which rose from N651.3 at the end of the first quarter in March 2011 to N725 billion at the end of March 2012.

The group’s profit before tax was also impressive, falling marginally to N4.08 billion as against N4.2 recorded during the same period in 2011.

Skye Bank: Performance driven by focus and strong fundamentals

By BABAJIDE KOMOLAFE HE financial performance of Skye Bank for the operating year ended December 31st 2011 further attest to the efficacy of focus as catalyst for improved performance.

During the year, the Bank, in spite of the pressures to do otherwise, chose to focus on its core business areas and upgrade its facilities to enhance service delivery. This decision coupled with the strong fundamentals carried over from the 2010 operating year, helped the bank to attract more business patronage in terms of deposit takings and lending to businesses and individuals. This occasioned growth in asset base and improved earnings.

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lso, the group’s IFRS compliant result sent to the floor of the Nigerian Stock Exchange showed that its loan portfolio increased from N518 billion in 2011 to N520 billion during the review period. The Net Interest Income after loan impairment charges grew by 18.1% to N12.4 billion as against N10.4 billion recorded in the previous year.

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2011 Financial Result According to the 2011 audited financial result of the Skye Bank Group total asset grew by 31.3 per cent to N927.1 billion, from N705.9 billion recorded in 2010 financial year.

Reflecting increased public confidence, the bank’s deposit base grew by 22.5 per cent to N658.1 billion during the year from N507.6 billion in the previous year.. This propelled the Group’s operating income to grow by 22.5 per cent from N60.8 billion in 2010 to N74.4 billion. The Bank also recorded 24.8 per cent growth in gross earnings (from N83.9 billion to N104.8 billion), representing growth in interest income and fee commission income. Similarly, other major growth areas included oil and gas commercial banking, retail banking, treasury, corporate and investment banking. This growth trajectory reflected in a 29.6 per cent increase in deposit volumes in the year, from N507.6 billion to N658.1 billion, and a 22.3 per cent growth in gross loans and advances from N424.8 billion to N519.7 billion.

This increased business patronage was however not reflected in its profitability as profit before tax dropped by 48.9 per cent from N12.7 billion to N6.5 billion due to additional provisions of N15.9 billion for diminution in assets value.

*Durosinmi-Etti, GMD, Skye Bank Group Managing Director/ Chief Executive Officer, Skye Bank, Mr. Kehinde Durosinmi-Etti, attributed the improved performance of the bank to power of focus.

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e said the Bank main tained its focus on certain business segments in which it has had good track records, in addition to new segments where it exploited business opportunities. He said that the pattern of reduction of the non-performing loan (NPL) ratio remained consistent in 2011, as the ratio dropped significantly to 4.9 per cent, from 11.9 per cent reported last year’.

“In pursuit of efficiency, we focused on reinforcing our branch network by upgrading facilities, deepening deployment of products and services, and ensuring optimal human resource input for improved customer service.

“We reaped good returns from the deepening of our treasury activities, which resulted in 545.9% and 274.2% growth in foreign exchange income and investment income, from N1.2 billion and N1.4 billion in 2010 to N7.8 billion and N5.1 billion respectively”, he said.

Durosinmi-Etti said the bank in the 2012 operating year will conclude the process of divestment from non-core banking subsidiaries, as approved by the Board of Directors and regulators, during the second quarter of 2012. “This will enable us focus on our main intermediation role in Nigeria and in our three foreign banking subsidiaries”. He added that the bank would grow its business in existing segments, while seeking to

expand into new markets and deploy new products and services.

He revealed that the bank would in the new financial year, affirm its focus on diversifying its income streams toward non-interest income, in anticipation of interest rate and inflationary pressures, largely from the external environment in addition to reinvigorating its cost management and efficiency apparatus toward attaining optimal returns.

Dividend reward for shareholders At the annual general meeting of the bank held last month, the N3.3 billion dividend proposed by the Board was approved by shareholders This translates to 25 kobo dividend per share for the period ended December 31, 2012.

Chairman of the Skye Bank, Mr. Olatunde Ayeni, said the dividend payout was in furtherance of the bank’s commitment to deliver optimal returns to shareholders.

The bank recorded total gross earnings of N27.8 billion during the first quarter ended March 31, 2012, the performance shows an increase of 12.6 per cent over the N24.7 billion grossed during the corresponding period in 2011 On the the ‘Cashless/Cashlite’ policy, the Skye Bank boss said it would provide a major vista for the Bank in 2012 and beyond, considering its well regarded footprints in technology-based infrastructure over the years.

2012 Q1 Performance The Bank’s financial results in the first quarter of 2012 show that the Bank is not only consolidating on the gains of 2011, it is also leveraging on it to deliver better results for the whole year. The Bank recorded a total gross earnings of N27.8 billion during the first quarter ended March 31, 2012. The performance shows an increase of 12.6 per cent over the N24.7 billion grossed during the corresponding pe-

He said that in arriving at the dividend sum, the board also took into account the need to have reasonable reserves to maintain the going concern status of the bank.

In his address at the AGM, Kehinde Durosinmi-Etti, promised that the bank would continue to do all within its power to enhance shareholders’ value and returns on investment. He said the bank has been positioned for leadership role in the nation’s banking industry and has been strengthened by capital injection and good corporate governance policy.

Some of the shareholder commended the management of the bank for the improved performance despite the tough operating environment.

BRIEF Top bankers honoured at AfDB annual meetings FRICA’S Top Bankers gathered in Arusha, Tanth zania, to celebrate the 6 edition of the African Banker Awards, under the patronage of the African Development Bank.

Olusegun Agbaje, Managing Director of Guaranty Trust Bank, Nigeria scooped the prize for African Banker of the year. He was presented with his Trophy by Tim Turner, Director of the Private Sector Operations of the African Development Bank at the picturesque Frangipani Gardens, where the Awards ceremony took place. Ecobank beat tough competition posed by six other contestants in its category to come out on top as African Bank of the Year.

The Bank was given particular credit for its continued expansion throughout Middle Africa as the pan African bank. Ecobank got a strong endorsement when South Africa’s Public Investment Corporation officially signed the $250m investment agreement in the Group.

The Best Regional Bank category named a winner from each of the five regions of Africa: Attijariwafa Bank, Morocco for North Africa; BGFI, Gabon for Central Africa; Bank of Kigali, Rwanda for East Africa; Access Bank, Nigeria for West Africa; and BCI, Mozambique for Southern Africa – thus highlighting Africa’s diversity but strength as one continent.

Arnold Ekpe, one of the most well recognised faces in the African banking community, was honoured with the Lifetime Achievement Award and received a standing ovation from the audience. Dr. Eleni Gabre-Mahdin, Founder and Managing Director of the Ethiopia Commodities Exchange follows in the footsteps of Ngozi Okonjo-Iweala and Adebayo Ogunlesi to win the African Banker Icon Award. This prestigious pan African evening was the biggest ever, with Hon. Mambury Njie, Minister of Finance for Gambia, Hon. John Rwangombwa, Minister of Finance for Rwanda, Dr Mustapha Kamel Nabli, Central Bank Governor for Tunisia, Professor Njuguna Ndung’u, Central Bank Governor for Kenya, Arunma Oteh, Director General of the Securities and Exchange Commission (SEC), Nigeria, and BBC World News presenter, Zein-

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24 — Vanguard, MONDAY, JUNE 4, 2012

Corporate Finance BRIEF Morgan Stanley moves to lift stake in brokerage ORGAN Stanley said it would buy another 14 percent of joint venture Morgan Stanley Smith Barney, starting what sources have said could become a negotiation to purchase the rest of Citigroup Inc’s 49 percent stake in the retail brokerage.

The two parties will seek a fair price for the 14 percent stake, which Morgan Stanley has an option to buy this year.

But because the banks will already be discussing a value for the business, Morgan Stanley may press Citigroup to sell its entire stake now, people familiar with the matter have said.

In the past, analysts have estimated the 49 percent stake to be worth about $10 billion, but those appraisals can change quickly as markets tank and the outlook for the retail brokerage business sours. The downturn of the markets may also temper Morgan Stanley’s desire to buy the rest of the venture it does not already own.

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Wells Fargo eyes insurance sales acquisitions ELLS Fargo & Co which has been renewing its appetite for acquisitions lately, is interested in buying insurance sales businesses, its chief executive said on Thursday.“I love the insurance distribution business,” John Stumpf said at a Sanford C. Bernstein conference for investors.

Wells Fargo’s insurance brokerage business is already one of the biggest in the world and the largest affiliated with a bank.

The fourth-largest U.S. bank by assets is the biggest seller of mortgages, used car loans and middle-market loans in the United States and those borrowers “all need insurance,” Stumpf said.

The CEO also repeated remarks from bank executives on May 22 that Wells wants to build its retail brokerage and wealth management businesses.

He issued the standard warning, however, that the bank will be “ very, very careful” on not paying too much for any purchases.

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From Left: Mrs. Yemi Adeyinka, Zonal Coordinator, Unity Bank Plc Aim & Win Promo; Mr. Umar Adabara, Regional Manager, Victoria Island and Mr. Lanre Fagbohun, Executive Director, Lagos & West at the 1st zonal draw of the bank’s Aim, Save & Win promo in Lagos.

Mutual funds value dips by N135m in one week

BY MICHAEL EBOH

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he value of mutual funds on the Nigerian Stock Exchange, NSE, depreciated

by N135 million in one week.

Particularly, according to data obtained from the Securities and Exchange Commission, SEC, the Net Asset Value, NAV, of mutual funds listed on the Memorandum Quotation

segment of the NSE, dipped by 0.15 per cent from N89.555 billion recorded May 18, 2012 to N89.419 billion as at May 28, 2012.

However, the NAV of the funds appreciated by N1.319 billion in one month, rising by 1.5 per cent from N88.1 billion in April 2012 to N89.419 billion in May. Equity based funds recorded the highest NAV of N41.422

billion in the week ending, May 25, 2012, dropping however, by 0.51 per cent from N41.635 billion recorded penultimate week ending, May18, 2012.

Real Estate Funds followed with a NAV of N16.272 billion, depreciating by 0.36 per cent from N16.331 billion recorded in penultimate week, while Balanced Based Funds recorded NAV of N12.39

billion.

Union Homes Real Estate Investment Trust Scheme, managed by Union Homes Savings and Loans Plc, recorded the highest NAV of N14.036 billion, followed by Stanbic IBTC Nigerian Equity Fund, managed by Stanbic IBTC Asset Management Limited with a NAV of N12.522 billion and Stanbic IBTC Money Market Fund also managed by Stanbic IBTC Asset, with a NAV of N7.51 billion.

ARM Discovery Fund, managed by Asset and Resources Management, ARM, Company Limited recorded a NAV of N4.719 billion; FBN Heritage Fund, managed by First Bank of Nigeria Plc, recorded NAV of N4.197 billion; SIM Capital Alliance Fund, managed by SIM Capital Alliance Limited’s NAV stood at N3.548 billion and Zenith Equity Fund, managed by Zenith Bank Plc posted NAV of N3.447 billion.

Others are: Coral Growth Fund, managed by FSDH Asset Management Limited N3.309 billion; Kakawa Guaranteed Income Fund, managed by Kakawa Asset Management Company Limited - N2.954 billion and Stanbic Ethical Fund, managed by Stanbic IBTC Asset - N2.864 billion among others.

To calculate a Collective Investment schemes Net Asset Value or NAV, the value of the total assets of the fund is subtracted by its liabilities, this amount is then divided by the total number of shares in the fund to give the unit price.

NASCON resolves to maintain industry …posts N2.2bn profits leadership

BY NKIRUKA NNOROM

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he Chairman of National Salt Company of Nigeria Plc (NASCON), Alhaji Aliko Dangote, has reaffirmed the management’s commitment towards retaining a leading edge over other competitors in the salt industry.

Making the remark in his address to shareholders of the company in the yearly general meeting, in Lagos, Dangote said the management would also commit itself to delivering improved returns to all stakeholders in the current year.

Dangote explained that the company will within the year expand its business to include

vegetable oil refinery and tomato packaging in order to retain key role in the sector.

“We continue to be committed to improving our upward trend, and we will ensure your company continues to grow and remain competitive so as to deliver increasing dividend to all stakeholders.

“To this end, your Board and management are working on establishing a seasoning business, vegetable oil refinery and tomato packaging operations, which unfortunately has been delayed for a while,” he stated.

He noted that the establishment of the new business line was in keeping with the company’s vision of becoming a frontline foods business in the country.

He further explained that the company achieved profit after tax of N2.2 billion for the year ended 31 st December 2011, which reflects 30.7 per cent growth over N1.65 billion posted in the same period of 2010. Tur nover grew by marginal 8.9 per cent to N9.7 billion from N8.89 billion reported in 2010, while operating profit rose to N3.1 billion from the previous N2.06 billion.

According to him, the performance is a reflection of the efforts of the board, management and staff in response to the difficulties experienced in the year, thus leading to a stronger and more profitable business.

Speaking on the challenges encountered by the company within the year, Dangote said that problems pertaining to

energy, poor infrastructure as well as uncoordinated tax administration contributed in preventing NASCON and other manufacturers in reaching their full potential, adding “most importantly, NASCON was severally impacted by the global raw salt shortages that characterized the year leading to a 20 per cent reduction in our normal import level.”

The shareholders at the meeting approved the distribution of N1.89 billion, which represents 70 kobo per share dividends for the period.

Other highlights of the results showed that shareholders fund grew to N5.78 billion from N4.96 billion, while the earnings per share rose to N81 from N61 in 2010.

Vanguard, MONDAY, JUNE 4, 2012 — 25

26 —Vanguard, MONDAY, JUNE 4, 2012

Cover Story Shareholders sue CBN over cost of reforms, recoveries from Cecilia Continues from page 18 accordance with the Law. The suit filed at the Ikeja High Court said that “this action was commenced by originating summons wherein the Plaintiff seeks an order of the court directing the defendant to release to the Plaintiff the requested information as demanded by the plaintiff through his Solicitors letter to the CBN dated 26 th January 2012.

The shareholders claimed that the CBN “acknowledged the receipt of the letter on 3rd February 2012 and has neglected, refused or failed to make available the requested information to the Plaintiff. As a result, the suit was filed to cause the CBN to release the information. It said “Whether having regard to the provisions of the Freedom of Information Act 2011, the defendant is not under a duty to make available to the plaintiff the

information requested in the said plaintiff ’s letter of 26tln January, 2012.

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he Shareholders argued that they have a right under the Freedom of Information Act 2011 to request information from the CBN which is an agency of Government established under the Central Bank of Nigeria Act Cap C4 laws of the Federation of Nigeria 2007. The CBN is bound within 7 days to make the

information available or decline with stated reasons.

The requested information is within the custody of the CBN and it has neglected, refused or failed to release the said information to the shareholders or to decline with reasons.

“Section 25 of the Freedom of Information Act 2011, gives the shareholders the right to mandatory order of court compelling the defendant to release requested information. The statutory

right to a mandatory order obviated or makes unnecessary any consideration of conditions for grant of such order under common law. The court is bound to grant a mandatory order where it is satisfied that the demand for information has been made and the public body has refused or failed to comply.” They are urging the court to uphold the originating summons and grant the mandatory order as requested.

Vanguard, MONDAY, JUNE 4, 2012 — 27

Corporate Finance

NSE: Declining trend persists, as investment value dips by N86bn

By MICHAEL EBOH & CHINEDU IBEABUCHI significant decline was re corded in investment value on the Nigerian Stock Exchange, last week, as the market capitalization of listed equities dipped by N85.625 billion.

Specifically, the market capitalization, representing investment value, depreciated by 1.21 per cent to close the week at N7.005 trillion from N7.090 trillion at which it opened the week.

The All-share index, another major indicator for measuring market trend, dipped by 1.21 per cent or 268.49 basis points to close the week at 21,963.87 points from 22,232.36 points.

