High interest rates killing economy — OPS

APRIL 7, 2014

High interest rates killing economy — OPS zSays 22-35% interest rate threat to NIRP zIMF says rates are declining in other economies zPrivate sector crowded out of borrowing

By OMOH GABRIEL, FRANKLIN ALLI & NAOMI UZOR

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drop in interest rate will assist manufacturers and other operators in Nigeria to grow the economy. This is the consensus of the Organised Private

Sector, OPS, and other economic operators in the country. At the moment, interest rates range between 22-35 percent, which they decry to be too high for any productive venture.

Interest rate is the price paid for money borrowed from banks. The Central Bank of Nigeria, CBN, has kept the rate at which it lends to banks at 12 per cent, which serves as the

barometer for the direction of interest rate charged by banks.

While banks pay a paltry three percent on savings account, they charge about 22 percent for money lent to customers. The margin between savings and prime lending rate has been increasing over, time thus making cost of funds in Nigeria one of the highest globally.

The OPS has therefore called on the CBN to ease its monetary policy rate of 12 percent, saying it is fuelling hike in interest rate and cost of borrowed funds to manufacturers by development finance institutions and commercial banks in the country to between 22-35 percent.

But the International Monetary Fund, IMF, in its World Economic Outlook report for April, which set the agenda for the 2014 Spring Meetings of the Bretton Woods institution, said that real interest rates worldwide have declined substantially since the 1980s and are now in slightly negative territory. The ten-year global real interest rates, a weighted average of safe real interest rates across countries, has declined from an average of 5½ percent in the 1980s, to 3½ percent in the 1990s, to two percent between 2001 and 2008, and to slightly negative territory in 2012.

According to the IMF, “The cost of Continues on page 18

171.0 2,951.00

16.86 107.20 -99.55

-3.15 -23.00

-0.19 +0.75 +0.56

CURRENCY BUYING CENTRAL SELLING DOLLAR

154.74

STERLING 255.3829

155.74

256.2081

257.0333

EURO

213.4793

214.1691

214.8589

FRA

175.2236

175.7898

176.356

CFA

0.3057

0.3157

WAUA

238.1654

238.9349

239.7045

RENMINBI 24.8557

24.9365

25.0173

RIYAL

41.394

41.5273

KRONA

MEETING: From left, Chairman, Forte Oil, Mr. Femi Otedola, President, Dangote Group, Alhaji Aliko Dangote, and Petroleum Resources Minister, Mrs. Diezani Alison-Madueke during the Economic Management Team meeting presided over by President Goodluck Jonathan at Aso Chambers, State House, Abuja.

Photo by Abayomi Adeshida.

155.24

41.2607 28.5941

0.3257

28.6865

28.7789 240.4781

SDR

238.934

239.7061

YEN

1.5128

1.5176

1.5225

CBN Exchange rate as at 04/04/2014 C M Y K

18 — Vanguard, MONDAY, APRIL 7, 2014

Cover Story

Breaking the Nigerian poverty cycle through entrepreneurial revolution (1)

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High interest rate killing economy — OPS Continued from page 17 capital has also fallen but to a lesser extent because the required return-on-equity has increased since 2000. Over the medium term, real interest rates and the cost of capital are likely to rise only modestly from current levels.

Part of the reason is cyclical: the extremely low real rates of recent years reflect large negative output gaps in advanced economies.” The body in its study said that real rates and the cost of capital are likely to remain relatively low even when output gaps are eventually closed.

While interest rates in some countries are as low as two to three percent, in Nigeria, the prime lending rate is above two digits, making the cost of funds too high for manufacturers and entrepreneurs.

The OPS chiefs who spoke with Financial Vanguard on the apex bank’s interest rate regime and its effects on small and big businesses and the economy as a whole, said “We are worried of the high Monetary Policy Rate (MPR) at 12 percent, which now keeps the interest rate high and expensive to borrowers as no bank would lend to customers at single digit, which is below its cost of 12 percent.”

Manufacturers Association of Nigeria (MAN) arm of the OPS, in its 2013 Economic Report, noted that the interest rates on facilities given to MAN members ranged from seven percent to 35 percent in 2013 (including the BoI/CBN intervention C M Y K

window of seven percent).

“With the monetary policy rate (MPR) still maintaining the same level at 12 percent in the last couple of years, it was difficult for manufacturers and indeed the real sector to access funds for operations as well as for expansion,” said MAN. MAN further noted that “provisional figures from CBN show that credit to private sector fell from its level in December 2012 by N26.98 billion to N15.258.3 billion in the first quarter of 2013. At this level, it was 46.4 percent lower than the proposed target of 46.2 percent for 2013 fiscal year, but 8.1 percent above the level reported a year ago.

“The MPC led by the central bank governor, still left the key monetary policy rate (MPR) consistently at 12 percent aiming at ‘easy money ‘ at the disposal of the banks by introducing a 75 percent cash reserve ratio (CRR) on public sector deposits. “ The higher CRR — which is the minimum balance that the banks are expected to keep with the apex bank — is a tightening measure intended to check excess liquidity in the banking system and this has the consequences of crowding -out private sector borrowing.

“This move, which is expected to drain about N950 billion of extra liquidity from the banking system, are monies that may otherwise have gone to credit expansion to aid investment and job creation. Arguably, the CRR hike and other tightening measures in the past have correspondingly led to a

reduction in loan availability, making them more expensive.

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ank loans to the private sector in Nigeria climbed 7.0 percent in May 2013, from a year earlier, according to CBN data, which is below the apex banks loan growth target. Any slowdown in loan growth will be a drag on the economy, which expanded by 6.6 percent in the first quarter of 2013, away from 7.0 percent in fourth quarter 2012.

“The level of financial leverage in the economy is already low as total credit to private sector at N15.6 trillion is just 34.3 percent of the 2012 nominal GDP of N45.4 trillion.

The equivalent level for China is 187 percent and 70 percent for South Africa respectively.

According to MAN, “From our studies, we have discovered that in the last 10 years, interest rates charged MAN members by banks have been at an average of 19.9 percent for most of the manufacturing sub-sectors, with an all time low of 16.4 percent average in the first half of 2012. Individually, some companies are charged as much as 35.0 percent and as low as 7.0 percent for those who source their funds from the Bank of Industry (BoI).

“The disparity is viewed from the risk classifications of the companies with the multinationals being favoured with lower rate as against the SMEs, which are viewed as ‘high risk portfolio transaction customers. The interest rates declared to be charged by banks range from 14.0 percent Continues on page 19

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BRIEFING: From left, Managing Director, Frontiers, Frankly Speaking on Radio, Muyiwa Afolabi; Chief Financial Officer, Sterling Bank Plc, Abubakar Suleiman, and Executive Director, LEAP Africa, Iyadunni Olubode, at a media briefing on Sterling Bank’s ”Get Ready For Work”- a programme for NYSC members, fresh graduates and those seeking employment held in Lagos.

igeria is a country of absurd economic realities. The 13 th largest crude oil producer in the world and the second largest economy in Africa earn an estimated $2.2 million a day in oil revenue. Yet, its GDP per capita, at just over $1,400, is among the lowest for the continent and 54 per cent of its 148 million people live on less than $1 per day. The figures are especially shocking because of the abundance of natural resources primarily oil and natural gas, and massive agricultural potential based on its climate and significant rural population.

Human development data for Nigeria has remained persistently bleak despite a considerable upturn in the country’s economic fortunes since 2000. The UNDP ranked

The obvious explanation behind this is that policy makers sorely failed to share the increase in wealth equitably

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th the country 80 in a poverty survey of 108 developing nations that focussed on severe deprivation. The agency gave Nigeria a Human Poverty Index of 37.3, placing it below more impoverished African neighbours with far smaller economies like Rwanda and Malawi. Significantly, the study looked not just at income destitution, but also at secondary aspects including education, access to health care, standard of living and life-expectancy. More than 67 million Nigerians are docketed as poor according to standard definitions, while 35 per cent of the total population live in extreme poverty.

These recent trends are especially worrying because they parallel a significant but contradictory improvement in Nigeria’s macro-economic

performance. Before the current global financial crisis set in, Abuja had been successful in wielding substantial positive change in its overall balance sheets through a process of reprioritisation and economic reform since 1999. A slew of measures, including privatisation of several steel, petrochemical, mining and port entities helped develop the non-oil sector, bring down inflation and boost international currency reserves. Nigeria also successfully negotiated with the London and Paris clubs to do away with a large part of its foreign debt.

However, World Bank research confirms that even during periods of relative prosperity, poverty levels remained unabated in the broadest sense, and actually worsened during successive positive growth periods.

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etween 1972 and 1980, for instance, the Nigerian per capita income shot up from $1,300 to $2,900 based on rapidly escalating oil prices. A subsequent decline in global oil revenues dragged down per capita income, consumption and expenditure to critical levels.

However, Nigeria neglected investment in human development projects and continued to pump borrowed finances into capital-intensive enterprises. The fallout was that the dramatic rise in national fortunes bypassed the majority of Nigerians, as evident from the negligible rise in per capita consumption figures for the same period.

The differential effect on poverty levels in rural and urban areas for the coinciding period is equally startling.

Because of a simultaneous worsening of income distribution, rural poverty declined slightly while the number of urban poor gained.

However, the worst-off were also the worst losers, as the population living in extreme poverty across Nigeria swelled up from 10 million to 14 million. The obvious explanation behind this is that policy makers sorely failed to share the increase in wealth equitably.

Vanguard, MONDAY, APRIL 7, 2014 — 19

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he challenge facing Nigeria today is not being tackled at the roots. It seems the symptoms are what those in position of authority are chasing after. It is like chasing shadows. The war between the Fulani cattle rearers and the Beroms, the South-South and the country at large, the various clashes among communities that have led to loss of lives in Nigeria, are all about right to land or claims of ownership of one property or the other. The dichotomy between the North and South is all about right to property. The struggle over resource control is about property rights. The call for fiscal federalism is about property rights.

The question of state of Commerce and Industry were origin as basis for accessing merged to form the Ministry contracts. They are worried office and position is about of Industry, Trade and that if they invest in Nigeria, right to property in the Investment. While it is their investment can be taken country. One would have important to seek to attract over by the state. The recent of Lekki thought that the National foreign direct investment into termination concession agreement by Conference would look the country, creating the Lagos State Government, the critically at this issue and ministry is no bait for foreign proffer long- lasting solutions. investors to want to come to taking over of private banks by The dispute over land and Nigeria. Globally, investors are the Sanusi-led CBN are property ownership has been interested in places where examples of such impunity that scare investors away from the bane of modern Nigeria. return on their investments is Nigeria.

In days past, community and high. Nigeria certainly Property rights, according to family ownership of property qualifies as investors have Professor Pat Utomi, had made it difficult for found out that they reap constitutes a major part of the individuals to make final claim higher benefit if they invest in constitutional arrangement to some property. The social Nigeria. The few that have setting therefore, encouraged done so have found this to be that makes an economy communal land and property true. Yet, Nigeria is not a advance. Now, until this entity called Nigeria has a ownership. Down the line, haven to foreign investors. philosophical understanding with the national economy There must be reasons why of what property rights means, without a well defined right of they shy away from Nigeria. individuals to property Many investors out there who Nigeria is not going to make ownership, the community speak privately to Nigerians any major economic progress.

To say the least, investors continued to set the pace for at investment fora are quick to are scared and skeptical about land and property ownership. point out that in Nigeria, there Nigeria because there is Over the years, many that is no sanctity of contract and impunity, and property rights ordinarily would have had property rights are not clearly are not guaranteed.

Sanctity of access to land that would have defined. Most foreign contract is a general idea that yielded some resources for investors see this as the most once parties duly enter into a them to live on, were deprived inhibiting factor that scares contract, they must honour of access to such property. At away would-be investors. They the national level, the Federal are not worried about the lack their obligations under that Government took over all the of infrastructure as is always contract. Contracts have been mineral resources in the land claimed by those who explain breached with impunity by but the title to such land comes away the Nigeria situation. federal and states agents and from the state. This lack of a Shell, Mobil, Chevron, MTN, servants who outrightly well defined right to property UACN and others know too disregard or disobey court has become a social malaise well the infrastructural orders.

Normally, before any foreign that is haunting the nation. deficiency in the country, yet investor commits his capital Each day, hundreds of they invested and are reaping into a project, he will want to Nigerians die fighting over the benefits. be assured that there shall be one form of property or the The truth is that both local stability in the investment other. and foreign investors are wary The key driver in President of investing in Nigeria regime. That is to say, the Goodluck Jonathan’s because the state and its whole or key aspects of the Transformation Agenda is agents have no respect for agreement will be respected massive investment. This is property rights and sanctity of by the host state and that the rules of the game will not be why the ministries of

A nation without defined property rights will continue to be at war with itself

the physical land area is under the c h a n g e d control of state unilaterally. governments, the The foreign m i n e r a l s investor needs contained in such At the national such an level, the Federal land belongs to assurance not Federal only as a Government took the Government in means of over all the the Mineral Act. ensuring that mineral resources While a corporate he realises the or individual expected in the land but the body seeking land for benefits for his title to such land investment goes shareholders, to the state to comes from the but also to certificate convince other state. This lack of obtain of occupancy, he sponsors of the a well defined has to obtain project that mining lease right to property the project will licence from the has become a generate . enough capital social malice that Federal Government. to pay off their is hunting the It is this loans and meet nation. Each day, confused and lack their supply of defined requirements. hundreds of property rights T h e s e Nigerians die that have resulted objectives may fighting over one in the contention only be the realised if the form of property or between F e d e r a l terms of the the other.

Government and investment the states as to agreement are who owns what. respected by Enforcing the host state. individual rights Hence, for that reason, the to property in the Nigerian principle of sanctity of contract courts is tortuous, timeis regarded as one of the most wasting as it takes years to get important legal concepts in judgments and is costly. In most cases, federal agencies the investment process.

The Federal Military without due process encroach Government in 1978 on individual property rights. promulgated the Land Use Is Nigeria going to continue Decree in which it delegated like this forever? There must authority over land allocation be a break from the past. to the 36 states and their local Nigerians must brace up and governments in an effort to do the right thing. A well ensure that rural and urban defined property rights rule of populations had access and engagement is what Nigeria not national secure tenure to land. While needs, conference.

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Business & Economy

High interest rate killing economy — OPS Continued from page 18 to 27.0 percent. Bigger and older companies attract the lower limit of rates, while the medium, small and newer companies attract high rates.

Higher interest rates of between 28.0 to 35.0 percent are usually charged as a result of default by companies in previous loan facilities given to them.

The Nigerian average prime lending for last year as declared by CBN at 16.6 percent in comparison further highlights the high cost of funds which manufacturers are faced with in Nigeria and which is one of the factors that have stunted the growth of the sector”.

In the same vein, Abubakar Badru, NACCIMA President, noted “With the current interest rates hovering between 17 percent and 28 percent and for a growing economy like ours, it will be difficult to achieve the desired economic growth and motivate indigenous entrepreneurs to create businesses since they will not be competitive with their foreign counterparts who obtain fund from their countries at single digit and invest in the Nigerian economy.

An industrialist and former NACCIMA president, Dr. Simon Chukwuemeka Okolo, added that government had better adopt fiscal and

monetary policy management strategies that can lower the high interest rate and cost of funds to single digit regime.

This he said would enable manufacturers across board to thrive and create the much needed jobs for Nigeria teeming unemployed graduates.

According to him, high interest rates beget high cost of funds, which have ushered in crippling industrial climate and factory closures across the country.

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kolo argued that unless the problem of high interest rate is tackled, the recently launched Nigerian Industrial Revolution Plan,

NIRP, might fail to achieve its thrust like other such previous government ambitious plans.

The Lagos Chamber of Commerce and Industry, LCCI, amplified the OPS concerns, noting, “The credit situation is still a major problem for investors in the economy.”

“For the last couple of years, lending rate was well above 20 percent. As a result, many small businesses still have serious challenge in accessing credit even at this high rate.

The tight credit situation is a major inhibiting factor to the capacity of domestic enterprises to the advantage of the robust Nigerian market,” said Muda Yusuf, Director

General Lagos Chamber of Commerce and Industry.

“Credit challenges affect productivity and competitiveness. It also limits the capacity of small businesses to create job and retain existing ones. We reiterate our call for both fiscal and monetary authorities to work together to ease the credit conditions, especially for SMEs and more importantly domestic economy. This is critical as well as to stem the gradual crowding out of domestic entrepreneurs by foreign investors.

This is also necessary to make the current growth trajectory more inclusive,” said LCCI. C M Y K

Executive Pro

Andrew L. Fa

20 — Vanguard, MONDAY, APRIL 7, 2014

Business & Economy

BY FAVOUR NNABUGWU

UBA to partner MIGA on development infrastructure financing in Africa

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he United Bank for Africa (UBA) Plc is set to partner with Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, to mobilise capital for important infrastructure projects in Africa.

