JULY 9 , 2012
Zenith, First Bank, GTBank, 4 others make top global 1000 banks By OMOH GABRIEL, Business Editor
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IGERIA’S top nine banks that featured in the Banker’s top global 1000 banks 2012 have a combined tier one capital of $11.699 billion as against the $11.332 billion they had in last year ’s top 1000 banks. This showed a slight improvement in the tier one capital of the Nigerian banks. However, the combined tier one capital of the nine banks is this time around slightly above the $9.842 billion of Standard Group of South Africa, the biggest bank in Africa and the 112th in the world. Standard Group’s tier one capital dropped from last year’s figure of $12.6 billion to this year’s $9.8 billion. This fact is contained in the 2012 edition of The Banker magazine top 1000 global banks, a publication of Financial Times of London. Bank of America which occupies the first position in the global ranking has a capital base of $163.626 billion. It is followed closely by JPMorgan Chase with a capital of $142.450 billion. The third position is occupied by HSBC, a British bank with a capital base of $133.179 billion. China has three banks in the top ten positions while Japan has just one. The Banker magazine’s endorsement has become an instrument that central banks and bankers seek after as a marketing tool. The low level of capitalization of Nigerian banks when compared to international standard is a challenge to regulators who are at the moment busy fragmenting the industry. The Banker in its benchmarking of the top 1000 global bank said that Zenith Bank PLC had, as at 2011 financial year, a total tier one capital of $2.398 billion as against the $2.405 billion of last year. This makes Zenith Bank the biggest bank in Nigeria, the 7th in Africa and the 322nd in the world. It is followed by the first generation bank, First Bank, with a total of $2.262 billion in 2011 as against its last year’s figure
of $2.221 billion shareholders' stake in the bank known as tier one capital. First Bank occupies the 2nd position in the Nigerian banking sector, 8th in Africa and 338th in the globe. The third highly capitalised bank in Nigeria by the standard of Bank of International Settlement
(BIS) is GTBank with a tier one capital of $1.478 billion as against the $1.362 billion of 2010 financial year. By tier one capital ranking, it is Nigeria's 3rd biggest, 11th in Africa and 455th in the world. Access Bank followed closely with a capital of $1.054 billion as against the $1.149 billion it
had last year making it the 4th largest bank in Nigeria, 15th in Africa and 541st universally. United Bank for Africa (UBA), one of the oldest banks in the country, as at the 2011 financial year end had $1.003 billion compared to the $1.037 billion capital in 2010 making it one of the internationally recognised strong banks in the country. It is by this classification, the 5th largest bank in Nigeria, 16th in Africa and 563rd in the world. Fidelity is next with $867 million as against the $904 million tier one capital the previous year, making it the 6th biggest bank in Nigeria, 17th in Africa and 618th in the world. First City Monument Bank followed closely with $683 million compared to the $854 million capital base it had a year before. It thus becomes the 7th largest bank, 22nd in Africa and 710th in Continues on page 18
176.70
-3.65
2,256.00
-72.00
22.19
+0.27
98.13
-2.57
84.75 CURRENCY BUYING CFA KRONER EURO POUNDS RIYAL SDR FRANC DOLLAR WAUA YEN RENMINBI
0.2779 25.7566 191.7662 240.6991 41.3034 233.527 159.6084 154.9 234.3423 1.9389 24.3357
-2.47
CENTRAL
SELLING
0.2879 25.8397 192.3852 241.4761 41.4367 234.281 160.1236 155.4 235.0988 1.9452 24.4147
0.2979 25.9228 193.0042 242.253 41.57 235.0348 160.6388 155.9 235.8552 1.9514 24.4937
CBN Exchange rate as at 06/07/2012
18 — Vanguard, MONDAY, JULY 9, 2012
Cover Story
Zenith, First Bank, GTBank, 4 others make top global 1000 banks Continued from page 17 the world. Skye Bank has $665 million compared to $695 million it had previously to feature as the 721st top banks in the world, 24th in Africa and 8th in Nigeria. However, the Nigerian banks did not rank among the top five in Africa. Zenith which is the most capitalised bank in the country ranks 7th as against its last year ’s 6th position in the continent. The top three banks in Africa are all from South Africa. Standard Bank Group topped the Africa chart with a capital base of $9.842 billion and is in the 112th position globally. The second is the FirstRand Bank Holdings, South Africa with a capital base of $8.471 billion. The Needbank Group Limited, also of South Africa, came third in the top 25 banks in Africa with a capital of $5.123 billion.