Nigerian Breweries Plc led 32 other stocks in the price losers category, dropping by 2.78 per cent to close the week at N105 per share; UAC Nigeria Plc followed with a share price depreciation of 4.83 per cent or N1.69 to close at N33.31 per share and Zenith Bank Plc dipped by N1.35 or 9.12 per cent to close at N13.45 per share.

Other share price losers include: Lafarge Cement WAPCO Plc N1.14, Flour Mills Nigeria Plc N1.04, Julius Berger Nigeria Plc N0.99, Okomu Oil Palm Plc N0.87, National Salt Company Plc N0.69, NCR Nigeria Plc N0.68, First City Monument Bank Plc N0.65 among others.

On the contrary, PZ Cussons Nigeria Plc led 21 other companies in the price gainers’ category, rising by 5.22 per cent to close at N24.20 per share; Glaxo Smithkline Consumer Plc followed with a share price appreciation of five per cent to close at N21 per share and Unilever Nigeria Plc garnered N0.70 or 2.47 per cent to close at N29 per share.

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ther share price gainers include: Presco Plc N0.65, International Breweries Plc N0.49, Access Bank Plc N0.23, Stanbic IBTC Bank Plc N0.21,Union Bank Nigeria Plc N0.20, May & Baker Nigeria Plc N0.18 and Cement Company of Northern Nigeria Plc N0.12 among others.

Equity trading also dipped by 25.23 per cent in the week under review, as a turnover of 1.301 billion shares valued at N9.46 billion was recorded in 14,792 deals, in contrast to penultimate week’s turnover of N1.74 billion shares valued at N15.108 billion in 19,754

deals. The Financial Services sector recorded the highest patronage, accounting for 56.73 per cent of the total market turnover, with 737.805 million shares valued at N5.896 billion in 8,553 deals. The Conglomerates Sector followed with with 269.168 million shares valued at N314.298 million

traded in 692 deals.

Banks’ stocks were the most sought after in the week under review, as investors traded 642.493 million banks’ shares valued at N5.832 billion in 8,258 deals. Transaction in t he sub-sector was driven by Guaranty Trust Bank Plc, First Bank of Nigeria Plc and Unit-

ed Bank for Africa Plc. Trading in the shares of the three banks accounted for 367.294 million shares, representing 57.17 per cent, 49.78 per cent and 28.23 per cent of the turnover recorded by the sector, sub-sector and total equities turnover for the week, respectively.

From left Otunba Adekunle Ojora, Chairman, NCR Nigeria PLC; Ambassador Hamzat Ahmadu, Director; Mr Stelios Atalianis, Director and Mr. Sadiq Onilenla, Acting Country Manager at the NCR Nigeria PLC 60th Annual General Meeting held in Lagos. Photo by Lamidi Bamidele.

BRIEFS Aig-Imoukhuede, Linkedln boss, eye Ernst & Young’s award CCESS Bank Plc Group Managing Director, Mr. Aigboje Aig-Imoukhuede is set for what could be described as ‘battle of the titans’ as he joins 50 other exceptional entrepreneurs, including Reid Hoffman, Chairman and co-founder of Linkedln, from around the world in Monte Carlo, Monaco, from June 7-10, to vie for Ernst & Young’s World Entrepreneur of The Year Award.

The Award was created by Ernst & Young to recognize the accomplishments of entrepreneurs around the world. It builds on Ernst & Young’s 26 years of success in running Entrepreneur of The Year Award programmes in many countries.

This year, 59 Entrepreneur Of The Year country winners, representing 51 countries, will be inducted into the World Entrepreneur Of The Year Hall of Fame and compete for the Ernst & Young’s World Entrepreneur Of The Year title in Monte Carlo. For the first time, Kenya (Eastern Africa), Nigeria (West Africa), Oman, Qatar, United Arab Emirates and Vietnam are participating in the programme.

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Agbaje emerges African Banker of the Year

FDI inflow to Africa grows by 27% M — Ernst & Young

By PETER EGWUATU RNST &Young (EY) has decried the wrong impression of some investors about investment climate in Africa, even as Foreign Direct Investment (FDI) projects on the continent grew by 27 per cent from 2010 to 2011.

The Regional Managing Partner for West Africa, Ernst &Young (EY), Mr. Henry Egbiki, who disclosed this at the launch of Ernst & Young’s 2012 attractiveness survey, weekend, said, “Many investors still view Africa as being a more challenging place to do business than other emerging market regions; despite the fact that in the World Bank’s most recent Ease of Doing Business rankings, 14 African countries ranked ahead of Russia, 16 ahead of Brazil, and 17 ahead of India.”

He further disclosed that Africa is often perceived as be-

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ing inherently corrupt, saying, “While corruption no doubt remains a big challenge in Africa, 14 African countries rank higher than India, and 35 higher than Russia, in Transparency International’s Corruption Perceptions Index.”

While commenting on EY’s findings in its “2012 attractiveness survey”, Egbiki said, “The number of Foreign Direct Investment (FDI) projects in Africa grew 27 per cent from 2010 to 2011, and have grown at a compound rate of close to 20 per cent since 2007. Despite this growth, there remain lingering negative perceptions of the continent, but only among those who are not yet doing business in Africa. The story of Africa’s progress, not just in economic but also in socio-political terms needs to be told more confidently and consistently. This broad-based progress is underscored by a substantial shift in mindset

and activities among African themselves, with increasing self confidence and continued strong growth in intra-African FDI (which has expanded by 42 per cent since 2007).”

According to the survey by Ernst & Young, seven African countries are among the 10 fastest growing economies in the world, with 5.5 per cent of Africa’s share of global FDI projects.

The survey noted that FDI flowed into diverse range of sectors, with manufacturing and infrastructure related activity accounting for a significant proportion of FDI. However, Egbiki, noted that regional integration is critical to accelerated and sustainable growth in Africa, saying, “Creating larger markets with greater critical mass will not only enhance the African investment proposition, it is also the only way for Africa to compete effectively in the global economy.

ANAGING Director/ CEO of Guaranty Trust Bank Plc, Mr. Segun Agbaje, has been conferred with the 2012 African Banker of the Year Award by African Banker Magazine.

The African Banker Award recognizes key financial industry leaders across the continent, who through good vision and leadership, have led their institutions to become industry leaders and trend setters. Winners of the coveted Award must have consistently guided their organization to strong financial performance and contributed significantly to the quality of service offered by the financial services industry in their country, Africa and abroad.

Commenting at the 2012 African Banker Awards Dinner, which held on Wednesday, May 30, 2012 in Arusha, Tanzania, Mr. Segun Agbaje attributed his receipt of the award and the Bank’s varied achievements over the years to discipline, a defined operating strategy, hands on knowledge about the various markets the Bank operates in and the passion of GTBank employees.

28 —Vanguard, MONDAY, JUNE 4, 2012

Corporate Finance ue such as employees or real estate, and lease items which depreciate or lose value such as equipment and machinery.

In addition to these advantages, a lease allows the lessee to acquire more of the product or more high-end equipment than they would if they purchased.

BRIEF Renesas investors wary over restructuring plan AJOR shareo l d ers of Japanese chipmaker Renesas Electronics Corp received the firm’s restructuring plan on Fr i d a y, b u t r e i t e r a t e d that they were still not willing to provide capital support, sources familiar with the matter said.

Renesas, the world’s fifth largest chipmaker and a product of successive mergers of the chip divisions of Mitsubishi Electric Corp (6503.T), Hitachi Ltd (6501.T) and NEC Corp, plans to raise more than 100 billion yen ($1.26 billion) in fresh capital and cut at least 12,000 jobs, sources told Reuters last month.

Sources said Renesas p r e s i d e n t Ya s u s h i A k a o visited all three companies personally and presented the firm’s plan on F r i d a y, w h i c h i n c l u d e s sweeping job cuts and fund raising.

Mitsubishi Electric and NEC are not considering providing capital support to Renesas at this time, sources said.

A source said Hitachi would not disclose its stance on the matter.

NEC, which has struggled with steep losses in its mobile handset and IT hardware businesses, has previously said that it was not considering additional capital support for Renesas.

Mitsubishi Electric, whose earnings along with Hitachi have been bolstered by strong results in the infrastructure business and by limited exposure to consumer electronics, said last month that Renesas’ shareholders were prepared to offer support.

The three companies will discuss the restructuring plan this month and Renesas aims to announce the final turnaround plan

by July.

Renesas, which logged a bigger-than-expected net loss for the year ended March 31, is struggling to survive as it faces higher costs and stiff overseas competition.

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From left: Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema; Managing Director/CEO, Nigerian Aviation Handling Company (NAHCO) Plc, Mr. Olukayode Oluwasegun-Ojo; Deputy General Manager, Transformation and Change, NSE, Mr. Olumide Lala and Head, Corporate Communications, NAHCO, Mr. Sanya Onayoade at the Bell Ringing Ceremony on the NSE in Lagos.

Financial expert lists importance of leasing for economic growth

By PETER EGWUATU QUIPMENT leasing has been described as an important tool to help organizations acquire equipment as paucity of investible funds continues to be the nation’s economic albatross.

Managing Director/CEO, Rosabon Financial Services Limited, Mr. Chukwuma Ochonogor, stated this during an economic interactive session in Lagos at the weekend.

He said‘‘In some cases, you

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can include the full cost of the equipment, as well as the service, shipping, installation costs and maintenance in the lease. This spreads the cost out evenly over the term of the lease freeing up cash flow for other vital business expenses.”

He, however, highlighted key reasons why Nigerian entrepreneurs should cultivate the habit of leasing; stressing that ‘’Leases allow you to retain capital strength by allowing you to buy the equipment you need today while spread-

ing out your payments throughout the life of your equipment. Thus allowing you to save your capital for other expenses such as adding sales personnel, increasing marketing, or taking advantage of quantity discounts (a 2% discount each month can really add up), which means that you will have more money to invest in revenuegenerating activities’’.

He added that ‘One general rule is to invest your working capital on things that appreciate or accumulate in val-

r. Ochonogor reiterat ed the sound Balance Sheet Management advantage of Leases explaining that ‘’a lease is not considered a long-term debt or liability, and therefore does not appear as debt on your financial statement, making your company more attractive to investors.

The Financial expert noted that payments are treated as operating expenses on the company’s balance sheet, and therefore do not have to be depreciated over the life of the equipment. ‘’As your business grows and your needs change, you can add to or upgrade your lease at any point through add-on leases or master leases. There are a number of leasing structures available to allow you to tailor the lease that best accommodates your needs and requirements: such as cash flows, budget, transaction structure, and seasonal or cyclical fluctuations.

Many leases also allow you a great deal of end-of-term flexibility, allowing you to purchase the equipment, renew your lease, or simply return the equipment once the lease has expired’’ He added that Tax agencies do not consider an operating lease to be a purchase, but rather a tax-deductible overhead expense, stressing that ‘’therefore you can deduct the lease payments from your corporate income and are not taxed on them’’.

Mobil eyes increased investment in facilities upgrade

By NKIRUKA NNOROM & KUNLE KALEJAIYE

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OBIL Oil Nigeria Plc has assured that it will continue to evolve strategies that will ensure delivery of superior performance to all stakeholders of the company in the coming year.

The chairman, Mr. Adetunji Oyebanji, made the declaration while laying the financial results for the year ended 31 st December, 2011, before the shareholders at the 34th annual general meeting in Lagos. To this end, he said the company will continue to invest in logistics and cutting edge technology as part of efforts to facilitate its facilities upgrade.

Oyebanji noted that in 2011, it completed the refurbishment of a storage

tank, while work commenced in a new tank, adding that additional investments in tanks and loading facilities are planned to further strengthen the company’s logistics.

“We made some modest investments in the retail chain and UAC, our alliance partner continued to invest in the back-court food offering. We started a project to upgrade our Blending Control Software and once completed, this will provide us increased efficiency and production capacity in our blending operations. Similarly, we plan to install additional testing equipment to keep up with advancements in laboratory technology, implement an even more stringent quality testing regime for the products we market and

maintain our industry leadership in quality management,” he said.

“We completed a major investment programme that has enhanced the value of our Mobil House office complex in Victoria Island. We are now starting the refurbishment of Mobil Court. At the end of the upgrade, the property will be restored to world-class standards. A long-term lease has been put in place that will guarantee a steady stream of income in the future,” he added.

The Mobil boss explained that the turnover for the period grew to N62.1 billion from N53.3 billion, translating to six per cent increase over the previous figure. The profit before tax dipped to N5.52 billion in comparison to N5.72

billion in 2010, while profit after tax depreciated to N3.75 billion from N3.89 billion in 2010, showing three per cent decrease in both PBT and PAT respectively.

Total assets grew by 29 per cent to N30.76 billion from N23.88 billion. However, the dividend declared for the period slumped by 29 per cent to N5.00 from N9.60.

Oyebanji explained the increase in turnover was due to higher pricing across of PMS and the higher lubricant sales which were partially offset by lower gasoline sales.

He said “Gasoline volume were affected by supply disruption to our retail outlets in some part of the country and increased competition from new entrants in the market.

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32 — Vanguard, MONDAY, JUNE 4, 2012

Interview BRIEF Diaspora remittance, microfinance key to proposed African financial inclusion GNES Soucat, African Development Bank (AfDB), human development Director, has said that remittances and microfinance were the two key components of the bank’s inclusive financial services. “Access to finance is a key component of our new human capital development strategy.

Increasing opportunities for the poor and marginalised and particularly for the African youth is crucial in order to ensure social inclusion as well as job creation,” Soucat said at one of the seminars at the ongoing AFDB, annual general meeting (AGM).

With an estimated Africa’s Diaspora fund of 40 billion dollars annually, 21 .5 billion dollars were remitted to SubSaharan Africa in 2011.

Participants at the seminar said remittances not only helped African communities to cope with crisis and lack of economic prospects but also contributed to enterprise development and human capital.

They also said remittances was a major driver in African poverty reduction scheme.

“There is no doubt that remittance inflow has been an important factor in Africa’s economic development, a significant proportion of that is handled by Dahabshiil, an African web-based money transfer system. Microfinance initiatives are equally enabling some of Africa’s poorest to plan for the future,” said Abdirashid Duale, the CEO of Dahabshiil. Council to train 10,000 freight forwarders Alhaji Hakeem Olanrewaju, the Chairman, Council for Regulation of Freight Forwarding in Nigeria (CRFFN), said on Wednesday that it would train about 10,000 freight forwarders in the country.

Olanrewaju said this in Lagos at the closing of a seven-day Training of the Trainers (TOT) programme organised by the council. The chairman said there must be attitudinal change in the practice of freight forwarding.

Olanrewaju said that Nigerians in the profession should be able to compete with their counterparts in Japan and Korea.

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AZI Okechukwu Unegbu is the Managing Director/Chief Executive, Maxifund Investment and Securities Limited and President of Chartered Institute of Bankers of Nigeria (CIBN) from 2002 to 2004. In his over 30 years career in banking and finance he has worked in prominent financial institutions including First Bank, defunct African Merchant Bank, Progress Bank (rose to become Chairman/Chief Executive), Broad Bank and Citizens Bank (as Chief Executive in 2005). As the guest speaker at the Zenith Bank sponsored Bi-monthly Discourse of Finance Correspondents Association of Nigeria (FICAN) held last week, he barred his mind on recent development in the nation’s financial sector especially the planned removal of the autonomy of the central Bank of Nigeria (CBN) by the National Assembly, the recent probe of the near collapse of the nation’s capital market by the House of Representatives and the demutualization of the Nigeria Stock Exchange.

Excerpts Considering the fact that the capital market collapsed in 2008, What is your take on the timing of the probe of the near collapse of the capital market by the House of Representatives? Is the timing right and is it properly focused on the necessary issues?

I do not agree with you that the timing of the probe was wrong. If you realize at some time most of us were saying let the government intervene in the market not by giving money but by reviewing the structure. For instance, the Securities a n d

Exchange Commission (SEC) is set up by law, the structure in that place is not correct.