Michel Wormser, Vice President and Chief Operating Officer of MIGA revealed the collaboration plan with UBA during a working visit to UBA House in Lagos on Monday. Speaking during the visit, Wormser said the proposed partnership with UBA would explore areas MIGA can increase its support to UBA towards increasing its investment into emerging markets in its countries of operation.

He disclosed that MIGA provides political risk insurance and credit enhancement products that can help mobilise UBA’s investment into projects with high development impact. “UBA is playing a prominent role as an investor in other countries in subSaharan Africa , and MIGA can help UBA increase its investments in these new markets,” he stated.

Deloitte expands to Rwanda

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rofessional services firm, Deloitte, recently opened a new office in Rwanda in line with its strategy to consolidate the firm’s operations and further cement its market leading position across the African continent.

The opening of an office in East Africa - based in the Rwandan capital, Kigali - adds to the Deloitte East African offices in Nairobi and Mombasa, Dar es Salaam, Kampala and Addis Ababa.

In June, Deloitte agreed to integrate its operations in Africa with a new structure for East and Central Africa, which comprises the operation and growth of the East African and Central African outfits and the Central African one comprising of Malawi, Rwanda, Zambia and Zimbabwe. Through this, Deloitte has clustered together its existing well-established practices, thus expanding the firm’s reach and level of expertise to ultimately assist clients with optimising their business across the continent. Lwazi Bam, Deloitte Africa Chief Executive Officer, referred to the opening of the Kigali office as a landmark achievement for Deloitte Africa. The Kigali office will offer tax, consulting, enterprise risk, audit and financial advisory services.

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he United Nations Industrial Development Organisation, UNIDO, is promoting Inclusive and Sustainable Industrial Development, ISID, in Nigeria to harness the full potential of industry’s contribution to the achievement of sustainable development and lasting prosperity for all.

The Director-General of UNIDO, Mr. Yong Li, during his three-day maiden visit to Nigeria in Abuja, disclosed that the agency has committed $1.6million to the nation’s National Industrial Revolution Plan, NIRP, to support Nigeria.

According to him, “The provision of the cash support base will help to complement the present administration’s efforts at repositioning the real sector as the key driver of economic growth through job creation and increased contribution to Gross Domestic Product”.

While reeling out the Organisation’s core objectives, he said,” UNIDO is world organisation that solely concentrates on industrial development. We have a new mandate of inclusive and sustainable industrial development; we would promote sustainable industrial development which has been supported by all the international community member states of UNIDO, including Nigeria.

“We are excited to launch 1.6 million dollars for a project to make impact in the industrial revolution plan in Nigeria. I have a very deep impression about the good relationship between Nigerian government and UNIDO for so many years.

“Now, we are going to start a new page, a new page on industrial development and I need to commend your effort and success on new implementation of industrial policy and national industrial revolution plan as well as national enterprise industrial programme which will lead your country to a new road of prosperity.

Li also officially opened the National Quality Infrastructure Project Office, NQIPO, situated at the Bank of Industry building in Abuja, noting that the project which was funded to the tune of EUR

PRESENTATION: Mr Mideno Bayagbon, Editor of Vanguard here presents copies of Vanguard and Sweet Crude to Managing Director of Chevron Nigeria Limited, Mr. Andrew Fawthrop (left), during a visit of Vanguard management to Chevron. In the middle is Mr Deji Haastrup, General Manager, Policy, Government & Public Affairs, Chevron Nigeria Limited.

UNIDO partners Nigeria on inclusive, sustainable industrial development 12 million will be implemented with the assistance of UNIDO. He said the project will help to improve the quality of Nigerian products, while commending the federal government for supporting him during his election last year and for supporting UNIDO’s ‘Inclusive and Sustainable Industrial Development Programme.

He said the document is a manifestation of member states’ support for and confidence in the agency, and highlights UNIDO’s critical expertise and experience in the field of

inclusive and sustainable industrial development, and in forging new development partnerships.

Lending his voice, UNIDO’s Country Representative, Dr Patrick Kormawa, expressed satisfaction at the establishment of National Quality Infrastructure Project Office, at a time Nigeria is promoting industrialisation as the basis of its economic development.

In fact, there is not a single country in the world that has reached a high stage of economic and social

development without having developed an advanced industrial sector. The world needs inclusive and sustainable industrial development to do its part in seizing the moment and contributing to the common good.”

UNIDO, as the specialized agency of the United Nations system mandated to promote inclusive and sustainable industrial development and international industrial cooperation, is well-placed to make a significant contribution to this process.”

Exhibitors want FG to support indigenous technology

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ome exhibitors at the 25th Enugu International Trade Fair have appealed to the Federal Government to take practical steps to boost indigenous technology.

The participants said that the government could do so by injecting more funds into research to improve the technology.

Mrs. Ifeoma Akagu, a director at the Project Development Institute, Enugu said the institute was yet to realise its mandate due to paucity of funds.

Akagu, who is the Director of Industrial Promotion, Information and Documentation, said the institute has the mandate to promote indigenous technology.

“Our mandate involves the promotion of indigenous private sector participation in manufacturing and industrial sectors. It also involves the development of capital goods to promote the growth of small and medium scale enterprises to substitute imports at prices and costs that local entrepreneurs can afford,” she said.

Akagu regretted that the fund given to the institute for its various projects was inadequate and hampered its activities.

“Most of the facilities we have were picked up at different locations after the civil war and they are obsolete. Our facilities have been dilapidated by landslide and erosion and we are supposed to build a factory, but no money,” she said.

Akagu said that the institute’s products are fashioned in line with local needs and international standards.

Akagu said that some of the products included insulated communal garri fryer, corn sheller, grinder, and ceramics utensils. She appealed to the federal government to show more commitment to indigenous technological advancement with a view to creating jobs.

Mr. Ogbonna Okoro, a lecturer/technologist at the department of electrical engineering in the University of Nigeria, Nsukka said that innovation requires funds.

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awthrop

Vanguard, MONDAY, APRIL 7, 2014 — 21

Business & Economy

Rebased GDP likely to make Nigeria Africa’s No. 1 economy N

igeria may become Africa's biggest economy when the National Bureau of Statistics publishes revamped data this week. The National Bureau of Statistics is set to release gross domestic product figures based on 2010 production patterns in the first time Nigeria has overhauled the data in two decades. A report was expected to be released at a press conference in the capital, Abuja.

The revision may boost the size of the economy by as much as 60 per cent to between $384 billion and $424 billion, according to

London-based Renaissance Capital Ltd., lifting Nigeria ahead of South Africa in the World Bank’s global rankings.

“This will make it increasingly hard for companies looking at Africa to overlook Nigeria, especially considering the size of the domestic market and its potential,” Samir Gadio, a strategist at Standard Bank (STAN) Group Ltd. in London, said in an emailed response to questions.

The World Bank calculated Nigeria’s GDP at $263 billion in 2012 and South Africa’s at $384 billion. The West African

nation’s population of 170 million is more than three times bigger than South Africa’s. Nigeria is following Ghana and Zambia in recalculating the size of its economy. When Ghana, a West African oil and gold producer, rebased its data in 2010 in a similar exercise, the value of GDP increased by 75 percent to about $31 billion.

The economy of Zambia, Africa’s second-largest copper producer, increased by 25 per cent to about $24 billion following data revisions in February.

Regardless of the new GDP number, investment in oil-

AGM: From left: Olorogun O’tega Emerhor, Director, Obinna Ufudo, President/CEO; Tony O. Elumelu, CON, Chairman; and Chinedu Eze, Company Secretary during the 8th Annual General Meeting of Transnational Corporation of Nigeria(Transcorp) Plc at the Lagos Oriental Hotel, Victoria Island Lagos.

NACCIMA calls for effective security to promote investment

BY NAOMI UZOR

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he Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), has called on the Federal Government to ensure efficient and effective security system that promotes business/investment climate, as well as guarantees lives and properties of the citizens.

The National President of NACCIMA, Alhaji Mohammed Abubakar, said that Public-Private Partnership (PPP) could be adopted through a collaboration with NACCIMA and private security agencies to achieve a lasting solution to the war against crime, terrorism and other vices currently besetting the nation.

He said the worsening state of insecurity in Nigeria, especially the sectarian

violence in the North and kidnapping in the SouthSouth and South Eastern parts of Nigeria resulting in serious threat to lives and properties, as well as resurgence of armed banditry and robberies have hampered the operations of its members in the zones.

According to him, some of the challenges being faced by the NACCIMA members is, late release of budgets; highly politicised environment in which business and economic activities are pursued, resulting in some conflicting polices/goals that affect optimal efficiency in service delivery and advocacy pursuit and inability to effectively engender closer chambergovernment relation as desired in representing and lobbying for the interests of our members.

“The timing of our budgets such as crafting, submission to the legislators for discussion and subsequent signing into law by Mr. President, C-in-C, and presentation to the nation require serious attention. A neat budget should reach the president in November while every Ministry, Department, and Agency should receive their release in December to enable them start implementation in the ensuing year” he said.

Abubakar said there is need for the provision of adequate infrastructure, especially in the areas of power supply and transportation and to accelerate the completion of the on-going power sector reforms so as to improve the present generating power capacity of below 4000MW to 10,000MW by December 2014.

producing Nigeria is constrained by power and infrastructure bottlenecks, corruption and weak governance. Nigeria’s power supply is less than a 10th of South Africa’s, while the West African nation was ranked at 144 out of 177 countries on Transparency International’s Corruption Perception Index last year.

“Addressing these shortcomings will probably have much more impact on investment than the perception that Nigeria is now a bigger economy,” Gadio said. The revisions will increase the number of industries measured by the statistics agency to 46 from 33 and give greater weighting to sectors, such as telecommunications, financial services, insurance, real estate and film-making. The new numbers will probably lower Nigeria’s debt-toGDP ratio, while reducing the proportion of government revenue to GDP. Nigerian Poverty “Crucially, what is not always clear is how governments then respond to these new ratios,” David Cowan, an Africa economist at Citigroup Inc. in London, said in an emailed response to questions. “Do they think they can borrow a lot more, or do they think the best policy response is to boost tax revenue? The latter is clearly the better policy response.”

The naira has dropped 2.1 percent against the dollar this year and was trading at 163.89 on the interbank market as of 11 a.m. in Lagos, the commercial capital. Per capita GDP in Nigeria is estimated at $2,666, according to data from the World Bank, compared with $11,255 in South Africa. The NBS’s most recent poverty survey, published in 2012, shows that 61 percent of Nigerians were living on less than a dollar a day in 2010, up from 52 percent in 2004. In the desert northeast, where Amnesty International estimates at least 1,500 people have been killed this year as security forces battle a Islamist insurgency, poverty rates may be even higher. Nigeria emerging as the biggest economy in Africa “changes nothing in terms of the challenges facing the economy — the need to build infrastructure,” Cowan said. “Nigeria will remain a poor country in terms of per capita income, even compared to South Africa.”

PENCOM issues 401 compliance certificates to PFAs

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he National Pension C o m m i s s i o n (PENCOM) issued 401 compliance certificates to Pension Fund Administrators (PFAs) in the third quarter of 2013. PENCOM status reports was contained in latest edition of the commission’s quarterly publication known as “Penlife’. According to the publication, 467 applications were received for the issuance of compliance certificates, while 66 applications were turned down. It said that the rejected applications were due to inadequacies which included non-remittance of pension contributions for the appropriate period and nonprovision of group life assurance for their employers.

“In the third quarter of 2013, the commission received 467 applications for the issuance of compliance certificates, out of which 401 certificates were issued, while 66 applications were turned down due to various inadequacies.

Huawei grows profit by 34%

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uawei, a global information and communications technology (ICT) solutions provider, has announced a 34 percent growth in its profit for the 2013 financial year. The company, in its financial statement for the 2013 financial year released to the investing community, experienced growth across all its business areas in 2013, achieving steady growth and sales revenues of CNY239 billion (USD39.5 Billion), up 8.5 percent year-on-year (11.6 percent YOY growth in USD), and net profit of CNY21 billion (USD 3.5Billion). The company, however, noted that Europe, Middle East and Africa (EMEA) region took up 36 percent of the revenue .

Briefing news men on the company’s strategy and 2013 performance during Huawei Annual Report Launch, Huawei Rotating and Acting CEO Eric Xu disclosed that the company ’s financial performance was strong across all business areas in 2013, achieving steady growth and sales revenues of CNY239 billion, up 8.5 percent year-onyear (11.6 percent YOY growth in USD), and net profit of CNY21 billion.

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22 — Vanguard, MONDAY,APRIL 7, 2014

Banking & Finance

Chinese banks to undergo stress test

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Rupee gains as foreign banks sell dollars

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he rupee gained on Friday after trading weaker for most part of the session on the back of a retreat in domestic shares from record highs and caution ahead of the U.S. monthly jobs data.

Lack of large demand and foreign bank selling of the greenback in late trade helped the rupee notch up some gains, traders said.

The week, however, was volatile and was also marked by heavy dollar buying by the Reserve Bank of India (RBI) looking to replenish its foreign exchange reserves and slow down the rise in the rupee. Latest data showed foreign exchange reserves rose by $5.04 billion to $303.67 billion in the week to March 28. Sentiment was cautious ahead of monthly U.S. jobs data later in the day and ahead of India’s fiveweek general elections set to kick off on Monday.

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STUDY - From left: Austin Okere, Group CEO, Computer Warehouse Group Plc; Henry Egbiki, Regional Managing Partner for West Africa, EY; Mitchell Elegbe, MD/CEO, InterSwitch and Paul Kokoricha, Partner, African Capital Alliance at the presentation of Private Equity Study, conducted by EY in Lagos.

DIAMOND BANK: Weathering the storm of tight monetary regime

By BABAJIDE KOMOLAFE

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he Central Bank of Nigeria (CBN) has been pursuing a tight money supply policy with the aim of curtailing inflation. The monetary tightening however assumed an unprecedented dimension when the apex bank increased the portion of deposits that banks must keep as cash (cash reserve ratio or CRR). For public sector or government related deposit, the CRR was first increased to 50 per cent in July, and then to 75 percent in January. For private sector deposits, the CRR was recently increased to 15 percent.

Cumulatively, these increases led to the withdrawal of about N2 trillion from banks.

The effect of monetary tightening The increased CRR on public sector deposit alone denied banks the opportunity to use about N1.5 trillion to lend and make money.

The implication is that for banks to make more money, they will have to look beyond government deposits for funds. Also the increased CRR on private sector deposits imply that banks

have to strategise to mobilise more deposits from individuals and organisation. Most importantly, they have to seek for what is called cheap deposit or low cost funds, which are mostly deposits in savings and current accounts.

Consequently, the CBN’s policy sparked off competition for cheap deposits among banks. The ability of any of the 24 banks to increase growth and profitability is thus determined by its ability to mobilise more of such funds.

Diamond’s Bank 2013 performance The performance of Diamond Bank Plc in the 2013 operation year indicates that the bank was able to discharge itself creditably in this regard. The bank proved its mettle by mobilising additional N296 billion from the banking public in 2013. This caused its deposit base to swell beyond the N1 trillion mark, to N1.206 trillion at the end of 2013, from N910 billion in 2012. The additional deposits, according to Mr. Alex Otti , Managing Director/Chief Executive of Diamond Bank, were mostly low cost funds.

The increased deposit from low cost funds, allowed the bank to lend more to the economy. During the year, it granted N104 billion additional loans, and thus increased lending to customers from N585 billion in 2012 to N689 billion in 2013.

,

he China Banking Regulatory Commission (CBRC) has said it will conduct regional and national stress tests after banks saw a spike in bad loans last year, reflecting growing concerns over credit risk.

“All (CBRC) offices, supervisory departments, must organize stress tests of banking institutions in a timely manner so as to analyze the impact of unfavorable situations in individual banks and the banking system and urge banking financial institutions to make emergency plans,” the regulator was quoted as saying in guidelines sent to banks in March.

Chinese banks’ nonperforming loan (NPL) ratio rose to 1.0 percent at the end of December, its highest level in two years, the CBRC reported in February. It was unclear; however, to what extent the latest guidelines are a departure from previous practice. “Commercial banks all have to submit stress test results to the local CBRC branch every quarter.

The Big Five banks reporting a rise in their NPL ratios probably caused CBRC to put more stress on this issue,” said an executive at a mid-sized bank in Shanghai who is involved in preparing reports for regulators.

This result is rooted in our strength to attract low-cost deposits and deploy these into various assets at profitable yet acceptable risk levels

,

The strategic deployment of increased low cost deposits achieved during the year is reflected in the difference between the interest the bank paid depositors (interest income) and the interest it earned from lending (interest expense), which is known as net interest income. This rose by 12.5 percent from N72.29 billion in 2012 to N81.33 billion in 2013.

