AUGUST 6, 2012 172.10
+0.45
2,415.00
+46.00
21.97
-0.07
108.55
+2.65
90.67
+3.54
CURRENCY BUYING CENTRAL SELLING CFA 0.2709 KRONER 25.595 EURO 190.5088 POUNDS 241.3029 RIYAL 41.2916 SDR 233.2811 FRANC 158.4408 DOLLAR 154.86 WAUA 232.8007 YEN 1.9785 RENMINBI 24.3183 2
0.2809 25.6777 191.1239 242.082 41.4249 234.0343 158.9524 155.36 233.5524 1.9849 4.3973
0.2909 25.7603 191.739 242.8611 41.5582 234.7875 159.4639 155.86 234.304 1.9913 24.4763
CBN Exchange rate as at 03/08/2012
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EVERAL Nigerians have sustained permanent injuries as a result of Okada accident which has come to be a means of transportation for the low, the mighty and the powerful in most metropolitan cities in Nigeria. In Lagos, Okada has become indispensable to almost all as a result of the traffic gridlock in the cities. In a bid to get to their destinations, many have taken okada ride only to fall victim of okada accident. Many have had their legs amputated while several others are receiving treatment at the orthopaedic hospital. Several others are equally being treated traditionally. In all of these, most of the okadas are neither insured nor their passengers. Due to the fact that commercial motorcycle (popularly called Okada) accidents have become a regular occurrence on Nigerian roads, over 10,000 okada riders and their passengers become physically disabled annually due to complications resulting from such accidents while over 2,000 lose their lives. Investigations carried out by Vanguard showed that the high rate of injury and death is as a result of the reckless driving of these okada operators coupled with their outright refusal to embrace insurance as a form of protection against accidents. Unfortunately, both the okada riders
From Right; Mr Babatunde Raji Fashola, Lagos State Governor, Cutting the Tape, Mr Nicholas Shin, Managing Director, Samsung Electronics West Africa, and Mrs Olayinka Oladunjoye, Lagos State Commissioner for Education, During the Official Commissioning of Samsung Engineering Academy Organised by samsung and Lagos State Government, Held on Tuesday 31-7-2012, At Government Technical College Agidingbi, Ikeja, Lagos PHOTO; Kehinde Gbadamosi
Lack of insurance for Okada contributes to poverty increase BY ROSMARY ONUOHA and their passengers are left to their own fate because there is no law compelling them to take up insurance, in contrast to the norm where all motor vehicles that ply Nigerian roads must be insured. According to the Federal Road Safety Commission, FRSC, a total of 17,464 victims were rescued from road crash scenes in 2011 on Nigerian roads while over 3,364 deaths were recorded. A significant portion of this number is okada accident victims.
Insurance, as provided by underwriting companies, is meant to take an insured victim who suffers injury as a result of accident back to the position he was before the accident occurred. Also in the case of damage to the vehicle, the insurance company is expected to replace or repair as the case may be. All these are subject to the type of cover which the insured took. However, investigations by Vanguard revealed that a couple of insurance companies that have tried to establish insurance schemes for okada riders got their fingers burnt as
okada operators don’t understand the workings of insurance, and even where they do, they just refuse to buy into it. Unfortunately, when okada operators who refuse to embrace insurance and are the bread winners of their families get accidented, it increases the poverty rate in the country because they become incapable of further providing for their families. According to the Corps Marshal of the Federal Road Safety Corps, Osita Chidoka, the effects of these deaths Continues on page 18
18 — Vanguard, MONDAY, AUGUST 6, 2012
Cover Story
Youth restiveness and unemployment in Nigeria: The way out (3)
*From Left: Zonal Coordinator, National Lottery Regulatory Commission (NLRC), Bayelsa, Rivers & Akwa Ibom states, Mr. Peterson Evi-Parker; Master Brand Specialist, MTN, Mr Dola Bamigboye; one of the winners of Hyundia ix35 SUVs in the ongoing MTN Goodwill Automania Game, Chief Henry Oluwole Taylor (with the car dummy key); and ace Nollywood actor, Bruno Iwuoha at the 4th prize presentation of cars to the winners at Excape Centre, Port Harcourt.
Lack of insurance for Okada contributes to poverty increase or injuries are displacements in families as well as increase in number of orphans and street children especially if bread winners are involved. Although the Federal Government has said that reducing unemployment and enhancing economic productivity are its top priorities, stakeholders are of the opinion that the Federal Government must drastically reduce the number of deaths and injuries suffered on Nigerian roads if the desired growth in the economy is to be achieved.
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ronically, as Nigerians are increasingly losing their jobs as a result of the economic downturn, more people are going into the okada business and the cycle goes on and on. Mr. Simon Ebute was an okada rider before he got involved in an accident. His waist was dislocated while he suffered a bone fracture on his right leg. Before the accident, he was the sole provider for the family as his wife was a full-time housewife. After the accident, his wife was forced to go seeking for help in their church. However, it was never the same again because the bread winner of the family was not able to provide for them. When asked if he knew of insurance, Ebute said that he has been hearing about it but that he does not understand how it works. Salimotu Ibrahim, a nineyear-old girl used to hawk
tomatoes and pepper for her mother each day after school. th She was hawking on the 6 of June when an okada ran into her. The okada man escaped with his bike while Ibrahim broke her left leg and was rushed to a native herbal home. Ibrahim’s mother was forced to stop her business to be with her daughter at the herbal home. Being a petty trader, Ibrahim’s mother be-
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Continued from page 17
Ironically, as Nigerians are increasingly losing their jobs as a result of the economic downturn, more people are going into the okada business
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came dependent on families and friends to assist in paying her daughter's medical bill. Another victim, Lara Jimoh, a trader was skeptical about the traffic gridlock on her way home after the day’s work on th June 20 and decided to pick a bike to get home early and attend to her children. On the way, there was a collision with a bigger vehicle and the okada rider died on the spot. Jimoh woke up later in hospital with her right leg bro-
ken in two places. “Please help me tell people that okada is not good oh,” she yelled when Vanguard paid her a visit in the hospital. Unfortunately, these cases are made worse when these victims become impoverished after suffering these accidents because there was no insurance cover to take care of them.
The increasing rate of poverty
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ccording to the National Bureau of Statistics, NBS, Nigeria’s poverty rate stood at 69 per cent in 2010, while 93.9 per cent of Nigerians considered themselves to be poor in 2010 against 75.5 per cent recorded in 2004. Reports by the NBS also showed that the total number of unemployed Nigerians rose from more than 12 million in 2010 to over 14 million in 2011, with the figure increasing by 1.8 million between December 2010 and June 2011. Unemployment is highest among people aged between 15 and 24, and 25 and 44 years. The NBS data also showed that over 22 million of the active population are either unwilling or unable to work or are working for less than 40 hours per week on the average. Experts are of the opinion that 49 per cent of the unemployed reside in the urban area and 39.7 per cent of the unemployed are in the rural areas coupled with the fact that some states are more afContinues on page 19
nadequate 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 per cent 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. Having been denied the chance to reach their potential, they are disorientated and readily available for antisocial actions. Worse still, some who struggle to enrol in various educational institutions drop out due to lack of basic learning facilities. This situation is attributable to the dwindling resources of government at both federal and state levels as a result of economic meltdown. Lack of Basic Infrastructure: Most rural communities and urban slums in Nigeria have no access to potable water, health facilities, electricity, communication facilities, industries and commercial facilities, etc. Behind social unrest and youth restiveness in the country is the agitation for equitable distribution of resources. Inadequate Communication and Information flow: Communication creates room for sharing information. It helps people express their thoughts and feelings, clarify problems, and consider alternative ways of coping or adapting to their situation. Such sharing promotes social cohesion. People must have access to communication facilities, to communicate with the people making the decisions that affect them. Sadly, rarely do
people in Nigeria participate in decision-making processes on issues that affect their lives. Effects of unemployment in Nigeria: Every year, over 300,000 graduates are churned out from the tertiary institutions nationwide. This number grows yearly and translates into more and more unemployed people littering the streets of Nigerian cities. Mental health: Mental health problems like: Low self-confidence, feeling unworthy, depression and hopelessness. With the lost income and the frustration involved in it, the recently unemployed may develop negative attitudes toward common things in life and may feel that all
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Having been denied the chance to reach their potential, they are disorientated and readily available for anti-social actions
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sense of purpose is lost. Frequent emotions could be – low self-esteem, inadequateness and feeling dejected and hopeless. Health diseases: The unemployment overall tension can increase dramatically general health issues of individuals. Tension at home: Quarrels and arguments at home front which may lead to tension and increased numbers of divorces etc. Political issues: Loss of trust in administration and the government which may lead to political instability. Tension over taxes rise: Unemployment also brings up discontent and frustration amongst the tax-paying citizens. In order to meet the demands of the unemployment fund, the government may have to increase the taxes thus giving way to restlessness amongst the taxpaying citizens.
Vanguard, MONDAY, AUGUST 6, 2012 — 19
When will Nigerian banks stop giving Nigerians sleepless nights? UST as Nigerians are be ginning to pick their pieces together from the ashes of the 2008 global financial melt down and the subsequent turmoil in the Nigerian capital market, Fitch Rating Agency to which banks submit themselves for evaluation in order to get attention has raised a fresh alarm over growing loan portfolio in the banks that can trigger off another round of non performing loans crisis. But CBN Governor, Sanusi Lamido Sanusi has dismissed the alert saying “I am not worried by the recent report from ratings agency-Fitch that Nigerian banks’ asset quality was at risk from recent rapid credit growth. He said banks should be increasing their lending to small and mediumterm enterprises. In my job, I have more information on the banks than Fitch has, and I don’t have the concerns that Fitch has.” Sanusi’s comment is expected of a regulator whose primary duty is to protect the industry and the economy. Beyond the official comment of the Governor, there is cause for concern as Fitch is not just any other agency.
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Banks use its verdict or rating for marketing. As a regulator, the CBN should be more concerned that a rating agency to which the banks often willingly submitted themselves for external examination has come up with an independent opinion. Whatever it is, CBN should be humble enough to accept the external verdict on the banks. If it were a positive report, it would have claimed the credit with paid advertorial and a blitz of media publicity
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enzil De Bie, a Director in Fitch’s Financial Institutions team, said in the special report on Nigeria that there was a marked improvement in banks’ asset quality during 2011 following the sale of problem loans to the Asset Management Corporation of Nigeria. “However, rapid underlying credit growth of 30 per cent-66 per cent was evident in most of the Fitch-rated banks in 2011 which the agency considers will be a negative credit driver if it continues.” The special report highlights some of the key rating drivers for Nigerian
banks in the context of their mostly ‘b’ range Viability Ratings. Nigerian banks appear not to be learning any lessons from the past. Already, some are selling performing loans to AMCON at a loss. It is either that there is lack of executive capacity to manage Nigerian banks or the business terrain has become so problematic that the banks
the grounds that you will soon leave. Over time, until recently, most top bankers rose through the rank without proper exposure to modern management practice. That may have changed over the years but a culture of 'this is how banking is done,' was established.
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check through those who have emerged in the past as presidents of the
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What Sanusi should tell Nigerians is if these observations made by the agency are right or wrong; if deposits in banks are short-term, how will they lend long-term?
are not in any position to do anything about it. The crop of managers in the banks especially in the older breed, had executive capacity problem. In the 70s and 80s, Nigerian banks were not employing individuals with grade one certificate from WASCE; the banks then will reject you on
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Chartered Institute of Bankers of Nigeria will bear witness to the fact that three of their past presidents have run aground some banks in the country. When these traditional bankers employed graduates, they passed their culture of nonperformance to them. That Fitch Ratings has raised fresh alert on the growing loan fa-
cilities in the Nigerian Banking sector that might lead to another round of non-performing loan crisis, should give every Nigerian cause for concern. Fitch has raised the issue that internal capital generation in Nigerian banks needs to be addressed as the generous dividend policies demanded by investors are not conducive to sustainable loan book growth in the medium-term. It also raised the point that many Nigerian banks have thin levels of Fitch Core Capital, which are lower than is appropriate for Nigeria’s difficult operating environment. It further said that “cost to income ratios are relatively weak across the sector, with most banks reporting ratios of 6075 per cent during 2011." It said that the Nigerian banks are primarily funded by customer deposits which make up at least 80 per cent of most banks’ funding profiles. Deposits are short-term, with 8095 per cent of deposits maturing within three months. What Sanusi should tell Nigerians is if these observations made by the agency are right or wrong. If deposits in banks are short-term, how will they lend long-term?
Cover Story Continued from page 18 fected than other states and what this means is that there is a disconnect between the economic growth achieved in the country in the last five years making this an economic issue which could grow to become a social issue.
The way forward The escalating poverty level in the country where people who need insurance the most cannot afford it, according to insurance operators, is hampering the growth of the insurance sector and affecting a greater percentage of the population. Accordingly, the operators are of the opinion that if the economy should continue in the snail-like pace at which it is going presently, the target of the government in achieving its vision 20 20:20 will be a mirage. President of the Chartered Insurance Institute of Nigeria, CIIN, Mr. Oluwole Adetimehin said that when, the level of disposable income is nothing to write home about,
Lack of insurance for Okada contributes to poverty increase there won’t be increased demand for insurance products from the public. Adetimehin said: “So if the industries rather than increasing in number or expanding by the day are shrinking and laying off people, how do you expect the insurance sector to grow?, when the level of disposable income is nothing to write home about, where do you expect to find the demand for insurance products? It is high time the government began to address all these fundamentals with all the seriousness it deserves if anything like the vision 20:2020 will be achieved or crystallised.” For Adetimehin, the government have to address basic fundamental issues affecting the environment in its entirety because it will be difficult for any sector of the national economy to experience any growth when the basic infrastructure is not receiving due
attention year in and year out.
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owever for Managing Director of FBN Life Assurance Plc, Mr. Val Ojumah, 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, insurance agents with motorcycles were going all over the place marketing insurance, 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
will not forget in a hurry what happened in the past.” Ojumah also said that insurance is still alien to Nigerians while the 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 part of practitioners, Ojumah said that their insurance products and services have not been particularly innovative while claims of administration process are still a problem in the market.
For the immediate past Chairman of Nigerian Insurers Association, NIA, Mr. Olusola Ladipo-Ajayi, the phobia for insurance by majority of the public is due to indiscipline and unethical practices which have been thriving in the sector for too long. Ladipo-Ajayi said that the matter is made worse because operators choose not to report offenders to the appropriate regulatory bodies. He stated that operators will choose to complain rather than report defaulters of laid down rules and regulations in the sector, adding “The most difficult thing in this industry is that we know ourselves too much. Everybody complains but nobody is reporting.” For Adetimehin, every fundamental has to be addressed before the government can begin to talk of growth in the economy adding that the insurance in any economy should not be downplayed.
20 — Vanguard, MONDAY, AUGUST 6, 2012
Business & Economy Earlier, Ini Onuk, Chief Executive Officer, ThistlePraxis Consulting Ltd, recommended that organisations that indulge in sharp practices and do not meet standards in their Corporate Social Responsibilities (CSRs) be delisted from the Nigerian Stock Exchange, NSE. “After the successful completion of this adoption exercise to ensure that in the near future, organisations that do not meet certain standards will be delisted or not listed on the Nigerian Stock Exchange.”
BRIEFS Council targets 50% local sourcing of raw materials by 2017 HE Raw Materials Research and Development Council (RMRDC) has said that it intends to achieve 50 per cent local sourcing of raw materials to conserve the nation’s foreign exchange. The Director-General of RMRDC, Prof. Peter Onwualu, stated this in Abuja. Onwualu said that Nigeria was presently importing about 90 per cent of raw materials that could also be sourced in the country. He said his agency had worked out a timetable that would enable the country achieve the 50 per cent local sourcing of such raw materials within the next five years. “Now we have a timetable and it shows the kind of raw materials we want to take off in the importation list or the ones we want to reduce their importation,” Onwualu said. He explained that if reduction in the importation of raw materials could be achieved, it would have a significant effect on the country’s economy. The Director-General said that if the country’s local raw materials were fully utilised, it would lead to the creation of new industries and job opportunities for Nigerians.