There was lack of proper coordination between the capital market regulator and the place that provide the platform. The Nigerian Stock Exchange is what we call a self regulatory organization providing the platform that enables market to be conducted and the license is regulated by the SEC. And we were calling for proper restructuring of the SEC the way it was and we can see that coming out very vital during the probe. So, I think some of the issues raised were also apt, even if everything was not such. It was only spoiled through what I may call inexperience of the legislators that is to some decree and the impunity role of the SEC. The regulators made a mistake of going to issues and then raise them when the issues have not being genuinely touched.

If the regulators have taken time, let us go. You don’t do things with a preconceived idea to find somebody guilty.

That is why the problem arose and that was what happened that almost diverted attention from the real issues. Some of the issues that came up that were not suppose to be there.

I mean that is my advice to that and I tell you also that that is why I am calling for a re-thought in financial regulation. There should be a rethought. Financial regulation should not be base on impunity but be based on facts.

On the ongoing debate about the quest of the National Assemble remove the autonomy of CBN, you said the problem is that the we have a weak CBN but a strong CBN Governor and that what is needed is to strengthen the CBN. But

Autonomy is imp CBN needs to re itself — Unegbu

By BABAJIDE KOMOLAFE what measures can be put in place to ensure that whoever becomes the CBN Governor does not use the CBN to pursue what might be perceived in some quarters as religious or political interest?

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hen the CBN autonomy, I think I have even answered that during my presentation. I said that all we need to do is to set up strong institutions. Let the institu-

tions be strong. Let it be, if you go there tomorrow what you see on ground will determine how you are going to do the job. You see that in the US Federal Reserve the man there now is still following what was there before. But in our own system I was talking about I think I talk financial friction, I have talked about the US- UK model; I have talked about the euro zone model. I said we don’t know what model we are following here and this model we need to look at what the situation is because as far as we are concerned conservatism is the

Vanguard, MONDAY, JUNE 4, 2012 — 33

Interview I have told you why the autonomy issue is coming. It is because there is one strong individual holding forth in a very weak and disorderly structured institution.

So why not let us ask that the institution should restructure itself to take care of the imbalances in its structure, the lack of foresight in the regulation you must first of all know your environment, get the environment working fine, take appropriate note; get to know the people that are working with you before you start commenting. I remember when I was appointed the managing director of Citizens Bank and one of you complained that I was not talking, saying it is unlike you. I told him what you want me to say. I have just spent one month. I don’t even know where I am. I told him to come back after nine months because by then I would have known the system and I would be talking from the experience of what I have done rather than getting there and after one month start talking. That is the problem that we have. So for anybody, conservatism is a very important aspect of our business.

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*Mazi Okechukwu Unegbu

et me tell you why autonomy is very important. In times of crises, let me give you the example, I remember I was in banking when the CBN reports to the ministry of finance and to the presidency. I was then given a mandate in First Bank then to set up FBN Merchant Banker. Myself and four other people and that was when Atedo Peterside was also going for his own bank as a merchant bank then and each time we go, the ministry of finance was here in Ikoyi and the other arms have moved to Abuja. It was a very terrible thing because in the ministry of finance, to move files; it could take you three months. To get license that time was like going through hell and coming back. So the files will never moved and you want to know, at that time bribery is not the way it is known now because you cannot come back to tell the your MD, they say I should bring money. You dare not say it.

At that time things were still good but it took time. So that is a strong reason, so when

portant but estructure u essence of regulation both for the capital market and the banking sector or money market. So it is important that whoever is at the Head of that institution should first of all sit down, study the institution before you start talking.. That is why most of the managing directors of banks that I know, those that were there when the banks were in trouble, and the moment they got there they started talking , we are going to raise it to a high level. That is all balderdash, because you don’t know where you are. Before you start making that comment

they removed the CBN from the stranglehold of the ministry of finance, we all applauded it. Then it was now going through the presidency and all that. There was a time when they had the instrument autonomy and then they also have the policy autonomy. Initially they granted them the instrument autonomy which made it easy for them to relate quickly with the banks and deal with them fast. Before that time you have to go through ministry of finance before you can close the bank. So, do want us to continue with that?

I

have told you why the au tonomy issue is coming. It is because there is one strong individual holding forth in a very weak and disorderly structured institution. So why not let us ask that the institution should restructure itself to take care of the imbalances in its structure, the lack of foresight in the regulation. If they can do that, then whoever goes there, things will keep going. I tell you, let me give you example, in First Bank that is why the bank is still growing. I don’t know what it is now but at that time if you like come from the air with all those razz mantas or grammar or you do it like this, you do it like that, there is a system that has been set in place, that this bottom-up approach to situations and once the middle say it agrees with the bottom, that this thing is not right to do, no managing director can change it. That is the system, a strong institution. You see before Even CBN talked about tenure limit for bank chief executives, there was already a tenure limit in First Bank. You can’t spend more than two terms, three years or so and once you scale through that you are up and another person is being groomed to take over. That has being the system and it is working for them perfectly.

For me we should not disturb the autonomy of the central bank as that will be dragging us back to the 80s.

You said there is need for more Exchanges before the Nigeria Stock Exchange is demutualised. An you elaborate on this?

I did say that the danger of demutualising is converting a mutual institution to a one now owned by private businesses. Now, it is not parallel exchange, even if they call it parallel, let them come, let them compete among themselves. Competition is the fuel of business so that they can have services. When it came up the former stock exchange authority kicked against it and some of us were called names for sup-

porting it. Because I remember I became a member of the Abuja Stock Exchange, I am still a member of the Abuja Commodity Exchange, I still belong. The reason is this; it is dangerous to have one monopoly, that monopoly would hold all the power. Take it or leave it.

Secondly if you now think that if we demutualize that particular monopoly without other competing organizations, we are going to face a problem. And I did say that supposing something happens to that privately owned business like some banks failed, in your korokoro eyes many banks failed in this country.

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upposing those banks that fell and there is no NDIC to pay you N100,000 or N200,000 as insure deposit and there is no other bank that you can go to what will happen? The system will ground to a halt. So that is why we are calling for more exchanges, so that if we demutualise the current Nigeria Stock Exchange and something goes wrong with, there is an alternative. Now assuming you have the share of First Bank and they demutualised the Nigeria Stock Exchange and because of the greed of capitalism and because of the greed of directors, because of the greed of staffers, and because of so many externalities that affect that business, and because we have to compete with other exchanges outside Nigeria and something happens to it and you have First Bank certificate or shares to sell and there is no platform and there is no other platform for you to do that. If there be is a struggle, are you not going to have financial difficulty even when you have something that can bring you money.

And secondly if those things happen, people wanting to raise money cannot raise money because the Exchange has failed. So you face problem of illiquidity and also you face problem of not being able to raise a development capital from the market. But if there is an alternative you don’t need to depend on that because you can take your share to another exchange, maybe in Ibadan or somewhere to raise money with your share.

So that is what am saying if you want to demutualize I am not against it, I know you people are not against it but we are saying there is a danger if you should demutualise and there is no other alternative competing exchanges, we would have problem should there be collapse of that particular exchange.

BRIEF Nigeria-India: increased collaboration to drive economic growth

BY PROVIDENCE OBUH

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ndian High C o m m i s s i o n to Nigeria, Mr. Mahesh Sachdev has emphasised the need for increased collaboration between Nigeria and India to boost e c o n o m i c growth.

In a statement made available to Vanguard by the Lagos Business School (LBS), he said this at the renewal of a Memorandum of Understanding between the LBS and the Indian Council Cultural Relations (ICCR) on the establishment of ICCR’s Chair of Indian Management Studies in Lagos.

Sachdev, who also represented the ICCR said it has become imperative for Nigeria, India to identify their core areas of strength for both countries to leverage on.

“Under the MOU, an Indian academician will head a rotating Chair of Indian Management Studies at LBS which will be utilised for teaching and research in management and related subjects such as marketing, strategy and finance, with strong emphasis on Indian experience.

“The overall context of India-Nigeria ties has continued to boom following the recent economic crisis. This partnership provides an extra dimension to India’s growing bilateral synergy with Nigeria,” he added.

Commending the moves to foster relationship between Nigeria and India, Dean, LBS, Dr Enase Okonedo said the level of development of Indian academics over the years is such that is worthy of emulation.

Okonedo said, “We believe that LBS will be able to reap some of the benefits of this development to improve our standards.”

34 — Vanguard, MONDAY, JUNE 4, 2012

Homes & Housing Finance BRIEFS Delta rakes N1.5trn from land charges in 5yrs

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elta State government has realised over N1.5 trillion as revenue from land related charges in the state within the last five years.

Commissioner for Ministry of Lands, Surveys and Urban Development, Mr. Patrick Ferife, speaking recently in Asaba, said that 4,196 applications have so far been received for private lands while 11,907 applications were received for government lands.

He warned that owners of land with certificates of occupancy who refused to develop their property risk forfeiting them, adding that only 4,587 certificates of occupancy were issued for both government and private lands.

The commissioner said the government is presently implementing the automation of all land and landed properties through the Geographic/Land Information System, stressing that the process would enable the ministry build a robust property data base.

TUC plans low cost housing scheme

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rade Union Congress of Nigeria (TUC) has revealed plans to build low cost housing scheme across the country.

President-General of the union, Peter Esele, disclosed this in Lagos recently during the launch of 150 mass transit buses acquired by TUC. “After the provision of buses, plans are underway for low cost housing. The houses would be leased out for N9 million and payable in 9 years. We are working together with our partner, The Infrastructural Bank (TIB) to make this dream a successful project,” he said.

He explained that the union purchased the buses from China in order to change the world of transportation in major cities of the country.

•Housing development for high-end users

Housing finance: FG seeks private sector collaboration Stories by YINKA KOLAWOLE

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he federal government needs the support of the private sector in order to successfully fund housing delivery in the country.

Minister of Housing and Urban Development, Ms Ama Pepple, said this recently in Abuja, in a seminar paper presented on “How to reach the Millennium Development Goals for Housing in Nigeria and How to Encourage the Private Sector ’’.

Pepple who was represented

by Mrs Morenike Babalola, Deputy Director, Town Planning in the ministry, said every opportunity must be explored to reduce housing deficit in the country through collaborative effort. “More efforts should be geared towards mobilisation of bilateral and multilateral funds in form of grants and interest-free loans for housing development. The issue of sovereign guarantee should be addressed as this is a requirement to attract foreign investors to the sector,” she stated.

In addition, the minister said the ministry would ensure the usage of alternative building technologies that will ensure faster and cheaper production of houses, such as the Industrial Building System.

She said government would

assist the private sector to purchase building materials directly from manufactures to reduce cost of construction.

The minister also promised that preventive measures would be taken to check the growth of slums through

proper planning, adding that funding of slum upgrading should be continuous and predictable at all levels.

Ogun set to build new workers’ estate O

gun State government is set to build a new housing estate to ensure provision of affordable housing for workers in the state at Kemta, Idi-Aba, Abeokuta South Local Government Area.

Commissioner for Housing, Mr. Daniel Adejobi, said in Abeokuta that provision of affordable housing and urban renewal was one of the five cardinal programmes of the Ibikunle Amosun administration in the state.

He asserted that government was taking every necessary step to ensure that the housing needs of people are met, with emphasis on provision of affordable housing to the largest number of people in the state.

The commissioner added that in line with the belief that government is a continuum, the Amosun administation is taking steps to ensure the all uncompleted housing estates from the immediate past administration in the state are completed, while efforts are in top gear to commence construction of new schemes across the state. He therefore called on interested civil servants to apply online for the new scheme stating the type of housing unit desired, as this would enable the ministry to

ascertain the number and type of housing units to be built in the proposed estate.

In a related development, allegations that the state government has taken over the operations of Ogun State Property and Investment Corporation (OPIC) due to insolvency has been debunked by the Managing Director of the Corporation, Mr. Kola Omobo. According to him, OPIC is maintaining its position as a leading agency in the housing sector,

noting that government was rather putting up strategies to boost the activities of the corporation.

According to Omobo, OPIC is still a self-sustaining agency that is meeting its financial obligations including regular payment of staff salaries as at when due, adding that no portion of the corporation’s land in Ikeja earmarked for the construction of a five star hotel had been tampered with as being alleged.

UK tenants face more debt problems

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eople who rent their homes in UK are increasingly likely to be in arrears, a debt charity has said.

Consumer Credit Counselling Service (CCCS) says it received just over 10,000 requests for help with rent arrears last year, a 27 percent rise on 2010. The charity blamed the increase on the fact that rents have been rising while earnings have stagnated.

The average client with a rent problem was £760 in arrears, with the arrears of private tenants standing at £924. “A very large number

of people are struggling to keep up with their rent payments - and with rents near record highs, the problem is getting worse, not better,” Delroy Corinaldi of CCCS said.

Some 12 percent of CCCS clients last year who rented their homes had problems paying their rent. That was up from a 10 percent figure the year before. The CCCS said housing association tenants who were struggling with their rents had average arrears of £705, while those behind with the rent on their council accommodation had average arrears of £622.

Vanguard, MONDAY, JUNE 4, 2012 — 35

Homes & Housing Finance

Poor concreting major cause of building collapse —NBRRI

By YINKA KOLAWOLE

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igerian Building and Road Research Institute (NBRRI) has identified poor concreting as a major cause of collapse of buildings in Nigeria.

In a paper reviewing cases of building collapse recorded in 2011, Director General of NBRRI, Danladi Slim Matawal, noted that the manner of collapse where in most cases the structures and loads came down without prior warning and the deformation movements so fast with no time to evacuate, is an indication of improper concreting. He further noted that 70 percent, 23.3 percent and 6.7 percent of collapse buildings belong to private, public and corporate organisations, respectively.

Matawal said notwithstanding other factors that may have precipitated the collapse, such as deficiencies of foundations, columns, beams or other structural elements and use of inferior materials, the sudden failure of the structures denoted that there was poor concreting on the various sites. “There is clear evidence that the reinforcement for all structural elements (floors, beams and columns) had dissociated from the concrete during demolition. Expert opinion is that this is evidence of poor concreting i.e. lack of bond between steel and concrete. The inspection also reveals that coarse aggregate size as large as 40mm may have been used in the batching process.

“In NBRRI investigations, there has been no convincing evidence to suggest that structural designs were lacking though in most of the situations, especially in Lagos and Enugu, it was a risk to the lives of our resource personnel to insist on obtaining these documents.

Nonetheless, it is important to emphasize that care should be taken not only to ensure that there should be structural designs for each project, but also to request that all ultimate and serviceability limit states are properly checked and complied with.

“Site supervision on construction sites is both a professionally mandatory function as well as a regulatory role. It is very important that site supervision should be taken seriously on all sites. Thus the town planning and/or

development control authorities should insist that all mandatory documents necessary for the successful execution of a project are made available before the commencement of construction and that proper supervision machinery is set up on every site.

“In the projects that NBRRI has visited as a result of failures, there were no project sign boards to state name of project, the client, the architects, the structural engineers, and the quantity surveyors. It is therefore very safe to say that there was no supervision which would have corrected anomalous designs and ensure that all design specifications are implemented on site.

“In nature generally, failures could happen due to faulty construction sequence, scaffolding and formwork faults and early striking of formwork, extra-ordinary loads and unexpected failures. Failures can also be due to a combination of reasons of known causes like design faults, foundation incapacities, etc. The issue of faulty construction is noteworthy because so many structures in Nigeria are standing not because they are technically safe but because the block-work, rather than the structural framing, is helping them to stand.

“Apart from huge corporate organisations that employ well-trained professionals to design and supervise their

constructions, private individuals and many government departments and arms of government (like local and state governments) don’t consult appropriate professionals and where there is design, no supervision is available to ensure that implementation is well done.

To complicate the situation, town planning and municipal regulatory authorities traditionally endowed with the responsibility of checking all plans before approval for development is approved no longer undertake their roles and development is now haphazard not only resulting in building collapse but also giving rise to many developments without access roads, water supply, sewerage, electricity and vital services.”