In addition to generating more income from lending activities, Diamond Bank also showed its ability to generate income from non-traditional sources by recording 46.2 percent increase in Other Income from N23.8billion in 2012 to N34.8billion in 2013.

Consequently, the bank was able to make 18.5 percent additional profit, as profit before tax (PBT) rose to N32 billion from N27 billion.

Commenting on the performance of the bank, Otti said, “We are pleased to

announce that Diamond Bank has exceeded its N30 billion profit guidance to return a profit before tax of N32 billion in 2013. This result is rooted in our strength to attract lowcost deposits and deploy these into various assets at profitable yet acceptable risk levels. The Bank’s PBT was achieved from gross earnings of N181.2 billion, an increase of 27 percent over N143.0 billion earned in the previous year.

The Profit After Tax (PAT) for the year grew by 29 percent to N28.5 billion as against N22.1 billion recorded in 2012. The PAT resulted in earnings per share of 197k for the year”, Otti said.

The improved performance of the bank enhanced its balance sheet size and shareholders’ funds. While the former grew by 33.3 percent from N1.18 trillion to N1.52 trillion, the later rose by 27.7 percent to N138.7 billion from N108.6 billion.

The effect of the performance of the bank is being extended to shareholders in the form of 30 kobo dividend per share. It would be recalled that the previous year, the bank did not declare dividend, a situation that did not go down well with some of its shareholders. But the management pleaded that 2013 would be different. And it has delivered on this promise.

Deposit mobilisation initiatives That is also the reason why Diamond Bank has been able to attract more deposits at low cost. In 2008, long before tight money supply forced banks to focus on mobilising savings, Diamond Bank introduced a savings promotion tagged SavingsXtra with total prize money of N200 million. The star winner went home with N50 million. To qualify, “existing and new customers only need a SavingsXtra account with Diamond Bank and need to maintain a balance of at least N5, 000 to automatically qualify for the draw. Every additional N 5,000 held will add one more chance.

The promotion is now in its fifth year, with Season Six, while the Bank has given away over N2 billion in prize money. In the process Diamond Bank earned the reputation has a bank that deliver on its promises, and as a bank that encourages savings. This attracted more customers to open account with the bank, and thus the increased in cheap deposits for the bank.

In addition to this, the bank also embraced the challenge of serving small and growing businesses by setting up a focused unit to drive Micro Small and Medium Enterprises (MSME) initiatives.

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Banking & Finance

Kogi to raise another N5bn infrastructure bond

By NKIRUKA NNOROM

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he Kogi State government will next month commence the process of raising another N5 billion in the second tranche of infrastructure development bond. The governor, Capt Idris Wada, stated this at its bond listing forum and bell ringing ceremony on the floor of the

Nigerian Stock Exchange, NSE. While addressing stockbrokers at the Exchange, in Lagos, Wada explained that the first tranche of the bond was oversubscribed, adding that the proceeds have been disbursed to various sectors for project execution.

Wada, who noted that the bond had given the state an

opportunity for infrastructural transformation, said that work has commenced on seven out of the 11 projects the bond was ear marked for. He explained that the state has commenced construction of a dualised by-pass, a multi link highway, which would give the state capital a befitting structural transformation. He pointed out that the state has

LISTING: From left, Executive Director, Business Development, the Nigerian Stock Exchange (NSE), Mr. Haruna Jalo-Waziri, Governor of Kogi State, Captain Idris Wada; Chief Executive Officer, NSE, Mr. Oscar Onyema and Managing Director, Afrinvest Securities Limited, Mr. Ike Chioke at the Kogi State Bond Listing Forum & Bell Ringing Ceremony at the exchange in Lagos.

launched a 500 housing units and land to accommodate the citizens and others in the private sector.

The governor further explained that the state would perform a ground breaking ceremony for the construction of 11 storey building in Abuja in the next two weeks.

He noted that these projects would boost its internal generated revenue (IGR), while calling on the stockbrokers “to continue to have confidence in the state and to fully support the second tranche of the bond issuance.

“We are blocking several leakages; Kogi is a strategic state location with natural resources, but to leverage on our human capital and natural resources has been difficult for us in our 23 years of history. When I assumed office, I found out that there is a huge gap between our fund and what we needed to do to transform the state.

“These projects would boost the IGR of the state,"he added.

CW G, MA G TTec ec h mo o curb cyber attac ks in ffinancial inancial CWG, MAG ech movve tto attacks sect or sector

By EMEKA AGINAM

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n an attempt to reduce the level of threat and Cyber- attack in the financial sector, Computer Warehouse Group (CWG PLC), and MAG Tech, a specialized information security and intelligence company, recently organized information security session in Lagos. During the session all the decision makers charged with security in financial sector, and technology experts converged to deliberate on the new concept that will curb Cyberattacks and fraud in the industry.

The session with the theme: ‘Security Operations Centre (SOC) - Financial Services in the Cyber Attack Era’ created an avenue for stakeholders to extensively discuss and understand the new concept, Security Operations Centre (SOC) as the ultimate information security platform required to drastically minimize Cyber-attack and threats currently being encountered by financial institutions.

James Agada, the Chief Technology Officer of CWG while speaking at the forum

said that CWG as a technology company goes beyond enabling businesses with products and solutions to concepts that will ensure 100 percent security of all the customers’ transactions.

According to Agada, product and product knowledge are not adequate to achieve the end result of any business solution, and hence the need for the new concept, which is centered on how to detect and react to fraudulent transactions.

Agada further expressed that 50 percent of the transactions in the industry are running on the servers that are being managed by CWG’s seasoned and trained engineers. “Our aim is to ensure that these skills are internalized in Africa as information security is crucial to us and our customers” he said.

Nadav Arbel – MAG Tech’s Chief Technical Officer, in his presentation on Darknet and Crime, stated that Cyber-attack

is originated from the Darknet which is the illegal part of the internet.

According to Arbel, Cyberattack occurs when there is data leakage which may be caused by misconfiguration of a server or other sources.

He stated further that no one can run a business efficiently without being on the internet and as long as your business is connected on the internet, you will experience some form of cyber-attack and threat.

Stockbrokers’ workshop focuses trade, investment, power

By PETER EGWUATU

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rrangements have been concluded for the 2014 Annual Stockbrokers workshop, with subject for discussion to focus on trade and investment, power and agriculture sectors respectively.

Information available to Vanguard indicated that the two-day national workshop has been scheduled for Wednesday, April 23 to Friday, April 25 at Nicon Hilton Hotel, Abuja. In preparation for the annual national workshop, technical sub- committees meeting was held where the Chairman, Mr.

Ayodele Adu, the Chief Executive Officer, Morgan Capital and his members brainstormed on the resource persons, publicity drive and logistics of the workshop.

Adu-led committee held a marathon meeting to align competent resource persons with the workshop’s sub-themes which are: Funding agriculture through the capital market, foreign investment initiative for Nigeria, financial inclusion strategies for Nigeria, creating wealth through the Nigerian Creative Industry, update on energy sector reforms and Nigerian Broadband revolution.

Diamond Bank earmarks N600m for reward scheme

By PRINCEWILL EKWUJURU

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iamond Bank Plc has mapped out over N600 million to be won at its ongoing DiamondXtra reward scheme.

The promo which is in two parts, says customers will earn salaries for life to the tune of N100,000 monthly by one customer. Ten customers will win N1 million for the monthly prizes. The second part will see five customers on weekly basis win N500,000, while N250,000 will be won by 15 customers.

Speaking at the activation venue of the reward scheme at Ipaja market, David Otukpe, Product manager, Savings Account of the bank said customers who have the Diamondxtra account are liable to earn monthly interest rates on their savings.

He also said that the product allows customers to deposit cheques, and dividend warrants from other banks directly into their accounts.

Utokpe further said that customers with the Xtra account can make third party payments with their cheque books in any of its branches.

On the whole, a customer can also apply for one of the bank’s VISA credit cards with a limit of up to 75 percent of its credit balance. Represent at the venue of the promo were Consumer Protection council by Camilus Anyanwu and Bright Anaekwu from.

Polo opens Montblanc shop

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olo Limited, a luxury shop in Nigeria has opened shop at the Transcorp Hilton Hotel in Abuja. The pop-up shop offers an exquisite collection of special edition writing instruments, timepieces, and leather accessories.

Describing the inauguration of the first Montblanc pop up store in Nigeria, Managing Director of Polo Limited Mr. John Obayuwana, said: “At Polo, we offer customers exceptional luxury products.

Montblanc has always been part of our portfolio; to us Montblanc exemplifies the highest in quality and craftsmanship and it is a brand revered by many.”

Obayuwana stated that the shop will afford customers a great opportunity to appreciate and purchase timeless pieces from Montblanc exclusive collection at their leisure.

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Corporate Finance WACMIC urges compliance with OECD corporate governance code

Consumer Consumer,, tech shares lead fall in US stocks

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.S. stocks fell, after benchmark indexes climbed to records, as consumer and technology shares slumped before the government’s monthly jobs report tomorrow.

An index of biotechnology shares plunged 3.5 percent, halting a three-day rally. The Nasdaq Composite Index fell 1.3 percent after four straight gains. Barnes & Noble Inc. plunged 14 percent as investor Liberty Media Corp. said it will reduce its stake in the bookstore chain. Google Inc. Class A and Class C (GOOG) shares each retreated after stock in the largest search engine effectively split.

The Standard & Poor’s 500 Index slipped 0.4 percent to 1,883.96 in New York after closing the past two days at a record. The Dow Jones Industrial Average dropped 40.33 points, or 0.2 percent, to 16,532.67.

U.S. futures regulator probing speed traders

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he U.S. Commodity Futures Trading Commission, CFTC, is investigating high-frequency traders to see if they were breaching the derivatives regulator ’s rules, its chief said on Thursday.

“Staff (is) responding to concerns brought to us about certain practices, whether it be spoofing just to give one example, whether that’s running afoul of our rule,” Acting Chairman, Mark Wetjen, told reporters during a meeting.

“And then whether or not it meets the definition of manipulative activity under our statute,” he said.

Many banks and hedge funds use sophisticated computer programmes to send large batches of orders into equity and futures markets in fractions of a second, a controversial practice known as highfrequency trading (HFT).

Proponents of HFT say the firms make it easier for other buyers and sellers to meet each other in the market, but critics argue it can cause sudden market crashes and easily mask market manipulation or other illegal activity.

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BY NKIRUKA NNOROM

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AWARD: From left: Chief Olusegun Osunkeye, Chairman, Lafarge WAPCO; Alhaji Jimoh Owolabi, National Champion award winner and Mr. Joe Hudson, Managing Director, Lafarge WAPCO, during the 2013 Lafarge WAPCO Customers Award ceremony in Lagos. Photo by Lamidi Bamidele.

APR shareholders approve N700m dividend

By NKIRUKA NNOROM

S

hareholders of Africa Prudential Registrars, APR, have approved the N700 million dividends proposed by the Board and management of the company for the financial year ended Dec. 31, 2013.

The dividend so approved translates to N0.35kobo per share and will be paid to qualified members on April 4, 2014.

Speaking at the first Annual General Meeting, AGM, in Lagos, the shareholders commended the Board and urged them to adopt a dividend policy that will be sustainable.

Mrs. Bisi Bakare, National Coordinator, Pragmatic Shareholders Association, described the dividend as excellent.

“We recorded earning per share of 38kobo and you are giving us 35 kobo.

This is commendable, but please we want you to look at it again and ensure that you adopt dividend policy you can maintain,” she said.

Also speaking, Mr. Gbenga Idowu, National Coordinator, Shareholders United Front, said the dividend is beyond shareholders’ expectations, while calling on the company to improve upon on the dividend in the years ahead.

Mr. Boniface Okezie, President, Progressive Shareholders Association of Nigeria, said that the 35k dividend is very impressive compared with the prevailing rates in the sub-sector.

Okezie said that the company needed to be appreciated for making Nigerian investors proud, adding that the company ensured proper training and re-training of its workforce for efficient service delivery.

Earlier in her address, the Chairman, Chief Eniola Fadayomi, observed that the company has put strategy in place to provide clear direction for deployment of its resources, both human and capital, saying that its vision is to create long term and sustainable value for its stakeholders in it chosen markets.

“In order to realise this long term objectives, the company is making every effort to identify and take advantage of every investment opportunity that will complement its long term strategic objectives.

“We will continue to look out for these investment opportunities that will help in increasing value for our stakeholders,” she assured.

Reviewing the financial performance, Fadayomi said that APR recorded significant success despite the continuing challenges of the operating environment.

The company’s revenue rose to N1.49 billion from N1.03 billion in 2012, an increase of 35 percent. Its profit after tax stood at N759 million from N562 million recorded in 2012 The total assets of the Group stood at N16.4 billion, increase of 95 percent over N8.4 billion recorded in 2012.

Mr. Peter Ashade, APR Managing Director, assured the shareholders of enhanced returns on their investments in the years ahead.

he West African Capital Markets Integration Council, WACMIC, has called on its member stock exchanges to align the corporate governance standards of their listed entities with the Organization for Economic Cooperation and Development (OECD) principles.

WACMIC is saddled with the task of ensuring successful integration of the various stock exchanges in the West African sub-region.

They also called for harmonization of minimum listing requirements of member countries to ensure they are at par with international best practices.

In a communiqué issued at the end of its 4th ordinary meeting in Abdijan, Cote d’Ivoire, WACMIC enjoined the various jurisdictions to set minimum requirements which will be enforceable by the regulators.

The meeting was held to finalise preparations for the commencement of Phase one of the integration initiative.

They expressed appreciation to ECOWAS Commission and WAMI for their support and efforts in the integration programme, while reiterating commitment towards accomplishing set targets within the scheduled time frame.

The Council as well adopted the guidelines for the issuance of common passports for capital market operators (CMOs) to trade across the region and reviewed the recommendations that would enable dealing firms in member states to trade securities and settle in markets other than theirs through local dealing firms in those markets by means of Sponsored Access.

“Members also passed a resolution for the adoption of the Sponsored Access Framework and related agreements to be approved by all member regulators, signaling the commencement of the integration of capital markets in West Africa.

“Additionally, members agreed to ensure that the appropriate processes and systems are put in place in the respective jurisdictions to facilitate the implementation of the Sponsored Access model of integration, thus paving the way for jurisdictions to launch as they complete their processes and obtain all the requisite approvals, WACMIC revealed in the communiqué. Continuing, WACMIC said, “Members further agreed on the guidelines and procedures for approving applications under the sponsored access framework.”

They emphasised the need to have minimum professional qualification standards and urged countries without training and certification institutes to immediately come up with some form of acceptable regime for qualifying and admitting brokers in the short term with a view to developing a curriculum for training its capital market operators, CMOs.

Vanguard, MONDAY, APRIL 7, 2014 — 25

Corporate Finance

Ecobank’s largest shareholder seeks evaluation of growth rate

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cobank Transnational Inc. (ETI)’s board must reconsider the speed at which the pan-African lender expands after allegations of management fraud and poor governance, South Africa’s Public Investment Corp. said.

“One of the key lessons coming out of Ecobank is that the pace at which you grow is very important,” Elias Masilela, chief executive officer of the PIC, the state pension fund that is Ecobank’s biggest shareholder, said in an April 1 interview in Johannesburg.

“Governance issues are as important as investment considerations.’

Ecobank’s board replaced CEO Thierry Tanoh last month after the Pretoriabased PIC called for him to quit amid allegations of mismanagement, which he denied. That followed a probe by Nigeria’s regulator after Laurence do Rego, group executive director of finance and risk, told Nigeria’s Securities and Exchange Commission in August that Tanoh and former Chairman Kolapo Lawson planned to sell assets below market value.

Founded in 1985, Ecobank operates in France and 35 African countries and has representative offices in

E

COMPETITION - From left: Chairman, Lagos Boat Regatta, Engr. Jawando; Commissioner, Lagos State Ministry of Culture & Inter-Governmental Relations, Hon. Disun Holloway; Executive Director (Lagos Businesses); Mr. Victor Ezenwoko; Head, Corporate Communications, both of Diamond Bank; Mrs. Ayona Trimnell; and Representative of the Lagos Black Heritage Festival Consultant (Prof. Wole Soyinka), Mr. Jahman Anikulakpo at the press conference in Lagos which held prior to the painting competition of this year’s Vision of The Child Competition of the Lagos Black Heritage Festival Beijing, Dubai and London.

Ecobank reported in October that profit increased 65 percent to $250 million in the nine months through September as its businesses in Nigeria and Ghana expanded.

Whistle-blower Do Rego, who was reinstated last month, also said she was pressured to write off debts owed by a business headed

by Lawson and manipulate the results of the Lome, Togobased lender. Tanoh and Lawson have denied any wrongdoing.

Lessons Learned “The investors, the managers of the company, the regulators, and the consumers, we all have to learn from those experiences,” said Masilela, whose PIC owns more than 18 percent of Ecobank. “The main lesson for me, is when you run companies, you run them for all stakeholders, not just for the investors.”