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New Insurance Draft Bill undergoing review - NAICOM Commissioner new Insurance Draft Bill is currently undergoing review for presentation to the Federal Executive Council and the National Assembly. Mr Fola Daniel, Commissioner for Insurance, National Insurance Commission (NAICOM), announced this in a press statement on Wednesday in Lagos. Daniel recalled that the commission had held a retreat in Nasarawa with members of the House of Representatives Committee on Finance and Insurance on the bill. He said that the retreat enabled the members of the committee to appreciate the challenges which a weak legal framework posed to the regulation and supervision of the insurance industry. “The draft bill is expected to be passed to the Federal Executive Council soon for onward presentation to the National Assembly,” Daniel said.
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*The Honourable Minister of State for Federal Capital Territory, Oloye Olajumoke Akinjide (left), sharing notes with the Secretary, Agriculture and Rural Development Secretariat, FCT, Mrs. Olvadi Bema Madayi, during the flag-off ceremony of the sale of Buffer Stock Grains at 50% subsidy at the Old Parade Ground, Area 10, Garki, Abuja last Thursday.
New ISO26000 to stop oil spills in Niger-Delta By FAVOUR NNABUGWU HE Standard Organisation of Nigeria, SON, has said the new ISO 26000 will stop oil spills in the NigerDelta region as the organisation has began the process on the guidelines for Corporate Social Responsibility (CSR). The process on guidelines, which is an integral part of global best practice when finally in place is anticipated to end oil spillage and other environmental hazards in that region. Director-General of SON, Dr. Joseph Odumodu, who stated this in an interview at a workshop on the Nigerian Adoption Process in Abuja, said it would no longer be business as usual for companies doing business in the country. Odumodu said: “We know what has happened in the Niger-Delta region before now, but I can tell you that if we promote ISO 26000 and adopt it in Nigeria, it would be difficult for those kind of things to happen again in the future.” He, therefore, called for cooperation between the federal and state governments “to adopt and promote the guideline and ensure that we all imbibe the tenets and principles of ISO 26000.” “ISO 26000 would become a cap of the internal business process in organisations in
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such a way that whatever you want to do, you have to ask yourself questions like “is it good for my employees?, is it good for the environment?, is it good for the business ideals?, is it the kind of profit that I would be proud to talk about? At the end of the day, it would be about moralization; you have to do the right thing,” he added. Odumodu explained that the aim of ISO 26000 was to show the path to be followed
by providing the core subjects so that an organisation willing to follow the standard shall seek to achieve Social Responsibility from its own internal mobilisation. He posited that if applied, ISO 26000 will not only offer the balance among safety, economic and environmental standards, but also promote innovation, which on the long run, would ensure Nigerian companies conform to global standards.
e noted: “We are look ing at a situation like what South Africa has on the Johannesburg Stock Exchange, where they have what they call the Social Responsibility Index. So for every company that is listed in the Johannesburg Stock Exchange, they have to meet the Social Responsibility Index. He added: “It is part of their qualification to be on the Exchange. That is what we are looking at. We are hoping that by the time we adopt this, we would adopt it as an index and part of the requirement for the Stock Exchange”. Onuk said that measures had also been put in place to work with the Ministry of Trade and Investment to ensure that Foreign Direct Investments (FDIs) had a human face and were made to adhere to a sustainable development policy. According to her: “This will ensure that the investments have tangible social impact devoid of periodic green washing or philanthropic tokenism often masqueraded as CSR."
Banks’ lending rate set for unprecedented rise — Expert By NKIRUKA NNOROM
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HE cost of borrowing from Nigerian banks will witness further increase by at least five per cent following the recent increase of Cash Reserve Ratio (CRR) by 400 basis points by the Central Bank of Nigeria (CBN) in its last Monetary Policy Committee (MPC) meeting, the Managing Director, Financial Derivatives Company, FDC, Mr. Bismark Rewane, has said. In its quest to maintain monetary stability and tighten liquidity, the MPC had in its last meeting raised the CRR by 400 basis points to 12 per cent and kept the Monetary Policy Rate, MPR, at 12 per cent, while the foreign exchange net open position
(NOP) of shareholders funds was also reduced to one per cent from three per cent. Cash Reserve Ratio (CRR) is the minimum balance that the banks are expected to keep with the apex bank. This will go a long way in reducing the amount of cash in circulation. In his Bi-monthly Economic and Business Update, Rewane said the move could lead to an additional increase in banks’ cost of funds by about 100- 150 basis points or two to five per cent, adding that withdrawal of liquidity would push money market rates higher than their recent levels. Rewane said, “The impact of a 400 basis points hike in CRR is expected to significantly affect the lending ability of banks. The amount of cash that banks have to keep with the
CBN will increase, thus lowering the volume available for transactions. As a result of this, we expect borrowing costs for individuals and companies to increase by an estimate of 2-5 per cent. “According to the CBN’s annual report for 2011, total bank deposits were N6.86 trillion. Using this figure as a proxy, the initial CRR of eight per cent led to an estimate of N548.8billion being withdrawn and kept with the CBN; at 12 per cent, N823.2billion will be deducted. Thus, the 400 basis points hike will reduce bank deposits available for lending by an estimate of N274.32billion, a quicker way of mopping up liquidity.”
Vanguard, MONDAY, AUGUST 6, 2012 — 21
Business & Economy
Petroleum Equalisation Fund targets 100% electronic products loading by November HE Petroleum Equalisation Fund Management Board (PEFMB) said it would begin 100 per cent electronic system of loading of petroleum products by November this year. The Executive Secretary of the fund, Mrs Adefunke Kasali, made this known in an interview in Abuja. She said the project had been tagged ‘Project Aquila’, and would help to track down fraudulent marketers and enhance prompt payment of marketers’ claims. “With Project Aquila, the first thing is that there must be loading and there must be receiving. One of the things that we have had is an issue where we were never sure that an item that was loaded was received. And in some cases, we even had situations where it was purportedly received, but it was never loaded. Aquila will ensure that there is a genuine transaction; that the product was
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loaded and was received. The other thing with Aquila is that the processing of that transaction is now very smooth and efficient and then the payment is done typically under
two weeks.” Kasali said at least 60 per cent of the depots in the country had been covered since the agency commenced electronic tracking of loading and
movement of fuel tankers across the country in April. According to her, the agency was working very hard to ensure that all the depots in the country are 'Aquila-ready' by the end of November.
*From left: Minister of Trade and Investment, Olusegun Aganga; Ekiti State Governor, Kayode Fayemi; Governor, Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, and Oyo State Governor, Senator Abiola Ajimobi, at the Nigeria Business and Investment Summit, titled 'New World Nigeria - The World’s Most Vibrant Market,' organised by the Bank of Industry at the Dorchester Hotel, London, United Kingdom, last week.
BRIEFS Cocoa association backs FG’s GES initiative
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HE Cocoa Association of Nigeria (CAN) has expressed its support for the Growth Enhancement Support (GES) Scheme under the Cocoa Transformation Agenda (CocTA) of the Federal Government. The News Agency of Nigeria (NAN) reports that farmers under the scheme are allowed to buy their inputs directly from designated input providers on the basis of their needs. The association’s president, Mr Sayina Riman expressed the association’s position on the new system while addressing cocoa farmers who paid him a visit in Akure. Riman said the present challenges being experienced by cocoa farmers were inevitable since the scheme was new. “The system introduced by CocTA is a clear departure from the old system which allowed for leakages, “ he added.
22 — Vanguard, MONDAY, AUGUST 6, 2012
Banking & Finance BRIEFS Keystone Bank delights customers with Awuf promo
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s a follow up to its recently launched ‘Never say Never’ corporate campaign, Keystone Bank has embarked on a promo to reward its loyal customers. Tagged the Keystone Daily Awuf Promo, the initiative is developed to reward the teeming loyal customers of the bank and to encourage saving culture among Nigerians. The promotion, which will run from August 1, 2012 to October 31, 2012, is open to existing customers; both active and dormant account holders and new customers. Keystone Awuf promo offers multiple benefits to all customers who participate during the period. The Executive Director, Retail Banking, Mrs. Yvonne Isichei stated that “the promo is designed to give back to our esteemed customers as Keystone Bank marks one year of providing innovative and best-in-class services”. She also hinted that activities during the savings promo would include daily cash gifts for 20 qualifying customers, instant gift items for all new customers and reactivated accounts. At the grand finale regional draw, three lucky customers would drive away with one brand new 14-seater bus each, while four customers per branch would receive consolation prizes. The consolation prizes are Generators, Rechargeable Fans, Satellite TV decoders and DVD players. Speaking further on the promo, Mrs. Isichei confirmed that “the decision to give out buses was informed by Keystone Bank’s mission to empower the low and middle income earners of the economy. We expect that winners of these busses will put them to profitable entrepreneurial use. “At Keystone Bank, our products support legacy planning and promote savings culture from cradle to old age, with products like Future Accounts, Growbiz, etc.” During the promo, which is scheduled to run for three months, customers of the bank will have instant access to ActivNet Keystone Bank’s suit of cashless banking channels. These channels include internet banking, mobile banking and debit cards.
Polymer currency: Improve the printing, increase enlightment By BABAJIDE KOMOLAFE, LAZARUS IBEABUCHI, WILLIAM JIMOH and ELIZABETH AMIHOR
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he polymer currency was introduced in Nigeria because it does not tear easily and it is water resistant but to Bilikisu Abubakari, a cloth seller at Idumota Market, it is bad money. “It cannot be spent when it is worn out. When old, the pictures and figures become blurred. When torn, I cannot spend it. I throw the currency away when they are bad and such is waste of money in this season of hardship. The paper money is better because when cellotaped, you can spend it. But the polymer money is the opposite. The polymer currency should be changed to the paper currency”, she told Financial Vanguard. That is the view of some Nigerians on the performance of the polymer currency five years after it was introduced. Mrs. Janet Enodiana, a vegetable trader at Salami market, Afromedia, Lagos is also one of such persons who believes polymer is poor currency. “I do not prefer it to the paper currency. It is bad money. If it gets torn, faded or burnt, you cannot spend it. Customers reject the money from me. Look at the hundred naira note, you can spend it when it gets torn. I think it should be changed. It is not funny at all because it affects adversely business transaction. But most people believe that the polymer is good money that is printed badly and treated badly by the people. Among those who believe that the problem with the currency is poor printing quality are Mrs. Mary Oshioniake, a Nurse and Mrs. Titilayo Hungbo, a teacher at Ojo High School, Lagos. “It has the advantage of resisting water. Mostly when I am drenched by rain or when I wash them in my clothes, they retain their shape. Its disadvantages are so many. Its quality is very poor. The colour and pictures get worn out easily. I have had incidences where people reject the money when it is cello-taped and faded”, Oshioniake said. According to Mrs. Hungbo, The nature (of the polymer currency) is good but there
should be good printing quality of which pictures and writing should be permanent instead of fading. Mr. Isiaka lamidi an Electrician however does not agree that the currency is poorly printed. “Nigerians are to blame for this unwholesome attitude. For instance, some people will pick a blade and cut it all in the name of wanting to know whether it can cut or not.
These are bad attitudes that must be corrected if we must get the best out of these currencies. Remember the currencies cannot tear If nobody cuts it. So our attitude towards the currencies is what should be looked into. Normally, the currencies are to be properly arranged in a purse and this will prevent them from been squeezed”, he said. His position was corroborated by a Hair Dresser, Mrs.
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tear it, decided to use blade to cut it. Some even go to the extent of using fire to burn it at the edge. “So what this implies is that we need to always see our currencies as national identity and give it the deserved honour. The currency fades because many people expose it to water, most especially when the currencies are washed with cloth. So people should often be often educated
on how to keep and use the currencies.” According to Adesina, “The government has played its part by changing the currencies from paper to polymer; but it should not stop there; rather it should see to the proper maintenance of these currencies. And to Nigerians, we need to protect these currencies from exposure to any substance
The currencies cannot tear if nobody cuts it. So our attitude towards the currencies is what should be looked into. Normally, the currencies are to be properly arranged in a purse and this will prevent them from been squeezed
Oluwaseun Adesina and Mr. Johnson Igbeikutu an Auto Mechanic. “The problem is that Nigerians don’t have good maintenance culture. This affects the way we handle and use our currencies”, said Igbeikutu. I can recall that when the polymer currency was first introduced, many people because they cannot
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that may deform it. We have our ways of protecting our valuables, so we should treat these currencies just as we keep our valuables”. The polymer currency was first introduced in Nigeria in 2007, with the N20 denomination. It was later extended to the N5, N10 and N50 denominations in 2009. Although, it was first
introduced in Australia to checkmate counterfeiting of the country’s currency, it was introduced in Nigeria because of its durability and cost of printing. According to the Central Bank of Nigeria, the polymer currency does not tear easily and it is not soiled easily. And compared to paper money, it is cheaper to print. This, according to the CBN would help to free-up resources for other use. The N20 note was chosen to test run the strength of the polymer currency because it is believed to be the most used currency in the country. It is usually used by public transport operators in giving change (fare balance on excess) to their passengers. Market women and traders also use it frequently in their daily transactions than any other currency denomination. The money changers, who help split larger denominations into lower ones at a fee at bus stops and vehicle parks have more twenty naira notes in stock and in more demand from their customer base concentrated around commercial transport operators. The apex bank therefore believe that the N20 note is the best test case for for the polymer. In 2009, while announcing the extension of the polymer currency to the N5, N10 and N50 notes, the CBN Governor, Mallam lamido Sanusi, said that the cost of printing the notes has been reduced while the polymer notes have been found to last longer in circulation. But five years down the line, investigations show that while the polymer is indeed stronger and hence does not tear or soiled easily, the features on it are vulnerable to fading when it stays too long in circulation, and this results into lose for the holders. That is why majority of the people interviewed, though acknowledged the durability of the polymer currency and the poor handling by Nigerians, call for improvement in the printing quality. The other alternative is that the apex bank should not allow the polymer stay too long in circulation before withdrawing it. They however maintained that either of this measures must be complemented with increased enlightment campaign to minimise poor handling of the polymer currency.
Vanguard, MONDAY, AUGUST 6, 2012 — 23
Banking & Finance
Cost of funds shot up as market liquidity falls by 89 per cent * Rewane highlight interest rate outlook for H2
By BABAJIDE KOMOLAFE
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he amount of funds in the inter-bank money market fell sharply by 89 per cent last week, prompting a sharp increase in cost of funds. From N187 billion the previous week, the balance of funds in the market fell to N19 billion at the beginning of business on Friday. In response short term inter-bank interest rates rose by about 300 basis points. According to the weekly inter-bank newsletter of Kakawa Discount House interest rate on Overnight borrowing and Collateralised borrowing (open buy back) rose to from 14.5 per cent and 14 per cent to 18 per cent and 17.5 per cent respectively. The sharp drop in liquidity might not be unconnected to the measures introduced by the CBN to reduce money supply and also the restrictions imposed on banks that borrow from the apex bank. In the previous week, the apex bank increase the cash reserve requirement (CRR) of banks to 12 per cent from 8.0 per cent. This effectively reduces the amount of funds that banks can lend reduces by about N823 billion. In addition to this, the apex bank banned banks indebted to from lending to other banks in the inter-bank money market. It also banned banks that lend funds in the interbank market from accessing its lending facilities. Also on Wednesday, the CBN prohibited banks from borrowing from it and purchasing foreign exchange from the official foreign exchange auction on the same day. “Authorized Dealers are henceforth NOT allowed to access the WDAS window throughout the term of a Repurchase or SLF (standing lending) transaction with the CBN”, the apex bank said in a circular. Interest rate outlook for H2 Commenting on these developments, Bismarck Rewane, Managing Director/ Chief Executive, Financial Derivatives Company Limited said that the
resulting high interest rate will reduce the net interest margin of banks by about 1.5 per cent and this cannot be effectively transferred to borrowers.
“We expect interest rate margins to remain pressured by high cost environment. The further tightening will affect bank loan growth and the cost of funds. We believe
Value of cheques cleared in Lagos
Foreign exchange sold @ WDAS
that Tier 1 capital of banks will remain insulated due to the cheap funds available to them. Manufacturing companies also face challenges as their cost of borrowing increases. There will also be sharp increase in NIBOR rates and we expect a further rise in bond yields. The higher interest expense squeezes the net-interest margins (NIM) of Banks, which NIM’s are expected to shrink by 1.50% and cannot be effectively transferred to borrowers.” In his outlook for the interest rate in the second half of the year, Rewane said the trilemma of maintaining low inflation, interest rates and exchange rate stability remains a challenge. “The CBN will maintain its “wait and see approach” with limited interest rate hikes, while the use of open market operations and other policy tools will increase but monetary policy easing is expected in 2013 as inflation outlook improves”, he said. “The CBN is faced with three possible scenarios. It could reduce the MPR or maintain it at present level or increase it He said a 50 bases points (bpts) reduction in the MPR 11.5 per cent will lead to further weakening of the exchange rate to N165 per dollar at the official market, depletion of external reserves to $32 billion. But it will prompt decline in borrowing cost and growth in credit. But an a 25 per cent increase to 12.25 per cent will lead to stable exchange rate, increase in external reserves to $40 billion and slow down inflation to 9.7 per cent. But this would tighten liquidity in the system and stunt economic growth. Leaving the MPR unchanged at 12 per cent on the other hand would lead to slow down depreciation of the naira to N157 per dollar and slow growth in external reserves to $37 billion. Though inter-bank rates would remain flat at 14.5 per cent, the measure would tighten credit to the private sector, increase yields on government bonds, and the CBN will have to Use of other monetary policy tools to stem inflation.