BRIEF Borno to build 1000 housing units

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orno State government is set to build 1,000 additional housing units in the state to give out in an Owner Occupier Housing Scheme.

Commissioner for Housing and Rural Electrification, Alhaji Sugum Mai Mele, said the move is in line with the effort of the state government to achieve the United Nations’ Millennium Development Goals (UNMDGs) on housing for all by the year 2015.

The commissioner said out of the targeted housing units to meet the UN-MDGs target, government has already built and allocated 1,280 housing units, including the 777 houses at the Moromti Housing Estates. He added that the completed 1,000 housing units at Tashan Journey and 540 units in the 27 council areas are yet to be allocated on OOHS. Mai Mele however noted that when the 1, 000 housing units project is completed, the total number of houses will hit 3,822.

US mortgage rates hit record low

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•Self-contained bungalow

Land registry confirms house price drop

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ouse prices in England and Wales fell last month following the end of the stamp duty holiday for first-time buyers, according to the Land Registry.

The fall in house prices wasconfirmed by the latest data from the .said prices in England and Wales dropped by 0.3 percent in April, taking average price down to £160,417, one percent lower than a year ago.

The drop confirms the

downward price movements seen in recent surveys by the Halifax, Nationwide and the Royal Institution of Chartered Surveyors.

The Land Registry’s figures again showed the widespread variation in prices and trends in England and Wales. in London shot up by 5.1 percent during April, to leave them also 5.1 percent higher than a year ago.the West Midlands experienced the largest monthly drop, at 2.7 percent.

Meanwhile the biggest annual drop in prices was recorded in Yorkshire and Humberside, where the average house price is now 5.6 percent lower than a year ago. “The divergence between house prices in London and those of the rest of the country has increased sharply this month,” the Land Registry said.”The average price of property in the capital is £360,721 in comparison with the average for England and Wales of £160,417.”

ortgage rates for 30year U.S. loans fell to a record low for a fifth straight week as concern about Europe’s worsening financial crisis drove investors to the safety of the government bonds that guide borrowing costs.

The average rate for a 30year mortgage dropped to 3.75 percent in the week ended today from 3.78 percent, Freddie Mac said in a statement. It is the lowest since 1971. The average 15year rate declined to 2.97 percent, also a record, from 3.04 percent.

Yields for 10-year US treasuries, a benchmark for home loans, hit an all-time low as Spain struggled to rescue its troubled banks, adding to signs that the European debt crisis is spreading to the region’s larger economies. Low borrowing costs are helping to provide a foundation for the stabilising US real estate market after a six-year slide in home prices.

36 —Vanguard, MONDAY, JUNE 4, 2012

Talking Insurance

Insurance

WITH

YnikaBoa lrniwa Reforms and the insurance industry (4)

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HE Nigerian Insurance sector has grown in absolute terms by a CAGR of 26.9% in the last five years. Pre-consolidation, the industry grew by an average rate of 21.2% annually. We note that a large chunk of capital injection into the industry in the consolidat ion era came from domest ic sources. In our view, the Nigerian Insurance sector has remained “unattractive” to foreign capital as a result of weak regulat ion as well as the unpopularity of insurance culture in Nigeria.

Growing premium base Nigeria’s Life Insurance premiums grew by a CAGR of 33.1%, higher than the 24.4% CAGR in non-life insurance and 25.9% combined industry gross premium between 2005 and 2009. This has pushed the life insurance share of total premiums to an all time high of 19.5%. Similarly, life insurance penet rat ion rate stands at c.0.2% of nominal GDP as life premiums grew in absolute terms by 70.4% in 2009. We note that in spite of this phenomenal growth, there is a considerable depth It is expected of unexploited potential in the life insurance seg- that domination ment. of the non-life In our view, the lack of consciousness of Nigeribusiness to ans about life insurance gradually reis a drag on the growth of this segment . Howevduce in the er, the development of a non-existent social secu- medium to long rity system will serve to term in line boost the growth of life insurance premiums in with global and the medium to long term. Af rica averages On the back of Nigeria’s favorable demographics (with a growing youthful populat ion), we expect Nigeria’s life insurance penet rat ion to converge rapidly towards the Af rican average.

Non Life premium dominates The Non-Life Insurance segment is growing at a annual rate of 24.4%. Despite the introduct ion of compulsory insurance policies in a few classes of the non-life segment which has fuelled premium growth, the segment’s penet rat ion has grown slowly. In addition, the loose regulation of the industry and excessive price wars among fragmented players have limited the growth of the non-life insurance business. The non-life insurance subsector is principally driven by the motor insurance premiums, which cont ributed c.20.8% to indust ry gross premiums in 2009. With a penetration rate of 0.7%, the share of non-life premiums to aggregate premiums fell from 85.9% in 2003 to 75.0% in 2009. It is expected that domination of the non-life business to gradually reduce in the medium to long term in line with global and Af rica averages. Non–Life share of insurance premiums current ly stands at 34.2% in Af rica and 42.4% globally.

Third party premium remains king The Nigerian insurance market is dominated by non-life segment, driven by mandatory third-party motor insurance. Motor insurance premium grew by 22.5% between 2005 and 2009. The growth in motor insurance premium (especially third party policies) has also been fueled by the rapidly emerging middle class in Nigeria as private cars are fast becoming a necessity rather than luxury. We expect this growth momentum to steadily increase as compliance for compulsory motor insurance level increases. Fire insurance, another compulsory general insurance policy, also showed an impressive CAGR of 18.7% between 2003 and 2009 owing to greater awareness of the policy, as well as the increased spate of real estate development in the economy.

L-R Bala Zakkariya’u, Chairman Niger Insurance Plc, Fola Daniel, Commissioner for Insurance, (NAICOM), Ms. Prisca Soares, Executive Secretary, African Insurance Organisation (AIO), at the 39th AIO Conference and General Assembly in Khartoum, Sudan

Operators urge public to change perception on insurance Stories by ROSEMARY ONUOHA

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NSURANCE operators have decried the low level of trust on the sector from the public saying that such attitude is crippling the growth of the industry in the country.

According to Managing Director of FBN Life Assurance Plc, Mr. Val Ojumah insurance is based on trust but the abuse of trust by insurers resulted in the poor public perception which is adversely affecting the sector.

Ojumah said “When insurance started in this country, it was based on one keyword, ‘trust’ but that trust was abused. In the early days when insurance agents with motorcycles were going all over the place marketing

insurance and people parted with a lot of money. But did the early companies pay claims as they promised? The answer is no. Not a few agents went away with the money they collected and what happened? Many of those insurance companies went down. Consequently, that created a snowball and a big problem for the insurance industry. People w ill not forget in a hurry what happened in the past.”

Other challenges which the insurance sector is battling with, according to Ojumah, is that insurance is still alien to Nigerians coupled with the

Insurance practitioners to brainstorm on challenges of operational environment

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NSURANCE practitioners are set to brainstorm on the topic New Tunes for Lean Times, an encapsulation of the imperatives for the management and control of lean resources for sustainable growth and development.

The topic is the theme for the 2012 international Education Conference of the Chartered Insurance Institute of Nigeria, CIIN. Described as the flagship of the CIIN Educational programmes, the annual confab is the gathering of the top echelon practitioners who hold the reins in their respective organisations.

Dr. Wole Adetimehin who spoke at a press briefing said that the conference theme could not be more apt, stating that business governance today had been in the searchlight and that it was becoming increasingly necessary for the managers of business to rethink their roles and

responsibilities, in securing the survival of their organizations.

Dr. Adetimehin further said that the CIIN in line with its statutory responsibilities was concerned more than ever to provide the platform for knowledge sharing in the realm of paradigm shifts in the global economy.

Dr. Christohper kolade, Nigeria’s former High Commissioner to the United Kingdom and current ProChancellor of the Pan African University will lead other eminent speakers at the Conference. Dr. Kolade is also the current Chairman of the Subsidy Reinvestment and Empowerment Programme (SURE-P).

fact that practitioners have not been innovative enough in creating new products.

He said “In our traditional way of life, insurance is not a primary security. As a family member when something goes wrong with any individual family member, we do not look at insurance. As a traditional African family we contribute to help our member. So insurance is still alien to our way of life.”

On the lack of innovation in regards to new product development, Ojumah said “On the parts of practitioners today our products have not been particularly innovative.

Our administrations of insurance companies have not been particularly interesting.

Claims administration process is still a problem in this market. Yes they will pay eventually but as they said justice delayed is justice denied.”

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jumah called for a change of attitude on the part of practitioners adding “If we need to grow this business there are things we need to do as operators and there are things we need to do as regulators.”

He said “Not many people are prepared to put their money into life insurance companies and wait for one, two, three, four, five years before they get the return.

How many people in Nigeria will prefer to do that? That is why FBN Life is institutionalised and not individualised.”

Vanguard, MONDAY, JUNE 4, 2012 — 37

Insurance

Microinsurance as a tool for economic change

By ROSEMARY ONUOHA N Africa, approximately one billion people live in the continent of which an estimated 60 per cent are classified as poor. With a microinsurance market of approximately 700 million people, only 2.6 per cent of the target population is currently using microinsurance products.

It was based on this that delegates at the just concluded Africa Insurance Organisation, AIO, in Sudan called for an improved and efficient microinsurance market in the continent.

Delivering a paper titled ‘Takaful and Poverty Alleviation,’ a representative of the International Cooperative and Mutual Insurance Federation said that the poorest citizens of the poorest countries are typically exposed to the greatest risks. Earthquakes, floods, drought, disease, crime all tend to hit the poor hardest. Vulnerability and poverty go hand in hand, but microinsurance holds out the promise of breaking a part of the cycle that ties them together, he said.

He defined microinsurance to be the protection of lowincome people against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved.

Also, the term “microinsurance” according to him typically refers to adapting insurance services mainly to clients with low income and no access to mainstream insurance services.

Giving a third definition of microinsurance, the representative of the International Cooperative and Mutual Insurance Federation added “Microinsurance is insurance that is accessed by low-income population, provided by a variety of different entities, but run in accordance with generally accepted insurance practices (which should include the Insurance Core Principles).”

He said that Cooperatives and Mutuals are the hidden giants of the world economy, adding that the largest 300 Cooperatives and Mutuals have a turnover of 1 trillion USD. On the potentials for cooperatives to provide microinsurance, he said that they have history of

BRIEF Australian businesses keen to understand risk maturity

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Cross section of participants at the World Bank/Bankers' Committee Power Sector Capacity Building Session held in Lagos. organising the poor; have operated in the interest of members by the members; have the principle of trust; there is ownership and loyalty; peer pressure while any surplus is reinvested or redistributed.

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ccording to him, the values in Cooperative and Mutual include self-help, s e l f - r e s p o n s i b i l i t y, democracy, equality, equity, solidarity, honesty, openness, social responsibility as well as caring for others.

On whether Cooperative and Mutual insurance can show the way, he said that a cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointlyowned and democratically controlled enterprise.

Speaking on the topic,

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UNCORP Commercial Insurance CEO Anthony Day has attacked three commonly believed public attitudes that he says are damaging the insurance industry’s reputation.

In a speech in Brisbane last week, he said several myths about insurance are “having a serious negative impact” on stakeholders’ views of insurance and the contribution the industry makes to the wider economy.

He says commentators, looking to place blame for rising premiums, have latched on to one such myth – that reinsurance is a villain. Mr. Day defended reinsurance,

Microinsurance as stimulus for microfinance “Sudan view” Omer Elfarowg Ahmed listed the microinsurance challenges to include microfinance awareness; efficient risk management tools; lack of credit information; moral hazard; reinsurance capacity as well as insurance products expansion.

However, the benefits of microinsurance, according to Ahmed are loan guarantee for finance providers; policy holders entitled to surplus; reduce insurance cost; policyholders benefits from loss prevention services; reduce economic waste; social responsibility; help poverty alleviation while also serving as a method of co-operation between participants.

For Dr. Nureldym Mukhtar Osman Fageery who presented a paper on ‘Critical review of microinsurance in

Sudan,’ he said that the Central Bank of Sudan started in cooperation with the Sudanese Insurance Union to introduce loan protection to cover the loss that a lending bank may incur upon the death, disability or sickness of a low- income borrowers or as a result of their assets loss especially standing crops damage, loss of animals and a house.

According to him, a co insurance pool was established by the members insurance companies in 2011 with objectives to promote the spread of innovative insurance policies in Sudan against loan linked risks in accordance with the terms of the Central Bank of Sudan; to reduce the cost of operation; to overcome the capacity problem of the market as well as to promote the exchange of information with similar pools.

on says it is “impressed” with the number of Australian companies wanting to have their risk maturity assessed as part of the company’s global risk maturity index project.

Global Head of Risk Consulting Joerg Schmitz says a significant number of large Australian companies participated in the project to gain an understanding of the developmental level of their risk management frameworks and how these can be improved.

“Since we opened up the Aon Risk Maturity Index to Australian participants, we have been impressed with the number of companies wanting to take part ahead of the deadline for the next round of analysis due out in July,” he said. The results show that for multinationals with operations in Australia and New Zealand, logistics and geographic factors are a significant challenge to instituting a consistent risk management approach.

The risk maturity assessment involves a 30-minute questionnaire on areas such as corporate governance, management decision processes and risk management processes. The companies are then given a risk maturity rating and suggestions for potential improvements. The assessment is available free to businesses, which do not have to be Aon clients.

In the US, a Wharton School analysis of the risk maturity index found a significant relationship between an organisation’s risk management development and its financial performance.

Suncorp hits back at insurance ‘myths’ describing it as an “enabler”.

He says that without reinsurance, Australian general insurers would find it difficult to operate, and that reinsurance actually lowers the cost of insurance for the end purchaser.

“The cost of meeting claims would be impossible without reinsurance. The spate of major disasters heavily impacted on insurers’ costs, but without the support of reinsurance the increase in costs could have been even steeper.” Mr. Day says the myth that insurers do not pay

claims is, in part, perpetuated by the industry failing to demonstrate its worth. “We are often reactive rather than proactively educating the public, governments and other stakeholders of the benefits the insurance industry brings to the community and the economic sustainability of insurance,” he said.

He says the level of denied claims within Suncorp’s commercial division is so low that the company doesn’t even bother tracking them because “the effort required to monitor

them is counter-productive”.

He says tracking complaints and dispute resolutions is a more instructive indicator of insurer performance. The final damaging myth Mr. Day identified is that people working in insurance are not seen as professionals.

He says insurance professionals are highly skilled and required a range of proficiencies in areas as diverse as legal, financial, actuarial, risk assessment, management, project management and communications.

38 — Vanguard, MONDAY, JUNE 4, 2012

FDI: Our own worst enemy (Asaba Airport as case study) – 3

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his is what the truth is.

Going behind what you hear first. Asking a hundred questions until you make up your own mind on the basis of real evidence”. James A Michener in Hawai.

James Michener was for years an editor before he became a writer of historical novels; he wrote over 20 books and he is one of my mentors – even in death. When in 1994, I first started writing general commentary, the first thing was to find out the cardinal principle of journalism and to apply it at all times to all situations and issues. It still boils down to finding the facts and not being swayed by popular opinions. I am still not a journalist, and will never be, but the issue of Asaba Airport, which to me is still basically an economic matter has driven me to the farthest length in recent times in getting to the bottom of a story. I thank the private donors who are only interested in the investment opportunities the airport will provide. May be one day, I

will be able to do the same for Uyo and Gombe Airports.

These are “gold mines” waiting to be mined.

In part two of this series, two text messages received concerning Asaba Airport were published. The first claimed that N40 billion had been spent on the project; the second asked me to go and find out things for myself.

That challenge by the second reader was accepted on this page and I went out in search of evidence. First , I virtually “gate-crashed” into a retreat organized by the Delta State Government, in Warri, for its Commissioners, Permanent Secretaries and Special Advisers. I requested for and got and appointment to discuss with anybody and everybody who could provide information about the airport.