The PIC is Africa’s biggest money manager with 1.6 trillion rand ($150 billion) of assets under management.

The Government Employees

Pension Fund accounts for 89 percent of those assets.

Investors approved a plan to improve corporate governance at an extraordinary general meeting last month, following recommendations by the SEC. Albert Essien, who was named Ecobank CEO on March 12, will focus on consolidation and making operations in eastern and southern Africa profitable, the Financial Times reported this week.

Uganda, joins Nigeria, Kenya in developing derivatives trading U

ganda is set to join Kenya and Nigeria in developing derivatives trading as the nation’s markets regulator approved plans for another Stock Exchange in East Africa’s third-biggest economy.

ALTX Africa Group Ltd., based in Port Louis, Mauritius, may open the exchange in the fourth quarter, Keith Kalyegira, chief executive officer for the Kampala-based Capital Markets Authority has said.

Trading will include equities, currencies, commodities, government and corporate bonds as well as derivatives, he said.

ALT Xchange Ltd. will compete with the Uganda Securities Exchange, which

ECCIMA urges NPA to cut red tape in goods clearing

has 16 listings with trading done by hand, and “drive improvements in the market overall,” Kalyegira said. The USE’s main index dropped 1.1 percent this year, compared with a 5.2 percent gain in the Nairobi Securities Exchange’s 62-member allshare gauge in neighboring Kenya.

Uganda, Africa’s biggest coffee exporter with a $20 billion economy, is joining exchanges that are set to offer more ways for investors to buy into sub-Saharan Africa, the world’s fastest-growing region after developing Asia, according to the International Monetary Fund. Expansion may reach 6.1 percent this year from 5.1 percent in 2013, the IMF said in January.

Kenya’s bourse plans to start

trading derivatives and realestate investment funds this year, Head of Market and Product Development Donald Ouma said in an interview on Feb. 19.

Nigeria’s Nasdaq trading platform, which started in September, is set to include derivatives this year, according to the country’s exchange.

Uganda’s second exchange will create a platform for cross-listings of debt and equities from other African markets, Kalyegira said in the e-mail March 31. About half of the bourse’s revenue is expected to be raised from listing fees, he said. ALTX still has to meet regulatory conditions including having membership of three brokers

independent of each other, according to Kalyegira.

“There’s definitely a need to diversify the capital markets in the East African region,” Julians Amboko, a research analyst at Nairobi-based StratLink Africa Ltd., said by phone today.

The ALTX will give competition to the Uganda market, which uses a trading system in which representatives of brokers give orders to a person who writes them on a board, according to the USE’s website.

Innocent Dankaine, chief executive officer of the USE, is out of the country until April 4, according to a person who answered the phone at his office.

nugu Chamber of C o m m e r c e , Industry, Mines and Agriculture (ECCIMA) has advised the Nigerian Ports Authority (NPA) to reduce bureaucracy at the seaports.

The President of the Chamber, Dr Ifeanyi Okoye, gave the advice in Enugu during the NPA Day at the ongoing 25 th E n u g u International Trade Fair.

Okoye expressed regret that importers were still facing undue delays in clearing their goods and called for pragmatic approach to tackle the issue.

He said that this challenge was stifling the progress and development of the country.

“We are not unmindful of the various measures to decongest our ports, but we wish to say that a lot still needs to be done,” he said.

Okoye said that importers, especially those from the Eastern part of the country, were still experiencing undue delays due to unwarranted bureaucracy in clearing their goods at the ports. “We call on the NPA to institute pragmatic and proactive approaches in these negating issues in the maritime sub- sector,” the chamber president said.

OAAN holds poster Award

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lans are on top gear for the 2014 Outdoor Advertising Association of Nigeria, OAA N Poster Award, scheduled to hold May 15, 2014.

The Poster Award is a tool created by Ad practitioners to promote professionalism and creativity in the Out-OfHome, OOH, industry.

The Award is aimed at rewarding creativity in the use of OOH media while also raising the bar of the practice.

Speaking at a media chat in Lagos, Chairman of the Poster Award Planning Committee, Mr. K o l e Ademulegun, said that the award which debuted almost a decade ago has become the benchmark for measuring and promoting creativity and ingenuity in the industry, thereby making it one of the most credible and industry endorsed award.

He also confirmed the attendance of the President of FEPE (World body of Outdoor Advertising Association) Mr. Karl Javurek, who will be the Special Guest of Honour for the event.

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Commodity index

Micro-Finance

Mar 28-Apr 03, 2014

PRESENTATION - From left: Chief Commercial Officer, Airtel Nigeria, Mr. Maurice Newa; Entrepreneur and initiator of UNFIRE, Mr. Mene Blessing Oritseweyinmi and Airtel Brand Ambassador, Mike Ezuruonye during the presentation of cheque to the young Nigerian entrepreneur sponsored by the telco to acquire skills from world-class mentor and investors at the Unreasonable Institute, Boulder, Colorado, US.

Skills gap, bane of baking industry in Nigeria — HONEYWELL Stories by PROVIDENEC OBUH

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espite large number of bakeries in the country, Honeywell Flourmills Plc has identified skill gap in baking.

The company graduated 14 bakers, weekend, from its baking school where

over 300 master bakers were trained from different parts of the country.

Speaking at the certificate award ceremony of Regular Course 24, Honeywell Baking School, Managing Director, Honeywell Flourmills, Mr. Lanre Jaiyeola said that it has no intention to drop the quality of any of

Ikorodu residents get cash gifts in Nutricima promo

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korodu indigenes, host community of PZ Cussons Nigeria Plc, last week, were beneficiaries of cash gifts from the ongoing Nutricima Mega Cash Promotion.

Speaking at the cheque presentation ceremony, Area Sales Manager, Nutricima, Mr. Abioye Ohu, said that the promo aims to contribute to people’s lives, making food readily available, enhance businesses and increase capital, saying, “one of the economic value of the promo is to alleviate a lot of people from poverty and encourage families and people to do business.

Students who are beneficiaries can pay their tuition fee without stress.”

He said that Ikorodu was picked for the presentation hence most winners emerged from the community, stating,”we have one of our major factories here in

Ikorodu. It gladdens my heart because we produce two millionaires in this community, he said.

Some of the winners who spoke to Financial Vanguard include: Mr. Thomas Okpakhia, a teacher who won N1 million.

According to Okpakhia, “I did not put my mind in this promo because of what I have seen from other promo where I wasted thirty thousand naira with one of the telcos. When the draws where being made that was when I switched off my phone, but for a Journalist who called me and told me I won.

Also, Tijani Olawale, a young driver at Pepsi depot Ikorodu, said that he will invest his money into distribution of Nutricima products but urged that such initiative is sustained to help the Nigerian economy and its people.

its product.

Jaiyeola, who made his debut as MD of the company, said that the initiative is part of its CSR to the people who form an integral part of its business.

“This is one contribution we have to make as a socially responsible organization because we realise that skill gap exist in the baking institution in Nigeria, and this is one way we can bring about the desired knowledge among the bakers in the country “The baking school is our own way of giving back to the community by empowering bakers with modern baking skills and flour handling procedures that they can use to run their businesses more professionally and profitably.

“In the school, bakers are taught common bread faults and how to solve them, basic selling, marketing, finance and people management tips and how to maximise bakery output through the production of fresher and richer bread varieties,” he said.

However, he assured on its brand quality, saying, “I want to reassure our customers that we will continue to partner with them in ensuring that our route to the market is clearly defined and we will minimise delays in getting our products across to them.”

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Homes & Housing Finance

Property title critical to mortgage creation — FMBN

By YINKA KOLAWOLE

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hairman of Federal Mortgage Bank of Nigeria (FMBN), Mr. Bisi Ogunjobi, has reiterated the importance of possession of property titles to mortgage creation and refinancing.

He made the remark at a stakeholders’ forum, in Abuja, to discuss effective implementation of the Nigerian Mortgage Refinance Company (NMRC) which was launched recently

by President Goodluck Jonathan. Among other things, the forum discussed land availability for affordable housing delivery, housing construction financing, building code and improving foreclosure processes to enhance housing access.

Ogunjobi said it is very difficult for FMBN and primary mortgage banks (PMBs) to create mortgages, talk less of refinancing them, without a system in place that allows people have titles to their houses.

“In all the states, if we don’t have a title to a property there is no way it can be turned into asset to refinance the bank. If you talk of mortgage, it is an individual personal title related to a property. So unless we have a system that allows each person, each house to have a title it becomes very difficult for the PMBs and for the FMBN to be able to create a mortgage.

“Once we cannot create a

mortgage it means we cannot even refinance the mortgage.

Today, only very few of them have the capacity to create mortgages. If you look at a lot of them, the portfolio which is on mortgage is very limited. Once that is done every other aspect can be easily handled, particularly with the reform that is going on in the FMBN in terms of computerisation, in terms of the e-platform which have been introduced whereby if you are a contributor of NHF you can access your account and know exactly what you are contributing.

“At a stage when your contributions come to the account then you have an alert. But some of the problems in the past still exist, in that some people paid and they are not remitted to the FMBN. So the FMBN is not in position to identify who and who have actually made that list. At the end of the day, there is confusion and people believe that they are not getting value for their money.

It is not the number of the mortgage banks that matters but the effectiveness and capacity of these mortgage banks to deliver in providing

mortgage,” he stated.

In a related development, UN Habitat Programme Manager for Nigeria, Mal. Kabir Yari, also speaking at the event, counseled that mortgage alone should not be treated in isolation of other components of housing development.

“Mortgage is only one component. Housing has about seven components, such as building materials, land, infrastructure, etc.

There are so many of them that are part of the building industry. If they cannot access land, how will they build houses? If you are allocating land for housing, locate it near jobs, because housing is not in isolation in itself. Housing is related to so many other economic activities. It is related to school, place of work, place of worship etc.,” he stated.

wara State government has compensated more than 2,000 traditional land owners and farmers whose land were acquired for public use in Lafiagi, Edu Local Government Area of the state.

Director-General, Bureau of Lands, Alhaji Yusuf Abdulwahab, disclosed this in Ilorin while presenting cheques to beneficiaries in 9 communities in the area. The beneficiary communities include Bindofu-Essun, Puta, Efagi, Estu-salam, Npagulu, Dumagi, Cheche and Landan.

Abdulwahab said the land was acquired by the defunct Federal Military Government for the establishment of Lafiagi Sugar Company. He said the company was later sold by the Bureau of Public Enterprises to BUA International Limited, a subsidiary of BUA Group. He however noted that BUA could not access the property due to agitation by traditional land owners who insisted on being compensated because the land was not originally paid for.

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•Private housing estate development

•Reminds beneficiaries of obligations

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Ogun HOC beneficiaries get Cs-of-O

Lagos decries FG’s stoppage of HOMS housing projects he Lagos State government has criticized the Federal Government for stopping construction work on the sites of two housing projects under the Lagos State Home Ownership Mortgage Scheme (Lagos HOMS) at Ilubirin and Oyingbo.

Governor Babatunde Fashola speaking at an event in Lagos, to commemorate his 2,500 days in office, said the site for the Ilubirin Foreshore Housing Project was invaded penultimate Saturday by soldiers who erected a signboard that the land belonged to the Federal Government, thus disrupting development of its housing scheme in the area.

Fashola lamented the action of the federal government,

Kwara compensates 2,000 owners of acquired land

noting that the land had already been sandfilled by the state government for the building of about 1,800 housing units under the Lagos HOMS initiative.

The governor said as he was driving through the area he saw a signboard on the land indicating that it belonged to the Federal Government.

“Ilubirin Foreshore land, where we were about to construct our estate, was taken over on Saturday by soldiers,” he said.

Fashola also disclosed that some people similarly brought soldiers to stop the work on another land at Oyingbo where the state government wanted to erect 48 flats, claiming that the land belonged to the Federal

Government, adding that as at now, the project has been stalled.

He insisted that the land belongs to the state government and that it was acquired for the state by the military administration of Mobolaji Johnson several years ago, adding that such ‘illegal’ actions by the Federal Government would only stall growth and development.

Lagos reminds HOMS beneficiaries of obligations In the meantime, beneficiaries who emerged at the first draw of the home ownership scheme have been charged to always meet up with all the obligations the ownership entails.

Executive Director, Lagos Mortgage Board, Mrs. Omobola Fashola, reminded them that proper maintenance

of the houses and prompt payment of mortgages are part of obligations that come with owning the houses.

At a forum organised to educate the winners and take them through how the scheme works, she stated it was imperative for the beneficiaries of the scheme to understand the vision behind the initiative, to bridge the housing deficit in the state.

“We want to ensure that the beneficiaries understand the responsibility of owning a mortgage. Mortgage is very important to everyone because it has to do with shelter, which is one of the basic human needs.

Therefore, we need your help and cooperation in order to achieve the set target of the Lagos State government, which is to deliver 200 homes a month,” she said.

overnor Ibikunle Amosun of Ogun State has given out Certificates of Occupancy (C-of-Os) and other title documents to the first set of beneficiaries under the Homeowner’s Charter, an initiative of the state government introduced last December to enable homeowners regularise their legal status at a discounted rate.

While presenting the documents to 10 beneficiaries in Abeokuta, the governor expressed satisfaction with the interest so far shown by indigenes in the scheme and charged those who are yet to take advantage of the program to do so.

Amosun explained that the Homeowners’ Charter was part of his administration’s plan to improve the standard of living in the state through innovative policies. He noted that the scheme was designed to ensure that residents of the state have titled documents on their properties at a discounted rate and in record time.

He said this informed the decision to extend the deadline from February 28 to

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36 —Vanguard, MONDAY, APRIL 7, 2014

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Vanguard, MONDAY, APRIL 7, 2014 — 37

Insurance Stories by ROSEMARY ONUOHA

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s part of ongoing efforts to sanitise the insurance industry of unethical practices, the National Insurance Commission, NAICOM, has said that henceforth, it is a punishable offence for insurance companies to pay fees on any insurance business transaction except as provided by insurance law.

In a recent circular signed

by Deputy Commissioner (Technical) of NAICOM, Mohammed Kari, the Commission said illegal fees such as over-riding commission, business acquisition fees and other similar fees not provided for, by insurance laws shall not be solicited, deducted, offered or paid in respect of any insurance transaction in Nigeria.

Recall that insurers have been indulging in payment of some illegal fees like overriding commission, return premium, business acquisition fees especially to insurance brokers in order to attract business from them.

However, NAICOM states that an insurer, who grants or receives such commission, has contravened Section 53(1)-(3) of the Insurance Act 2003 and would be appropriately penalised.

According to the Commission, “Each insurer shall submit a quarterly return on the rebates, brokerage commission and other fees paid out or payable

Australian insurer jailed

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PROMO: From left: Mrs. Bose Ogundipe, Head, HR, Mr Suneel Vasudevan, Managing Director, Mr. Raphael Agbaje, Category Marketing Manager, Standard Milk, and Mr Bola Arotiowa, Sales Director, all of Nutricima Limited, during the second e-raffle draw to determine winners in the on-going Nutricima Mega Cash Promo in Lagos.

ILLEGAL FEES: NAICOM to wield big stick on perpetrators on all its production during the preceding quarter to the Commission, not later than 14 days from the end of the quarter.”

Moreover, it stated that a broker should submit a copy of his dedicated client account duly stamped and signed by the bank and a quarterly

return of the brokerage commission received or deducted at source, taxes paid and rebates received during the preceding quarter on all businesses not later than 14 days from the end of the quarter, to NAICOM. NAICOM warned that no insurer, broker or its agents

African insurance market must get rid of corruption, poverty — A.M BEST REPORT F

or the African insurance market to thrive, corruption and poverty on the continent will have to be addressed for it to remain attractive, A.M Best has said Although regulatory reforms and improved governance continue to take hold, the industry has still been plagued by a negative image among consumers due to fraud and unhealthy competition, the company said.

In its latest report, A.M. Best noted that the growth of the insurance industry in Africa and increased competition from international participants will continue to be important to the health and development of the insurance sector.

A.M Best however said that companies need to stay

focused on the economic and regulatory environment, given the diversity of markets on the continent.

According to a recent report by the company, a sudden deterioration in the fundamentals that have helped to attract foreign participants and spurred growth of the insurance industry could represent risks for investors. Though recent developments have been promising, and growth on the continent is expected to continue for many years to come, even as political and economic stability still represent important challenges for the insurance industry in Africa if it is to meet its potential.

The report states that the growth of the industry in Africa is linked to economic

expansion as well as the sustainability of economic growth. Peace and stability are key ingredients as many African markets still face challenges such as armed conflicts and terrorism.

should charge or receive premiums in excess of the actual premium on an insurance policy that may result in refunding the excess amount paid, with the intent of returning the excess, either by cash or otherwise to the insured, its agents or any party thereafter.