BRIEFS Experts discus economic performance at FICAN Roundtable
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panel of economic experts will discuss the performance of the Nigerian economy at the inaugural Round-Table on the Economy of Finance Correspondents Association of Nigeria (FICAN). The panel include, Mr. Wale Abe, Executive Secretary, Financial Market Dealers Association of Nigeria (FMDA), Mr. Edgar Ebunum, Cowry Assets Management Limited, and Mr. Bunmi Asaolu of FBN Capital. The event, tagged: ‘The FICAN Roundtable on Economic Performance’ is designed to enhance the understanding of financial Journalists on key developments in the economy. It is equally expected to assist them in deepening their understanding of key issues on finance and investment, bridge knowledge gaps in these areas and enhance reporting and news judgment.
e-Tranzact’s profit increases by 81% in 6 months
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Tranzact Plc says it recorded 81 per cent growth in its profit after tax for the half year ended June 30, 2012. The profit is contained in the company’s result published on Friday by the Nigerian Stock Exchange (NSE) in Lagos. The company said it posted a profit after tax of N101.23 million as against N55.78 million posted in the comparative period of 2011. The publication said that the company’s profit before tax grew by 81.5 per cent to N148.85 million from N82.02 million declared in 2011. Also, the company’s turnover rose to N1.57 billion as against N898.49 million declared in 2011. The company’s net assets, during the period under review, appreciated to N2.61 billion against N2.51 billion recorded in 2011. The company posted a turnover of N2.24 billion for the financial year ended Dec. 31, 2011 against N917.82 million posted in 2010. Its profit before tax stood at N126.04 million compared with a loss before tax of N200.23 million declared in 2010. Also, the company’s profit after tax rose to N81.29 million against a loss after tax of N138.30 million recorded in 2010.
24 — Vanguard, MONDAY, AUGUST 6, 2012
Micro-Finance BRIEFS Bangladesh orders new probe into Yunus
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angladesh’’s cabinet has ordered a new probe into Nobel Prize winner Muhammad Yunus which will check for irregularities during his time as head of microfinance pioneer Grameen Bank, an official said. The 72-year-old “banker to the poor” was forced from the institution last year, due to what his supporters say is a government vendetta against him. A separate review of the bank has been underway since May this year. Yunus, who fell out with Prime Minister Sheikh Hasina after talking about going into politics, was officially fired for exceeding the mandatory retirement age of 60. He challenged the move in the Supreme Court, but lost. “The investigation will cover the period of beyond that mandatory retirement age and see whether the facilities he enjoyed during that period were lawful,” the government’’s cabinet secretary Musharraf Hossain Bhuiyan said. It will investigate in particular “if he enjoyed any tax exemption when he brought foreign currency home during his tenure as the managing director”, he said.
Micro-Finance firms eye unbanked market
L-R: President, AES Excellence Club, Dr. Ausbeth Ajagu; Osun State Governor, Ogbeni Rauf Aregbesola and Chairman of the Club, Mrs. Nike Akande when the Club conferred the Governor with the prestigious AES Fellowship Award in Lagos
Nigeria not ripe for microfinance banking — Ajagu STORIES BY PROVIDENCE OBUH
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he way microfinance banks (MFBs) operate in the country does not promotes banking culture, says Ausbeth Ajagu of Entrepreneurial Studies (AES) Excellence Club “Until we go back to the drawing board to get the rules and principles right, we may not succeed, he said.
In an exclusive interview with Vaguard, Ajagu, who is also the Chairman Corporate affairs and Strategic Planning, Manufacturers Association of Nigeria (MAN) said the problem of MFBs include lack of infrastructure, technologies to checkmate fraud, and also the mechanism to check staff, especially the performances of marketers in the industry. He said “How would you expect a Chief Executive of
MFB to be pursuing staff, checkmating them, doing everything to make sure they don’t become fraudulent, everyday they have to go to the market, because the true customers are the market women who do not go to the bank. “The cost of running a micro finance bank is very high considering how much they collect from the market, sometimes N1,000, at other times N200 per day, how
much does it cost to go to the market to collect such money? “Microfinance banking, we are not ripe for it; every nation has its own peculiarity. It is just like the cashlite/cashless society, it will not work in Nigeria because we are not ripe for it. We have our predicaments, we have our peculiarity. Technologically we are still backward and institutionally, we are backward, infrastructure unfortunate. “If you go to most POS terminals operated in the super markets, they don’t work any more so Nigeria is basically a cash society. Moreover, it is only in this country you don’t trust your banker because the pin number they give to you, they can go back to duplicate it and finish you. “The awareness is not there, we are not where we are supposed to be, in terms of infrastructure and electricity wise, how many people have light, and you need light to operate your POS, there are so many handicaps. “I have talked about education, I have talked about infrastructure, I have talked about technology, awareness, really, cashless is a good initiative, they operate every where in the world especially in developed countries, but we are not ripe in terms of infrastructure and technology to checkmate fraud in Nigeria. For the Academy, he said, “We teach entrepreneurship, we prepare people to face challenges and we instill and inculcate good corporate governance best practices into our student such that they will have quest for growth.”
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or decades microfinance institutions have played a pivotal role in funding small businesses and individuals, albeit at a premium. Traditional banks in Zimbabwe have largely failed to play this role due to their rigidity, which has also led to an estimated $3 billion to be circulating in the informal market with dire consequences on the economy, reeling from a liquidity crunch. MFIs could once again salvage the situation given the Government’s latest move to license the institutions allowing them to take deposits from the public. Finance Minister Tendai Biti announced while presenting the Mid-Term Fiscal Policy Review Statement a week ago that Cabinet had approved a new law “which for the first time creates an institution of a deposit taking micro-finance institution”. Previously, the MFIs had been restricted to channelling small loans mostly to small and medium scale enterprises as well as individuals.
Mastecard, SEEP commit $8m to microfinance associations T
he MasterCard Foundation and the SEEP Network has signed a $7.6 million, four-year partnership, with a view to further strengthen and develop the capacity of microfinance industry associations in sub-Saharan Africa. In a statement issued by the Foundation, Reeta Roy, President and CEO MasterCard Foundation said “This partnership will enable African microfinance associations to mainstream client protection principles across the industry, so that
clients benefit from the responsible delivery of financial services.” The statement stated that through the partnership, eight microfinance associations with a membership of nearly 500 microfinance institutions, (serving, in total six million clients) will improve their core management capacity. “The project will also advance financial transparency and consumer protection principles among microfinance institutions, and share learning with associations across sub-
Saharan Africa to scale and sustain industry growth.” Director of Community Development, SEEP Network, Jenny Morgan said, “We understand the powerful role microfinance associations can play in promoting financial inclusion and improved standards of practice.” Both institutions believe there is an opportunity to support greater consumer protection and financial transparency within the industry across the continent. The MasterCard Foundation advances microfinance and youth learning to promote financial
inclusion and prosperity, through collaboration with committed partners in 48 developing countries. The SEEP Network is the world’s largest community of microfinance associations that provides global perspectives on the advancement of microfinance ensuring relevance with respect to local needs, broad participation, and leadership of practitioners, and also a global network of over 130 international practitioner organizations dedicated to combating poverty through promoting inclusive markets and financial systems. .
Vanguard, MONDAY, AUGUST 6, 2012 — 25
Corporate Finance
Stakeholders chide NSE over introduction of Islamic Index …Say it’s provocative, insensitive By MICHAEL EBOH
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TAKEHOLDERS have kicked against the introduction of the Nigerian Stock Exchange, NSE, Lotus Capital Islamic Index, NSE LII, saying it is an attempt to Islamise the Nigerian Financial system and further provoke non-Muslims. In an interview with Vanguard, the stakeholders said the NSE should overturn the introduction of the index and focus on returning confidence to the capital market. “What the NSE should have done, giving the multireligious nature of our country which is officially a secular state, is to introduce a religion-neutral ethical investments index. “Is ethical investing only for Muslims? Will the NSE create separate indices for Christians, Traditional Worshippers, Buddhists, Eckists and other religious groups? Should this be NSE’s priority?” said Mr. Eghes Eyieyien, a financial analysts and Managing Consultant/ Chief Executive Officer, Pharez Consulting Limited. “The NSE should not dabble into sentimental issues. They need to go back to the drawing board, as this is the best way they can discover and come up with the right action or policy that is going to move the capital market forward,” said Mr. Taiwo Oderinde, a shareholder and National Coordinator, Proactive Shareholders Association of Nigeria, PROSAN.
N its own view, the Pentecostal Fellowship of Nigeria, PFN, in a statement signed by its General Secretary said, “The action of the NSE in introducing a religionspecific Index is shocking, utterly insensitive and even provocative to non-Muslims. Giving the multi-religious nature of our country and its secular status, organizations such as the NSE should not be seen to be promoting and projecting any religion.” The PFN said the desire to invest in funds or securities in the Nigeria capital market which meet certain ethical standards and moral criteria is not the exclusive preserve of Muslims. According to the PFN, the murderous activities of the Islamic terrorist organization,
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Boko Haram, has tested the unity of our nation and put a strain on the already fragile relationship between the two largest religious groups in our country — Christianity and Islam. “Nigeria’s quest for true unity and harmony would not be served by the NSE’s attempt to create another cleavage along religious lines in the capital market. The NSE should rescind its decision and rather focus on restoring investor confidence in the capital market which has
remained bearish for a protracted period,” the PFN noted. Continuing, Eyieyien said the NSE’s insensitivity is another attempt by Islamic bigots to present Nigerians with a fait accompli and create the impression that Nigeria is an Islamic Country, saying that, “the Islamic Index is dead on arrival.” He said, “Some naively think that there is no ‘Islamisation Agenda’ being pursued by Islamists in the Nigerian Financial Sector
despite the evidence to the contrary. “Mallam Sanusi Lamido Sanusi’s impunity to disregard extant provisions of the Nigerian Constitution and the Banks and Other Financial Institutions Act in imposing Malaysia-style Islamic Banking is well documented. “Indeed, Justice Gabriel Kolawole of the Federal High Court, Abuja, recently ruled that Sanusi’s action in issuing an Islamic Banking licence to Jaiz Bank was ultra vires as he had no such powers."
BRIEFS HSBC to sell ship consultancy arm to management team SBC Bank (HSBA.L) said on Thursday it had reached a deal to sell HSBC Shipping Services Ltd to the ship broking and consultancy unit’s management team. HSBC (0005.HK) has been pulling back from unprofitable markets and businesses as part of a three-year recovery plan. It has already sold 28 businesses and cut 15,000 staff from its payroll. “The sale represents further progress in the implementation of the HSBC Group’s strategy and is expected to complete in the fourth quarter of 2012,” the bank said, adding the group would continue to provide a full range of banking products and services to the shipping industry. The sale price of the deal was not disclosed. HSBC Shipping Services, which will be renamed Hartland Shipping Services Ltd, will subsequently provide shipping-related valuation and consultancy services to the HSBC Group on a global basis.
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Canadian miner to invest $4bn in Zambia *From left: Regional Manager, Ibadan Zone, Mr. Akinniyi Olutayo Owoeye; Regional Manager, Ikeja Zone, Mrs. Yemi Adeyinka; Regional Manager, Yaba Zone, Mrs. Bisi Makainde and Regional Manager, Apapa Zone, Mr. Umar Adabara, at the just-concluded Unity Bank Aim, Save And Win Promo Zonal draw in Ibadan.
Cost control lifts Lafarge WAPCO half-year profit to N12.1bn By PETER EGWUATU AFARGE Cement WAP CO Nigeria Plc has announced a Profit Before Tax (PBT) of N12.1billion for the half year ended June 30, 2012, a situation attributed to reduction in cost control initiatives. The PBT grew by 162 per cent when compared to N4.6billion recorded for the corresponding period in 2011. The increase in the Net Finance Cost was as a result of cessation of capitalisation of interest on loans used for the construction of our new plant - measures have been put into place to reduce the impact of high borrowing costs. Basic Earnings per share
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also grew from 106 kobo to 292 kobo; a growth of 175 per cent in the period under review. Commenting on the result, Managing Director and Chief Executive Officer, Mr Joe Hudson, said “the results represent a strong first half of the year, which reflects on the delivery of our operating plan” Continuing he said: “We have continued to optimize production from our new Ewekoro II Plant. In addition, these results demonstrate the impact of a number of internal process improvements and cost efficiency initiatives. “Our new subsidiary, Lafarge ReadyMix Limited has started to operate profitably. We will continue to provide innovative products and services to our valued customers
and consumers as we believe that this is the best way to maintain our heritage, touch the society where we operate and provide good returns to our shareholders” In his remarks, the Finance Director, Mr Fred Amobi stated that the first half of the year was both challenging and exciting. According to him, “through various internal improvements and cost reduction initiatives, we have kept fixed cost growth below 50 per cent of inflation rate. The operating margin has doubled from 16 per cent (during the same period in 2011) to 32 per cent in 2012 - a reflection of higher volumes and improved cost management.”
ANADA’S First Quantum Minerals (FM.TO) plans to invest more than $4 billion in a new mine and expansion projects in Zambia - Africa’s top copper producer - in the next two to three years, a company official said. Adam Little, head of tax at First Quantum Minerals, told Reuters more than $2 billion would go into upgrading its Kansanshi mine while its new Trident mine would absorb about $1.7 billion. First Quantum has been talking to the government on deals to guarantee policy stability, he said. “It would be nice and would help us with our investment if we could have some assurance for maybe 15 years that the tax rates would be as you see them now,” Little, who was on a visit to Zambia, said on Thursday. Little also urged the government to reduce mineral royalty taxes, which doubled to 6 percent last year. “We at First Quantum and probably the industry as a whole would prefer the mineral royalty tax to be at a lower level, in the 3 to 4 percent range,” he said.
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26 —Vanguard, MONDAY, AUGUST 6, 2012
Corporate Finance BRIEFS Heineken accepts deal to take control of APB
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lobal brewer Heineken agreed a $4 billion-plus deal to take control of Asia Pacific Breweries by agreeing to buy a stake in the Singapore-based brewer from partner Fraser and Neave, said sources with knowledge of the situation. Heineken had given F&N a deadline of Friday to agree to a sale, and a deal has been agreed in principle and has gone to the F&N board for rubber stamping, they said. The deal was slightly ahead of Heineken’s initial offer of S$50 a APB share, but no further details were available. “The deal has been agreed by Heineken and F&N’s management, and the agreement will now go for approval by the F&N board and then be announced officially,” said one of the sources.
Credit Agricole faces $2.4bn outlay to sell Emporiki
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rance’s third-largest bank Credit Agricole (CAGR.PA) faces the prospect of shelling out more than 2 billion euros ($2.43 billion) to offload Greek subsidiary Emporiki Bank, raising fears that it may be obliged to raise new capital. Greece’s bank support fund has told possible buyers of Emporiki that it will approve a sale only if the struggling lender is fully funded and recapitalized before it is sold, a senior banking source said on Friday. Credit Agricole has been trying to sell Emporiki to limit its 4.6 billion euro exposure to crisis-hit Greece, but the bailout fund wants to avoid having to pump in further capital after Emporiki is sold to a Greek lender, the source said.“The Hellenic Financial Stability Fund (HFSF) has set four eligibility criteria for the sale to go through; mainly the need for Emporiki to be sold recapitalized and fully funded,” the banking official, who declined to be named, told Reuters. The sale has drawn the attention of Greece’s three biggest banks. Eurobank (EFGr.AT) and National Bank (NBGr.AT) confirmed their interest this week but have yet to submit offers.