The Governor granted the request on a Saturday and I was scheduled to arrive Asaba the following Thursday for the official appointment.

Unknown to the Governor, I dashed to Lagos Sunday and returned to Asaba on Monday

with a retired Airforce pilot friend in tow; he knows a lot about airports having flown into over 300 worldwide. We wanted to conduct our own investigation before the officials took over. We returned to Lagos on Wednesday with independent information; most of which will be shared with our readers. The only parts left out will be those pertaining to security – for obvious reasons.

There is probably no media practitioner in Nigeria today who knows more about the airport than me. I even now know a few things the Governor does not know; because the establishment of an international airport induces more economic, social, cultural, environmental and political changes than a feasibility study can capture.

At this point let me provide the answer to the questions asked about feasibility study and increased cost. Yes there was a feasibility study when the airport was first conceived as a purely a domestic airport.

It was amended when it was decided to scale it up to an international airport. Surely, everybody can understand that when you alter an airport designed to accommodate small aircraft to one which can service the biggest in the world, 747s and Airbuses, the cost of construction must go up. So there was no “economic terrorism” involved –only understandable economics of scale and scope.

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owever, before going into the “heart of the matter”, let me make a few necessary observations which will assist non-Deltans, as well as Deltans themselves, to understand the state a little bit better. In summary, ethnicity and politics are combining to make cooperation for overall development of the state virtually impossible. The “Pull-Him-Down, PHD” syndrome is probably highest in Delta State than in most states of Nigeria. Thus, assessment of every project, or initiative of government, is filtered through those prisms

first making objective appraisals almost impossible.

Garibaldi, 1807-1882, the Father of modern Italy was once quoted saying that, “we have created Italy, now we must create Italians”.

President Ibrahim Badamasi Babangida, IBB, when creating Delta state should also have announced that “we have created Delta State, now we have to create Deltans”.

Few states in Nigeria emulate the Tower of Babel more than those ethnic groups, mainly, Urhobo, Itsekiri, Ijaw, Isoko, Igbo and Ika, in Delta State.

Each of them holds primary allegiance to their ethnic group first and to Delta State next. Thus when Babangida’s government selected Asaba as the state capital, a choice allegedly influenced by his wife Maryam, the couple incurred the everlasting enmity of the “real Deltans” – defined as Urhobo, Itsekiri, Ijaw and Isoko. Making matters worse was the fact that oil production in the state takes place mainly in the “real Delta”.

Vanguard, MONDAY, JUNE 4, 2012 — 39

Economy

Deceptive faces of IMF and World Bank: What people

must know

By TONY NAVAH OKONMAHA HE IMF and the World Bank enjoys the false global messiahice image they are often given by the ignorant majority of the global community who think that these institutions are international charity agencies. Many people do not understand that the IMF and the World Bank are not not–forprofit or charity organisations. The Washington financial institutions are fully fledged profit oriented organisations with boards whose first allegiance and obligation is to their shareholders whose interests in turn are primarily to make profit.

The Boards of these organisations have ethics and codes that guides or dictates their business principles. They set rules and standards that are strictly adhered.

Their area of business is finance and economic matters. Membership to these institutions is supposedly global and free.

However, the selection criteria are heavily lopsided and favour only the super rich countries.

The poor countries even when admitted are there to swell the number and for other clandestine reasons. They rarely exercise any rights and can hardly influence or initiate a policy.

Their admittance often times is used as smokescreen to cover the negative and unnecessary press attractions. Not that these institutions care anyway about press images but they cannot afford to be distracted from the false and deceptive cover as ‘the caring empire’ and the hope of the hopeless. “A lender of last resort”?

This phrase may only be relevant to the developed economy and the super rich countries.

The poor countries and the developing economies will continually remain the milking cow of the Washington financial institutions. They pay for the needs of the super rich through the agencies of Washington’s fi-

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•Christine Lagarde nance houses (IMF and the World Bank). Africa and the other developing economies will continue to struggle to stand firmly on their feet because of the deceptive faces of the IMF and the World Bank. genuinely sympa thise with the governments of the developing economies who are struggling to cope or to understand the dynam-

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Poor countries even when admitted are there to swell the number and for other clandestine reasons.

They rarely exercise any rights and can hardly influence or initiate a policy ics of the demands of the IMF and World Bank policies, but their vast majority do not understand the politics of international finance and economics. To the vast majority, their governments have failed them (fair enough to a great

degree without making excuses for most African governments), because the IMF and World Bank gives the impression that they are there always for any government who are struggling and needs help. The people do not understand why the governments lacked the capacity then to initiate necessary progressive developments. To them, it is as simple as A, B, C., if you lack money to develop infrastructure, go to the IMF and the World Bank and draw down as much as you need. It is fairly straight forward most of them think.

It is time to unmask the roles of the IMF as a developmental agency and show why Africa and other developing economies are still struggling.

It is time to educate our people of the real struggles facing successive governments in Africa and the dearth of infrastructural development.

It is time Africa calls the bluff of Washington’s financial institutions and finds ways (internal) to liberate itself.

Watch out in this column for part 2, as I uncover the deceptive faces of the IMF and the World Bank. *Okonmah Tony, financial consultant and analyst wrote from London.

40 — Vanguard, MONDAY, JUNE 4, 2012

Appointments & Promotions vicahiyoung@yahoo.com

Mimiko gets fellowship award

BRIEF ICEM congratulates ILO’s DG-elect HE world of labour is cel ebrating the election victory of Guy Ryder as the tenth Director-General of the International Labour Organisation, ILO, the trilateral United Nations agency charged with protecting workers around the world.

The election last Monday by the ILO governing body marks the first time someone from a trade union background has been chosen to lead the organisation.

Several rounds of secret-ballot voting reduced the list of candidates from 8, and appointed Ryder on a five-year term.

International Federation of Chemical, Energy, Mine and General Workers’ Unions, ICEM, General Secretary, Manfred Warda, congratulated Guy Ryder on behalf of the global union, looking forward to the ILO now building on past successes and collaboration, placing decent jobs and proper trade union rights at the heart of the global agenda, in the spirit of tripartitism.

“Our duty to the poorest and the most vulnerable must be paramount in the journey ahead,” stated Ryder.

The 56 titular members of the ILO Governing Body are eligible to vote in the election; half are from governments, and a quarter each from employers and workers’ groups.

ICEM affiliates lobbied their home governments to support Ryder.

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President of National Association of Political Science Students, NAPSS, Obafemi Awolowo University, Ile-Ife, Mr. Ayedun Charles, presenting an award of recognition for good governance and progressive to Governor Rauf Aregbesola of Osun State, represented by Deputy Chief of Staff Osun State, Mr. Gbenga Adegbusuyi, at a lecture organized by NAPSS in Obafemi Awolowo University, Ile-Ife.

Macaulay heads Standard Bank products, services for West Africa TANDARD Bank Group has named Mr. Babatunde Macaulay its Head of transactional products and services for West Africa.

The group in a statement said the appointment is bolstered its plans to secure a greater share of transactional banking business in Africa.

Hasan Khan, Standard Bank’s Head of Transactional Products and Services in Africa, said Macaulay, who will be based in Lagos, will have the core responsibility of exe-

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cuting the growth strategy for transactional banking services in the West Africa region.

Before joining Standard Bank, Tunde was the Divisional Head of Transaction Services at First City Monument Bank plc in Nigeria, where he was responsible for transactional banking, alternate channels, structured commodity and trade finance and value chain financing.

He has over 15 years’ experience spanning the banking and manufacturing sec-

Ibusa community pledges support for ruler

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HE people of Ibusa have pledged their total loyalty, commitment and support for the traditional ruler of the community, Professor Louis Nwaoboshi.

In a communiqué by Chief Awele Nwaezigwe, Mike Nwabuoku and four others, at the end of the Executive Committee meeting of Ogbor Ikpe Ogboli na Ibusa, the umbrella group of the community, noted that Ibusa had witnessed tremendous development since Nwaoboshi ascended the throne.

The leaders drawn from the 10 quarters in Ibusa attributed the prevailing peace and development of the community to the leadership qualities of Nwaoboshi and described him as an upright and honest monarch who is irrevocably committed to improving the socio-economic transforma-

R Mimiko will be deco rated with award at an Investiture ceremony schedth. uled for Abuja on June 8 The town planners remarked that with a little over three years in office, the Mimiko administration has been able to transform the state capital which has also become a tourist delight.

“Roads in the metropolis are well asphalted while major roads in the city are being expanded into four lanes even as beautiful landscaping has emerged. Apart from the many beautifications going on at different parts of the state, a covered pedestrian bridge has been erected at the popular Oba Adesida road thus giving the popular area a befitting look coupled with the well defined vehicular marked routes” Also commending the street lights adorning the long stretch of Fiwasaye to FUTA areas of the city as well as those erected at Ondo road and other areas in the city, the Town planners mentioned that the manner in which the state capital has been transformed in such a little period of time is worthy of commendation.

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tion of the community.

The leaders of the Ogbor Ikpe Ogboli na Ibusa asked all well meaning indigenes of the town to join forces with the traditional ruler in order to bring about speedy development of the town.

The communiqué appealed to aggrieved members of the Ibusa Community Development Union ICDU to sink their differences and bury the hatchet saying that they should not allow parochial interest to subsume the collective development aspiration of the people as epitomized by the Obuzor traditional institution.

It enjoined the members of the ICDU to shun unguarded statements capable of denigrating the revered traditional institution, saying that Obi Nwaoboshi should be accorded the highest respect befit-

ting of a first class traditional ruler.

tors.

His banking experience spans; operations, cash management, commercial banking, transaction banking and human resources.

According to Mr. Khan”We are particularly pleased to have Tunde join the team, as he has a strong profile in the region and is well-qualified to drive the growth of our transactional banking business in West Africa to higher levels.

West Africa provides attractive growth prospects for our transactional business and we plan to roll-out additional products and services across the region from the Lagos office.”

*Mimko

NSITF recruits to boost ECS operations

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IGERIA Social Insur ance Trust Fund, NSITF, has employed more than 1, 400 workers to fully commence the Employees Compensation Scheme, ECS. Managing Director, Alhaji Abubakar Munir, announced this development in Abuja at an induction workshop for some of the new employees on the managerial cadre.

The Managing Director, who was represented by Mr. Ibrahim Wakawa, NSITF’s Executive Director, Administration, said other cadres of the newly employed staff would be trained soon at various locations in the country.

According to him, “The

NSITF has recruited over 1,400 new staff to help implement the Employees Compensation Act. At the commencement of the Pension Reform Act in 2004, NSITF had to shed almost all its staff and now that we have the Employee Compensation Scheme coming on board, there is the need to recruit new staff that will drive the process. What we are doing today is to initiate 45 officers from principal manager to general managers into the operations of the fund.

These staff will soon be deployed to various states of the federation to begin the full implementation of the scheme in all the states of the federation.”

The MD noted that since the

full implementation began in July 2011, the number of injuries and deaths recorded by construction companies contributing to the fund had been on the increase. He said the development might make the fund to review the contributions of construction companies to accommodate all reported cases.

Munir said some claims that were reported to NSITF were being looked into and that effective structures had been put in place to pay the claims.

He reiterated the Federal Government’s commitment to ensuring the success of the scheme as well as the organised private sector for its steady contributions into the fund, saying.

Vanguard, MONDAY, JUNE 4, 2012 — 41

Tax Platform

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TATE Governors would be expected to ensure co-operation among State Boards of Internal Revenue, the Federal Inland Revenue Service, the Nigeria Customs Service and other revenue agencies for the development of the Nigerian tax system in areas such as information sharing, improved structure and efficiency in tax administration, elimination of multiple taxation and adoption of a nationwide Unique Taxpayer Identification Numbering (U-TIN) system.

Federal Executive Council in general and the Federal Ministries of Finance, Education and Information in Particular The Federal Executive Council (FEC) is the highest Federal level decision making body in Nigeria and is responsible for decisions, which impact all levels of Government in Nigeria. In addition, the Minister of Finance who exercises oversight functions on tax and fiscal issues is a member of the FEC. In this regard, the FEC shall be responsible for approving all matters, which will ensure effective oversight of tax policy and administration. The FEC would be expected to give necessary direction to other levels and tiers of Government in this respect as may be relevant. Tax and fiscal matters shall be treated with priority, given the important role they play in the economic and national development of the country.

The executive arm of Government is responsible for encouraging voluntary compliance by taxpayers. An effective mechanism for achieving high compliance is by leading by example as well as by making the most efficient use of the tax revenue collected by the Government. Accordingly, all members of the FEC shall on an annual basis ensure that they fully disclose all sources of income and ensure the right taxes are computed culminating in the publication of their tax clearance certificate by the 30th of June annually. The FEC shall in addition ensure in all of its decisions and actions that tax revenue is judiciously allocated and utilised for the benefit of the entire citizenry.

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he FEC shall also en sure that on a monthly basis taxpayers are informed of the use to which tax monies are being applied. In this wise, the FEC shall ensure that matters of taxation and revenue generation in general form an intrinsic part of the deliberations and decisions around the annual appropriation budget as well as in discussions at the Federal Executive Council meetings on at least a quarterly basis.

National Tax policy guidelines and rules (5)

The FEC shall co-operate with the Legislature in initiating legislation on tax matters and shall provide the necessary approvals required to speedily implement legislation, which is passed by the Legislature. The FEC shall also ensure a cordial relationship with the Judiciary and that the independence and integrity of the Judiciary is maintained at all times. There shall be co-operation amongst all the members of the FEC in relation to tax and fiscal matters especially with regard to information sharing. All Federal Ministries, Departments and Agencies are required to provide and share all information that would assist in the accurate assessment and collection of the relevant taxes. This would include amongst others: Having a revenue generation (as distinct from an expenditure) mindset. Strict implementation of tax laws including overt and explicit support through referrals of major cases to tax authorities (Federal and State) on a continuous basis and integration of tax “psyche” in the day to day business of government: Ensuring proper assessment, collection and prompt remittance of taxes to designated government accounts; Ensuring fiscal compliance of every person that they deal with; * Ensuring that every database maintained in government has a compulsory field for the inclusion of the unique taxpayer identification number for every company, enterprise, individual and other registered organisation *Use of e-payment systems in all transactions inclusive of direct remittance to the ac-

counts of the tax authorities;Use of technology and related systems in the way business is done - e.g. electronic cash registers, automated land registries, etc and linkage of databases and such systems maintained in government to that Federal and State tax authority databases *Ensuring tax is a major consideration in the evaluation process of individuals and organisations such that the lack of payment of taxes is seen as an affront on government and a crime.

ernment through the signing of agreements, writing of letters, or other communication regarding fiscal policy issues without the authority or consent of the Federal Ministry of Finance. * The FMF and the relevant Government agency, which will administer the tax, shall seek recommendations from the relevant stakeholders to ensure that enactments are regularly reviewed and substantially meet the principles of good taxation and the objectives of Nigeria’s tax system as stated in this document. *The FMF shall partner with the State Ministries of Finance and other State and Local Government agencies to ensure the development of Nigeria’s tax system and a tax culture amongst Nigerian citizens. *The FMF shall in this role, work closely with the Federal inland Revenue Service, the Joint Tax Board and the Nigeria Customs Service (in the case of import and excise duties) who have secondary responsibilities to support the FMF on all tax policy issues affecting the country. *The FMF shall support the Federal Inland Revenue Service and the Nigeria Customs Service (in the case of duties) on all tax administration matters as would complement the efforts of those agencies. Such support shall cov-

The executive arm of Government is responsible for encouraging voluntary compliance by taxpayers. An effective mechanism for achieving high compliance is by leading by example as well as by making the most efficient use of the tax revenue collected by the Government. *Ensuring that all Tax Clearance Certificates and other tax documents used in government transactions are referred back to the relevant revenue authority for authentication. * Have primary responsibility for tax policy matters, including initiating proposals for amendments to tax laws by the National Assembly. *The FMF shall coordinate all requests from other Federal Ministries and Agencies relating to fiscal issues as would ensure harmonisation of the fiscal policy issues of government. In this regard, no other Federal Ministry or Government agency shall have the right to commit gov-

er amongst others: *Ensuring that taxpayers monies collected are effectively accounted for and judiciously utilised *Communicating to the tax payer the use to which tax payer monies are being put *Demonstrating in action and words that the taxpayer is a priority of government and is well appreciated The Federal Ministry of Education (FME) Shall provide support to the Federal Ministry of Finance and the relevant tax and revenue authorities in developing a tax culture amongst Nigerians. The Ministry through its relevant organs shall be responsible for ensuring the

inclusion of taxation in the curricula of Nigerian educational institutions from primary to tertiary institutions based on a cradle to grave concept.