The regulator however stressed that any insurer that fails or omits to comply with the content of the circular shall be penalised in line with relevant provisions of insurance guideline and such other penalties as may be prescribed by the commission from time to time.

NAICOM pointed out that the first report as contained in the circular, covering the quarter 1st April to 30th June 2014, shall be submitted not later than the 14th of July 2014, adding that strict compliance is required.

Ex-broker admits selling bogus insurance policies

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former insurance broker admitted to conspiring to defraud purchasers of commercial liability insurance by overcharging for policies, as well as issuing some customers bogus policies, U.S. Attorney Paul J. Fishman announced.

Thomas M. Grubb Jr., 58, of Voorhees, New Jersey, pleaded guilty before Chief U.S. District Judge Jerome B.

Simandle in Camden federal court to an indictment charging him with one count of conspiracy to commit mail fraud and wire fraud.

Grubb was originally arrested on April 14, 2008, and charged by complaint with one count of obstruction of justice. On November 5, 2008, Grubb failed to appear in court and a warrant was issued for his arrest.

he NSW Supreme Court in Australia has jailed Rural & General Insurance founder Timothy Charles Pratten to three years and six months on charges of obtaining a financial advantage by deception.

Pratten has lodged an appeal but was not granted bail last week and was taken into custody. He had pleaded not guilty to seven counts of obtaining a financial advantage by deception from the Commonwealth over tax returns he had filed.

The court ordered he be released after 18 months jail on entering a 24-month good behaviour bond. The sentence also includes 750 hours of community service.

Justice Stephen Rothman found Pratten did not declare income of more than $2.77 million and received a financial advantage of more than $1.25 million, being tax that was not paid.

He said Pratten has high levels of depression and anxiety, no prior criminal record and is the only available carer for his two daughters. Justice Rothman says despite the Crown’s submission, the offending is not “anywhere near the higher end of ‘seriousness”.

Lawyer faces ‘life sentence’ in Mutual Benefits scheme

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65-year-old Fort Lauderdale lawyer who rolled the dice on a criminal trial — and lost — will learn Tuesday whether he will spend the rest of his life behind bars.

Anthony M. Livoti Jr. was convicted in December of playing a supporting role in a $1 billion-plus insuranceinvestment scam, among the largest financial frauds in Florida history.

But because he didn’t cut a plea deal like a dozen other defendants — including most recently the Ponzi scheme’s mastermind — Livoti could be sentenced up to 80 years for manipulating trust accounts to keep Fort Lauderdalebased Mutual Benefits Corp.’s racket going for a decade.

A 12-person Miami federal jury found Livoti guilty of conspiring to commit fraud and money laundering, along with two other counts.

38 — Vanguard, MONDAY, APRIL 7, 2014

Tax Matters

By EMBUKA ANNA

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Federal Inland Revenue Services Head Office

Becoming Tax Certified

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efore the advent of the Europeans, Nigerians willingly paid their taxes in kind by rendering free services such as clearing of bush and fallow farmlands, digging pit toilets, wells, etc. for the benefit of the community as a whole.

Properties were usually seized whenever there was a default and such properties might be reclaimed on payment of money.

Today, the voluntary payment of taxes in Nigeria has systematically deteriorated as few taxpayers enjoy paying taxes voluntarily, although many regard it as a public duty to pay tax as required by government and law, which of course comes back to them in the form of social services.

However, some citizens perform this duty but do not see what benefit they derive from it; others still have the simple mentality that the tax collector is a public enemy to be outsmarted by all possible means.

In an attempt to ensure that taxpayers pay their taxes as and when due, the federal government in the late 1970s, introduced the issuance of the Tax Clearance Certificate (TCC) as a tool to enhance revenue collection. This was especially necessary in order to enable governments and other related third parties to, at a glance, confirm that the holder of the certificate had in the three preceding years of the date of the issuance of the TCC, paid his or her taxes. The logical obverse is that persons that do not have a TCC are deemed not to have paid their taxes.

The best description on what a TCC is can be found in the statutory provision of Section 101(1) of the Companies Income Tax Act (CITA) as amended, which provides that ‘Whenever the Board is of the opinion that tax assessed on profits or income of a person has been fully paid or that no tax is due on such profits or income, it shall issue a tax clearance certificate to the person within two weeks of the demand for such certificate by that person, or, if not, give reasons for the denial’. Reference to the Board in this provision is the Federal Board of Inland Revenue now the Federal Inland Revenue Service (FIRS).

A tax clearance certificate must disclose, with respect to the three preceding years of assessment, of the mentioned taxpayer, the total profits or chargeable income of the taxpayer, the tax payable, the

In an attempt to ensure that taxpayers pay their taxes as and when due, the federal government in the late 1970s, introduced the issuance of the Tax Clearance Certificate (TCC)

tax actually paid and alternatively, a statement that no tax is due for payment.

Section 101(2) & 101(4) of CITA, as amended, further elucidated that it is a mandatory statutory requirement that all departments of government and commercial banks must demand for the TCC, for the three preceding years, of any person with whom they intend to have any dealing in the areas of applications for government loans, contracts and other businesses, registration of motor vehicles, applications for firearms

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license, foreign exchange transactions or the remittance of funds outside Nigeria, applications for certificate of occupancy of land, building plans, transfer of legal title to land, applications for plot of land, export or import licenses, pools or gaming licenses, distributorship, registration of a limited liability company or a business name, allocation of market stalls, etc.

A point of contention with regard to tax assessments and TCC has always been whether they are by themselves final and

conclusive tax documents.

Section 76 of CITA, as amended provides that where no valid objection or appeal has been lodged within the time provided in the relevant tax law against a tax assessment, or where the total profit and the tax payable on such profit of a company has been determined after an objection or an appeal, the determined assessment shall be final and conclusive for all purposes of compliance with the tax provisions of CITA, as amended.

There is however no specific Section or provision in the Act or in any tax circular which makes the issuance of a TCC a final and conclusive evidence of the tax paid or payable for the stated period.

The professional view in this regard is that many TCC are generally issued based on the tax returns which are filed under the self-assessment procedure. However, should the tax authority detect any under-payment of tax or fraud in the payment or nonpayment of tax, the various

tax legislations allow the FIRS to undertake a tax audit and/or issue further tax assessments based on the audited accounts filed with the self-assessment forms, or apply the best-of-judgment principle or other methods allowed under the tax laws to raise further tax assessment.

Therefore, the amount of tax paid and indicated as such in a TCC will be final and conclusive only where it has been adjudicated upon and or finally determined by a judicial authority.

So, whenever you plan to apply for a government loan or contract, firearms license, foreign exchange transaction, certificate of occupancy of land, building plans, transfer of legal title to land, plot of land, export or import licenses, pools or gaming licenses, distributorship, registration of a limited liability company or a business name, allocation of market stalls or the remittance of funds outside Nigeria etc, be sure you are tax certified with the TCC.

Vanguard, MONDAY, APRIL 7, 2014 — 39

Appointment & Promotions vicahiyoung@yahoo.com 08033348923

Microsoft names Makwane Nigeria country manager

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OFTWARE giant, Microsoft, has announced the a ppointment of Kabelo Makwane as the company’s new country manager for Nigeria.

Prior to this appointment, Makwane served as Public Sector Director in Microsoft South Africa.

As country manager, Makwane is to among other things, address the challenge of local innovation.

With this development, the South African born Makwane, will lead the company’s global shift to offering in one of the

most dynamic, innovative and fast growing countries on the continent.

Speaking on his appointment, he said “I am extremely excited to be appointed to lead the Nigerian subsidiary during this dynamic time on the continent.

Microsoft is focused on unlocking the economic opportunities of Africa and it is a time when the company can have real economic impact in the country. I believe technology is an enabler at every level of society and I am excited at being able to have an impact on

SAT announces Pitso Regional Manager West Africa S

OUTH African Tourism, SAT has announced the appointment of Mr Lehlohonolo Pitso as its Regional Manager, West Africa.

As Regional Manager, West Africa, he will implement a marketing strategy for all West African markets and work to develop and grow trade, media and other stakeholder

As part of his appointment, he will relocate to Lagos, Nigeria, to work out of South African Tourism’s first regional marketing office on the continent.

“We are delighted that we have, in Hloni, a professional of his caliber to manage our new office in Lagos and our incredibly important marketing

relationships to e n s u r e continued robust tourist arrival growth from West to South Africa.

Hloni (as he is known) has a 17-year track record of distinction in the travel and t o u r i s m industry. He started his career whilst still a student at Boston City Campus when he was chosen to join the HRG Rennies Travel Learnership Programme which was swiftly followed, upon graduation, by his appointment as a travel consultant to Rennies.

He has also worked at Air Botswana and as a sales executive at Protea Hotels where, after eight months, he was promoted to Sales Manager: Africa.

Hloni joined the Africa team at South African Tourism five years ago as the Trade Relations Manager: East Africa.

He takes up the Regional Manager: West Africa position after having served as the Regional Trade Relations Manager: East and West Africa.

work, trade relationships and consumer engagement across the entire West A f r i c a n region,” says c h i e f executive officer, Mr T h u l a n i Nzima.

By the end of June, 2013, Nigerian

tourist arrivals to South Africa were up 15.9 percent. This was exceptional growth on the back of phenomenal increase in arrivals of 13.8 percent in 2012 when Nigerian tourists contributed an estimated R720 million to the South African economy. Moreover, Ghanaian arrivals were growing at 27.3 percent by end June 2013.

“West Africa is an incredibly important and valuable market region for our destination,” Mr Nzima says. “The entire African continent, in fact, is of significant strategic importance to our destination. South African consistently records excellent tourist arrival growth from all key African markets.

South African Tourism made the decision in 2011 to invest R218 million in the African markets.

The opening of the regional West African office, and Hloni’s appointment, is part of that growth investment.

this vibrant and unique country.

“While most technology trends, innovations and consumer products come from the West and the East, Africans are realizing that for us to solve the continent’s technologyrelated challenges, we have to find African solutions. ICT holds transformational opportunity for Nigeria.

Innovation will help the country leap from the industrial revolution into the information era. It is the land of opportunity.

There is no place like it.

The renewed emphasis by the Nigerian government on the ICT sector holds considerable promise for what technology can bring to consumers and businesses. It gives us an opportunity to use our technology, talent, time and money to help create sustainable growth in the country and across the African continent. I am very happy to be spearheading this continued investment in Nigeria, and certainly look forward to

working with government, industry, academia and the general public to enable Nigeria to realize its potential through innovation. I look forward to unearthing the economic opportunities, especially with small businesses to drive job creation, and to foster meaningful 21st century skills in our youths.

Reacting to the new development, Hennie Loubser, General Manager of West, East, Central Africa and Indian Ocean Islands said “I applaud Kabelo on this exciting new role. He has a close relationship with the team and has been following the market closely, establishing strong connections in the region. His passion and natural understanding of our business makes him the ideal candidate for this role. As a multinational organization, Microsoft believes in hiring individuals that can bring global and external expertise into different regions, whilst at the same time gaining new experiences.

Ogunbiyi retires from Afren

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HE boards of Afren and First Hydrocarbon Nigeria, “FHN”, has announced the retirement of its Executive Director, Constantine Afolabi Ogunbiyi, from the organization after close to a decade in the service of the company. Mr Ogunbiyi has been a core member of the executive management team of Afren since inception and has assisted the growth of the company as well.

He held various positions in the company starting as a Special Assistant to the Chairman and General Counsel; Associate Director, Executive Director and Member of the Board respectively. As Executive Director he was responsible for business development and led Afren’s team in negotiating certain key Nigerian acquisitions and capital raisings.

OMD Nigeria.

In 2011, he was appointed Odugbemi, who is particularly strong in as Founding Chief Executive unconventional media placement has been involved in a number of significant transactions Officer of First Hydrocarbon within and outside the Nigerian advertising Nigeria Ltd, and played an industry, and as the MD of Ogilvy Africa Media instrumental part in the did extensive work on the Airtel and other key establishment of FHN, its accounts across many markets within the region. capital raising efforts and its The new MediaShare boss has had broad acquisition of interests in complementary competencies covering media OML 26 and OML 113 in sponsorships, digital media management and Nigeria. senior account management.

Constantine ‘Labi Ogunbiyi A former lecturer of lecturer/consultant on said, “I am extremely proud Technology Policy, Odugbemi is a regular to have been a part of the speaker at advertising industry programmes establishment and evolution across the continent. of Afren and FHN and to He is expected to bring in vast and varied have been a part of their industry experience into the company and group incredible successes. " at large.

Prima Garnet Africa appoints Odugbemi MediaShare’s MD

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RIMA Garnet Africa Group, an integrated marketing communications group in Nigeria, has announced the appointment of Dele Odugbemi as the new Managing Director, MediaShare, its media independent/management agency.

Until his appointment, Dele Odugbemi worked with Aegis Media Group in South Africa, and was responsible for the business growth and supervising of the General Motors Account Team in South Africa. He also served as the MD of Ogilvy Africa Media.

Odugbemi, an MBA holder in Technology Management, has over 15 years experience in multinational media account management and has managed key clients like Virgin Atlantic, MTN, Diageo, SuperSport, M-Net, Nestle, Unilever, Motorola, Airtel at both local and international levels.

The media management veteran also worked with the OMD Network where he rose to the position of Head of Planning and Innovations at MediaReach

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40 — Vanguard, MONDAY, APRIL 7, 2014

Interview

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he immediate past Executive Vice Chair man/CEO, Honeywell Flour Mills Plc, Mr. Folaranmi Babatunde Odunayo, retired on April 1st, 2014. Mr. Odunayo retired after 17 years of meritorious service. Odunayo, Honeywell's pioneer CEO is a graduate of the then University of Ife, Ile-Ife (now ObafemiAwolowo University). He attended King’s College, Lagos and is a Fellow of the Institute of Chartered Accountants of Nigeria. In this interview with Peter Egwuatu, he spoke on challenges facing the manufacturing sector, performance of Honeywell Plc in the industry, agriculture sector and other vital issues. Excerpts: How has manufacturing sector fared in Nigeria?

Manufacturing definitely is hard. If you look at the Nigeria economic environment, it is obviously not the best way to make quick money but one of the best ways to make steady money and see what value it is adding to the society. Manufactures represent to the country the real sector; Manufacturers are people you can locate and find and the people from the organised private sector rather than being in trade from Belgium to Lagos and bringing all kinds of goods. It has not been a rosy path because support from manufacturing is not well understood.

The principal reason is because of Nigerian’s attitude generally. Those who are in government, civil servants who are expected to provide support comes from the standpoint of doing a lot of favour to the manufacturing sector so the manufacturers have to struggle through many obstacles in order to be heard and today the Manufacturers Association of Nigeria has grown to become an advocacy group that is always advocating good government andimprove the lot of the private sector.

What are the challenges facing the manufacturing sector?

We have many challenges which range from inadequate power supply, to lack of road infrastructure, to a tariff system that does not support manufacturing that can in fact in many situations support importation rather than manufacturing.It is a continuous battle to condone advocacy sections in government and try to show the gap between duty paid for finished goods in Nigeria and importing the same items. Fortunately over the years, we have recorded good structure with government in negotiating appropriate tariffs. Fortunately, also in recent times government has finally seen that it is best to grant tariffs and tariff adjustment to sectors of the economy rather than to individual companies that are able to successfully go to Abuja and get things worked out for themselves.In the past, you could be in same sector with other manufacturers and some of your counterparts that are in same competition have favourable allowances and tariffs from government. Today the government has realised that finally and we get sectoral reviews of tariffs. I found out that the biggest challenge of cost to manufacturing is far too many. Small and Medium Scale Enterprise, SMEs have gone out of business because of

We have many challenges which range from inadequate power supply, to lack of road infrastructure, to a tariff system that does not support manufacturing in the country

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Manufacturers face too many cost challenges — ODUNAYO lack of adequate supply of power, because the capital required to invest in generating capacity and to maintain a regular production quality is just too high. Infrastructure is a major problem because they are not in best condition.

The transport sector also lacks capacity in terms of ability to invest in quality trucks for movement of goods and services. The transport sector today is supported by private efforts of small and medium scale organisations who struggle to invest in used trailer trucks in order to earn a living for themselves and put them on the road. How much more different it would have been if manufacturers have capacity for mass transit of goods? I will not even speak on mass transit for human beings which is also very essential. In summary what's being said above is:

Inappropriate Tariff, Inadequate Transportation and Inadequate Power supply.

In spite of these challenges, how has Honeywell coped?