Honourable Minister of Communications, Mrs Omobola Johnson (right) presenting the award for overall winner in the Insurance category of the 2012 Web Jurists Awards to the General Manager, Finance & Technology, Consolidated Hallmark Insurance Plc, Mr. Babatunde Daramola. With them is Mr. Folusho Phillips, Chairman, Phillips Consulting, organisers of the awards.
NSE index, capitalisation appreciate by 0.99% BY MICHAEL EBOH, CHINEDU IBEABUCHI & WILLIAM JIMOH
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significant improvement was recorded in transactions on the Nigerian Stock Exchange, NSE, last week, as the value of listed equities appreciated by N73.32 billion. Specifically, value of listed equities, represented by the market capitalization and Allshare index grew by 0.99 per cent. The capitalization which opened the week at N7.414 trillion gained N73.32 billion to close at N7.487 trillion; while the index rose by 230.36 basis points to close at 23,523.16 points from 23,292.80 points at which it opened. Nigerian Breweries Plc recorded the most share price gain, rising by 5.30 to close at N122.30 per share, from N117 per share at which it opened; Glaxo SmithKline Consumer Nigeria Plc followed with a gain of N3 to close at N28.50 per share and Unilever Nigeria Plc garnered N2.38 to close at N36.45 per share. Other share price gainers include: Guinness Nigeria Plc N2.20, Lafarge Cement WAPCO Plc N1.22, Guaranty Trust Bank Plc N0.58, First Bank of Nigeria Plc N0.55, Zenith Bank Plc N0.45, Ashaka Cement Plc N0.45, Portland Paints and Products
Plc N0.44 among others. On the contrary, Mobil Oil Nigeria Plc recorded the most share price loss, dropping by N6.25 to close at N118.75 per share, from N125 per share at which it opened the week; Arbico Plc followed with a loss of N1.85 to close at N17.29 and Okomu Oil Palm Plc dipped by N1.79 to close at N29.60 per share. Other share price losers
include: Dangote Cement Plc N1.50, Julius Berger Nigeria Plc N1.38, Forte Oil Plc N1.29, Berger Paints Plc N0.79, Chellarams Plc N0.62, Beta Glass Company Plc N0.52, Stanbic IBTC Bank Plc N0.45 among others. However, equity trading dipped by 43.19 per cent, as investors exchanged 930.677 million shares valued at N6.327 billion in 17,744 deals,
in contrast to penultimate week’s turnover of 1.639 billion shares valued at N11.869 billion in 20,989 deals. The Financial Services sector recorded the highest transaction in the sectorial analysis, accounting for 70.8 per cent of the market turnover with 658.917 million shares valued at N3.746 billion in 10,381 deals. The Banking sub-sector in the Financial Services sector dominated trading in the sector, accounting for 74.85 per cent and 52.99 per cent of the sector ’s turnover and total market turnover respectively. Diamond Bank Plc recorded the highest patronage in the banking sub-sector, with a turnover of 96.212 million shares valued at N205.07 million in 452 deals; Zenith Bank Plc followed with the exchange of 66.269 million shares valued at N904.022 million in 1,490 deals and First Bank of Nigeria Plc recorded 66.163 million shares valued at N717.216 million in 2,315 deals. The Services sector followed on the sectorial analysis, accounting for 5.99 per cent of the total market turnover, with 55.763 million shares valued at N145..173 million in 547 deals. Ikeja Hotel Plc, in the Hotels/Lodging sub-sector dominated trading in the sector, with 16.276 million shares valued at N18.696 million in 48 deals; RT. Briscoe Plc followed with the exchange of 12.016 million shares valued at N18.359 million in 106 deals, while Tourist Company of Nigeria Plc recorded 8.86 million in 40.156 million one deal.
Fidelity Bank gross income up by 79% in first half BY PETER EGWUATU
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idelity Bank Plc has recorded a gross income of N51.9 billion for the six months unaudited results ended June 30th, 2012. This represents an increase of 79 per cent from N28.9 per cent recorded in the corresponding period of 2011. The Bank’s six months results show a Profit Before Tax (PBT) of N10 billion for the half year ended June 30, 2012. PBT was N9.9 billion for the half year ended June 30, 2012 compared to N3.8 billion for the corresponding period in 2011; a growth of 160 per cent in the period under review. Other performance indicators show a Net interest income after impairment charge for credit losses increased by 88 per cent to N19.5 billion during the period under review from
N10.34 billion in the corresponding period of 2011. Net interest margin shrank; with the proportion of interest income used to service interest expense which was 39 per cent in the half year ended June 30 2011, rising to 49.8per cent for the half year ended June 30, 2012. Net fee and commission income grew by 30 per cent to N11.4 billion in the half year ended June 30, 2012 compared to N8.7 billion in the corresponding period of 2011. Operating Expenses rose by 40 per cent in the half year ended June 30, 2012 to N23.2 billion from N16.5 billion recorded in corresponding period in 2011, due to sustained branch development activity. Branch count was increased by 5.4 per cent, as ten new branches were opened in the 12 months to June 2012. Ear nings Per Share (annualized) increased by 160
per cent to 52k per share in the period under review from 20k per share in the half year period ended June 30 2011.? Total Assets increased by 46.9 per cent from N502 billion as at June 30, 2011 to N736.9 billion as at June 30, 2012. The Bank’s balance sheet showed that Net Loans and Advances rose by 36 per cent to N274 billion as at June 30, 2012 from N201 billion as at June 30, 2011. Total Deposit from customers stood at N554 billion as at June 30, 2012, which represents 61per cent growth over the June 30 2011 figure of N345 billion. ? Shareholders’ Fund stood at N141 billion as at June 30, 2012. ? Pre-tax (annualized) Return on Assets (RoA) increased to 2.7 per cent from 1.5 per cent, while Return on Equity (RoE) rose to 14 per cent in June 2012 from 5.8 per cent in June 2011.
1.37
1.05 5.52 1.05 6.43 33.50
27.63 7.21
Livestock/Animal Specialities Livestock Feeds Plc
CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc SCOA Nigeria Plc Transnational Corporation Chellarams Plc UACN Plc
CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc
40.12
6.50 4.53 52.80 1.94 4.50 0.57
14.80 500.00
10.55 36.19 3.30 2.88
25.00 34.07
7.60 0.64 0.57 2.46 10.30 1.38 0.50 11.45 3.20 17.02 1.07 0.70 1.15 3.00 0.88 7.00 1.13 4.26 4.00 0.50 0.50 14.50
0.50 0.65 0.50 0.50 0.50 1.49 0.50 0.56 0.50 1.55 0.50 0.76 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.53 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50
0.50 0.50
0.50 2.02 0.50
Beverages-Non-Alcoholic 7-UP Bottling Company Plc
Food Products Dangote Flour Mills Plc Dangote Sugar Refinery Plc Flour Mills Nigeria Plc Honeywell Flour Mill Plc National Salt Co. Nig Plc UTC Nigeria Plc
Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc
Household Durables Beta Glass Co Plc Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc
Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc
FINANCIAL SERVICES Banking Access Bank Plc Afribank Nigeria Plc Bank PHB Plc Diamond Bank Nigeria Plc Ecobank TRANSNATIONAL INCORPORATION Fidelity Bank Plc FinBank Plc First Bank of Nig. Plc First City Monument Bank Plc Guaranty Trust Bank Plc NPF Micro-Finance Bank Plc Intercontinental Bank Plc Oceanic Bank International Plc Skye Bank Plc Spring Bank Plc Stanbic IBTC Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc
Insurance Carriers, Brokers and Sector AIICO Insurance Plc Continental Reinsurance Plc African Alliance Insurance Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guaranty Trust Assurance Plc Guinea Insurance Plc Intercontinental Wapic Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Universal Insurance Plc
Mortgage Carrier, Broker and Sector Aso Savings and Loans Plc Resort Savings & Loans Plc
Other Financial Institutions Crusader (Nigeria) Plc Deap Capital Management & Trust Plc Royal Exchange Assurance
7.39
3.29 240.00 5.68 117.00 0.89
Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc
HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers
0.50
100.00
Real Estate Investment Trusts Skye Shelter Funds CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc
9.85
0.50 31.39 15.35
1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc
Real Estate Development UACN Property Development
0.50
Oil and Gas and Products Petroleum Products Capital Oil Plc
Company
Opening Price (N)
Capital Market
7.39
0.50 2.02 0.58
0.50 0.50
0.50 0.65 0.50 0.50 0.50 1.35 0.50 0.56 0.50 1.60 0.50 0.72 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.51 0.50 0.50 0.52 0.50 0.50 0.50 0.50 0.50
7.44 0.64 0.55 2.68 10.21 1.29 0.50 12.00 3.04 17.60 1.07 0.70 1.15 2.97 0.88 6.55 1.10 4.40 4.41 0.50 0.50 14.95
25.00 36.45
10.03 36.19 3.13 2.88
14.90 500.00
6.51 4.94 52.50 1.91 4.46 0.67
40.12
3.29 242.20 5.93 122.30 0.89
0.50
100.00
9.85
26.25 7.21
1.05 5.52 1.03 5.81 33.61
1.37
0.50 29.60 15.36
0.50
Closing Price (N)
1,500
512 84,748 108,096
419 4,200,000
477,000 661,500 1,000 2,000 329,600 917,110 893,577 50 2,000,000 1,698,475 1,000,000 1,000,000 116,666 1,670,890 80,000 76,030 1,000,000 1,500,000 500,000 500 2,000 196,000 200 50,000 100,000 56,050 1,000 100,371
1,981,057 646,608 13,287,533 9,795,960 3,480,049 19,608,250 1,000 20,606,478 1,013,024 43,814,902 56,000 73,200 91,000 1,208,394 1,006,032 9,694,209 16,206,125 15,760,964 690,986 219,190 1,994,793 8,731,730
423,153 3,955,950
120,500 60 1,084,781 50
6,754,190 142,462
321.917 2,085,103 432,546 239,764 4,996,912 219,359
75,813
100 132,768 528,167 2,503,084 10,000
51,500
100,000
23,655
11,714 2,500
144,800 1,550 3,595,323 100,100 432,271
978,845
909 145,347 432,172
50,000
Quantity Traded
10.54
0.61 2.02 0.66
0.50 0.50
1.06 1.20 0.50 0.50 0.50 3.51 0.50 0.69 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.90 0.50 2.50 0.50 0.50 0.50 0.50 0.50 0.50
11.10 3.39 2.30 9.27 4.30 3.20 9.50 16.12 8.30 20.50 1.78 1.78 13.50 10.17 2.18 11.38 2.91 11.70 5.38 1.92 1.75 16.70
43.50 31.25
15.58 42.66 6.75 3.67
29.20 470.00
19.90 16.20 95.00 6.60 6.70 0.88
51.49
9.52
0.50 2.02 0.50
0.50 0.50
0.50 0.85 0.50 0.50 0.50 2.00 0.50 0.50 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.90 0.50 0.50 0.50 0.50 0.50 0.50
4.26 0.64 0.53 2.05 1.65 1.20 0.00 7.95 3.60 11.64 0.00 0.87 0.00 3.90 0.73 6.30 0.95 2.17 1.96 0.50 0.52 11.45
27.00 22.56
12.71 36.19 4.78 2.66
10.17 367.83
4.31 4.02 57.00 2.31 3.80 0.50
,39.00
2.23 186.00 5.23 72.50 0.93
4.63
0.50
97.00
11.59
32.96 3.01
1.45 5.52 0.50 6.43 28.70
0.48
0.50 14.53 6.40
Year Low
255.00 7.10 100.00 1.01
0.50
100.00
20.15
62.26 8.28
2.54 8.28 1.82 7.60 42.50
0.66
0.64 24.58 8.30
Year High
0.00
0.00 0.00 0.03
0.00 0.00
0.09 0.10 0.00 0.00 0.06 0.43 0.00 0.00 0.00 0.08 0.00 0.00 0.00 0.02 0.06 0.10 0.00 0.10 0.36 0.01 0.01 0.14 0.03 0.07 0.00 0.00 0.00 0.00
0.80 0.00 0.00 0.00 0.28 0.22 0.00 1.34 0.69 1.61 0.00 0.18 0.00 0.85 0.50 0.54 0.22 0.13 7.59 0.11 1.34 1.57
1.29 1.32
3.90 1.61 0.70 0.00
0.28 15.94
0.54 0.71 4.50 0.26 0.73 0.06
3.70
12.12 0.35 4.50 0.00
0.00
0.00
11.75
1.66
3.26 3.66
0.28 0.35 0.22 0.31 7.03
0.04
0.01 7.94 1.80
E.P.S.