The Federal Ministry of Information (FMI) Shall provide support to the Federal Ministry of Finance and the relevant tax and revenue authorities in carrying out public enlightenment campaigns on tax and revenue matters affecting the country.

It shall support the process of providing accurate and timely information flow to Nigerians on all tax and revenue matters decided at the Federal Executive level. In this regard, it shall co-operate with the Federal Ministry of Finance and the relevant tax al)d revenue authorities to obtain the required information for dissemination to the public.

The SEC shall co-operate with the State Houses of Assembly in initiating legislation on tax and revenue matters, which are within the jurisdiction of the State Houses of Assembly and also provide the necessary approvals required to implement legislation, which is passed by the House of Assembly.

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he SEC shall ensure a cordial relationship with the Judiciary and that the independence and integrity of the Judiciary is maintained at all times. There shall be co-operation amongst all the members of the SEC in relation to revenue matters.

State Executive Council in general and the Ministries of Finance, Education and Information in particular The State Executive Council (SEC) shall playa role similar to that of the Federal Executive Council as the highest decision making body at State level. In this regard, it shall be responsible for approving all matters pertaining to policy development as well as the implementation and enforcement of taxes at State and Local Government level.

It is also expected to give the necessary leadership and direction to Local Governments in respect of revenue generation matters. Tax and revenue matters shall be treated with .•. priority, given the important role they play in the economic development of the States.

All State Government (SG) Ministries, Departments and Agencies are required to provide and share all information that would assist in the accurate assessment and collection of the relevant taxes. This would include amongst others: Having a revenue generation (as distinct from an expenditure) mindset.

42 — Vanguard, MONDAY, JUNE 4, 2012

ICT BRIEF

RIM ready to launch Blackberry 10

Telecom operators need govt support — Onuegbu

*Peeps into future with hope

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OTABLE experts in the Information and Communications Technology, ICT industry are taking turns in expressing concern over the raging war between the telecommunications operators in Nigeria and the regulatory agency, the Nigerian Communications Commission, NCC, over poor telecom service provision.

The latest is the Managing Director of one of Nigeria’s frontline IT systems integrators, Signal Alliance, Mr Collins Onuegbu, who last week advocated for a massive government investment in infrastructure and power supply as a solution.

Onuegbu’s take in the whole issue was that both the telecom operators and the government have important roles to play to ensure satisfaction of consumers’ expectation,which he also said were sometimes out of proportion.

According to Onuegbu,”sometimes we blame these telecom operators for poor quality of service, but we refuse to also look at the environment in which they are operating. We should ask ourselves if they are operating under basic acceptable parameters of providing quality of service? Are they enjoying the needed environment by government which ensures they provide grade A services ? I think, there are fundamental issues that we should look at before heaping blames on these operators”.

He noted that for the country to have the kind of high grade QoS Nigerians are clamouring for, the government needed to invest massively on telecom infrastructure and also improve on its power system,.

“Right now, we are talking of three sub_marine fibres (SAT_3, MainOne and Glo1) in operation in the country.

Shortly, WACS,another undersea cable would join them and there is even expectation that a fifth one would join before 2015. But all these fibres have not in anyway improved broadband application in Nigeria because they are all in Lagos and their effects are not experienced in the hintherlands.

“This is where government needs to come in and invest massively in the provision of infrastructure to boost broadband intake throughout the country,” he added.

progress with the innovation of our next generation BlackBerry 10 mobile computing platform, which is still on track to launch in the latter part of calendar 2012.

Our global subscriber base continued to grow this quarter to approximately 78 million, driven primarily by growth in international markets, which is partially offset by high churn in the United States, and our BBM user base has grown to approximately 56 million users globally.

Our strong brand internationally was recently enhanced with the successful launch of two new BlackBerry 7 phones in India and Latin America.

Stories by PRINCE OSUAGWU RESIDENT and CEO of Research In Motion Limited, RIM, makers of the popular Blackberry device, Mr Thorsten Heins, last week, provided a business update of the company, painting a picture of hope for a company severally reported to have been a bit under stress.

But the most interesting aspect of his outing was the announcement of the company’s readiness to launch Blackberry 10 before year end.

Updates “During the Q4 2012 and fiscal year-end financial results conference call on March 29, I said that I would provide our shareholders with candid and timely updates when possible on the progress and challenges RIM is experiencing. While we are no longer giving quantitative financial guidance, I wanted to provide a brief business update at this time, and will provide more details when our Q1 financial results for the quarter ended June 2, 2012 are released on June 28.

In terms of challenges, as I mentioned on the March financial results conference call, RIM is going through a significant transformation as we move towards the BlackBerry 10 launch, and our financial performance will continue to be challenging for the next few quarters. The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter. We are continuing to be aggressive as we compete for our customers’ business – both enterprise and consumer – around the world, and our teams are working hard to provide cost-competitive, feature-rich solutions to our global customer base. On the positive side, we expect to further increase our cash position in Q1 from the approximately $2.1 billion we had at the end of fiscal 2012.

Progress and challenges Despite the current challenges, we have made significant progress on a number of fronts in the past few months.

Our annual BlackBerry World conference and BlackBerry 10 Jam took place earlier last month and both were tremendously successful. More than 5,000 developers, partners,

*Thorsten Heins carriers and enterprise customers from 115 different countries saw the first glimpses of our next-generation BlackBerry 10 platform and their response was encouraging. Our developer partners have been enthusiastic with the BlackBerry 10 Dev Alpha prototype unit we distributed at BlackBerry World and many are well underway in developing applications to be ready for the launch of BlackBerry 10 in the latter part of calen-

dar 2012.

The support and enthusiasm from our developer community is also reflected in our app growth, where we now feature more than 80,000 apps, which represents a 220% increase from one year ago, and more than 15,000 apps for PlayBook compared to less than 2,000 last year. We believe this bodes well for our ecosystem as we get set to launch BlackBerry 10.

We are also making steady

Strategic changes We continue to make strategic changes to RIM’s senior management team with the hiring of two key new members to RIM’s executive leadership team. Kristian Tear, our Chief Operating Officer, whose background also includes extensive experience in international sales in Europe, Asia and Latin America, and Frank Boulben, our Chief Marketing Officer, who will provide our team with deep experience in the mobile computing and communications industry. Both will assist me and the existing executive team as we continue to make the organizational changes necessary to position RIM for the future and prepare for the launch of our new BlackBerry 10 platform.

CSR: ZINOX doles out over N50m to Lagos state HAIRMAN of Zinox Group, Leo Stan Ekeh, over the weekend led the Group’s Executive Management comprising of the Managing Directors of Zinox Computers, Technology Distributions and Task Systems to donate items worth over N50m to the Lagos State Government.

These items include, four units of fully equipped Security Vans, 150 units of Digital Radio, 150 units of Digital Solar lamp and 150 units of Solar Torch meant to enhance the efficiency and digital comfort of the Police and other security organizations in Lagos State while on duty.

The donations were made as the group paid a courtesy call on the Executive Governor of Lagos State, Mr. Babatunde

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Raji Fashola.

At the visit the Zinox Group The Zinox Group also promised to use four schools in Lagos state as DIGITAL CONTENT CENTRES for its new digital Product - the ZINOX WHIZKID Version 11, which is said to have helped many students to achieve excellent result in GCE, WASCE, JAMB and Post UME nationwide.

The Zinox Chairman, Leo Stan Ekeh, explained that Zinox will deploy the equipment and content, train the Teachers in its digital laboratory in Gbagada and certify them ready to challenge the best Teachers in the world. This will revolutionize education in tandem with President Jonathan’s Transformation Agenda.

Presenting the items , Ekeh said that Lagos State has done well to merit the ‘A’ list of the Zinox CSR portfolio. He described Governor Fashola’s leadership of Lagos State as exemplary, robust and world-

*Leo-stan Ekeh

Vanguard, MONDAY, JUNE 4, 2012 — 43

ICT BRIEF

Nigeria’s adoption of IFR shaky *As companies falter on global trend

Lagos State commences mast regulation

By PRINCE OSUAGWU

L-R:- Claire Alexander, Oracle PR Manager for Africa ; Layo Ajayi, Oracle Country Manager, Nigeria and Gbemisola Aruwayo-Obe, Oracle Applications Manager for Nigeria, as Oracle announced the Research report on the Challenges of Corporate Financial Reporting, in Lagos.

Research Highlights The report also highlighted that businesses in Nigeria recognize the need to invest in new financial reporting systems to address efficiency challenges. 80 % of surveyed companies have made changes over the last three years to their close, filing and reporting processes. Meanwhile, only 18% have invested sub-

reporting and filing processes. Importantly, the situation is so opaque that managers across the finance function are unable to fully understand the financial impact/cost implications of managing and publicizing their company’s financial results. 74% of Nigerian respondents admitted they did not know the total cost of managing and publicizing finan-

Report released from Oracle and Accenture revealed that companies in Nigeria are not following the global trend of investing in financial reporting systems

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he research report, titled “Challenges of Corporate Financial Reporting,” highlighted that businesses were unable to fully understand the cost of their financial reporting, with 74% of finance professionals unable to identify the total cost. Unfortunately this percentage is remarkably higher than the global average of 60% The report suggested that a lack of investment in proper software and an over-reliance on spreadsheets and e-mails increases costs and results in ineffectual financial reporting and missed key deadlines.

The report surveyed about 1,123 finance professionals in large organizations in 12 countries, including Nigeria, South Africa, the UAE, UK, USA, Germany and Russia.

HERE are every indica tions that the Lagos State Government has, again, commenced regulation of masts in the state. This time around, through another agency christened Urban Furniture Regulatory Unit (UFRU).

Commissioner, Ministry of Physical Planning and Urban Development, Olutoyin Ayinde dropped the hint at a consultative forum organised by the ministry Wednesday.

According to him, the essence of the regulation was to ensure safety of lives and property and to avoid a repeat of the February 23 rain storm that pulled down several masts belonging to Banks and Internet Service Providers (ISPs), killing people at different locations.

He added that “henceforth, mast operators must seek permit of approval from UFRU for every new mast to be installed in the state, while inventory of existing masts will be taken,” However, he noted that the ministry was not going to issue new specifications for mast installations, but would ensure strict compliance of existing specifications as released by the Nigerian Communications Commission NCC and other regulatory bodies.

The consultative forum, were attracted the presence of members of the Association of Telecoms Company of Nigeria,ATCON, the Association of Licensed Telecoms Operators of Nigeria,ALTON, telecoms operators, ISPs, NCC, mast builders, among others.

Ayinde advised all users of masts in the state to obtain a planning information form with which they will process approval for new mast installation in the state.

“Our integrity is in creating a conducive environment for businesses to thrive in the state and we are concerned about safety of lives and property, hence the need to supervise mast installation in the state,” he added.

Meanwhile, Head, Compliance Monitoring for NCC, Mr. Ephraim Nwokonneya told the Commissioner that NCC as a regulator, respects environmental laws and has introduced infrastructure sharing among telecoms operators in order to reduce the number of masts, which are estimated to be over 6,500 in Lagos alone.

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IGERIA joined other counterparts in the World business community, January 1, 2012, in the adoption of International Financial Reporting Standards (IFRS).

However, reports are that barely six months after, many companies still face challenges of complying with the requirements of that law, particularly, that of closing, reporting and filing their financial accounts accurately.

50 Nigerian companies were included in a global survey of 1123 medium to large organisations conducted in April 2012, to establish their level of investment in, and use of financial close, reporting and filing software systems. The results of the survey will show that while Nigeria invested heavily in all three areas of the process little more than two years ago, companies today do not yet have adequate control of their systems.

The survey also shows that most companies anticipate the cost of reporting to rise over the next five years, and that 40% of those interviewed believed their job was at stake if there were errors or deadlines missed.

The report released Thursday, from Oracle and Accenture revealed that companies in Nigeria are not following the global trend of investing in financial reporting systems intended to improve their close, reporting and filing processes, leaving businesses with ineffective solutions and a lack of visibility, quality and confidence in their financial data.

stantially in at least one of these three areas over the past 12 months, the lowest in the survey along with the Middle East.

•Insufficient, Ineffective investments: Whilst 16% of businesses in the survey have invested in just one of the three financial reporting phases (close, reporting and filings); only 2% have invested in all three.

It noted that 68 percent of spreadsheets and 36 percent of emails are heavily used to track and manage reporting on a daily basis.

•Increased costs and uncertainty: 28%of finance teams claim to have seen their costs rise across the financial close,

cial results, whereas 60% of companies globally confessed that they were unable to put a figure to the cost.

•Persistent challenges: Due to inadequate reporting systems, the majority of businesses reported that they still face significant problems with financial reporting. 88% of respondents admitted that they have inadequate visibility of reporting processes as compared with 68% globally, while 82% of finance managers reported that they find it difficult to control the quality of financial data across the course of their reporting, highlighting that additional attention should be paid to performance management.

•Decreased effectiveness: Despite the challenges presented by unreliable and opaque data, finance teams are sanguine about how effectively they can do their jobs.

72% of finance managers feel their effectiveness is limited in some way by data analysis-related issues, most admitting they did not have adequate visibility of reporting processes. Failure to meet formal reporting deadlines was most common in Nigeria, with 32% of businesses indicating that they have missed statutory filings.

•Addressing the challenge: Encouragingly, businesses are intending to take steps to improve financial reporting methods, with 86% of companies likely to make a significant investment over the next five years, an approach which may address many of the challenges they currently face, and bring their reporting processes into line with their performance expectations.

38% of businesses are due to overhaul all three phases of reporting, a slightly lower percentage than the global average (46%) Evaluating the report, Vice President EPM Product Marketing at Oracle, Mr John O’Rourke, said that “it is clear from the report that businesses are well aware that financial reporting needs to change. The good news is that many are doing something positive about this by investing in new reporting systems.

44 — Vanguard, MONDAY, JUNE 4, 2012

Agric BRIEFS Empowerment: Lagos Senator distributes farm inputs to residents

By OLASUNKANMI AKONI ENATOR Gbenga Ashafa, representing Lagos East Senatorial District at the weekend marked his first year stewardship at the senate with the distribution of various empowerment materials including farm inputs as part of “operation back to farm” programme.

The crop farming inputs donated were: 10 bags of fertilizers, cassava stalks, plantain sucker, maize seeds, herbicides, knapsack sprayer, hoe and cutlasses.

Ashafa, who noted that the gesture was in fulfilment of his electoral promises, stressed that the challenge plaguing the polity was the imbalance of resources centralization versus responsibility decentralisation.

He said that the mantra on food and food security has not changed;” a country that can not feed her citizens can not protect them. Human dignity derives its root from descent meal from the body.”

Ashafa maintained that with the over 18 million people of the state, the state faces the challenge of food production and distribution hence, the need to go back to farm as many people have shifted to white collar jobs that were nonexistent.

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Jigawa govt releases N709.6m to procure fertiliser HE Jigawa government has released N709.6 million for the procurement of 6,000 metric tonnes of assorted fertilisers for farmers in the state.

The State Commissioner for Information, Youth and Sports, Alhaji Babandi Ibrahim, disclosed in an interview recently in Dutse.

Ibrahim explained that the fertilisers would be distributed to farmers for this year’s farming season at subsidised rates.

He said that N47million had also been approved for irrigation facilities in Miga Local Government Area of the state.