Most companies in Nigeria ran out of business because of inappropriate tariffs and also inadequate protection of manufacturing sector. In our kind of industry, we have been fortunate that flour and flour products have reasonable protection and some smuggling too takes place from the Northern part of Nigeria, but we’ve been fortunate they are in limited quantity. If they were in large quantity, the industry would have been greatly affected. We have survived because of the absence of smuggling of the product in large numbers but it can easily destroy an industry. As a

company, our survival has been shaped largely by ability to define our customers, define them in terms of their needs,and also define them interms of the quality of products they desire. Having defined the customers, knowing what they like, even their age bracket, and income bracket and knowing exactly what they want, we were able to fashion production and production quality toward these targets and offer precisely what they require.We always stand above competition in our offering to the customers. Good quality products offerings is one strategy that guarantees you to know your customers and that has kept our volume. It has also helped us to sustain a very strong brand image, brand equity in theminds of consumers. The consumers, they speak about it and help you to sustain a mandate for your production.

How has Honeywell performed in terms of financial indicators? he company has performed reasonably well. The financial details of our performance is very open in terms of being available at the Nigerian Stock Exchange, NSE but to be more specific, the company is one of the best performing in the industry which sustains production capacity, which sustains high volume and sustains strong consumer perception.

So I think we are one of the top performing companies in the relative short time we have been in the business of flour and other associated products.

What is your market share in the industry?

You know Nigeria is a very big country of 160 million people and we can easily boast of a market share that is almost 15 and 20 % of a market for one company out of 20.

How is the employment policy like in Honeywell?

There is a lot of academic education but not a lot of it have been retained.

Honeywell does very intense training programmes but our biggest help has been in a strategy to always ensure that it is only good people that are recruited into the organization, regardless of whether somebody is your relation or friend, only good people are recruited.

The management will fail if it does not ensure that it is only good people that are recruited. If you do favour, you also undermine yourself and also undermine the capacity to deliver

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Interview the way it is fair to the consumer is that you must offer them choices. It is not the business of the government to regulate what somebody wants to eat, if it is too pricy then you will choose something else. We use wheat for bread flour and for the baking of bread,we should continue to use wheat for bread and also continue to import wheat for that purpose and

result because you are going to use people to do it.

When we employ, we employ good quality people and we bring them in.

What has been the impact of agriculture in your industry?

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First of all, I will speak about a g r i c u l t u r e generally.

To promote agriculture is a major problem in Nigeria.

The Minister of Agriculture has been working very hard to see to the improvement of agriculture and I am very happy with that, not only because agriculture is my first course, in which I graduated many years ago. He has done a great job so far. I will like to see a great success with one crop, any crop, if we can succeed with cassava and I pray we do so, or we succeed with corn or whatever we pick, we would have been able to establish a model of agriculture in Nigeria succeeding with the crop. Starts from planting seeds, cultural practices, farmer education, credit, then harvesting, storage, transportation and a lot of marketing. Right now,we don’t have a workable system that runs across all these issues in Nigeria. If we can take it up from any crop, it will become a model for agriculture in Nigeria. I also believe in competitive advantage that a country needs to also concentrate on those areas where you have competitive advantage over others. It is certain we have competitive advantage in cassava, maize, yam, we have many crops that we can handle. If we can handle groundnut which used to be the soul of Nigeria, lets handle this crop and finally we can substitute these cassava plant with maize, with wheat to some extent. Let’s do some substitution.

What am not too clear about is whether Nigeria has a wheat growing environment. I will be glad if we can take agriculture to a point where we can actually grow variety of crops in Nigeria at economic use and in such volume giving a land tenure system

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Fortunately, also in recent times government have finally seen that it is best to grant tariffs and tariffs adjustment to sectors of the economy rather than to individual companies

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and we can be able to meet the needs of farming. That is something in the future that I will personally be glad to see. In the meantime, what remains for us to do is continue to import wheat and continue to spin some others to an increasing percentage until government is able to offer improved wheat and varieties from certain areas.

Are you in support of the industry to use wheat?

The way a country should run and

in

the North and that is the reason why your question is relevant. There are underlining things that are suffering, trade is suffering, commerce is suffering. How are we coping? We are redirecting our efforts in other markets to see whether we can have some edge above competition. What is not certain in some areas, may be we can increase it in other areas. In the meantime, the bottom line is: for any business to survive you need stability, for any nation to survive in the long run you need stability, if

The Minister of Agriculture has been working very hard to see to the improvement of agriculture and I am very happy with that

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substitute it with cassava until one day when we can also grow locally with the volume that is required. The problem of the economy in Nigeria is a mono-product economy with oil constituting the main export and the problem is not the wheat, the problem is to grow other sources of foreign exchange earnings. Can we grow cassava as a foreign exchange earnings or can we grow maize and export maize and export cassava chips. Can we export groundnut, can we export many other products to the point that we can generate high foreign exchange.

If we could triple our export earnings, including oil, the problem will not be wheat, in fact, the success is, it will double your revenue, and you offer the Nigeria consumer whatever he wants, whether he wants some maize products or yam products or wheat or whatever, the consumer must have choices. I think we are making too much noise about wheat being imported, we should offer substitute foreign exchange earners, we should develop the good spectrum of agriculture, we should develop manufacturing to the extent that manufacturing in Nigeria can also process raw materials into a finished product, and for export. Right now, all we have is raw materials, there is no manufacturing in Nigeria that is ready to help us convert all this raw materials into anything not even cocoa, so how can we develop our export earnings?

How is Honeywell coping with instability in the North East? n Nigeria we are more concerned with the instability

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there is no stability in a nation the nation won't progress.

What is your projection on Honeywell performance in the next five years?

From the foundation we have laid, I expect progress and from the project we are planning even today am sure that we are going to Sagamu, many projects are coming up in food sector.

In the next five years I expect that we are going to see a bigger company.

Why are you leaving Honeywell now?

First of all when you have been in a company as the CEO for 17-18years, that’s quite a long time in your working career, not counting what you have done before but when you are also the CEO of a company for 1718 years, then you are wondering how long you want to remain the CEO of that company and before it begins to look like the African thing, of the CEO who does not want to go and especially if for 20-22 years people who have been working with you have grown and they are part of the success of the company because only one man does not build a house. So, if there are people who have been part of that success today and they have become men of themselves. I think the best thing to do is to step aside because if you stay longer you find out that mature men of certain strong skills which am very proud of, if you don’t step aside these strong mature men will soon find a way to express themselves outside the company and if you stay a little longer, you will discover there is no one there anymore because they have all gone to find their own way.

Has there been succession plan before now?

Succession plan is about training, exposure, selection, because people have to be selected. At the right moment, people are ready.

Appointment is a final thing that you do, so there was a selection arrangement which made it possible that at the right moment people are selected to certain positions. The incoming Managing Director has been very active, from the beginning.

He came up at a beginning level but after 20 years he has gone to be his own man,so what can I say to a man that is skilled and suitable? I can only wish him the best; he knows exactly how to continue and I know he will keep to the values that we have always cherished.

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42 — Vanguard, MONDAY, APRIL 7, 2014

Agric Wheat Flour and Its Derivatives and the Establishment of a Special Tax Regime for the Mixed Flour”.

Nigeria, centre of Obama’s power Africa initiative - FG

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he Federal Government has described the American President Barrack Obama’s Power Africa initiative as a uniquely designed plan aimed to ensure rapid socio-economic development of the continent.

The Permanent Secretary in the Ministry of Power, Ambassador Godknows Igali said this at a meeting between the officials of his the ministry and the American delegation, led by DeputyAssistant Secretary, Mathew Murray, in Abuja. He said that the initiative will also assist countries to access finance required for investment purposes. Igali who presided over the meeting, said the focus on the power sector will open up window of opportunities for Nigeria’s private sector to further consolidate on the gains recorded following the recent transfer of ownership of Discos and Gencos to the private sector.

O2 Academy addresses skills gap in ad industry

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n a renewed effort to bridge skills gap in the advertising industr y, O2 Academy, an arts institute is currently training young Nigerians on modern techniques in advertising.

Speaking, Ozoemena Mbanefo, founder, 02(Oxygen) Academy, said: “We have decided to come together and help train talented Nigerians on advertising. Our desire is to enable them achieve their desires. We want to bridge the gap in skills in the industry and cut down unemployment among school leavers,” while addressing a cross section of journalists during its 5 th anniversary in Lagos recently.

In addition, he noted that many sectors of economy are still bedevilled by structural challenges, one of which is skills gap.

In the manufacturing sector, for instance, Dangote has established an institute to train school leavers on the demands of the modern industrial economy. Dearth of technical personnel in other sectors such as telecoms, energy, among others, has also led to high demands of expatriate technocrats, in an atmosphere where youth unemployment rate is 54 percent.

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MEETING: From left, Permanent Secretary, Ministry of Agriculture, Mrs. Ibukun Odusote (centre) flanked by Director-General, The Federal Institute for Industrial Research (FIIRO), Dr Gloria Elemo and a director in the ministry at the stakeholders meeting on 20% Inclusion of High Quality Cassava Flour or Sorghum to Wheat Flour held in Abuja recently.

20% CASSAVA FLOUR IN BREAD:

Stakeholders seek legal backing

By JIMOH BABATUNDE

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on’t tell me it is not possible, if you don’t include 10% of cassava flour in your wheat flour, wait and see what we will do.”

That was President Olusegun Obasanjo in a chat with one of the millers when his government was pushing for Cassava flour inclusion in Bread.

The millers had always argued that it was not possible to have 10% inclusion of cassava in flour, but Obasanjo who was promoting the cultivation of cassava vigourously was convinced it was possible.

So, no wonder when he left government the policy of cassava inclusion in wheat flour failed as there was no law in the country to back that pronouncement.

Many investors that went into Cassava production business got their fingers burnt as the ideal of High Quality Cassava Flour inclusion in wheat was jettisoned as soon as his tenure ended Effort of the present administration to have a law backing the inclusion of Cassava flour in Wheat flour suffered a setback in the House of Representatives two years ago as the members unanimously voted No to an executive bill on the excuse

that compelling manufacturers of flour to include cassava would amount to compelling Nigerians to eat products that may be injurious to their health.

But stakeholders in the agriculture explained that the issue of Cassava inclusion in wheat flour is beyond what the National Assembly thinks as the bill when passed was capable of job creation, wealth creation, poverty reduction and local content utilisation as Nigeria today is the highest

producer of cassava in the world.

This informed why they gathered last week in Abuja to take a look at a draft bill seeking to make it mandatory for the inclusion of 20% cassava in the production of all flour products in Nigeria.

From farmers to processors; millers to bakers, all gathered to deliberate on the Bill titled “A Bill for an Act to provide for the Mandatory 20 per cent Inclusion of High Quality Cassava Flour or Sorghum to

ddressing the stakeholders, the Permanent Secretary, Ministry of Agriculture, Mrs. Ibukun Odusote, said the meeting was conveyed to discuss the draft Cassava Bread Bill which will eventually be passed to the National Assembly for passage into law.

Odusote disclosed that Nigeria produces over 40 million metric ton per annum of cassava as about 60% of Nigerian farmers are involved in cassava production because it is one of the food security crops.

“Unlike cassava, Nigeria is the highest importer of wheat in the world with a whooping sum of N635 billion spent annually.”

She argued that the quality of wheat imported into the country for Nigerians consumption is also questionable, adding that inclusion of 40% cassava flour in wheat for bread is not only safe for consumption, “but also improves the nutritional quality of bread by reducing the glycemic index, the factor responsible for diabetes.”

Mrs. Odusote’s claim supports that of the Minister of Agriculture, Dr. Akinwumi Adesina, who said that the information that cassava consumption was bad for patients suffering from diabetes, is one of the misguided information being passed around so as to truncate the government policy of including cassava in

FAO, FG collaborate for improved seed production

By SALIMAT GARBA

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o further ensure food security and enhance sufficiency, the Food and Agriculture Organisation (FAO) has partnered the Federal Government through the National Agricultural Seeds Council (NASC) in the production and processing of quality seeds.

Mr. Olusegun Olatokun, the Coordinating Director, NASC, said this has contributed to the rapid increment in the country’s seeds production from less than 8000 tonnes in 2011/2012 to over 150,000 tonnes in 2013.

According to Olatokun, the collaboration is to execute the ‘Strengthening National Seed Systems in Nigeria’ project, a

two-year pilot project launched in 2013 with FAO contributing $345,000 to the seeds sector.

He said the collaboration has not only aided production across the seeds value chain but has also helped the industry to modernise its processing facilities which have been obsolete.

“Let me start by saying the collaboration has made serious impact; the area of major impact has to do with quality of seeds. At the same time, the support is focusing on capacity development of the modern processing facilities.’’

“Currently, a site and facility inspection is going on and immediately after this the project will address the skill gap,’’ he said.

It is recalled that the project is targeting five pilot states: Ebonyi, Ondo, Kaduna, Sokoto and Jigawa, with four staple crops (rice in Ebonyi, maize in Kaduna and Ondo, sorghum and millet in Sokoto and Jigawa).

Strengthening National Seed Systems in Nigeria has the aim to increase the adoption rate of improved seeds by smallholder farmers, improve income and ensure food security in the country.

Meanwhile, Dr Louise Setshwaelo, the FAO Country Representative, at the launch of the project said the organisation hopes that at the end of the project in 2015, the seeds law would have been updated to international standard.

Vanguard, MONDAY, APRIL 7, 2014 — 43

Aviation

Nigeria must invest in aircraft maintenance facility — AON Stories By LAWANI MIKAIRU

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hairman of Airline Operators of Nigeria, AON , Captain Nogie Meggison has cautioned that until Nigeria establishes an aircraft Maintenance, Repair and Overhaul , MRO, facility in the country the aviation sector will not optimize the inherent potential and benefits of the sector.

Speaking in an interview in Lagos , Capt Meggisson, who is also the President of JedAir, said setting up an aircraft maintenance facility in the country will assist to train the horde of aviation professionals in the country including aircraft engineers.

He said the unfavourable government policy of granting multiple entry points to foreign carriers into Nigeria has contributed to the stunted growth of indigenous airlines.

He further noted that the unfriendly business environment where operators grapple with multiple charges has not helped the process that would lead to private sector players showing interest in setting up aircraft repair centres. He believes if some of the intervention fund given by government were channeled into the establishment of aircraft repairs facility, the industry would have made some progress.

According to him merely

setting up a national carrier will not alone step up the development of the sector, as aircraft MROs have the capacity to create thousands of jobs and retain huge sums of money in the country that indigenous carriers spent on the repairs of their aircraft oversees.

“I don’t think the national carrier is the issue. Our policies are the issue. We had a national carrier in the defunct Nigeria Airways. One

of the main issue was not being able to pay for its maintenance bills of airplanes scattered all over the world including Brazil, Ireland, Germany, France, USA, and Israel,”.

“If you have a national carrier and you don’t exercise the cabotage law or the Fifth Freedom Right of the Chicago Convention of 1945, we are putting water down the drain.

If you have a national carrier and you don’t have MRO, you

Group picture of pupils, teachers and Nestlé staff that participated in the 2014 World Water Day celebration at the Nestlé factory in Agbara.

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he Managing Director of the Federal Airports Authority of Nigeria, FAAN, Engr. Saleh Dunoma has promised early completion of the Cargo and Pilgrims terminal located at the Murtala Mohammed International Airport, Lagos.

Engr. Dunoma made the pledge while on site to inspect the on-going construction works going on at cargo and pilgrims terminals. He said the completion of the terminal will sanitise the cargo section and increase business activity.

At the Pilgrims terminal, the Managing Director said the facility will provide comfortable and decent passage for both Christian and Muslim pilgrims.

According to Engr. Dunoma, the Terminals are designed with special emphases on safety and security for the overall benefit of travellers, airport users as well as goods and services.

Preliminary training for IOSA process will prepare us for audit — Dana Air

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ana Air said Implementation Training Initiative undertaken by the airline is

part of the preliminary process to prepare the airline for the IATA Operational Safety Audit IOSA. This was

Airspace managers charged to key into NAMA's vision

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are putting water down the drain.

Those intervention funds did not filter down to the aviation sector. The last one of N350 billion to the aviation and power sectors; the one for aviation actually went to the banks. It did not come to aviation, and as far as the President is concerned, he would be thinking that it came to aviation because they called it aviation intervention fund.”

Lagos cargo, pilgrims terminals to be completed soon

irspace managers at the nation’s airports have been charged to sustain the current drive for high quality air navigation service delivery to airlines by the Nigerian Airspace Management Agency, NAMA. The Managing Director of the Agency ,Engr.

Ibrahim Abdulsalam, made the charge in Ilorin, Kwara State at the quarterly meeting of the airspace managers from 26 airports across the country.

The NAMA boss told the managers that the agency as an air navigation service provider in the West African sub- region could not afford to lack behind in the provision of quality services if the agency must be relevant in the 21st century.

According to General Manager, Public Affairs, NAMA, M r Supo Atobatele “ Engr.

Abdulsalam said the management would do everything possible to ensure that most of the glaring operational challenges at the various stations would be tackled systematically to

enhance effective operations.”