0.00
0.00 0.00 16.67
0.00 0.00
5.56 10.20 0.00 0.00 8.33 4.88 0.00 0.00 0.00 17.25 0.00 0.00 0.00 25.00 8.33 5.00 0.00 5.00 1.39 50.00 50.00 6.43 16.67 7.14 0.00 0.00 0.00 0.00
5.83 0.00 0.00 0.00 25.91 6.68 0.00 6.96 6.20 8.74 0.00 5.44 0.00 5.07 5.44 14.81 4.68 19.23 0.28 4.82 0.43 7.83
20.93 20.46
3.26 22.48 7.34 0.00
37.57 27.96
16.91 14.38 16.89 16.92 5.75 8.83
13.92
19.98 16.29 22.22 0.00
0.00
0.00
8.51
7.33
10.11 2.26
5.18 15.77 3.64 20.74 4.14
15.00
50.00 2.77 4.37
P.E. Ratio
Non-Metalic Mineral Mining Multiverse Plc
0.50
4.90 1.81 6.00
0.50
Road Transportation Associated Bus Company Plc
Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company
1.64 1.99 4.20 4.35
Speciality Interlinked Technologies Plc
0.50 Printing & Publishing. Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press
6.94 1.19
0.50
3.00
1.97 1.49
Media/Entertainment Daar Communications Plc
Hotels/Lodging Capital Hotel Ikeja Hotel Plc
Courier/Freight/Delivery Red Star Express Plc Employment Solutions C & I LEASING PLC
Automobile/Auto Part Retailers Incar Nig. Plc RT Briscoe Plc
Afromedia Plc
SERVICES
0.50
20.50 0.50 25.50 2.28 11.29 125.00 32.29 133.00
Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Eterna Oil and Gas Plc Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc Hospitality Tantalisers Plc
0.63 13.95
Intergrated Oil and Gas Services Oando Plc
3.98 12.71 13.28 4.30 1.05 2.92 0.66
INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service
1.44 0.50
145 0.50
Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans
0.50
Processing Sysetms Chams Nigeria Plc
1.38
0.50
Metals Aluminium Extrusion Ind Plc
Paper/Forest Products Thomas Wyatt Nig. Plc
5.70 10.60
NATURAL RESOURCES Chemicals BOC Gases Plc
8.26
2.42 1.79
9.30 7.33 24.10 4.48 120.00 0.50 0.52 42.28 2.87 2.28 10.93
Tools and Machinery Nigerian Ropes Plc
Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company
INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc
0.50
Computers and Peripherals Omatek Ventures Plc 13.12 2.66
0.50 0.50
ICT Computer Based Systems108 Courteville Investment Plc
ICT Telecommunications Starcomms Plc
5.05 1.05 0.76 28.50 1.69 0.76 8.59 3.17
Pharmaceuticals Ekocorp Plc Evans Medical Plc Fidson Healthcare Plc Glaxo Smithkline Consumer Nig May & Baker Nigeria Plc Neimeth International Pharm Nigeria-German Chemicals Plc Pharma-Deko Plc
IT Services NCR (Nig) Plc Tripple Gee and Company Plc
0.50
Opening Price N Union Diagnostics & Clinicals Services
1.81 5.82
4.90
0.50
1.64 1.81 4.20 4.13
0.50
6.94 1.16
0.50
3.00
1.97 1.56
0.50
0.50
20.50 0.50 25.50 2.12 10.00 118.75 32.29 133.00
14.00
0.64
3.98 12.71 13.28 4.30 1.05 2.78 0.66
1.44 0.50
1.66 0.58
0.50
1.38
0.50
10.55
5.98
8.26
2.19 1.80
9.75 7.33 24.12 4.45 185.50 0.50 0.50 43.50 2.16 2.27 10.93
0.50
13.12 2.41
0.50
0.50
5.05 1.00 0.76 25850 1.62 0.76 8.59 3.17
0.50
Closing Price N
1,000 523,689
20
1,000
4,017 14,163 4,322 794,519
55,000
50 249,150
200,000
957,741
240 16,000
1,600
50
82,191 10,300 139,384 323,890 263,587 241,875 3,060 8,640
1,549,689
1,512,186
6,888 1,000 100 29,198 200 84,311 2,749,340
2,000 1,000
24,204 15,000
50
1,000
7,500
50
500
1,550
5,310 340,817
254,140 244,833 275,322 500,839 99,009 10,374 86,961 118,809 500 21,000 1,000
10,000
500 3,850
1,000
1,020,000
168 282,500 670,383 2,178,943 118,968 103,673 1,927 50
100
Quantity Traded
2.78 11.75
5.15
0.80
8.00 6.82
3.68
0.50
400 2.07
1.64
3.67
4.33 3.65
0.72
600
1.57 6.50
4.90
0.50
4.60 3.60
3.17
0.48
3.00 1.33
0.90
2.65
1.97 1.30
0.51
141.00 63.86 195.50
163.50 2,100 240.00
27.99 0.50 0.50 5.71 3.89
1.87
3.98 12.71 13.97 3.60 1.05 2.92 0.63
1.33 0.50
1.62 2.58
0.50
1.38
0.50
10.70
6.80
8.26
5.94 1.47
12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93
0.50
3.25 3.25
0.50
0.50
5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28
0.50
Year Low
0.87
0.51 0.80
0.00
0.00
0.00 0.13
0.26
0.00
0.22 0.69
0.08
0.54
0.00 0.16
0.04
13.32 3.32 11.91
4.93 0.00 6.02 0.67
6.95
0.16
0.00 3.90 0.00 1.22 0.17 0.07 0.00
0.05 0.00
0.13 0.00
0.00
0.00
0.00
0.13
0.93
0.00
0.15 0.19
1.59 1.71 1.76 1.80 8.01 0.00 0.00 1.05 0.36 0.18 0.00
0.00
6.49 0.00
0.04
0.05
0.06 0.00 0.27 8.88 0.21 0.08 0.00 0.00
0.00
E.P.S
4.22 8.75
0.00
0.00
0.00 27.69
12.19
0.00
34.09 2.12
11.25
4.91
0.00 8.19
12.75
11.11 19.23 17.07
6.99
7.40 0.00
4.17
6.06
0.00 3.26 0.00 3.52 6.18 41.71 0.00
28.80 0.00
13.15 0.00
0.00
0.00
0.00
85.77
7.37
0.00
39.60 9.16
7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00
0.00
1.43 0.00
12.50
10.00
9.05 14.13 0.00 0.00
88.50 0.00 3.07
0.00
P.E Ratio
as at Friday, August 3, 2012
37.10 0.70 32.60 5.59
78.97
0.97
3.98 15.58 15.03 4.30 1.86 2.92 0.63
1.51 0.99
2.50 2.58
0.50
1.38
0.50
12.39
9.20
8.69
6.91 3.60
30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40
1.47
9.31 3.59
0.50
0.52
5.31 1.45 3.20 23.11 5.61 1.96 12.91 200
0.50
Year High
Stock Market Report
Vanguard, MONDAY, AUGUST 6, 2012 — 27
28 — Vanguard, MONDAY, AUGUST 6, 2012
Interview
Dana crash, a case of criminal negligence By Kenneth Ehigiator and Kunle Kalejaiye
R
ecently, former Nigeria Airways pilot, Capt. Tito Omaghomi was in the corporate headquarters of Vanguard Newspapers where he fielded questions on issues relating to the Dana Airlines’ crash, which occurred on June 3, 2012. He particularly expressed angst about the preliminary reports released by the Accident Investigation Bureau (AIB) on the accident, raising questions about the propriety or otherwise of the report. Excerpts: Introductory remarks Where is the black box of the plane? We want to know. If we could get readings from the voice recorder, how come they can’t get information from the flight data recorder because from the crash of the plane, only the tail of the plane was left while the rest part of the plane was burnt? What is the job of the flight data recorder? It will tell you the altitude of the air plane; the speed; whether landing gear was down; it will tell you everything before the plane crashed. All what civilized airplane operators do now is that they will take the black box to the manufacturer, they will slot it into a machine and you will see everything about the plane, the way it took off from Abuja until the plane crashed, you will see everything about the plane. But thank God, they agreed to strengthen parameters from their voice transcription. The plane had its landing gear down; its flaps and slack were extended, and they said they lost two engines. Landing gear in an airplane, when you are operating a two-engine airplane, when you do your procedure turn, you come in and you are prepared for landing, you then put your landing gear. Any pilot that puts down his landing gear is double sure of hitting the runway, not to mention an airplane that was operating on one engine. If you put down your landing gear, you cannot re-tract those gears again, not to talk of a plane that has no engine. The
landing gear is brought down by free fall but you raise it up with hydraulics and the hydraulics work in conjunction with the pumps of the landing gear. But to bring it down, you just have to open the door and it will free-fall. But what they said in their report was that the pilot was asking the co-pilot to raise the landing gear. Which landing gear were they raising? With what system were they going to raise the landing gear when the engines were not working? And it is only with hydraulic that you can raise the landing gear. The flaps they wanted to raise can only be done electrically, the engines are not working and all the electricals were down, the hydraulics had failed, so why was the pilot asking the co-pilot to raise the landing gear? These are statements that lawyers can use with the knowledge that I have, put them on the witness box, then you will find out that it was a case of Criminal Negligence. I told Mr. Falana and Agbakoba that I want to know why they are involved in this coroner inquest. Is it to ask them (Dana) to come and pay the people their money, about $100, 000? If it is that, they will be paid. But in this
’
•Capt. Tito Omaghomi
If you load a plane up, put it on a runway, let’s say from here to Ajegunle or farther than Ajegunle, you put it with one engine, the plane will not take off. That brings us to the issue of knowing why an airplane flies. If you know why an airplane flies, then half of your problem is solved. From the same AIB (Accident Investigation Bureau) report, the captain and the co-pilot were comparing the position of the throttle in relationship with the engine reading of this same throttle engine. They said the engine does not tarry with the position of our throttles. If the thrust is forward, it should have an engine reading that is high. But this one, the thrusts were
That airplane was just looking for where to rest and that is why it ended in people’s houses and I am happy that they said that the pilot requested to land on runway 18R, which is the longest runway.
business, it should be established that it was a case of Criminal Negligence that caused the death of the over 100 people on board. These are things we should be looking at because the coroner will be there and it is the story that everybody should take. Falana was saying the other day that the plane took off with one engine but that is not true.
’
down and it should be reading zero but now, they said the engine was reading high. May their souls rest in peace. When you have two engines in operation, you can lose one engine, it has been proven. That is why they tell you in an accident like this, you don’t punish anybody but the essence is to ensure that it does not occur again. Those two throttles are here, the pilot
not flying will carry out a shutdown checklist. He will shut down the engine. Because of mistakes people have made in the past, Air space Bulletin had said that the pilot flying the airplane will use his hand to secure the last engine so that the one not flying will not go inevitably to shut the last engine, that is what the people discovered. One RPM was not reading in conjunction with the position of the throttle that has no engine and if there was no engine, they have created all the drags in the world that they brought down the landing gears, they have created all the drags by taking down the flaps. That airplane was just looking for where to rest and that is why it ended in people’s houses and I am happy that they said that the pilot requested to land on runway 18R, which is the longest runway. So he had runway 18R, he had his problem but he did not tell anybody his reason for asking for a longer runway and there is a system in place that once you are in contact with the radar, it is they in the control room who will give directions to fly, how to go about it until they establish you for landing, then they will tell you to contact Lagos tower on 118 decimal 1. Up till that stage, they did not say that they had problems, and then you will know why they took off their landing gear, took off their flaps, hoping to come and land. It was at that stage that they had contact with control tower 118 decimal 1 that they shouted MAY DAY!!! While they were saying MAY DAY, Dana was saying that the plane was in tip-top shape. We do not have any
evidence that the plane was in tip-top shape because they did not record anything on the checklist. The people who were going to do search and rescue actually had nothing to search for, they just had to go and rescue the airplane. It was the inability to get there on time that made the rescue mission degenerate into recovery because everybody was dead. So they only had the job of rescue, they did not have the job of search and they did not have to rescue anybody. By the time they got there, the area boys were on top of the situation. It was dead bodies they were removing. So it was not a question of search and rescue, it was a question of recovery; that is the story. So this accident is going to become very interesting as you all get to the coroner inquest and see how people will come and pour their hearts out and you must know that this is a dangerous aspect of this investigation. 160 people have lost their lives and the multiplying effects on the families who will be roaming out there looking for whom to put their hands in. They should talk right and act right because we don’t want anybody to take revenge on us. Because people are trying to divert us from the matter on ground, they are talking about the contract that has been awarded for the renovation of airports. It was not the contract that caused accident, we should not be talking about contract now but we should talk about the matter that is on ground. I heard some people were saying that they should suspend those renovations going on but that is a head wind suggestion, when somebody has awarded a contract to renovate 11 airports and you say they should suspend it. Good, let them suspend it, tomorrow, the contractors will come with contract variations, so what are we talking about? You see, I don’t want to talk about this contract award because I am not a contractor, the people told me they are not carried along, then I asked them are you contractors? If you want to go and look for a job, go and look for a job and leave this matter of contractors alone. We are talking about people that are dead and you are here talking about contract. This is the truth of the matter. I want you to do your own independent investigation. These people who are causing these troubles today are in the good book of Demuren and his people because Demuren and his people refuse to play ball with them. That is why they are now enemies. This is a dangerous situation just like I always tell you. If you let me talk about aviation in this country, nobody will go to the airport and fly an airplane; that is the gospel truth.
Vanguard, MONDAY, AUGUST 6, 2012 — 29
30 — Vanguard, MONDAY, AUGUST 6, 2012
Vanguard, MONDAY, AUGUST 6, 2012 — 31
Homes & Housing Finance BRIEFS Odu’a unveils N200m Ibadan estate DU’A Investment Com pany Limited has commissioned a N200 million estate in Ibadan, the Oyo State capital. The estate, named Almond Court, located in the heart of Ikolaba Estate, near Agodi, was built under the company’s Property Redevelopment Programme (PRP). The company has been redeveloping all its old properties that have become physically and functionally obsolete, in the last few years, turning them into modern buildings. Almond Court is a luxury estate of 10 units of four-bedroom duplex built on a 5,300 square metre land, which hitherto contained a three bedroom bungalow with Boys’ Quarters. Chairman of the conglomerate, Chief Sharafadeen Alli, said: ”The Board and Management of Odu’a adopted the idea of Property Redevelopment Programme (PRP) to rejuvenate most of the company’s derelict properties spreading across the Odu’a states and Lagos to enhance new value and profitability.”
O
•Some of the houses being developed for Lagos HOMS
HOMS: Lagos intensifies housing development Stories by YINKA KOLAWOLE N furtherance of its Home Ownership Mortgage Scheme (HOMS) aimed at facilitating home ownership for residents of the state, Lagos State government has intensified the development of housing units across the state. The state is currently developing housing estates in line with the scheme simultaneously in all the five divisions’ across the state, in such places as Igbogbo in Ikorodu, Sangotedo, Mushin, Ilupeju,Omole, Magodo, Lekki and Badagry. General Manager, Lagos State New Towns Development Authority (NTDA), Dr. Adeyemi Isiba, disclosed this during a tour of the on-going construction work at the site of the 492 housing units in Igando under Lagos HOMS. He said the estate consists of 41 blocks of 12 flats of 1, 2 and 3 bedroom flats, with functional infrastructure like a miniwater treatment plant, a central sewage treatment plant, laundromat with solar drying room and refuse disposal point for each of the block which would be serviced through an alley which goes all around the estate to service the flats. According to him, the vision to design each block to consist of 1, 2 and 3 bedroom flats was to facilitate mixed cohabiting amongst different social class in the society. This, according to him would
I
further promote social harmony and peaceful co-habiting among low, middle and high income groups in the society. “The implication of this is that with these housing estates, when completed in the next 18 months, this administration would have provided more housing units than what any other administration has been able to provide in Lagos State,” he said.
O
n a recent tour of three of the housing estates under construction, Governor Babatunde Fashola explained that the delay in the take-off of the scheme was to enable contractors handling the various building projects complete
more houses before the commencement of allocation to subscribers. According to him, this is to ensure that the scheme delivers homes to as many Lagosians as possible from the onset. He said the Ilupeju site consists of 10 blocks - each having 12 apartments to be allocated to 120 households; Mushin has five blocks, while the Ikeja GRA scheme has a total of 76 apartments for 76 households, “with many others in other parts of the state”. Isiba noted that the Igando project is being developed to function as an independent community on its own with sustainable facilities that would make life more meaningful to its inhabitants, with provision
for school, worship centres community centre, basketball court, shopping mall as well as lot of green area. He decried the slow pace of work exhibited by some of the contractors handling the project, noting that some aspects of the project are behind schedule. He directed the project managers to ensure that contractors work extra hours to achieve prompt and timely delivery, if need be. The NTDA boss asserted that the project, aside from its potential to improve the standard of living of future residents, will also generate employment for the estate managers who will be engaged to manage the facilities put in place. Lagos HOMS is a home ownership scheme that affords first time home buyers resident in Lagos State the opportunity to own their homes. The purpose of the scheme is to encourage first time home buyers with verifiable source of income to own their own houses.
Developers seek ways to transform housing sector ROPERTY developers, under the aegis of Real Estate Developers Association of Nigeria (REDAN), plan to use the occasion of their tenth anniversary, coming up later in the year, to deliberate on how best to transform the nation’s housing sector to meet international best practices. A statement by Chairman, Publicity Committee for the event, Mr. Niyi Odutayo, stated that a number of housing related activities have been lined up to commemorate the occasion, which is scheduled th th to hold from 9 - 11 , October, 2012, in Abuja. The programme for the event include an international housing summit, award for eminent Nige-
P
rians who have made sterling contributions to housing development in the country, a housing workshop, a tour visit of the UK housing finance sector, among others. In order to ensure a fruitful event, the statement added that REDAN is calling on all stakeholders in the housing sector, including its members and affiliates, to support the programme and make it a resounding success. “There is no doubt that REDAN has greatly impacted on the progress of housing development in the country. Although there are quite a number of grounds to cover, the effect of REDAN as a pressure group has added tremendous bite to housing
advocacy and sensitization, especially since its formation 10 years ago. REDAN today is recognized by government as the only organized private body saddled with the basic need of providing affordable housing in the country,” the statement added. Odutayo further stated that eminent personalities expected at the occasion include Vice president of Kenya and his Botswana counterpart , Nigeria’s Vice President, Arc. Namadi Sambo; Minister of Land, Housing and Urban Development, Ms Ama Pepple; FCT Minister, Senator Bala Mohammed; Governors of Akwa-Ibom, Kwara, Lagos, Kaduna, and Central Bank of Nigeria.
UK house prices fall continue
H
OUSE prices have fall en for the fourth time in five months, says the Nationwide Building Society. The fall of 0.7 percent in July means prices are now 2.6 percent lower than they were a year ago, at an average of £164,389. Figures indicated that the property market is heading for a new downturn, with new mortgage approvals at their lowest since 2010. Nationwide said the decline in house prices was due to the current recession. “The weaker price trend observed in recent quarters is unsurprising, given the disappointing performance of the wider economy. The UK recession intensified in the three months to July, with the economy contracting by 0.7 percent quarter on quarter. This disappointing outturn can be only partly explained by unusually wet weather and the impact of an extra bank holiday during the quarter,” said the Nationwide’s chief economist, Robert Gardner. Bank of England’s Funding for Lending scheme has already led to a sharp cut in the cost of long-term, fixed-rate mortgages for people with at least a 40 percent deposit. C M Y K
32 —Vanguard, MONDAY, AUGUST 6, 2012
Homes & Housing Finance BRIEFS Lagos to prosecute C of O applicants with fake documents AGOS State government is set to prosecute people who seek to obtain Certificate of Occupancy (C of O) with fake and forged documents. This follows a directive given by Mr. Babatunde Fashola to the State Attorney General, Mr. Ade Ipaiye, in this regard. The directive was recently given by Governor Fashola while signing into law the Land Use Act Regulation. Fashola also issued six months’ ultimatum to land owners in the state to perfect their Deed of Assignments. He said the introduction of Deed of Assignments will eliminate fake documents and touting in land administration in Lagos. Meanwhile, the Attorney General and Commissioner for Justice said the law which will take effect from August 1, will give room for land owners to have proper documentation to their lands, while Permanent Secretary, Lagos
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De-regulation vital for robust housing sector (2) By NWACHUKWU OBIECHINA
HE monopolies enjoyed by some institutions of government are partly constitutional and result of practice over the years. PHCN, the succeeding company of NEPA, enjoys absolute monopoly in the generation, transmission and distribution of power. Similar organisations are the water, boards and solid waste management outfits established by state governments. Their activities impede housing development in many ways. In the case of PHCN, private estate developers construct power supply network in new estates only to bring-in PHCN to connect to the national grid after the network has been certified okay by the Ministry of Mines and Power. PHCN usually will
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•Blocks of luxury flats at Banana Island
demand for the payment of some amount termed capital contribution and from that time start collecting tariff from subscribers. The above development is not fair on the developers who must have committed large funds to provide the networks.Other actions of government hindering the rapid development of affordable housing are the various exorbitant charges by agencies of government as fees n a m e l y building plan approval, taxes, obtaining of C of O before approval of building plans can be granted.