The commissioner noted that the aim was to boost dry season farming in the area. Ibrahim also disclosed that N31.1 million was set aside for the ministry of agriculture and natural resources to embark on agricultural extension programme in the state.

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There is still wide gap in Nigerian meat market — Mafindi ...plans multi million naira modern abattoir

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E tells you proudly that he is a farmer in a society when many are shy to be associated with the profession, but who would not be if you are in the position of Alhaji Tafida Mafindi, the chairman of FAMAG-JAL farms.

One of the farms is sitting on an expanse of 15,000 hectares of land in Jikwoyi, a suburb of Abuja and the other farm in Taraba state is over 36, 000 hectares. The farm is host to over 1,500 cattle and over 50 staff engaged for different activities in the farm.

On a visit to the Jikwoyi farm recently, Mafindi took out time to have a chat with JIMOH BABATUNDE as he supervised work on the modern abattoir that is being erected at the farm by some Chinese.

Here is an excerpt .

On reason for investing in modern abattoir and animal husbandry We are investing in this modern abattoir, because the demand for meat in the country has not been meant. The protein needs of the country is in the region of 20% and there is up to 80% left to be meant, so it is a market that is readily available and anybody that ventures into it will not have any problem.

The only problem you will have is how to sort out yourself by producing what the people want hygienically, then it will fly and the sky is the limit.

If you go to any cocktail party, and you see ten trays of food items brought in, four out of these food items are protenious food like meat , fish and before the other six trays are consumed, these four are gone because the demands are very high.

On the funding of the abattoir project

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hose of us who have in vested in the agricultural sector are very few because of low support from government and related agencies. I single-handedly finance my project here without any support whatsoever from anybody or government except for agric loan I got and it’s for the proposed abattoir market.

We started modestly, we accessed commercial agricultural loan to the tune of N250m from the First bank , then I introduced my own personal money to the tune of N600m and that is what has gone in

*The modern abattoir underconstruction and I hope at the end of the day we come out with what can take care of Nigerians.

On the facilities at the abattoir The challenges are real.

What we have here are two lines and three receiving facilities. This line you see here are for processing rams and goats. And the other line there is for processing cows, goats and the middle line is a splitter unit where the cow will be processed , then you have a filter where they are selected for consumption.

Those that will be certified for consumption and those that will not be certified for human consumption go in for feeding of dogs and if not certified for consumption at all they go into the incinerator.

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fter that, we have four chilling rooms, the floors are being done and the chilling rooms are for reducing the meat to minus 30 degrees within 30min so that you don’t loss the nutrient, the content and everything.

We also have the processing units after the cold rooms where the meat is split to what is demanded whether fillet, mince meat or any other type of meat that is demanded for will be done there.

What we are going to produce here are going into international market, so we have to cold store it and get it to the costumer in the right quality .Even the local consumer might want to pick his meat well processed for his table On the sources of goat,

ment of Babaginda there was an organisation for provision of farm lands, we need to reactivate it and that cannot be done commercially, it has to be done as a venture capital for a long time investment from government for whoever decides to have a commercially viable farm, because for you to harvest, you need to harvest everything at a time, no wastage and no loss

*Alhaji Tafida Mafindi sheep and cow Nigeria has enough sheep , goat or cow for any company, the materials are there , the only thing we are creating is the environmentally hygienic processing. That is what we are selling to the customers.

If you visit any abattoir in Nigeria today, you may dislike meat forever. That is the difference we are creating.

What we are going to give the consumer at the end of the day is hygienically processed, certified meat, because we are going to be certified here in Nigeria and all international food certifying bodies. They are going to come here to certify us so that we can have access to different markets.

On how to get the private sector involved in processing It is to cluster and investment in farm availability, this when you use the available land we have today, that is properly cleared, root removed, stump surveyed.

I know under the govern-

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f you are going to plant maize, you need the population , because if you have an hectare and you are planting one meter apart that means there will be 100 plants by 100 plants that means you have 1000 stuck to produce comb, but if you have six inches which is 150cm, you have 600 by 600 in one hectare which will give you 360,000 cobs of maize in one hectare, that will allow you to produce 15 tonnes per hectare and the traditional one allows you to produce one tonne per hectare.

You cannot compare the result of the two. What about the by-products? the grass that comes out of this that you process into cattle feed, if you have 1000, an hectare will not give you one tonne but if you have 360,000, an hectare can give you five tones of hay, then you don’t need to see the magic there for the production of cattle when you mix the byproducts with molasses, and other additives like palm kernel cake, ground nut cake, cotton seed cake and you feed your cattle.

Vanguard, MONDAY, JUNE 4, 2012 — 45

People in Business BRIEF

Training budget is becoming welfare budget

AfDB loans, grants commitments grow by 36% in 2011 — report

— Leke Olufade

By EBELE ORAKPO

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R. Leke Olufade is the Chief Executive Officer/Team Leader of Total Business Solutions (TBS) Consulting Limited, an outfit set up to help organisations move to a higher level of corporate performance through customised, cost effective and timely business solutions using technology and people.

The graduate of Chemistry from the University of Ibadan, who is also a qualified Chartered Accountant and a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN), spoke to Vanguard in Lagos during a one-day workshop with the theme: Training on Trial, organised by the firm in conjunction with Centre for Management Development recently. Excerpts

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ccording to Mr. Leke Olufade, TBS Consulting is into management consulting and capacity-building to help organisations to become more competitive.

Speaking on the choice of the theme of the workshop, Olufade said: “Training on Trial, the idea came because we suddenly found out from our interactions over the years that we are no longer paying attention to training. Training budget just became a welfare budget in which case we just spend it without expecting much from it and so we get nothing from it. But now, it is getting to a complaint level where people no longer want to budget, they no longer want to train people and it is affecting productivity in many organisations. You see people with very high degrees MBA, MSc., etc. but they are not as productive as the older managers with only school cert and the difference is training.

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here are no coaches, no mentors in the workplace and so we just felt we should throw it open as a national discussion so that we begin to see where we got it wrong, what they do in other climes and how we can get back on track. In other climes they still spend money on training, they still develop

their people,” he noted.

He regretted that in the socalled computer age, so many people cannot use the computer and this does not help productivity.

“Now, you get to some organisations and you find out that people cannot even use the computer. It affects their productivity and yet, they will tell you ‘we spend money on training people on computer and they cannot use it.’ So if you train someone on computer and he cannot use it, training cannot be one off. There are different stages so if there are specific competencies you know are important to your productivity in the workplace, you need to focus on them until the person becomes better or you change him. You have to train him to be able to do what you have engaged him to do,” he stated.

Continuing, he said: “People are complaining, especially banks, that they have huge training budget but there is no return on investment or they could not measure the return on investment. And we say

*Leke Olufade form this assignment creditably, he needs this skill so we send him on training so when he comes back, if he still cannot do that job better, then we know he is either not trainable or the training was not the right one so you take a decision. If for example I have an accountant who is supposed to be using an accounting package and I send him on training and he comes back and still cannot use that package, then something is wrong. But you find out that it is not so. At the senior level, you have executive training, people go for MBA and come

You get to some organisations and you find out that people cannot even use the computer; it affects their productivity and yet, they will tell you ‘we spend money on training people on computer and they cannot use it.

‘fine, you will get to that level because you have really not designed your training budget to focus on need and if it is not focused on need, then you cannot evaluate the return on investment. So what we want to do at this workshop is to come up with all those issues and then discuss the way forward and put it in a document that we can make available to all Nigerians.”

Decrying the situation where people are just sent on training without taking into consideration the needs of the organisation, Olufade said: “How do we come about the training needs of our people? Are we doing it well or somebody just sits down and says ‘oh, I have this request for training, ok, you go.’ Or you sit down and say ‘ok, for this person to per-

HE African Development Bank (AfDB) approved loans worth about 8.5 billion dollars in 2011 representing about 36 per cent increase over the figures in 2010. The bank’s overall loans and grants approvals in 2010 stood at about 6.2 billion dollars.

Statistics from the continental bank showed that infrastructure accounted for over 38 per cent of loans and grants. Multi-sector loans and grants followed with about 21 per cent while development financing got over 19 per cent of the loans and grants outlay.

The multi-sector approvals cover funds for public sector management, good governance and anticorruption programmes, industrial import facilitation and export promotion.

The finance operation includes finances to development banking, commercial banking, non-bank financial intermediation, reinsurance and microfinance funds. According to AfDB, the profile of funds toward infrastructure stemmed from the fact that it remains one of the four main pillars of the continental bank’s strategy for assisting the development of Africa. The other three are investing in the private sector, education and the promotion of good governance.

Mr Pierre Van Peteghem, AfDB’s Treasurer said that the bank’s investment in infrastructure have been rewarding and worthwhile.

According to him, the bank’s 23 million dollar rural electrification project in Guinea would boost electricity supply from three per cent to 20 per cent by 2015. Peteghem also said that the construction of 82 million dollar Kazungula bridge linking Zambia and Botswana would slash the man hour time spent on the road from 30 hours to six hours when completed in 2018. Between 2009 and 2011, he said, 12.5 million people benefited from new or improved access to water and sanitation programme of the bank across Africa. Similarly, about 11 million people enjoyed better access to transportation through AfDB investments during the period under review. The Treasurer said that in the three years, the bank invested in the construction, maintenance or rehabilitation of 25,000 km of roads.

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back and cannot apply those things because they need follow-up discussions and engagements which they don’t get because they just look at training as means of making money. “ On whether the time allocated to most training is adequate, Olufade said: “It is how you design the training. For example, there are skills you need to acquire, I can design it in modules so you can do one day training, go back to your work, put it into practice, come back may be one month after to do module two.

So I can design it that way but if it is not properly planned, a one day or three-day training is not just adequate. You will not learn enough to apply but if somebody had planned that you need this skill, even if it is taking you six months, he

knows that it is six months.

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ut here, because we are not planning and because we just felt we are helping people, we say ‘ok, three days training, who is available?

Ok he is a nice guy, you go.’

So that will not be adequate.

We have seen instances where people come for training and we ask them questions, they say, ‘I’ve attended this training before, but because they said I should come I’m here.’

Let us change that, let us use training to drive national productivity, It’s a capacity-building thing, either in civil service or private sector, you need to have a focus in making that staff a better staff and that is what training is all about. Even though training alone cannot do it, there is what we call performance management aspect of it because if you are well trained and somebody is not managing your performance, you may still not be productive.

For example, a good driver is well trained, you don’t need to send him on training but if you are not managing his performance, he could just be a useless driver. He may not come on time, he may be careless about something and you are not checking that and you say he needs training, no it is not training, it is performance management. Give him targets, see whether he is complying with those targets and then evaluate him and give him feedback on how he is doing. That is performance management. But if he has no skills, doesn’t know the highway code; that is where we get to a T-junction and he doesn’t know what to do. Then send him on training and when he comes back, you see whether when he sees those signs he is able to react.”

46 — Vanguard, MONDAY, JUNE 4, 2012

Aviation BRIEFS Aviation recorded no significant development in last one year, says Ore

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resident of Aviation Round Table ,ART, Captain Dele Ore has affirmed that the Nigerian aviation industry has not recorded any significant development in the last one year of President Goodluck Jonathan’s administration.

Disclosing this development to newsmen on the 13 years of uninterrupted democracy in the country, Captain Ore pointed out that what is going on in the aviation industry at the moment was just to further consolidate on the gains of the erstwhile ministers of aviation Mrs. Fidelia Njeze.

“The only thing that has been achieved in the last one year is the consolidation of past gains and efforts put in place in the last four years by erstwhile minister of aviation, Mrs. Fidelia Njeze” he noted.

Captain Ore however decried that the on going airport remodelling project by the Federal Government under the Minister of Aviation Princes Stella Oduah was a total flop .

Peacock Travel opens 5 new subsidiaries in UK

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ast growing Nigerian Travel Management Company, Peacock Travels and Tours Limited, has opened five new subsidiaries in the United Kingdom. The five new subsidiaries are Peacock Travels and Tours, Peacock College, Peacock Aviation Training Centre, Peacock Bureau De Change, and Peacock Property.

The opening ceremony of the companies was held in London at a grand event attended by top UK government officials including the Speaker of the London Borough of Hackney, Ms Susan Fajana-Thomas; and a representative of Her Majesty, the Queen of England, Deputy Lieutenant of Hackney, Col. Roderick Morris.

The launching of the five UK subsidiaries, which is headquartered in a sprawling edifice located at 13, Ramsgate Street, Hackney, London, E8 2FD, came barely 24 months after the fastest growing Nigerian travel management company extended its operations to South Africa.

Babalakin faults FG over concession agreement ...says govt didn’t contribute money to construction of MMA2 Stories By LAWANI MIKAIRU & DANIEL ETEGHE

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hairman of BiCourtney Aviation Services Limited, Dr Wale Babalakin has faulted the Federal Government for not keeping to the terms of the concession agreement entered into by both parties in 2003.

Speaking during the 5th year anniversary of BiCourtney Aviation Services Limited at a press conference at the Murtala Muhammed Airport Lagos, Dr. Babalakin said that he was even surprise to hear insinuations that Bi- Courtney Aviation Services Limited was given N30billion by the Federal Government to construct the terminal.

According to him, BiCourtney Aviation Services Limited did not receive any money from the Federal Government to construct the MMA2 terminal adding that the government was not even truthful to respect the terms of agreement that was signed.

He further explained that within a few years, the company was able to construct and delivered an airport terminal that has become a reference point in the Nigerian aviation industry.

Dr. Babalakin however added that the dwindling

clientele at the MMA2 terminal was a result of the non-compliance of the government to the terms of the concession agreement stressing that most of the organisations doing business at the terminal had to withdraw because their financial projections could not be captured by the available passenger traffic at the terminal.

“Government has derailed from the vision of the agreement. That is why we are calling on all stakeholders

to support us to achieve PPP in Nigeria. But, we have found out that something is peculiar about the concept of PPP in Nigeria. There is reluctance by new entrants,which is largely due to our bad experience. We will still welcome more Nigerians into PPP” he affirmed.

He also pointed out that the financial institutions where the funds for the construction were sourced have shown considerable understanding over the slow repayment of the

loans, which they have realised stems from dwindling revenues at the terminal.

Babalakin said : “ We are not raking in sufficient revenues from MMA2,which is a far cry from our projections and expectations.’’

He said that the situation had led to the banks getting worried over the returns. ‘’The banks even wrote a letter detailing how the non compliance of the agreement by government is affecting our operations’’

L-R, Director, Flight Operations, Arik Air, Capt. Ado Sanusi looks on while Managing Director, Arik Air, Mr. Chris Ndulue receiving the (MOU) certificate from Rector/Chief Excutive, Nigerian College of Aviation Technology (NCAT) Zaria , Capt. Mrs. Chinyere Kalu during the signing of Memorandum Of Understanding (MOU) agreement between Arik Air and NCAT held yesterday at NCAT, Zaria .

NAHCo contributes over $70billion to Nigeria economy T

he Nigerian Aviation Handling Company, NAHCo aviance PLC, has contributed over US$70billion in improving the economic growth of Nigeria as a nation.

Deputy Vice Chairman of the Board of Directors of the company , Alhaji Suleiman Yahyah made this disclosure yesterday to newsmen during the commissioning of the company’s modern cargo warehouse valued at N1.9billion.

Alhaji Yahyah pointed out that the warehouse has the capacity to handle about 270 million tonnes of cargo as against the 17 million tonnes the previous warehouse was handling.

According to him, Nacho has

invested over US$70billion in the Nigerian economy and the company ’s next target is to embark on an expansion plans. He further said that ‘’ between 2006 and 2011, we paid N1.9billion as concession fees to the Federal Airport Authority of Nigerian (FAAN) , we paid N2.2billion to the Federal Government as tax, we paid N2.9billion to shareholders and N9.6billion to our staffs” he added.

He further noted that Lagos airport should be developed as a hub in Nigeria as well as the West Africa Sub-region adding that passengers can fly for close to six to seven hours from Lagos to other parts of

the world.