He assured the airspace managers that staff welfare would remain the focus of his management, saying that “acquisition of modern technology without prerequisite training will amount to nothing”. The NAMA boss therefore charged “ the managers to key into the corporate vision of the agency of becoming one of the leading air navigation service providers in the world.” “ The Chairman of the forum ,Remi Olajire in his opening speech ,remarked that the gathering of the airspace managers would afford them the opportunity to exchange notes on operational achievements / challenges and profer possible solutions where applicable.”

The host Airspace Manager, Godfrey Ebele Abaneme while pledging total loyalty and commitment of his colleagues to the new managing director, called for aggressive revenue drive at all the stations to achieve the desired corporate goal of a robust agency.

disclosed by the Chief Operating Officer of the Airline Mr. Yvan Drewinsky.

Dana Air is one of ten airlines benefiting from the IOSA implementation training initiative that is 100 per cent funded by International Airline Training Fund (IATF), a non-profit foundation whose purpose is to bridge the training gaps for airlines in regions of the world where it is most needed, with a particular focus on improving safety.

According to Drewinsky “ The first stage of the implementation training is a gap analysis workshop, the first of three sessions over the next year, that will give Dana Air a greater understanding of their shortcomings in relation to the IOSA standards and recommended practices (ISARPs) and to provide guidance and tools to establish action plans towards ISARPs implementation.”

Last year the Abuja Declaration by the states of the African Union mandated that

all African airlines should achieve IOSA status by 2015.

The total accident rate for IOSA carriers in 2012 was 77% lower than the rate for non-IOSA operators.

Speaking also on Dana Air ’s commitment towards achieving a listing on the IOSA directory in line with the African Union mandate, Drewinsky noted that Dana Air is resolute in adhering to globally recognized safety standards and its commencing preliminary training for the IOSA process confirms the premium the airline places on safety.

“The IOSA Implementation Training Initiative is coming at an auspicious time when Dana Airline is looking at reinforcing services as well as seeking the possibility of forming alliances with global airlines as it aims to operate in line with the highest global standards”, said Mr. Drewinsky.

The Manager of the IATF, Oscar Haro, said IATA was pleased to confirm Dana Airlines Limited as one of the C M Y K

44 — Vanguard, MONDAY, APRIL 7, 2014

Economy

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he U.S. economy has finally regained all the private-sector jobs it lost during the Great Recession. Yet it took a painfully slow six years, and unemployment remains stubbornly high at 6.7 percent.

The comeback figures were contained in a government report Friday that showed a solid if unspectacular month of job growth in March. Businesses and nonprofits shed 8.8 million jobs during the 2007-09 recession; they have since hired 8.9 million. But because the population has grown since the big downturn, the economy is still millions of jobs short of where it should be by now.

Also, government jobs are still 535,000 below the level they were at when the recession began in December 2007. That’s why the overall economy still has 422,000 fewer jobs than it did then.

U.S. employers did add a seasonally adjusted 192,000 jobs in March, just below February’s 197,000, which was revised higher.

March’s figure nearly matched last year’s average monthly gain, suggesting that the economy has recovered from the hiring slowdown caused by severe weather in December and January.

The March figures did signal that stronger gains could lie ahead: More Americans without jobs are starting to look for one, and paychecks are growing.

UK house prices accelerate again

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ouse price inflation has increased once again, according to figures from the UK’s biggest mortgage lender, Halifax. It said prices rose by 8.7 percent in the year to March, the highest inflation rate since October 2007.

Halifax put the increase down to an improving economy, growth in employment, rising consumer confidence and low interest rates.

However measured on a monthly basis, prices fell by 1.1 percent in March, compared with February.

That was only the third monthly decline in the last fifteen months, and means the average price of a house in the UK has actually fallen, to £178,249. However prices were still up over the medium term.

In the first quarter of 2014 prices rose by 2.3 percent, compared to the last quarter of 2013.

Along with evidence from the Nationwide Building Society this week, the figures suggest that the rate of house price growth has recently slowed.

The Nationwide reported that price rises had “moderated” over the last couple of months.

However, over the year as a whole the Nationwide said that prices had risen by 9.5 percent.

It also said that the gap between prices in London and the rest of the UK was now the widest it has ever been, with prices of homes in the capital twice those in the rest of the country.

Last week the Bank of England reported a sharp slow-down in the number of mortgages being taken out in February.

Affordable housing: From dream to reality

By NGOZI OKONJO-IWEALA

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xactly fourteen months after convening the Housing Retreat in November 2012, President Goodluck Ebele Jonathan is launching the Nigeria Mortgage Finance Company (NMRC), signaling the beginning of a process that would finally increase opportunities for Nigerians to own their homes at an affordable price. Today’s event will also involve the reinvigoration of mass housing initiatives which will, along with the NMRC, give the housing sector the necessary fillip to start realising its great potential for the good of the country.

The country as a whole will gain significantly from the unleashing of a sector which has the capacity to transform the entire economy through millions of direct and indirect jobs as well as many other ancillary benefits. To appreciate the significance of this, let us consider a few facts.

Nigeria’s significant housing demand has been estimated at 17 million, with an additional 2 million units needed every year. Labour impact assessment studies in countries with similar demographics and economies as Nigeria, estimate that at least 5.62 direct jobs can be generated with every new home, and 2.48 indirect jobs in housing related expenditure. So far, our country is yet to realise this potential. In 2012, housing, construction, and real estate accounted for only 5.54 percent of our GDP. This figure is low in comparison to many other developing countries. Addressing the housing deficit will have a game-changing impact on our society and our communities.

Globally, there is a strong consensus that the development of the housing sector is important for stimulating economic growth and job creation in any economy.

Indeed, housing construction is one of the most used indices for gauging the economic situation in most developed countries. The Case-Schiller index used to monitor housing starts in the US is a good example. Likewise, in Malaysia, one of the main contributors to the country’s 8 percent per annum three-decade long GDP growth was the housing and construction sectors. New home construction is a major generator of jobs through direct employment in the construction industry with significant multiplier effects on other sectors of the economy. This is the kind of potential that the launch of the NMRC and related initiatives is set to unlock.

This explains why the President made housing a priority sector in the Transformation Agenda. As a practical expression of this focus, he directed in May 2012 the convening of a major presidential retreat on the housing sector that brought all stakeholders together to discuss issues of land titling

Dr. Ngozi Okonjo-Iweala, Coordinating Minister of the Economy and land administration foreclosure policies, access to affordable housing finance and cost of construction materials among others. The second event was a Roundtable on Housing Finance which the President instructed me to convene in November 2013. This was attended by banks, development finance institutions, private sector players, and public sector partners like the Ministry of

,

US regains jobs lost in recession

affordable mortgages for the Nigerian people.

The outcome of the committee’s work was the recommendation to set up the Nigeria Mortgage Refinancing Company to significantly increase the liquidity available to mortgage organisations such as Primary Mortgage Institutions (PMIs), banks, Housing Microfinance Institutions and other financial actors.

NMRC and the initiative to open up the housing sector also involves efforts to improve land titling and land registration, speed up governors’ consent, and improve foreclosure policies

Lands, Housing and Urban Development, and the Federal Mortgage Bank - to review and analyse the potential for housing finance in Nigeria, and see how to overcome trenchant obstacles.

A major outcome of the Roundtable was the setting up of a housing finance committee chaired by the Federal Ministry of Finance, and comprising the Federal Ministry of Lands, Housing and Urban Development, the Central Bank of Nigeria, mortgage and commercial banks, supported by the World Bank and the IFC. The committee was mandated to take forward the work of developing a facility that would significantly scale-up access to

,

The NMRC is a public-private sector initiative with majority shareholding by the private sector. The federal government is a sponsor and also a shareholder.

It is backed by a World Bank zero interest credit of $250 million with a 40-year tenor and 10 years of grace, a very attractive facility.

The NMRC will further float an additional N50 billion in bonds as soon as it is operational to which institutional and other investors can subscribe. Further bond issuances will take place in a phased manner to significantly boost NMRC’s resources and liquidity for purchase of bundled mortgage products from the PMIs and other institutions.

The launch of the NMRC and the initiative to open up the housing sector also involves efforts to improve land titling and land registration, speed up governors’ consent, and improve foreclosure policies all presently impediments to the proper functioning of the housing sector. Many states are active in housing development and have put in place supportive policies.

However, the advent of the NMRC hugely expands the horizon of what can be achieved. As such, 14 pilot states including the FCT are working closely with the federal government on this initiative. Once they fulfill laid down criteria in putting in place appropriate policies, their citizens stand to benefit from greater access to affordable mortgages.

The Governors of Abia, Anambra, Bauchi, Bayelsa, Delta, Gombe, Kano, Kaduna, Lagos, Edo, Enugu, Ondo and Ogun States and FCT have signed on to work on the Housing Initiative.

The launch of NMRC and enhanced housing initiative will have significant multiplier effects on many sectors of the economy unleashing jobs for architects, builders, plumbers, welders, carpenters, painters, interior decorators, furniture manufacturing and other allied small scale industries.

•Dr Okonjo-Iweala, Coordinating Minister for the Economy & Minister of Finance, gave the speech at the launching of NMRC in Abuja

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Vanguard, MONDAY, APRIL 7, 2014 — 45

E- Commerce

How online retailers can leverage Omni-Channel to deepen market

By JONAH NWOKPOKU

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s consumer behaviour evolves and new technologies emerge, the term “omnichannel” will be used increasingly within the retail environment.

While a number of advertisers have already successfully rolled out multichannel strategies, the need to place customers at the heart of a digital initiative has gained even greater importance. So, retailers are beginning to understand that regardless of how customers interact with them in the future, shoppers need to be provided what they want and when they want it — whether online, via mobile or in a brick and mortar store. They are taking a more integrated approach which will work in harmony to generate the sale and provide a more engaging overall experience for their customers.

Omni-Channel Retailing, an integrated marketing approach, is the evolution of multi-channel retailing, but is concentrated more on a seamless approach to the consumer experience through all available shopping channels, i.e. mobile internet devices, computers, brick-andmortar, television, radio, direct mail, catalog and so on.

Retailers are meeting the new customer demands by deploying specialized supply chain strategy software.

There has long been interest among retailers in adopting a unified and customer-centric approach to their marketing and sales. There have also been strategic approach by retailers using various forms of incentives, all geared towards delivering a positive brand experience by providing potential customers with more convenient purchasing options.

With today ’s consumers having access to multiple devices (e.g. desktop and mobile) and engaging with retailers on a number of channels (e.g. social and search), sellers have realized that they must adopt a single customer view, as it allows them to understand how a consumer’s online behavior translates to how he or she interacts with a brand offline.

A price-conscious online consumer, for example, is likely to be tempted in-store when offered a discount through another marketing channel.

Case in point, mobile commerce and performance

marketing are key drivers in enhancing the concept of omnichannel retailing, as they prove to be effective in breaking down the barriers by allowing consumers to purchase in their preferred way.

Some retailers, for example, creatively create a discount code and make it available across multiple channels — print, online and via mobile coupons. Analysts believe that, “Advertisers should embrace

the benefits of consumers being connected while at brick-andmortar locations rather than fearing the impact of showrooming.”

This, they argue, is because, while online and in-store, a potential customer would be able to read product reviews, check prices and, if the product is not in-stock, order it immediately through his or her smartphone to either have it delivered or scheduled for in-

store pickup, whichever is more convenient for the individual. Retailers have been relatively quick to launch multichannel strategies, but adopting a single customer view and embracing an omnichannel approach is key to future success, as future technological developments will only enhance this further.

EU parliament votes to guard ‘Net Neutrality,’ end roaming fees

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he European Parliament voted in favor of “net neutrality” rules, which restrict how phone companies manage their networks, in a move meant to prevent blocking or degrading of certain websites and traffic.

The rules also include a plan for eliminating roaming charges — the fees mobiledevice users pay when making calls or using data outside their home country — by the end of next year within the European Union. EU members will continue to review the regulation and the Commission expects a final agreement by end of the year. “This is what the EU is all about — getting rid of barriers to make life easier and less expensive,” European Commission Vice President Neelie Kroes said today in a statement.

Google issues over 3m shares

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GRADUATION - From left: Managing Director/Chief Executive Officer, Honeywell Flour Mills Plc, Mr. Lanre Jaiyeola, Best Graduating student, Mr. Sunday Haruna and Managing Director, Bofik Nigeria Ltd, Mrs. Bolanle Adereti at the 24th Honeywell Baking School Graduation ceremony in Lagos.

Kenya’s M-Pesa mobile money heads to Europe

By JONAH NWOKPOKU with agency reports

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n its first push for global acceptance, Kenya’s mobile money, M-Pesa has extended its text-messaging transactions to millions in Romania, aided by Vodafone.

Vodafone said it had chosen Romania to target the seven million people there who still mainly use cash rather than cards, and others with bank accounts who could still benefit from transferring money by text.

Customers can use M-Pesa to pay for goods, pay bills, make deposits and withdraw cash from authorised agents.

“The majority of people in Romania have at least one mobile device, but more than one third of the population does not have access to conventional banking,” said Vodafone’s director of mobile money, Michael Joseph.

Services such as M-Pesa have helped Vodafone, the world’s second largest mobile operator by customer numbers, to support revenues and grow customer loyalty at a

time of falling prices for basic telecoms services such as calls.

The British group launched M-Pesa in Kenya in 2007 through its Safaricom operations. Since then the service has spread rapidly and in the last 12 months it has rolled the service out to its operations in Egypt, India, Lesotho and Mozambique.

About 16.8 million customers were actively using the service by the end of last year, making more than $1.2 billion (720 million pounds) worth of transactions per month.

Vodafone had 8.3 million customers in Romania at the end of last year.

Vodafone believes that mobile money could reach around 10 percent of service revenues across its emerging markets businesses over time.” While slow to take off in all parts of the world, global mobile payments are predicted to grow rapidly over the next few years, with telecoms groups, retailers and banks all trying to secure a piece of the pie.

ore than 330 million new shares of Google Inc. landed in the U.S. equity market last week, completing a two-year process through which the founders of search engine, Sergey Brin and Larry Page are cementing control of the world’s third-biggest company. Stock in the largest search-engine owner is effectively splitting via a dividend distribution, with the price of existing Google A shares, which hold one vote each, falling by about half.

Mozilla CEO resigns over support for gay marriage ban

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ozilla Corp., maker of the Firefox Web browser, said Chief Executive Officer Brendan Eich resigned after being criticized for donating money to an anti-gay marriage group.

Eich, who also co-founded Mozilla, became CEO in March. The controversy concerned a $1,000 donation he made in 2008 to a group that supported Proposition 8, a California initiative that banned same-sex marriage and was later found to be unconstitutional. While Eich said in interviews in recent days that he wouldn’t resign for expressing a personal opinion, he changed his mind, according to a blog post by Mitchell Baker, Mozilla’s executive chairwoman.

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46 — Vanguard, MONDAY, APRIL 7, 2014

International Business News

Nigeria, Sao Tome hope on new technology in joint oil zone

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igeria and Sao Tome and Principe plan to use “ non-conventional” oil exploration technology in their joint offshore zone and hope to start oil production within 18 months, according to a statement issued by the countries. Sao Tome, a tiny former Portuguese colony in Africa’s Gulf of Guinea, has failed to find oil despite being surrounded by resource-rich neighbours.

“Important decisions have been taken about the area and the organisation, such as the approval of new technology for oil and gas exploration as well as production at the Block 1 via non-conventional methods that will allow production to start in an 18 months’ time,” according to the joint statement. It gave no details on what technology was envisaged. Nigeria pumps just under 2 million barrels of oil a day, making it Africa’s largest oil producer. Sao Tome’s government in February short-listed four companies, including Portugal’s Galp Energia, to bid on two oil blocks in its exclusive economic zone.

AfDB plans $200m boost for Nigeria’s power risk guarantees

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he African Development Bank is in talks with Nigerian officials to boost the value of its partial-risk guarantee for power industry investments by $200 million this year.

An agreement would see the amount from which eligible projects can benefit rise to $380 million from $180 million, Bocar Toure, senior energy economist at the African Development Bank, said today by phone from Lagos, Nigeria’s commercial capital.

“The partial-risk guarantee is there to enhance the creditworthiness of the bulk trader,” said Toure. “Usually a lot of investors that are hesitant will feel more comfortable with the guarantee.”

Nigeria is building an electricity market after handing over 15 state-owned power utilities to private companies in November. In 2010, it created the Nigerian Bulk Electricity Trading Plc to act as a clearing house for power generating and distribution companies.

VISIT: From left: Femi Olaloku, Executive Director, Treasury & International Banking Group, UBA; Michel Wormser, Vice President/Chief Operating Officer of Multilateral Investment Guarantee Agency (MIGA), World Bank Group; Phillips Oduoza, Group Managing Director/ CEO UBA; and Solomon Adegbie-Quaynor, Country Manager, Nigeria, International Finance Corporation (IFC) during a working visit of MIGA Vice President to UBA Head office.