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n addition, the property taxes charged and new rent edict enacted by Lagos State also act as disincentive to investors. The cumbersome
nature of the processes of obtaining building plan approval and that of estates before any development permit can be granted, all add up to impediments. The sector is not only over-regulated but also the delays encountered throughout the process of obtaining all the necessary approvals to commence development impede progress. The Supreme Court Judgment of 2003 makes it possible for State governments to frustrate the housing development efforts of the private estate developers, corporate organisation and even agencies of the Federal Government, like FHA, Ministry of Lands, Housing and Urban Development, and others by either delaying approvals or denying same completely. The multi-charges imposed on residents are another source of worry to developers. The seeming confusion as to who will manage (provide post construction management) of completed estates is another source of concern. The charges, namely the new property taxes, tenement rates, ground rents, service charges and others shall be well defined, as to who shall collect and what services shall be provided to residents. These not well-defined fees constitute disincentive to property developers. There is urgent need to bring all stakeholders to a table to agree on the best way forward. The de-regulation of the sector is long overdue as the contribution of the private sector cannot be overlooked. Land is very central to any housing development, without it there can be no housing. So, access to land
should not only be guaranteed but also made affordable. That is why the late President, Umaru Musa Ya’Ardua made Land Reform one of his seven point agenda. The regime before, that of President Obasanjo, set up the Mabogunje Committee to fashion out ways of overcoming the problems surrounding land acquisition and utilisation. It should be stated that the effort of the committee has not yielded visible results as no new bills have been sent to the National Assembly to canvass land reform. The transformation agenda of the present administration should address the Land Use Act with the view of making land accessible, in a timely manner and affordable. Finance is required in both the provision of housing and in assisting the intendin beneficiaries of housing to be able to purchase them. The problem of developers is mainly the high interest rate of funds and the inability to secure long term funds because banks are more interested in giving out only short tenured funds for a number of reasons, it pays the banks to concentrate on short tenured funds because of the volatile nature of the money market.
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econdly, banks cannot take people’s deposits and give them out long-term, because it will result in investment mismatch. The housing sector is not a very good area of investment because the return on investment is very low and has a very long gestation period, hence the need to give it special concession.
Vanguard, MONDAY, AUGUST 6, 2012 — 33
Insurance
FRC directs NAICOM to suspend management of A&G Stories by ROSEMARY ONUOHA
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he Financial Reporting Council, FRC, has directed the National Insurance Commission, NAICOM, to suspend the management of Alliance & General Insurance Ltd and Alliance & General Life Assurance Plc respectively. The Council also directed the Commission to appoint interim managements who shall recommend a firm of external auditors to NAICOM and FRC to carry out a substantive audit of the companies. The decisions were taken at a meeting the Council held last week with representatives of the external auditors (both disengaged and new) of both A&G companies, Asset Management Corporation of Nigeria (AMCOM), Institute of Chartered Accountants of Nigeria (ICAN) and NAICOM in attendance. Announcing the outcome of the meeting in a statement issued on Friday, the FRC said, “In the course of the review of the 2010 audited accounts submitted to National Insurance Commission (NAICOM) by the above named companies, some errors/lapses were observed and communicated accordingly to the companies by NAICOM. Rather than deal with the issues raised in the accounts, the companies provided entirely different sets of accounts, incorporating items that were not originally included in the accounts under review. Curiously, the different sets of accounts were signed by the same firm of chartered accountants (External Auditors).The matter was brought to the attention of the Financial Reporting Council (FRC). The Council requested the two companies to submit the versions they regarded as the Financial Statements that should be relied upon. The Financial Statements sent to the Council were reviewed and several non compliance with Statements of Accounting Standards were also observed. The companies’ managements were invited for inspection by letters dated June 01, 2012. Thereafter, several meetings were held with teams from both companies, drawing their attention to matters of noncompliance with some Statements of Accounting Standards, several financial reporting irregularities and corporate governance issues in the said financial statements for the year 2010 which they submitted to NAICOM and separately to the Financial Reporting Council.
BRIEF Consolidated Hallmark clinches Web Jurist’s overall best category award ONSOLIDATED Hall mark Insurance Plc has emerged as the overall winner in the insurance category of the 2012 Web Jurist Award. Organised annually by Phillips Consulting Limited, this year’s edition, the 10th in the series not only witnessed the conferment of the overall 1st winner position on Consolidated Hallmark Insurance, but the company also clinched the Best Customer Experience Award during the event. Held in Lagos where the Honourable Minister of Communications, Mrs. Omobola Johnson presented the keynote address, the company which recently relocated its head office to the state-of-the art corporate head office in Lagos is winning the award on the first nomination. Consolidated Hallmark Insurance’s Awards from Web Jurists is coming on the heels of the company’s recent valuable investment in the upgrade of its website, enabling a seamless online transaction platform in sync with the web-based operations application being used for technical, accounting and HR operations companywide. Phillips Consulting has, since the inception of the Awards in 2001, successfully established the barometer for effective measurement of websites through verifiable criteria by their web jurist with the aim of continuously enhancing ebusiness activities and encouraging the best in web communication practice.
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*President of Nigerian Council of Registered Insurance Brokers, Barrister Laide Osijo (right), presenting the Most Broker-Friendly Award to the Managing Director of Goldlink Insurance Plc, Mr Femi Okunniyi, during the July edition of the NCRIB Members Evening held recently in Lagos. The following issues were taken into consideration before reaching a decision: The non consolidation of their subsidiaries, the several accounting abuses noted in the said 2010 financial statements, the tax issues (non disclosures) dating from 2007 and the liabilities now unnecessarily held by AMCOM are strong enough to mislead a significant stakeholder; The corporate governance of the companies is opaque and very worrisome; The policyholders are exposed to untold risks due to the inadequacy of the asset cover and poor solvency margin of the companies; The approach to changing External Auditors and the confusing assignment given to them are questionable. “The companies were directed to bring this to the attention of their Board immediately: The companies
are directed to refrain from engaging any external auditors on the said 2010 accounts and financial statements and submit itself to the National Insurance Commission; their primary regulator; NAICOM has been notified to suspend the managements of the companies and appoint interim managements which shall recommend a firm of external auditors to NAICOM (and FRC) to carry out a substantive audit of the companies; The organisations are to publish, within the next seven business days and not later than August 10, 2012, in at least two widely read national newspapers (full page), that the managements of the companies have presented misleading financial information to regulatory authorities and that in the interest of policyholders interim managements shall be
appointed by NAICOM.” They are also required to furnish the FRC with the following documents as agreed at the meeting: The Financial Statements of Fidelity Bond Limited for 2010; The Board minutes that led to the appointment of AAE Professional Services and Baker Tilly Nigeria (Chartered Accountants); and Management letter issued by the external auditors of Fidelity Bond Limited for the year 2010. The companies were duly informed of the implication of non-compliance with the directives of the FRC as it may result in administrative, civil and/or criminal sanctions. Decision meeting on the external auditors involved in the matters on the two companies has been scheduled for August th 13 , 2012 with NAICOM and the Investigative Committee of their professional body in attendance.”
Goldlink pays N929m claims in H1 OLDLINK Insurance Plc has paid a total of N929 million in the first six months of 2012 as claims to some of the company’s clients who suffered one loss or another within the period. Managing Director of the company, Mr. Femi Okunniyi stated this last week in Lagos when the company hosted the July 2012 edition brokers evening of the Nigerian Council of Registered Insurance Brokers, NCRIB. At the forum which took place at the newly built na-
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tional secretariat of the NCRIB, Okunniyi said that breakdown of the figure shows that they paid N209 million on motor; N258.3 million on fire; general accident took N80.3 million; N30 million was paid on engineering insurance while the Life arm settled claims totaling N316.9 million during the period under review. Okunniyi emphasised that Goldlink Insurance in her 20 years existence has remained unshaken in its belief that quick settlement of claims is
the only way to gladden the hearts of the insured and give confidence to brokers. According to him, “Claim settlement remains the acid test of insurance. He also took the opportunity to introduce the company’s online third party motor insurance and to showcase the competitive edge his company has in the areas of thoroughbred professional staff, state of the art Information Technology, good corporate governance culture, among others.. Okunniyi emphasised the
need for harmonious business relationship in the insurance business so as to enhance the image of insurance practice and the industry as a whole in the country. He appealed to brokers to actively support the NIID programme of the industry by providing adequate information about the businesses they generate in order to evolve a database that all stakeholders can be proud of.
34 — Vanguard, MONDAY, AUGUST 6, 2012
Vanguard, MONDAY, AUGUST 6, 2012 — 35
Diversification: Missing the boat on rubber – 3 “History Never repeats itself; man does”, wrote Barbara Tuchmann, US Historian. Even, when some of the broad outlines of history appear to repeat themselves, on the whole nothing remains the same. Mankind has been repeating many errors made in the past since recorded history. Africans are the most backward people on earth because we hardly wrote our own history. We waited for Europeans to start writing our history for us. And, now in Nigeria, history has been removed from the school curriculum. That will guarantee that future generations will fall into the same traps as we. The economic history of the last century reveals that from time to time certain nations or groups of countries experience spectacular economic growth and they drag the rest of the world along with them. The United States after World War I led until its economic depression became a global depression. Then again, it pulled the free world from World War II until the mid-1950s when it slowed down. By then Communist Union of Soviet Socialist Republics, USSR, running a managed and centralized economy, especially under Josef Stalin, 1879-1953, “proved” that a planned economy could deliver GDP
growth of over 10% annually. It worked for almost a decade and the slow down came suddenly. The world should have learnt that no economy can grow at 10% perpetually. The latest miracle economies, China and India, for almost ten years mesmerized the world with over 10% annual GDP growth, sucking in large volumes of crude oil to power their expanding economies and giving comfort to those who refuse to acknowledge that oil has had its day. Nigeria, like all oil producing countries must urgently develop other viable sources of revenue before the eclipse of oil. Rubber is one of them. WHAT NEEDS TO BE DONE? Prioritise Agric Effort The first thing is to prioritise our efforts aimed at diversification of the economy; looking closely at those which provide us with comparative advantages which we can build upon. With respect to agricultural products, rubber is a prime target. Granted we have other products; cassava, yams, maize, vegetable oil, rice, sorghum, cashew etc, which can be produced in large quantities and exported. But, a hard look at most of the other products will reveal that they are food as well as cash crops. With a large population, increasing by 7 million mouths to feed
annually, it will require all our efforts and ingenuity to produce enough of the food crops to feed our people. Rubber has the singular advantage that it is not a food crop; it is purely a cash crop. Cultivating more rubber will have two aims, not mutually exclusive. The first is to attempt to become a tyre manufacturing nation once again; the second is to share in the global bonanza which rubber will continue to offer well into the future. Establish a Partnership
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thirty years. Members of the organization must be people who are passionate about rubber and the establishment should have permanent as well as temporary members. For instance the Ministers and Commissioners of Agriculture will remain as members as long as they hold the portfolio. Permanent members will be appointed for seven years; renewable once because the life cycle of rubber is seven years from seed to the first yield. The assignment of the
Cultivating more rubber will have two aims, not mutually exclusive. The first is to attempt to become a tyre manufacturing nation once again; the second is to share in the global bonanza which rubber will continue to offer well into the future.
A four-way partnership and an organisation, led by governments (Federal, States, Local) in areas where rubber can be gainfully cultivated must be established. Such an organization will focus only rubber and set realistic targets for greater output of rubber for a generation – defined as
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organization will be to remove all the obstacles in the way of greater output of rubber and to encourage research into increasing yield per hectare. The other partners include private investors in rubber plantations; research institutes and the banks –ably led by the Central Bank of
Nigeria. One of the major problems facing rubber producers in Nigeria is inappropriate tenure of loan facilities. Banks never lend for more than five years to farmers; that is, if they do at all. But, as noted in the second part of this series, it takes seven years from seed to the first harvest; whereas the bank is already asking for repayment before the farmer receives a kobo of income. The Central Bank can help in removing this obstacle by creating a special Rubber Development Fund, which will be for exclusive promotion of rubber with a tenure of eight years; that is “seven-plus-one”. The extra year is to enable the farmer and all the partners to take stock and determine how to proceed – bring more land under cultivation; invest in increasing yield on existing acres etc. All these efforts should be supported by increased funding of research. Most rubber producing countries are in the tropical zones of the globe; invariably, they have been the least users of the developments in biotechnology which has made it possible to increase yields without adding land for other crops. This we must face squarely because no nation can continue to bring more land under cultivation for one crop forever.
BUSINESS & ECONOMY
W.African leaders slash taxes to battle high food prices M
ali, Niger and Ivory Coast have slashed or removed taxes on a range of imported basic foods as they try to contain rising food prices, which led to protests in a number of countries when they last spiked five years ago. Grain prices hit record highs on international markets in July as drought scorched crops in the U.S. midwest and Russia, prompting the UN’s Food and Agriculture Organization to warn that it was concerned about prices although it did not yet see a repeat of the 2007/08 crisis. Russia’s heatwave has fuelled speculation about export restrictions in the Black Sea producer, while U.S. corn and wheat prices at times rose by 50 percent in the last six weeks and remain close to highs. High food prices sparked riots in countries
such as Egypt, Cameroon and Haiti five years ago, although the UN has pointed out supplies of staple rice are more comfortable this time. Global food price pressures come as many in West Africa celebrate the Muslim holy month of Ramadan, which traditionally drives up prices, and as a food crisis affecting some 18 million people across the Sahel peaks with the onset of annual rains. “I know we are in a period of rising prices, especially when it comes to basic foods like sugar. But I call on businesses to respect promises that they made with the ministry of trade,” Niger ’s President Mahamadou Issoufou said in a speech late on Thursday, referring to meetings between the government and traders last month. Niger has removed all taxes
on imported cereals but figures produced by the country’s SIMA agricultural information index showed the price of cereals was 45 percent higher in July than during the same month last In markets in the dusty capital, 100 kg of millet now costs 30,000 CFA francs, up from 25,000 CFA the month before and 19,000 at the same time last year. The same amount of maize cost 25,000 CFA francs in July, up from 19,000 CFA the month before, according to SIMA. Saley Saidou, the landlocked nation’s trade minister, blamed failed rains in Niger and the high cost of transport from ports in nations to the south, as well as world prices for the increases. Alarm is growing that an expected fall in U.S. grain exports could cause shortages and further jumps in prices worldwide. Niger, a uranium-producing
nation that straddles the south of the Sahara, saw street protests against the cost of living during the 2007-8 food price spike. Neighbouring Mali, which is gripped by a political crisis in the south and whose northern desert zone is occupied by a range of Islamist forces, has slashed taxes on imported rice and sugar as it too seeks to keep prices under control. Customs and value added tax on imported rice were reduced in May to a combined 2.5 percent, down from 31.28 percent. Meanwhile, the tax bill for sugar importers has been brought down from 105 percent to 2.5 percent. The move is a welcome relief for a country seeking stability after a March coup precipitated the fall of the north to a mix of rebel forces. “This year I was surprised to buy a kilogramme of sugar
even cheaper than the price fixed by the authorities,” said Moussa Doumbia, a stonemason. “Long may it continue.” Even top cocoa grower Ivory Coast, which with its ports is spared the same costs of transporting goods hundreds of kilometres north towards the Sahara but is still recovering from months of post-election violence last year, has been forced to act. The government this week temporarily suspended all taxes on rice imports, estimated at some 900,000 tonnes a year, denying the government some 7 billion CFA in revenues. This decision was taken as the government wants to maintain the price of rice at a level that corresponds to the purchasing power of the Ivorian population,” government spokesman Bruno Kone said after a cabinet meeting on Wednesday.