Also speaking at the event,the Minister of Aviation, Princes Stella Oduah who was represented by the Managing Director of the Federal Airport Authority of Nigeria, (FAAN), Mr. Goerge Uresi said that the construction of a massive terminal by Nacho aviance was part of the transformation agenda of President Goodluck Jonathan. He further noted that the present administration of President Goodluck Jonathan was poised towards transforming Nigerian airports into a world class airport.

She said”Let me use this opportunity to reiterate the commitment of the Federal

Government and the ministry of aviation to transforming all the airports in this country. We have completed the 1st phase of 11 airports, we are moving into the 2nd phase by June and the 3rd phase will entail the expansion and remodelling of four international airports which are in Lagos, Abuja, Port Harcourt and Kano” “What we are doing goes beyond remodelling of the airports, we are actually doing restructuring and reconstructing of the airports. As you have seen, we are just starting to go round the airport. we are doubling the sizes of those terminals and changing all the facilities and utilities within the airport” she added.

Vanguard, MONDAY, JUNE 4, 2012 — 47

Media & Advertising

BATN not against regulating tobacco industry — CORA Director I

N recent times the tobacco industry bill has been in discourse in the National Assembly in a chat with Princewill Ekwujuru, Bassem Bekdache, Corporate &Regulatory Affairs (CORA)Director , W/Africa, of BATN spoke on the bill, BATN’s developmental projects and other sundry issues in the industry. Excerpt.

History/overview of tobacco market British American Tobacco of Nigeria (BATN) established its presence in Nigeria over 100 years ago and has been here, since then in one form or the other, as part of the former Nigerian Tobacco Company (NTC) and now as a fully owned subsidiary of the BATcompany.

Before our entrance into the Nigerian market as BAT, the tobacco market in Nigeria was 80 percent of illicit product and 20 percent legal product.

We collaborate with appropriate government agencies to fight against illicit trade in the country. Today, we have been able to reduce illicit trade to at least about 12 to 15 percent illicit product and that alone is a huge contribution to the government and to the Nigerian market. Our products are manufactured in line with approved quality standards and we market our products responsibly to adults who have made an informed choice to consume our products.

We also manufacture for export in Nigeria, we currently export to about 12 to 14 countries depending on the point in time. So right now, our factories in Ibadan and Zaria have become the export hub for our business in West Africa.

A key aspect of our business is our corporate responsibility framework which dictates how we work, making sure we are responsible at all times, especially recognising what stakeholders think and want, and also making sure that we are in full compliance with local laws and internal standards where local laws are not in existence.

An example of this, is when we work with others to try and stop youth access to our products. We carry out campaigns in partnership with our retailers at the retail

point. There is currently no law that prevents retailers from selling to under aged persons, so in line with our Corporate Social Responsibility framework we make sure that we •Bassem Bekdache do all we can to deter under age access to communities where we work. these products. There are The projects we work on are fed challenges, but we are to us through stakeholder working hard at it with our dialogue, through partners. communities, groups or non About BATNF profit organisations’ requests.

The Foundation is a The feedback we have received company limited by guarantee from the beneficiaries and and it operates as an through the impact assessment independent charitable we carried out is positive. organisation.

BATN What informs decision for Foundation focuses on four the Foundation to embark on main areas which are: a project (s) within the country Sustainable Agricultural as the country is divided into Development, Sustainable different geo-political zones.

Provision of Portable Water, Also, with regards to the Sustainable Environmental handover of any CSR project, Protection and Vocational is there any fixed timeline as skills development. We regards BATNF and the host basically support national and community? global objectives in areas of What we look after is the development for our different ability of the communities to communities. take full charge of the projects BATNF’s scorecard on completion. We keep Since inception, we have working together up to a stage completed over 108 projects in whereby we feel that the the 36 states in Nigeria communities can take over the including the Federal Capital project. Therefore, the timing Territory.

We aim to varies, some projects take up positively impact the to 3 years and others are development of the considerably shorter.

In terms of choosing location, we receive requests from different communities and as is normally done with most corporate social investments, we align ourselves to national and state objectives especially where they fit into our focus areas. We don’t want to say that we are in one part of the country or the other. It is not how it works; it is based on need by the host community. So we work across board and are therefore present in every State. Every community has a need and our intervention is based on meeting this need if it falls within our focus areas.

These requests are sent to the Foundation’s technical committee which looks at it on the basis of focus, sustainability, impact and resources. So, very good planning is put into consideration before any project is done by the Foundation.

Regulatory issues/enactment There is a belief that BAT is against regulating the industry, this is not true. We are very supportive of regulation, by this, we have always said that we mean a balanced regulation that is evidence based and will achieve the health advocates objectives, whilst maintaining the ability of the legal industry to operate as opposed to encouraging illicit trade.

The bill in its present form contains ambiguities and inconsistencies. This will cause confusion and will make it unenforecable. we are not against the bill, we are for a balanced regulation that does not contain any form of ambiguities, will not cause confusion , will be enforceable and will not encourage illicit trade.

Samsung, Spinlet partner on galaxy pocket smartphone launch AMSUNG Electronics and Spinlet hosted a collaborated launch party for the Samsung Galaxy Pocket as part of the on-going Industry nite series.

Spinlet, a mobile music download and streaming application company partnered Samsung Electronics to launch the brand’s new Samsung Galaxy Pocket S5300 in Nigeria. The Galaxy Pocket comes with a pre-installed Spinlet application loaded with five songs and enough credit for consumers to purchase five additional songs from music catalogue available through the Spinlet app.

Speaking, Daesong Ra, Business Manager, Mobile

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Division Samsung Electronics West Africa, said that the company’s proposition offers consumers a smart phone experience that is not only affordable but ‘Clearly Different, Clearly Smart.” The Samsung Galaxy pocket comes packed with over 400,000 free apps, faster internet connectivity at a low retail pricing in addition to one month free internet data if on MTN network.

In addition, Eric Idiahi, Spinlet Chairman, said the market for digital music in Africa has been untapped by any of the major music services to date. Thus the open door for the partnership with Samsung.

According to him, “the

Spinlet model allows independent musicians and bands in Africa to sell their music alongside other more prominent artists in Africa and from around the world. Spinlet also provides artists with tools to better understand their fan base and interact with them through social media. By providing the application preinstalled, Samsung significantly increases the amount of listeners and potential buyers of these artists’ music. “In a country riddled by piracy, the free streaming and pay per download model that Spinlet and Samsung are providing to the market really helps create value in fans eyes and a revenue stream for artists,” says Idiahi.

BRIEFS NIM cautions on 2015

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he President and Chairman of Council, Nigerian Institute of Management, Dr. Michael Olawale-Cole, has called on Nigerians and especially politicians who have been urging the incumbent President, Goodluck Jonathan, to either re-contest in 2015 or take a position on the next general elections to tread cautiously.

In a statement issued by the Institute and signed by him, he admonished politicians and other Nigerians who are engaged in the raging debate to desist from their nefarious activity and allow the President to concentrate on delivering dividends of democracy to Nigerians who committed their future into his hands by voting him into office.

According to him, “I honestly think that those engaged in this campaign and debate are neither being fair to Mr. President nor the Nigerian electorate who are yet to reap the dividends of the democracy from the pools held barely a year ago”. “If anything, those who are engaging in this unnecessary and unwarranted exercise have not only succeeded in overheating the polity but have also been distracting the President from focusing on real issues of governance”, he added.

Cartier partners Polo to reposition brands

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rench watch maker and jeweler, Cartier International SA. Geneva has entered into strategic partnership with Polo Nigeria Limited to reposition its products in the country.

Polo Nigeria is a collector and marketer of luxury items like watches, jewelry, leather accessories, eye-wear, etc for manufacturers worldwide.

Bruno Carraz, Export Director, while speaking on the partnership, said they were in Nigeria to discuss with Polo how they can better attract Nigerians to the brands.

Bruno who was in the country with Vincent Decoopman, Area Manager, said: “Cartier has 300 boutiques worldwide and four in Nigeria (Lagos and Abuja). Cartier is 165 years in existence and operating globally. In Africa, we are in Tunisia, Angola, South Africa; Ivory Coast, Zimbabwe, Mozambique as well as Nigeria and Congo.

48 — Vanguard, MONDAY, JUNE 4, 2012

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HE issue of fuel sub sidy removal has become recurrent in our economy. The following are answers to salient questions on the beneficent resolution of this dilemma: 1. Is There a Relationship Between Fuel Subsidy and the Naira Exchange Rate?

In reality, there will be no need for fuel subsidy if Central Bank (CBN) adopts a naira and people friendly framework for infusing dollar component of monthly allocations into the economy. If we cast our minds back, we will recognize that the bogey of fuel subsidy evolved from the dastardly blows to naira and welfare of Nigerians

by Babangida’s reckless devaluation of the naira in consonance with IMF’s prescribed Structural Adjustment Programme in the late 1980s.

The reason for this inverse relationship between naira value and fuel price is obvious; fuel prices, like most commodity prices are denominated in dollars; thus, if for example, the international ex-refinery price of P.M.S. (petrol) is about 50 U.S. cents, then, our domestic price will be N75/litre (@ N150=$1) plus shipping/transportation and clearing charges, plus reasonable profit margin for the importer.

It should be obvious from above that naira value vis-à-vis dollar is a significant determinant of local price of fuel. Unfortunately, neither the media nor Labour Unions, nor indeed, government seem to recognize this reality! Consequently, Nigerians are misled into searching for solu-

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The bogey of fuel subsidies tions to fuel subsidy removal everywhere else but this one!

Incidentally, if the naira, for example, conversely appreciates to, say, N75=$1, when exrefinery price of petrol remains at $0.5/litre, then, of course, our domestic pump price will fall in nominal terms to N36.5/litre plus shipping and clearing, plus a margin for the importer! In such scenario, petrol price will become cheaper than the current subsidized rate of N65/litre. Thus, instead of all the furore on subsidy removal, the government can in fact levy a tax of N10/litre or more on each of the 30 million litres reportedly consumed by Nigerians daily. In addition to projected savings of N1000bn from subsidy removal, almost N400bn can also accrue to government as tax revenue annually.

2. Will Infrastructural Enhancement and Economic Growth be the Product of Subsidy Removal?

If one believes government’s promise of infrastructural enhancement from savings from erstwhile subsidy leakages, then one will believe anything; Nigerians are very familiar with government’s failure to deliver on such promises in the past. For example, the huge infrastructural and social welfare enhancement promised after the Paris/London Clubs debt exit have remained a mirage; meanwhile, we gleefully parted with about $18bn on this false premise of huge debt service charges becom-

If we cast our minds back, we will recognize that the bogey of fuel subsidy evolved from the dastardly blows to naira and welfare of Nigerians by Babangida’s reckless devaluation of the naira in consonance with IMF’s prescribed Structural Adjustment Programme ing available for revamping our economy!

Indeed, a fortuitous reserve base in excess of $60bn was whittled down to just over $30bn within four years, and yet, such expenditure has not resulted in any major improvement on our social welfare and infrastructure; if anything, Nigerians have become poorer than we were 12 years ago!

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esides, even if as claimed that the abolition of subsidy might indeed generate savings of about N1000bn a year for government, the reality is that the impact of a deregulated pump price of over N150/litre for fuel will create a poisonous ripple that will further deepen the extent of poverty nationwide as the purchasing power of all naira income earners plummet from its already precarious level.

Ultimately, Nigerians will not witness any significant improvement in infrastructural and social welfare enhancement, while they will continue to slip further into poverty as their paltry naira incomes buy less and less in the market place.

3. What is the Impediment to the Establish-

Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Yemi Adeoye Oscarline Onwuemenyi Franklin Alli Michael Eboh Amaka Abayomi Ebele Orakpo Ifeyinwa Obi

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Group Business Editor Acting Finance Editor Energy Editor Head, Capital Market Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Energy Correspondent Energy Correspondent Industry Reporter Capital Market Reporter Money market Reporter Energy Reporter Maritime Reporter

CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT

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Media/Marketing Industry Capital Market Graphics Department

ment of More Refineries?

We recall that about 20 licences have been granted for private sector sponsored refineries, but understandably, none of these licencees has shown much seriousness to progress the project to completion.

In reality, prevailing high cost of

borrowing, no businessman is so trusting as to borrow between $500m to $1bn and above with rising cost of funds for a business, whose success depends on government’s usually unreliable and undefined schedule for payback of subsidy differentials from actual market selling price.

On the other hand, the festering sore of corruption, and the eternally rising cost of maintenance of existing refineries should be a warning to desist from pouring more

public funds into what is patently a wasteful escapade to build more refineries; besides, there is no evidence of any major government utility that has been efficiently and profitably managed, so why should we trust that government’s fresh forays into such projects will be successful this time around? In any case, the relevant question is what would be the impact of subsidy removal on Nigerians and national growth and development. How would N150/litre price affect the standard of living of most Nigerians, who live on less than $2 a day?

A combination of the pervasive impact of fuel price hike of such magnitude, with lending rate well over 20% (as can be expected with MPR currently at 12%!) and a naira that is under pressure and widely

speculated to fall to about N200=$1, will deal a deadly blow to the welfare of Nigerians as our incomes rapidly lose more value because of the unmitigated rage of inflation. The volatile mix may spur an inflation rate above 20% and reduce the profitability and security of any investment including that of building new refineries.

4. In the Event that Nigeria is a Major Exporter of Crude Oil, is it Not Fair That Nigerians Should Enjoy Subisdy?

My position and recommendation on the appropriate handling of petrol pricing is well articulated in several articles and interviews in both print and electronic media. The concept of fuel subsidy in the Nigerian context is a promotion of waste and an instigation to spiraling inflation with devastating consequences on the welfare of Nigerians.

SAVE THE NAIRA, SAVE NIGERIANS!

IFC, AfDB sign ISDA agreement to expand local currency finance

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FC, a member of the World Bank Group, and the African Development Bank (AfDB) today signed an ISDA Master Agreement to enter into crosscurrency swap transactions to facilitate local currency lending and bond issuance in Africa. It is the first ISDA Master Agreement either institution has signed with another multilateral financial institution.

The agreement will enable IFC and the AfDB to collaborate and benefit from each other’s local currency bond issues, enhancing their local currency funding capacity to support their clients’ development projects. Local-currency bond markets provide long-term, local currency finance for projects, protecting them from foreign exchange risks.

These markets are a vital potential source of finance, particularly in the wake of the global financial crisis, when foreign capital inflows to Africa have diminished.

Last year, the Group of 20 called for a concerted effort to develop and

strengthen local currency bond markets in emerging markets. The agreement is the first step in an initiative for greater collaboration among multilateral institutions to accelerate local capital market development and increase local currency financing options. ”Expanding long-term currency initiatives is a cornerstone of IFC’s strategy to strengthen capital markets in developing countries,” said IFC Vice President and Treasurer, Jingdong Hua. “Helping to establish and strengthen such markets allows us to work with regulators and local institutions to ensure that capital market regulations are effective and entrepreneurs are able to grow and create jobs.”

AfDB Vice President for Finance Charles Boamah said: “Promoting the development of local capital markets in Africa is paramount to successful, sustainable economic development.

This agreement supports our African Financial

Markets Initiative, which aims to further the development of domestic African capital markets, enlarge the investor base, and reduce African countries’ dependence on foreign currency denominated debt.”

In Africa, IFC has issued local currency bonds in Morocco, the Western CFA zone, and the Central CFA zone, and has obtained approvals to issue local currency bonds in Kenya and Nigeria. Under its Pan-African Domestic Medium-Term Note Program, IFC is working with authorities in Botswana, Ghana, Kenya, South Africa, Uganda, and Zambia to obtain consent to issue local currency bonds. IFC is also working with eight members of the West African Economic and Monetary Union to establish local currency bond programs.

Since 2007, IFC has committed more than $650 million in 17 different local African currencies through a combination of swaps, bonds, and structured finance products.