US jobs market shakes off winter’s icy grip

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euters - The U.S. labor market emerged surprisingly strong from the severe winter, with employers hiring at a brisk pace and the jobless rate holding near a five-year low.

Nonfarm payrolls increased by 192,000 jobs last month after rising by 197,000 in February, the Labor Department said on Friday. The unemployment rate was unchanged at 6.7 percent even though Americans flooded the labor market to hunt for work.

“This is a nice number, one of those Goldilocks numbers that is decent but not so good that it gets fears going about interest rates or the economy growing too quickly,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

U.S. stocks traded modestly higher, prices for U.S. Treasury debt rose and the dollar was higher against a broad basket of currencies.

The pace of hiring in March was close to Wall Street’s expectations, but the count for the prior two months was revised to show 37,000 more jobs were created than previously reported.

The government’s survey of employers also found Americans were working longer hours, while the smaller survey of households from which the unemployment rate is derived showed a much larger surge in employment. That jump was met by a rise in the

number of people entering the labor force, a show of confidence in the jobs market.

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, hit a six-month high of 63.2 percent. An even broader gauge of labor market health, the percentage of working-age Americans with a job, reached its highest level

since the summer of 2009.

With payrolls and the workweek both rising, a measure of total work effort jumped by the most in more than seven years, suggesting the economy was beginning to accelerate.

“It looks like the party goes on,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

An unusually brutal winter

slammed the economy at the end of 2013 and the start of this year. Growth was further undercut by efforts by businesses to trim inventories, the expiration of long-term jobless benefits and cuts to food stamps.

But data ranging from manufacturing and services sector activity to automobile sales have signaled strength as the first quarter ended.

The jobs data did the same.

The economy’s return to a steady pace of job gains should comfort the Federal Reserve as it scales back its bond-buying stimulus program. However, the stillhigh level of unemployment also should bolster its resolve to keep overnight interest rates near zero for a while.

Fed Chair Janet Yellen has pointed to the unusually large number of Americans who are either suffering a long spell of unemployment or who are working part-time because they are unable to find fulltime work as reasons to maintain an extraordinarily easy monetary policy.

The number of Americans looking for work for at least six months fell by about 100,000 to 3.7 million in March, but the ranks of Americans working part-time for economic reasons rose modestly. Some economists had argued a recent rise in earnings might signal a tightening in the jobs market that the Fed might want to monitor closely. However, average hourly earnings for private employers fell back in March, as did a narrower gauge that had been rising more swiftly.

Effective governance critical to tackling energy financing — CITIBANK MD

By JONAH NWOKPOKU Managing Director of Citibank, Mr. Omar Hafeez, has said that effective governance is critical to tackling the challenges of attracting the required financing for the energy sector.

He stated this while making a presentation at the Energy Finance Forum organized by Centre for Petroleum Information in Lagos recently.

Hafeez who spoke on the topic: “Matching global finance with expanding local energy sector opportunities,” said: “The relevance of local companies in the oil and gas sector in Nigeria is continuously increasing. But it is important to note that access to capital, whether debt or equity, will determine success. The wider, global pool, if tapped will open newer vistas for the local players. It is critical

that attention be paid to governance, as it is the single most important factor if one wants to be considered attractive globally.”

Also speaking, Managing of Director of Union Bank, Mr. Emeka Emuwa, in an opening remark at the morning session of the forum noted: “The energy industry remains the key drivers of the Nigerian economy but despite this, its growth has been checkered because of limited investments in the sector. And that is reflected in the foreign reserve which has remained flat over the years. And the only way things are going to improve is by investing. Fiscal policies, tough operating environment and the non passage of the petroleum industry bill have made things more difficult for operators in the sector.” He also said that the Nigerian banking industry is not capable of meeting the huge

investment needs of the local energy sector and called for more creative ways for financing projects in the sector.

On his part, the Chief Executive Officer of M E consulting, Victor Eromosele who spoke on creatively finding finance for Nigeria’s oil, gas and power projects, said, “The operators need to find solutions for financing by thinking outside the box.

Chief Financial Officers must understand changing markets and look for the best opportunities by matching strength with opportunities to achieve corporate objectives.”

Earlier the chairman of the Centre for Petroleum Information Board of Governors, Chambers Oyibo, in a welcome address, said, “The idea of an annual Energy Finance Forum is to provide a specialist platform to share knowledge and to network at very senior levels.

Vanguard, MONDAY, APRIL 7, 2014 — 47

Advertising, Media & Marketing

Dangote explains ‘X’ in cement grade

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he Management of Dangote Cement said the newly introduced cement, 3X, represents, “Xtra strength; ‘Xtra life and Xtra yield which is for the safety of human lives rather than profits.

The company said that this brand will make the company the only cement company in Nigeria that is producing the 42.5R cement grade locally.

Group Managing Director, Dangote Cement Plc, Mr. Devakumar Edwin, who unveiled the new cement bag, said Dangote is committed to the safety of human lives rather than maximising profits. He maintained that incidences of building collapses in the country do not only destroy lives and properties, but also bring about huge economic losses to the nation.

Edwin said most of the building collapses in the nation were caused by varied factors among which poor quality cement is significant, pointing out that the lifetime investment by Dangote was to further demonstrate the company’s effort to guard against unfortunate incidents of failure of buildings and the attendant loss of lives and property.

He said, “Dangote has since stopped the production of the 32.5 lower cement grade,” saying as a corporate organisation, it values human lives rather than just making money. According to him, “This is why we are focusing heavily on 42.5 cement grade, because we believe as a responsible organisation, human life is more precious than making profits. The introduction of Dangote 42.5, X cement, is not to dominate the cement industry, but to follow the acceptable global trend, which has also been adopted by West African

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countries like Ghana, where the focus is shifting towards the 42.5 cement grade as the preferred quality of cement for building and construction activities.”

The Standards Organisation of Nigeria (SON), also on Tuesday formally gave approval to Dangote Cement Plc to commence the rolling out of 42.5 higher grade of cement into the Nigerian market.

The agency said it had inspected the company’s

manufacturing facilities across the country and found the processes to have been upgraded to efficiently produce the 42.5 cement grade, which provides higher strength in building and construction.

SON made this declaration during Dangote’s pre-media launch of its newly-introduced 42.5 cement grade, Dangote 3X cement, in Lagos, stating that the indigenous cement manufacturer had been given full certification by the standards agency to produce the high quality cement.

OPENING: Mr. John Obayuwana, Managing Director of Polo Limited and a friend at the opening of Polo shop at Transcorp Hilton Hotel in Abuja recently.

Noah’s Ark launches 'Boko Halal' advocacy campaign

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oah’s Ark, has unveiled an advocacy campaign ‘Boko Halal’, aimed at ensuring that every Nigerian child has access to quality education.

According to the ad agency, the campaign is designed to push for an advocacy campaign to encourage and drive the right of the Nigerian child to education and to serve as a clarion to all Nigerians to stand up for the Nigerian child’s right to education, especially in Northern Nigeria.

The agency ’s Chief Executive Officer, Mr. Lanre

Adisa explained that Boko Halal metaphorically describes Nigeria as an indivisible book adding that the world is waiting to read her success stories; hence the need for every citizen to play their part.

He added that as the nation celebrated her centenary anniversary, the campaign is to ensure that no Nigerian child is left behind.

‘From Zungeru to Enugu to Abeokuta to Abakaliki, this is the time to send out a new message. This is the time to let our children know that the book, or Boko, or whichever name it goes by, and whatever language it is written, is the only way to that great future we all like to talk about.,’ he added.As against the Boko Haram’s insurgency,

Nokia ‘X’ hits market

okia has introduced to the market the family range of the Nokia X Smartphone after launching it at the Mobile World Congress in Barcelona, Spain. The dual SIM android compatible device comes with a fresh, tile-based user interface inspired by the Lumia family as well as Fastlane to simplify and enhance the consumer experience.

Speaking to newsmen, Head, Marketing of Nokia, West/ Central Africa, Debbie Shepard, explained that the Nokia X device combines beautiful design, quality hardware with access to the android app ecosystem to provide consumers with an affordable dual SIM smartphone in a range of exciting colours.

Her words, “We believe this unique combination will resonate with consumers around the world and set a great precedent for the level of quality

that can be achieved in the fast-growing Smartphone market. Users will enjoy signature Nokia experiences including free* HERE Maps, with true offline maps and integrated turn-by-turn navigation, Microsoft services such as Skype, One Drive and Outlook email as well as chat applications including BlackBerry Messenger (BBM) and WhatsApp” she said.

Speaking further she noted that “ The device comes with a 10.4mm slim, durable monobody design further enhanced by 4” scratch-proof display and runs on the Nokia X Software Platform and is powered by a 1Ghz dual core Qualcomm Snapdragon processor.” Nick Imudia, Vice President, Nokia West and Central Africa, believes that influencers are at the core of a company’s success.

Customers as Captives – Part One

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.T. Briscoe (Nigeria) Plc is one of Nigeria’s foremost distributors of Toyota cars, among other things. It also offers after-sales support at its service centres strategically located in major cities. The company has been doing business in Nigeria for nearly 60 years. And it appears to have distinguished itself in the various sectors of the economy it has ventured into.

So when the air-conditioning system of my Toyota car began to malfunction, it was a no-brainer for me to take the car to R.T. Briscoe. Interestingly, the two customer service representatives I met at the company asked me to deposit N15,000 before anybody could look at the car. I found that strange. I thought the company was supposed to diagnose the problem with the car first, and give me an estimate for the repairs for approval. At least, that was what I was used to, but I was a first-timer there.

I sought the rationale for the deposit and I was told it was “management policy.” I sought to know what would happen to my deposit if I decided not to fix the car. I was told the deposit was refundable. But I smelt a rat. I know how difficult it is to get a refund from a Nigerian company. Moreover, I didn’t see the sense in taking a deposit in the first place if it would be refunded in full to a customer that decides not to go ahead with the I sought the repairs. While I was still rationale for trying to challenge that method of doing the deposit business, a customer and I was service rep pointed out told it was that technicians were paid on hourly basis. “management That “Freudian slip” policy.” I settled the matter for me.

Was it possible that part sought to of the deposit would be know what converted to a would “diagnosis fee” (for the technician’s wages) if I happen to my decided not to fix the deposit if I car?

I didn’t wait to find out. decided not I left in a huff and R.T. to fix the car.

Briscoe lost me before I I was told the could become a customer! I drove to deposit was Metropolitan Motors in refundable.

Ikeja. Thankfully, the approach was But I smelt a refreshingly different. rat.

There was no talk of deposit. Instead, the company quickly diagnosed the fault with my car and gave me an official estimate of almost N26,000 for approval. I approved willingly. At least, I knew beforehand what I was letting myself into. Work commenced immediately, still with no talk of deposit.

In fact, while the repairs were on, I dashed to a nearby ATM to get cash for the bill. After the car was fixed, the final bill was N1,000 less than the estimate. Again, I was happy with the approach at Metropolitan. But that was not all. One week later, someone phoned from the company to find out how the car was doing and whether I was satisfied with the work done. You can guess my response. If you were in my shoes, which of the two companies I encountered would you rather do business with?

Let’s get to the point of this story. Why do some companies make customers part with money even before they know exactly what they are paying for? Is it that such companies are afraid of losing out completely if customers change their mind? Or do they believe that the best way to do business is to treat customers like captives? If that is so, then such companies have very weak value propositions indeed. Those organisations that try to hold customers captive lose in the long run.

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STORIES BY PRINCEWILL EKWUJURU

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TO BE CONTINUED

48 — Vanguard, MONDAY, APRIL 7, 2014

Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

Collegiate presidency and national harmony generally accepted six geopolitical zones.

However, the constitutional provision for a maximum of two – four year terms could mean that each geopolitical zone would produce a president every 48 years (that is, assuming that each president enjoys control of the treasury for eight years). This also implies that all other eminently gifted, qualified and socially committed presidential materials from all other zones would be wasted in every 48 years cycle with little chance that the best available candidate at any point in time would be the one from the geopolitical region in line for the Presidency!

In the above political dilemma, particularly where the plunder of resources takes precedence over service and wealth creation, Nigerians become victims of the greed of a parasitic political class – invariably championed by

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here can be no end in the foreseeable future to a do-or-die fight for the presidency of our nation.

The unbridled struggle for the position of top dog has generally been motivated by the attraction of the prospect of almost absolute power over our lives and our nation’s resources, particularly the proceeds from the oil wells of the Niger Delta. Indeed, if income derived from oil is removed from the federal purse, federal government would have to manage on a consolidated budget of that in a fraction of annual current revenue. The underbelly of the arbitrarily created 36 states and 774 local governments would become exposed, as they would literarily collapse without what some people have described as ‘blood money’ from the Niger Delta.

Our political godfathers in their wisdom have attempted to bring some sanity to the acrimony, insecurity and instability generated by the struggle for the lucrative centre with the concept of rotating the presidency along North and South axis or more loosely, amongst the

Nigeria’s ultimate office?

Some eminent Nigerians have rightly argued that the first requirement for a sustainable, stable egalitarian nation should be the adoption of a truly federal constitution, where the centre devolves more of its powers to the states/regions as the engines of growth, so that the states/ regions will freely exploit their internal human and material resources and pay appropriate dues to the central government. Such a structure would motivate each region to look inwards and develop its own God-given resources to the best of their ability, rather than wait for monthly handouts from Abuja.

All regions would be actively engaged in putting their citizens to work and we will achieve additional wealth creation with attendant improvement in social welfare and security.

In addition, we may also consider the adoption of a sixyear collegiate presidency, to douse the tension and attrition created by the usual battles to instal.

The underbelly of the arbitrarily created 36 states and 774 local governments would become exposed, as they would literarily collapse without what some people have described as ‘blood money’ from the Niger Delta

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autocratic leadership in the last four decades.

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ndeed, the greatest threat to our contrived democracy is dictatorship! If we want sustainable peace and stability in this country, our constitution should ensure that the best available presidential materials from each geopolitical zone at any one time have unfettered

access to contest for and become President. Our constitution should also ensure that no one person controls power long enough to become so formidable as to successfully engineer term elongation and perpetuate a dictatorship!

So, how do we tackle these pitfalls in a nation in the grip of irrepressible ethnic/ regional aspirations for

Business & Economy

ICAN awards forensic, IFRS certification to members T

he Institute of Chartered Accountants of Nigeria (ICAN) has awarded the Forensic Accounting and International Financial Reporting Standards (IFRS) certificates to some of it members who qualified in the various examinations.

Forensic accounting is a mechanism for the global war

against corruption, money laundering and terrorism financing, even as IFRS is the globally accepted accounting principle.

In the last five and three years about 365 and 204 members have received the forensic accounting and IFRS certification respectively.

The rising spate and sophistication of fraud in the

public and private sector spurred the certification, President of ICAN, Alhaji Kabir Mohammed said.

He said this at the 5 th induction for graduates of the institute’s forensic accounting and certification programme cum 3 rd IFRS proficiency certificate award ceremony in Lagos. Mohammed said that the capacity building is a

Zimbabwean manufacturers struggle with cheaper imports

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imbabwean factories are struggling to stay open in the face of cheaper imports from South Africa and China, the high cost of capital and lack of lending, according to a survey by staterun export promoter ZimTrade. The southern African nation’s manufacturingcapacity use declined to 38 percent in December from 44 percent in 2010, Rongai Chizema, director of operations, said today in the capital, Harare. ZimTrade is a government agency that promotes Zimbabwean exports and lobbies for foreign investment.

Zimbabwe’s economy shrank by 49 percent between 2000 and last year, he said. “The biggest contributor to that loss is de-industrialization, since most companies have closed.”

Zimbabwe emerged from a decade of

recession in 2009 after President Robert Mugabe’s Zimbabwe African National Union-Patriotic Front formed a coalition government with Morgan Tsvangirai’s Movement for Democratic Change following disputed elections.

The government abolished the local currency and allowed the use of the U.S. dollar and other currencies including the South African rand, after devaluation of the Zimbabwean dollar drove inflation to what the International Monetary Fund estimated was 500 billion percent. The violent seizures of white-owned farms from 2000 decimated farming.

Of the companies surveyed by ZimTrade, 40 percent are exporters, while the rest sell their products in the local market, said Chizema.

financial reporting. The impact of globalization on our economy in particular, our capital market from implementation of IFRS remains a major reason of concern.

“Following Nigeria’s adoption of IFRS the corporate finance management has been in the forefront of building capacity in this area.

It is in pursuance of this mandate that certificate of proficiency are issued to desiring members,” he said.

reaffirmation of its commitment to the war against corruption, fraudulent and other social vices that have impeded the nation’s smooth match to development.

He advised the inductees to consistently discharge their duties, encouraging that they develop the habit of watching crime related films and attending court sessions in order to avail self with financial frauds.

“Globalisation has impacted business transactions, ethics,

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