36 — Vanguard, MONDAY, AUGUST 6, 2012
Apointment & Promotions vicahiyoung@yahoo.com 08033348923
BRIEF Anambra to empower 10,000 youth through SURE NO
fewer than 10,000 people are to be empowered by the Anambra Government through the Subsidy Reinvestment and Empowerment Programme (SURE-P) in the state. The Acting Coordinator of the programme and Commissioner for Sports and Youth Development, Dr Edozie Aroh, said this in an interview with News Agency of Nigeria (NAN) in Awka. He said the state would engage the beneficiaries of the programme economically on partial basis to enable them have time for other activities. “The programme is targeting 10,000 economically active grassroots population, the essence is to create jobs which will impact on the poor of the society. “We intend to engage rural people, especially youths, for five hours a day, for five working days a week and pay them N10, 000 per month. “We are engaging them partially so that they can engage in other economic or academic activities while they are working for the government.”
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dozie said the state had selected some council areas for the take-off of the programme. He said that beneficiaries of the scheme would be engaged in areas of health, security, crafts, traffic control, and agriculture. The coordinator said that ladies would be empowered on hairdressing, confectionery and tailoring. ”Anambra has been selected as one of the six pilot states for the SURE-P and here in the state, we are working with nine local government councils, three from each senatorial zone. ” We in the ministry of sports and youth development are conscious that this is a programme for our unemployed youths. “So, we are going to ensure that they benefit by sensitising them and making them to key-in. We will engage them economically and pay them.” Edozie frowned at what he called “lack of cooperation” on the part of traditional rulers, urging them to cooperate to enable their communities benefit from the programme when it took off. The state chairman of National Youth Council, Mr Nwagbufor Nwankwo, said he was convinced that youths in the state would benefit from the programme.
Ishii assumes office as GEF’s CEO D
EPUTY Vice Minister of Finance of the Government of Japan, Dr. Naoko Ishii has assumed office as Chief Executive Officer, CEO, and Chairperson of the Global Environment Facility, GEF, the world’s largest public funder of environmental projects. The GEF’s Council in June unanimously selected Dr. Ishii, to succeed Monique Barbut, who completed her second term as CEO in July. Prior to becoming the fourth CEO and Chairperson of the GEF, Ishii, as Deputy Vice Minister of Finance, was responsible for Japan’s international financial and development policies, and for its global policies on environmental issues such as climate change and biodiversity. She led the Japanese delegation at the Transition Committee for designing the Green Climate Fund. Dr. Ishii’s career at the Ministry of Finance began in 1981 with a focus on the international sphere, particularly development issues. Later in her career she was Japan’s Director for Bilateral Development Finance (20042006) and for coordination with Multilateral Development Banks (200204). For nearly half of her career, Ishii has served in international assignments outside of Japan, including at the World Bank and the International Monetary Fund. At the World Bank, she was the Country Director for Sri Lanka and the Maldives (2006-2010). During that period, while based in Colombo, she managed the World Bank program for Sri Lanka amidst that country ’s quartercentury old civil conflict by building partnership among key stakeholders. She also served as the country program coordinator for Vietnam at the World Bank (1997-2001), project manager at Harvard Institute for International Development (1996-1997), economist at the International Monetary Fund (1992-1995) working for Africa and Asia, as well as visiting fellow at Center for International Affairs at Harvard University (19841985). Dr. Ishii also taught sustainable development and environment at Keio University. Speaking on her new office, she said “I begin my tenure at a time when the GEF is ready to shift from being a ‘silent partner’ in the global environmental community to having a more active voice in sharing the experience and
knowledge acquired during 21 years of innovative global environmental project undertakings and to strengthening the coalition of partners in the stewardship of global commons.” “The GEF has established a record of great achievement. Yet the world remains on an unsustainable path and needs new ways to manage the global environment. It is urgent and critical to forge trusting and productive partnerships among governments, international partners, the private sector, and civil society
organizations.” She emphasized that Finance and Environment ministers need to talk to each other and ensure that environmental concerns are embedded at all levels of policy making, saying “My focus will be bringing people together to work for our environment. Citizens also need to play their part in solving global environmental threats.” “My goal is to make the GEF coalition of partners greater than the sum of its parts in order to maximize the impact of the GEF projects and
•Dr. Naoko Ishii programs on the ground. We are not there yet. Now is the time for us to bring joint efforts up to scale to achieve sustainable results through global and local coalitions.”
Osun State Head of Service retires O
SUN State Head of Service, HOS, Elder Segun Akinwusi, has retired as the Head of Service of the Osun State Government after attaining the mandatory retirement age. Akinwusi rise to the top of the Civil Service started in 1977 as an Administrative Officer in the Old Oyo State. His career progression, spanning virtually all ministries, departments and agencies of governments, offered him deep and rich exposure to virtually all facets of Public Administration. Following the creation of Osun State in 1991, he was a principal actor in the smooth take off of the new state. His personal integrity, drive, resourcefulness and
•Elder Segun Akinwusi
dedication was usually sought after to handle sensitive assignments that required these qualities to bear. He acted as Permanent
Secretary/Clerk of the Osun State House of Assembly between 2002 and 2003 and was confirmed a Permanent Secretary in May 2003. The administration of Rauf Aregbesola saw in him some inherent qualities and retained him as the Head of Service to help stabilize the new administration. The retired HOS, graduate from Social Sciences department at the University of Ife (now Obafemi Awolowo University) in 1976. He attended the University of Bradford, England where he obtained a Post Graduate Diploma in Project Analysis in 1980 and Public Administration in 1984 respectively.
Phase 3 telecom wins award
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HASE 3 Telecom, a provider of carrier services, has been honoured with best internet infrastructure service provider award. IT received the award at the just concluded Africa Information Society Merit Award and Cyber Nigeria Forum held in Lagos. According to the organizers of the event, “Tribe Media”, the Africa Information Society Merit Award, AISMA, a pan Africa award initiated in 2009 to recognize and celebrate iconic contributions to science and technology and ICT applications, usage, deployment and development across Africa. The awards seek to celebrate innovations that are transforming Africa landscape from business to finance, tourism to entertainment and the media. The pan Africa award is meant for individuals, organisation initiatives that promote the knowledge economy on the continent. According to the organizers of the award phase3 has made a significant impact in
broadband connectivity in the West Africa sub region noting that network is connected to the subsea (SAT-3) fiber cable via NITEL (Nigeria) & Benin
Telecom(Benin Republic), giving the network a redundancy on international sub-marine and aerial fiber routes within the sub-region.
Minister of technology, Mrs Omobola Johnson (left); and Mr Olusola teniola, Chief Operating Officer, Phase3 Telecoms receiving an award from the Minister during the Africa Information Society merit award and Cyber Nigeria Forum in Lagos.
Vanguard, MONDAY, AUGUST 6, 2012 — 37
Technology news & reviews
Nigerian made Tab PC scares international brands BY PRINCE OSUAGWU
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igerian made tablet PC Inye has debuted, sending competition signals to international brands like Apple iPad and Samsung Galaxy tab among others. Invented by a young Nigeria, Mr Saheed Adepoju , Inye is from the stable of Encipher Group, a company Adepoju and his web developer friend, Anibe Agamah, formed to offer customised IT services and products, including cloud computing. The product is to be designed for the African market. According to the 29-yearold Adepoju, the key selling point of Inye is its price - $350 (N56,000) as against the approximately $750 or about (N130,000) for an iPad. Adepoju believes that, for the price, there is a big market for his new invention, particularly in Nigeria and elsewhere in Africa. Adepoju is hoping find market for the new tab, among secondary and tertiary institution students as well as among the Nigerian government. He intends to market the product and create awareness that would see the product deployed at least one in each local government area. Inye is a mobile internet device runs on the Google Android operating system.It gives access to the internet and allows the user to play media files and watch movies. Built in a unique way between a laptop and a mobile phone, the device is an 8-inch machine. Among the features of the tab is the standard software
applications that come preinstalled and many other bundles from various local developers. Inye is an Igala language, meaning ‘One’. The product has a local app designed to raise awareness about HIV among others related to water and sanitation. Lead inventor, Adepoju is a Sun-certified Java programmer with a background in software development. He revealed that after doing a first degree in maths and computer science in Nigeria, he however completed another course in advanced computing by research at Bournemouth University, in the United Kingdom. Inspiration Adepoju said that after graduation in 2009, he returned home to Nigeria, had a stint in a consulting firm, got sacked in a controversial circumstances and had hit his inspirational idea when Apple launched iPad in 2010. For him, with the waves iPad made and the ease of work it brought about, price could be a barrier for low i n c o m e earners who may actually need it most. •Inye tab So the idea that creating a similar product with low price particularly for Africa’s low income earners would be a novel idea. So Inye became an idea. Help from borrowed money Having created the idea,
convinced that it would sell, the biggest problem for Adepoju was capital and in the African business environment sourcing money for investment was almost a suicide mission. He had to
MTN offers customers more value for money with MTN Zone
•Nigerian Wizkid Adepoju borrow money from friends and family, raising close to N10 million. However, the sum could only take care of the devices and logistics and so had to depend on oral marketing strategy and social media to look for market for the product. Adepoju said that the first 100 units of the device, were built in China, adding that the apps developed in the product are focused on keeping the local culture through technology. He also said that his company was working on Encipher TV, where people can watch African movies, plays and films.
Intel joins Adlevo in Rancard Africa cloud business I
ntel Corporation’s global investment and M&A arm, Intel Capital is collaborating with Adlevo Capital Managers, a private equity fund manager focused on investments into technologyenabled businesses in subSaharan Africa, to expand investment into Rancard Solutions Limited. Rancard is a leading provider of cloud based software for mobile content discovery and delivery with focus in Africa. President of Intel Capital and Intel Executive Vice President, Arvind Sodhani, who announced the collaboration to journalists, said that “Africa is a market with attractive macroeconomic trends which we believe will unearth great business opportunities for us. With technological developments playing a key role in the region’s economic
growth, we are seeking out Africa’s leading technology companies and great entrepreneurs as part of our mission to foster technology innovation globally. ” Also elated by the development, Intel GM Europe, Middle East and Africa, Mr Christian Morales, also said that “as a business Rancard provides a wide range of services that are well placed to meet consumers’ rapidly shifting demands, particularly as the market for cloud based mobile content grows. It’s a company that has a promising future and one we feel could benefit not just from access to our capital, but also from our global network and technological expertise.” The deal marks Intel Capital’s first investment in West Africa. Intel Capital is represented in the region by Sam Mensah, who is Investment Director for sub-
Saharan Africa. This latest investment builds upon Intel Capital’s long track record of supporting the growth of companies which deliver innovative technology solutions. Meanwhile, CEO of Rancard, Kofi Dadzie, commenting on the investment, said that “it will play a vital role in enabling us to expand our footprint across Africa on both a reputational and operational level. We’re delighted that both Adlevo Capital and Intel Capital have agreed to come onboard at a time of such opportunity and are excited about working with such experienced and globally recognized partners.” Since launching in 2001, Rancard has been recognised as a trusted provider of cloudbased mobile software and services which Africa’s mobile operators are increasingly
BRIEFS
turning to. As voice-based average revenue per user declines, mobile operators are increasingly using Rancard’s content discovery platform to profitably increase data revenues by delivering targeted content to their subscribers. The company has developed a cloud-based social recommendations engine called ‘Rendezvous’, which maps connections among mobile users and then uses this mapping of shared interests as a basis for recommending content to consumers. Perhaps that is why Managing Partner of Adlevo Capital, Yemi Lalude, described Rancard as a perfect example of African entrepreneurs bringing world-class technology solutions to market.
MTN Nigeria, has introduced a dynamic tariff plan tagged, MTN Zone. The service enables subscribers to enjoy as much as 100 percent discount on their calls depending on where they are making the calls. Consequently, customers will be able to make significant savings on their phone calls and enjoy much more value for the money spent on the network. Chief Marketing Officer, MTN Nigeria, Mr. Larry Annetts, in a statement said, “MTN Zone is a service which offers attractive discounts to customers depending on the prevailing discount rates available on the cell site from which the customer receives signal.” Explaining further, he said customers will be advised of discounts available in the area they are through a service called cell broadcast. Available discounts will be displayed on the screens of their phones, he said.
Concept Nova unveils new management software
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oncept Nova, one of Nigeria’s fastestgrowing Information Technology solutions company, has unveiled her flagship Fleet Management Software (Fleetrak AMS) in Lagos. According to Mr. Chukwuma Ochonogor, Managing Director, Concept Nova Limited, “Fleetrak AMS has been in existence as a stand-alone application that had to be deployed on our clients’ servers. What we are celebrating today is the fact that we have taken the solution to the cloud. This means that organizations can monitor and manage their Fleet on the go. We are celebrating a more convenient and affordable Fleet Management Solution”. The official unveiling of Fleetrak was carried out by Mr. Yinka Ipaye, Head of Fleet, Lagos State Signage and Advertising Agency (LASAA) supported by Mr. Chukwuma Ochonogor. Mr. Ipaye commented on the timeliness of the solution. “Fleetrak is a splendid solution for Fleet and Transport Managers. The solution is a “MUST HAVE” for any organization.
38 — Vanguard, MONDAY, AUGUST 6, 2012
Agric BRIEFS Niger consolidates on ‘Irrigation for Life’ project By WOLE MOSADOMI
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fter the landmark flag off of the Nigeria-Israeli Joint Agricultural Project, tagged “Irrigation is Life” in Lapai Gwari village, near Minna in Niger state recently, the Niger state Governor, Dr. Mu’azu Babangida Aliyu has brought in over 100 tractors to boost food production not only in the state mechanized farming. The “Irrigation is Life” project was muted in July last year under the auspices of the Israeli Agricultural Humanitarian project which is aimed at promoting dry season farming in the state. Speaking at the flag off ceremony in Lapai Gwari Village few kilometers from Minna the state capital, Israeli Ambassador to Nigeria, Mr. Moshe Ram called on the Federal government on the urgent need to go back to Agriculture as a way out for a permanent sustenance of the economy not only for the country but even for the people of the country as individuals.
NAFDAC partners foodbext on exhibition
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HE National Agency for Food Drug Administration and Control, NAFDAC has re-confirmed its endorsement of the FoodBext West Africa exposition. Mrs. Ogochukwu Menaisara, Director R/R in the agency disclosed this recently when she said NAFDAC as principal regulator will be at the event and is committed to creating an appropriate environment for the vibrant development of F&B businesses, especially from a standpoint of food safety and proper standards of manufacturing practice. While she said that the agency will ensuring that products manufactured and offered for consumption is in compliance with proper levels of hygiene, packaging and product integrity remains a key point of interest to the organization. “ Companies are hence advised to take advantage of the opportunity of Foodbext to promote their products to the trade expected to last for three-days in Lagos.
Agricultural research can eliminate poverty – Nwanze STORIES BY BABATUNDE JIMOH
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he International Fund for Agricultural Development, (IFAD) President Kanayo F. Nwanze, has disclosed that Agricultural research has tremendous power to eliminate poverty as such should form the bedrock of Green Revolution in Nigeria. He added that strong extension system cannot be overemphasized because it ensures the link between research and farmers. In a lecture on how to revamp agriculture in Nigeria, the boss of one of three United Nations agencies based in Rome said “Extension takes the new technology from researchers to farmers. Through its interaction with farmers, extension feeds back information to researchers to adapt research results to the farmers’ needs.” Kanayo F. Nwanze noted that agriculture contributes about 45 per cent of Nigeria’s GDP and employs around two-thirds of the workforce, including 90 per cent of the rural population. Yet, the nation imports more food than it produces, and most Nigerian farmers are poor. To reverse this situation, he said agricultural research has tremendous power to eliminate poverty as studies have indicated that every US dollar spent on agricultural research produces nine dollars’ worth of added food in developing countries. “Agricultural research successfully drove the first Green Revolution in Asia. And it is agricultural research that must now drive a Green Revolution in Africa, as we work to feed a growing population at a time when climate change is starting to affect agricultural productivity. “While agricultural research and development can lead to higher crop productivity and better water and soil usage, research in other areas is equally valuable. Research in medicine and healthcare, for example, can improve the health of poor people and in so doing can also improve their productivity and incomes. While calling for more investment in science and technology, he urged
scientists to understand the environment where their discoveries will be used, and the needs of the people who live there, adding “If they don’t, their research never gets beyond the lab. “Equally important, we cannot and should not rely exclusively on research done in developed countries to address the needs of developing countries. No one is better placed to know the conditions on the ground in Nigeria and to discover the
solution to the challenging conditions in Nigeria than Nigerian scientists themselves.” Nwanze explained that for research to move from the lab to the field, it needs to be supported by a strong extension system and enabling policies that link research to products and markets so that the applications benefit both the public and private sectors. “In the years ahead, more research in science and
technology will need to be directed towards climate change adaptation and mitigation. “Poor rural people are often the most vulnerable to the effects of climate change. Many live on ecologically fragile land and depend on agriculture, livestock, fisheries and forestry. Climate change is already having an impact on agriculture in many parts of our continent, leading to crop failures, livestock deaths and higher economic losses.”
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‘Why Mimiko is investing in agriculture’ —Akinmade O
ndo state government says its investment in agriculture is based on the belief that neglect of the sector is a call for food and economic insecurity and ultimately poverty. The State Commissioner for Information , Kayode Akinmade, said agriculture is the first manufacturing industry in the world as it does not only give riches to a nation but the only she can call her own.” Nothing brings a nation down than dependence on foreign countries for food.” He said the Agriculture potential of Ondo state has been under-utilized before the advent of the Mimiko-led government, “as an agrarian state, with a large land mass and an estimate 60% of its population who derive their livelihood from agriculture,
Output from the industry had nonetheless been minimal.” He added that agriculture process had been uncoordinated, farming was basically labour-intensive and farmer were largely unmotivated. “So, the caring heart government, through the ministry of agriculture therefore set a policy thrust to promote accelerated development of agricultural activities in the state including food, free crop, livestock, fishery and forestry. “The policy thrust is also to provide raw material for agro based industries in Ondo state, to ensure food security and to efficiently harness the agricultural resources of Ondo state so as to contribute significantly to its GDP.” He explained that to actualize the dream of
turning around the economy of the state and to create employment for the youth, the Government created Agriculture Villages at Ore, Owo, and Auga among others. The information commissioner said the various agric villages are changing the perception of farming so that young people stop trying to escape the farm and instead look at farming as an attractive option, something that is as appealing as a career in hightech, in fashion or industry. “When rural communities offer young people a range of income-generating opportunities to choose from, more will decide to stay in the villages and resist the call of often dead-end futures in the cities, abroad or in extreme religious or political movements.”
Vanguard, MONDAY, AUGUST 6, 2012 — 39
Advertising, Media & Marketing deed to make Lagosians and Nigerians see more than the games. We want them to see the miracle of friendship. You can see that we are confidently expressing that intent on all our banners here today. One of our key messages during Eko 2012 is for people to see more than the games as they come to Lagos. We will be showcasing the best of our businesses and entertainment and this is quite significant as it goes beyond the realm of sports alone. So, for those planning to come to Lagos to see just a beehive of sporting activities, get ready to see more than the games”
BRIEFS Mouka launches ‘Dial –A–Mattress’ OUKA Limited, manufacturer of bedding materials and other polyurethane said it will be introducing its Mouka Dial Mattress concept to reenforcing its leadership in delivering innovative solutions to customers. The concept of Dial-AMattress is designed to give easy and convenient access to Mouka products for all customers. By dialing dedicated numbers customers get advice on the appropriate products to purchase to suite their specific needs and get the products delivered to them free of charge. Speaking on the concept, Mr. Jude Abonu, Head of Commercial, Mouka Limited said that Mouka DialA-Mattress provides ease for busy professionals or persons who want to buy mattresses but want to avoid the hassles of delivery and risk of fake products. Abonu further said that the desire to put customers and Stakeholders of Mouka first in all dealings had motivated the company to embark on this initiative, “Customers are just a phone call away from getting our trained customer service personnel recommend the best sleep and comfort solutions in Nigeria,” he added.
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Etihad embarks on promo TIHAD Airways, the national airline of the United Arab Emirates, has launched a new low fare promotion for passengers travelling from Nigeria to the Middle East, Africa, Europe, Asia, Australia and North America this holiday season. The promotion is open to both Pearl Business class and Coral Economy class passengers who book th between 18th July and 15 st August and travel until 31 August. Maurice Phohleli, General Manager, Nigeria and West Africa, said: “Etihad Airways prides itself on building strong relationships with its guests. With summer and Ramadan here, we are pleased to unveil our latest fare offers for Pearl Business class and Coral Economy class travelers in Nigeria. The special offers form part of the ‘welcome on board’ service in our first month of operations in Nigeria and we hope travelers will take advantage of them. “
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From Left; Mr. Abraham Benson, Marketing Manager Strategy of The La Casera Company Limited, Mr. Guna Sekaran, Head Strategy Business Unit, Distribution, Mr. Bayo Obarotimi, Marketing Manager Execution, and Mr. Dave van Rensburg, General Manager, Marketing at the Media Launch of the New Nirvana Soda and Tonic Water held in Lagos.
18th NSF: Lagos deploys tagline to drive festival Stories by PRINCEWILL EKWUJURU
NCE again, Lagos State, host state to the National Sports Festival (NSF) scheduled for November/December 2012, has created a new tagline; ‘Go Lagos, Ignite The Spirit of Friendship to drive the festival. Coming as a creative sequel to its ‘Lagos Own The Game’ theme for the 2009 FIFA U-17 World Cup, Princess Adejoke Orelope-Adefulire, Lagos State Deputy Governor and Chairman of the Local Organising Committee (LOC), while speaking at a Media Conference organised by the Marketing and Sponsorship SubCommittee of the LOC in Lagos assured that Lagos State is set to host the best NSF ever. She said for this reason, wide range innovations that will give the sports fiesta an international outlook and make it distinct from any past event are being introduced. To en-
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sure the state government delivers on this promise, the Marketing and Sponsorship Sub-Committee has engaged the services of two leading marketing communications firms, Chain Reactions Nigeria and Insight Communications Limited, as Joint Lead Consultants to develop the overarching strategic communications plan for Eko 2012.
The theme has been carefully crafted to be a call to action on the one hand and an easy to recall cliché for the youth population the campaign is targeted at. While extrapolating the theme and its strategic underpinnings, Lagos State Commissioner for Youth, Sports and Social Development, Mr. Waheed Enitan Oshodi said, “our intent is in-
Guinness unveil new campaign for Jonny Walker …picks Siasia as brand ambassador OHNNIE Walker from Guinness Nigeria Plc stead has unveiled its new campaign tagged, Keep Walking Nigeria and announced Samson Siasia, former Super Eagles Coach, as the first Nigerian Johnnie Walker giant. The Keep Walking Nigeria campaign will celebrate indi-
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viduals who achieve their goals despite the odds, and seek to inspire the nation to Keep Walking. The event attended by a host of high profile Nigerian entrepreneurs, politicians, businessmen and celebrities, guest speaker, Samson Siasia, made one of his rare public addresses and
Unilever takes new fragrance, pink variant
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NILEVER Nigeria has taken the competition in the detergent segment of the fast moving consumers goods (FMCG) market to a new dimension by including in Sunlight detergent with new fragrance and pink variant. Since its introduction, Unilever Nigeria has ensured it flagship detergent brand, Omo does not compete against Sunlight by creating a different segment and target for the
lso speaking at the event on the strategic underpinnings of the theme developed by Insight Communications Limited and Chain Reactions Nigeria, Sarah Agha, a Business Director with Insight Communications explained that the agencies explored Sports, Business and Entertainment as critical pillars around which engagements during Eko 2012 will revolve. “What you are about to witness is therefore not just a sports meet but an exciting fusion of Sports, Business and Entertainment. Therefore, we have created, together with our partners at Chain Reactions Nigeria, three exciting pillars of experiences built around Sports, Business and Entertainment with the big idea being, Friendship and we have woven this into an easy-to-recall single-minded proposition, Go Lagos, Ignite the Spirit of Friendship.”
premium laundry brand. Speaking at the unveiling of the new improved Sunlight, the Managing Director, Unilever Nigeria Plc Mr. Thabo Mabe stated that “the Sunlight brand has grown tremendously, and has recorded several improvements in its formulation to bolster its cleaning and freshness properties to ensure that it is the consumer’s detergent of choice”. He said this is a very spe-
cial day for us at Unilever as we breathe life into our corner stone brands, Sunlight, the world’s first packaged branded soap. Sunlight has always been on the mission to make laundry delightful through great cleaning and gorgeous fragrances, the clean that smells.” In Unilever, we work to create better life everyday so people can feel good, look good and get more out of life.
inspired the esteemed guests with his own story of personal progress. The first Nigerian to be recognised as a Johnnie Walker giant, Siasia’s ideals as a person, a former player and coach are in harmony with those of Johnnie Walker himself and the brand philosophy of ‘Keep Walking’. Sharing with the assembled guests the story of his own journey through life so far and how he is determined to Keep Walking to achieve his goals, Siasia moved the audience as he told how, throughout his life, he had always believed in himself and had been determined to make a success of his life. Relating personal progress to his passion for football, he summarised, “One thing I have learnt: when life tosses you the ball, play it; because nothing can stand in the way of a man who believes in himself.”
40— Vanguard, MONDAY, AUGUST 6, 2012
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THE RETURN OF ARUNMAH OTEH
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considered the so-called ‘administrative lapses’ weighty enough to warrant Oteh’s suspension, curiously, it was the Presidency, in apparent cahoots with the Finance Minister and Head of Service, who reinstated the D.G.! In fact, it required the personal intervention and pleas of Okonjo-Iweala for SEC staff to ‘forgive and forget’, and once again embrace Oteh’s suzerainty. So, the question is, is the preservation of Arunmah
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curiously contrasts remarkably with Mr. President’s apparent refusal to respect the recommendation of the National Judicial Council to reinstate Justice Salami as President of the Court of Appeal. There are lessons, nonetheless, to be learnt from fallouts from Oteh’s courageous outburst and allegations of demand for bribe by Hembe. In the first place, the proceedings of the Committee’s investigation confirm public suspicion that the oversight functions and investigative hearings of various Legislative Committees are simply avenues to line the pockets of members of the respective committees. In spite of the illegality of such ‘administrative lapses’, as revealed in the House Committee hearing, global best practices in public accountability would suggest that it is inappropriate and indeed, unethical for a supervisory body to be funded directly or indirectly by its subordinate agencies. The question now is how can this incestuous relationship be stopped? The drama of Oteh’s suspension and reinstatement underscores an incoherent policy protocol for such matters in the Commission. It is recalled that while the SEC Board of Directors
he Director General of the Securities & Exchange Commission (SEC), Ms. Arunmah Oteh, returned to her post lately, after the two-month suspension from duties because of the fraud-related counter allegations between her and members of the House of Representatives Committee on the Capital Market. However, some critics insist that Ms. Oteh’s reprieve was ill considered and premature. Such critics are not convinced by auditors’ report that her infractions were merely ‘administrative lapses’. Social critics may need to comment on whether stakeholders’ and public interests would be better served with Oteh’s return; however, Jonathan’s declared zero tolerance for corruption appears out of sync with the elegant lady’s admission of a N5m ‘donation’ (some may call it bribe) to Herman Hembe, the agency’s oversight House Committee Chairman. It is unlikely that Oteh can provide any legal or constitutional authority for sponsorship of an ‘invigilating’ House Committee member for any purpose whatsoever! The prompt arraignment of Herman Hembe by the EFCC on allegations of ‘extortion/ bribery’ contrasts sharply with Oteh’s soft landing, which was based on the report of an administrative panel! It also
sanctions. Oteh’s undenied singular management of stakeholders’ donations to the SEC’s ‘Project 50’ and her unilateral authorisation of travelling allowances/‘bribe’ to Hembe, for example, should count as serious infractions; the DG’s inclusion of staff from a commercial bank in directorate roles outside the enabling Act of the SEC is also a serious infraction. The DG’s unapologetic appetite for extravagant and expensive
The Stock Exchange should be compelled to confirm the value of these donations over the years, and the EFCC should unravel the utilisation of these funds, while such donations should stop forthwith.
Oteh as D.G. more important to government than smooth cohesive administration of the SEC with a fresh candidate, who is unencumbered by the allegedly abrasive tendencies and profligate disposition of the embattled amazon with public funds? Government’s clean bill of health to Oteh also raises the question as to where one draws the line between socalled ‘administrative lapses’ and culpable infractions that attract more severe
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management style may also be inappropriate for a public servant with millions of Nigerians barely surviving on $2/day. The layman recognises that it is fraud to spend someone else’s money without appropriate authority, and the media is replete with reports of conviction and sentence for small time misappropriation of third party’s frauds. In Oteh’s case, the actual value of the ‘Project 50’ for which the D.G.
alledgedly had sole discretion is reported to be between N100m and N1bn. Incidentally, in her testimony, erstwhile Stock Exchange DG, Dr. OkerekeOnyiuke revealed that the Exchange has consistently donated 0.3% of the value of all its transactions to its supervisory agency, to facilitate the work of the SEC! The Stock Exchange should be compelled to confirm the value of these donations over the years, and the EFCC should unravel the utilisation of these funds, while such donations should stop forthwith. From the foregoing, government’s decision to reinstate Arunmah Oteh rather than replace her may regrettably be seen as a power show, as the apparent body language suggests that government does not care a hoot about best practices, since it insists on imposing an evidently poor manager of persons, who has lost the confidence of her team on such a critical regulatory agency! Worse still, the legislators may ultimately also see Oteh’s return as unnecessarily provocative and a potential source of attrition and government’s gamble on Oteh’s reinstatement may further assault the integrity of the Capital Market and ultimately restrain economic growth. SAVE THE NAIRA, SAVE NIGERIANS!!
BUSINESS & ECONOMY
Tribunal orders tskj ii to pay N5.75bn to FIRS Inland Revenue Service (FIRS). Hon. Nnamdi Ibegbu (SAN), the Acting Chairman of the Tribunal made the order following an appeal by TSKJN, challenging the FIRS Tax
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he Abuja division of the Tax Appeal Tribunal (TAT) Thursday ordered TSKJN to pay N5.14 billion ($35,938,087 dollars) as tax liabilities to the Federal
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
assessments in a contract for the construction of Nigeria Liquefied Natural Gas (NLNG). Ibegbu also awarded N300, 000 against the TSKJN as cost of the three appeals decided in favour of FIRS. The company (TSKJN) had filed three separate appeals with suits No TAT/ ABJ/APP1010/2008, TAT/ABJ/ APP/006/2006 and TAT/ABJ/ APP/017/2010 before the tribunal. In the appeal to the Tax Appeal Tribunal by TSKJ II against the FIRS assessment, the company challenged FIRS refusal to amend its assessments for 1997-2002 and additional assessment raised by the Service and 550, 556.74 dollars tax liabilities for 2008 and 2009 tax years among others. In the first ruling on TSKJ II appeal of FIRS assessment for 1997-2002, the Tax Appeal Tribunal upheld FIRS assessment that TSKJ II is to pay $ 16, 688, 267 dollars as tax. Bright Igbinosa
supported by Patricia Gata represented FIRS in the appeal. Also, in the second ruling yesterday representing assessment years for 2006, 2007, and additional assessment for 2008, the court upheld FIRS assessment of $ 19, 249, 820 million dollars. FIRS was represented by Adesola O. Adeyemi TSKJ II’s counsel in the appeals was Babatunde Ogundipe. In the two suits, TSKJ II (CONSTUCE INTERNATIONAL SOCIAAADE UMPESSUAL Ltd, a multinational firm was awarded contract by the Federal Government on the Nigeria Liquefied Natural Gas, Nigeria LNG project. It has a company called TSKJ Nigeria Limited, a subsidiary of TSKJ International, which offered services to TSKJ II but was not party to the NLNG contract. In trying to fulfil its tax obligations for the years in question, TSKJ II filed its tax returns, under Section 26
of Companies Income Tax, CITA, but made deductions on expenses incurred by TSKJ Nigeria, a subsidiary to TSKJ II- a multinational company. FIRS scoffed at this. It maintained that since TSKJ II did not file its audited accounts, but filed under Section 26 of CITA, deductions in favour of TSKJ N (Nigeria) – a Nigerian subsidiary, which FIRS maintained were not allowable. Rather, FIRS maintained, Section 26 of CITA gives the FIRS Board discretionary powers to allow 80 per cent turnover as expenses/costs, and assess the remainder of 20 per cent of turnover at 30 per cent. Statutorily, companies are required to file returns based on audited accounts, but TSKJN filed its returns for the years in question based on the Section 26 of CITA, with Turnover as basis for assessment.