largely the reason why Standard Bank’s tier one capital decreased from $12billion to $9.8 billion in 2011, causing it to drop from 94th to 112th in the ranking – leaving Africa without any bank in the Top 100. “In last year ’s Top 1000, Standard Bank had doubled the tier one capital of its nearest rival, FirstRand, which had $6 billion. FirstRand has closed the gap substantially and has $8.4 billion of such capital in this year’s ranking. It was helped, however, by its financial year ending on June
cent to $705m. Banco Angolano de Investimentos, Angola’s biggest lender, saw its tier one capital increase by 11 per cent to $708m and assets expanded by a hefty 42 per cent to $12billion. This caused it to climb the global assets ranking from 674th to 596th. “While Nigerian lenders did not move up the tier one ranking significantly, Access Bank’s assets increased 93 per cent to $10.3 billion, thanks to its takeover of local rival, Intercontinental Bank. This led it to move from 805th to
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ttjariwafabank of Morocco, an Islamic Bank, is fourth with a capital base of $2.786 billion. Investec of South Africa came 5th in The Banker ranking of the top 25 banks in Africa with a capital base of $2.519 billion. According to The Banker, two Nigerian banks featured in the capital adequacy ratio measurement. Fidelity Bank, The Banker said, has a capital to asset ratio of 28.8 per cent, making it the soundest bank in the country. The report also said that First City Monument Bank with capital to asset ratio of 23.89 made it to the 1000 soundest capital to asset ratio banks in the world. According to The Banker, going by the Bank of International Settlement measure, Zenith was the only Nigerian bank that attained the 1000 soundest BIS ratio of 36. The Banker in the 2012 review of Africa Banking landscape said: “African banks suffered in this year ’s Top 1000 ranking from the weakness of their currencies, many of which fell sharply against the US dollar in the second half of 2011. South African banks were among the hardest hit, with the rand sliding almost 19 per cent versus the US currency last year, though Standard Bank retained its position as the largest bank on the continent by tier one capital and assets. “Yet, while the latter rose 12 per cent in local currency during 2011, assets fell from $201billion to $183 billion in dollar terms. This was also
The Basic Guide to Starting your Business Part 2 a) What is not business? One might wonder the importance of knowing what is not business, but this is necessary because you need to know the kind of business you should not go into, and businesses that are prohibited by law. Not every business is a genuine one and I will be taking you through a list of businesses you must not be found doing. b) The mentality of a business man: There’s a saying in the good book which reads thus “by their fruits you shall know them”. The same applies to business men; they possess certain qualities and mind sets that make them stand out. Consequently, before you start a business you need to be adequately sure that you possess the die-hard mentality of an entrepreneur to withstand the challenges that will arise. c) Who is an entrepreneur? Over time various definitions have been given to the term, but I will be teaching you the difference between an entrepreneur and a businessman, the boundless and countless opportunities open to an entrepreneur, the traits and characteristics of a successful entrepreneur. In short, everything you need to know if you want to be not just a business man but also an entrepreneur. d) Your readiness to be your own boss: A lot of people embark on a journey without fully preparing for it, and as such they are knocked off balance by the slightest wind that blows. No warrior goes to war without his arms and it’s only a stupid farmer that goes to farm without his hoe. At the end of this topic, you would know if you are ready to start a business and peradventure you are not, you would be taught steps that will help you to be both mentally and financially ready. e) The basic steps: In this chapter I will be taking you through the steps that you cannot overlook, if you want to have a successful business. These include: conceiving an idea, planning, funding, structuring, location, training and so much more.
30, 2011. In the 12 months prior to that date, the rand actually strengthened against the dollar, Standard Bank’s year ended on December 31. “Last year, 30 African banks made it to the Top 1000, whereas this time, 31 did. The continent’s banks still account for a small proportion of global tier one capital, collectively making up 0.98 per cent of the total in the Top 1000, down slightly from last year. Mauritian banks, assisted by the rupee being one of the few African currencies to hold its own against the dollar in 2011, were some of the fastest risers in this year ’s ranking. Two of them, Mauritius Commercial Bank and State Bank of Mauritius, were among the four African banks that increased their tier one capital the most. “Angola’s banks also had a good year. Banco de Poupança e Crédito is a new entrant to the Top 1000, after its tier one capital rose 31 per
635th in the assets ranking. Togo-based Ecobank moved from 609th to 498th in terms of assets, thanks mainly to its acquisition of Nigeria’s Oceanic Bank.
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hile European banks count the cost of the Eurozone sovereign debt crisis, China is leading the emerging markets into a new era of banking dominance. But the established markets of the US and Japan should not be forgotten. It will come as no surprise that 2011 was the year when the Eurozone crisis dragged the global banking sector backwards. Assets and tier one capital in The Banker’s Top 1000 World Banks ranking continue to grow, although at a much reduced rate to last year ’s ranking. But aggregate profits, which had staged two years of recovery since the financial crisis, reversed by one per cent, to stay only just above the $700 billion mark.
I am of the sincere opinion that this would be more than just a book for you and your loved ones; it will be a compass that will guide you on your journey into the world of entrepreneurs. There is no better time to start your own business than now. These same steps have worked for me and I dare say are still working for me, and I am confident they will work for you and everyone that reads this book. WHAT IS BUSINESS? Before you start a business, it is very important to understand what a business is in order to avoid making mistakes that can be very detrimental. The term business is very broad and can be vague; for some it is any activity or trade with the sole aim of making profits. On the one hand, it can be said to be the occupation, work or trade in which a person is engaged in. On the other hand, a business can be defined as “an organization that provides goods and services to people who want or need them”. When many people think of business careers, they often think of jobs in large wealthy corporations, but for the entrepreneur, a business is any activity aimed at creating and keeping customers. There are basically two ways to carry out a business: 1. Sell goods (physical things like books, toys, cars, houses, etc). 2. Sell services (intangible things like nursery education, legal services, health care, insurance, etc). Many business-related careers though, exist in small businesses, non-profit organizations, government agencies, and educational settings. Conversely, your business may consist of selling both goods and services; for example if you are a computer dealer, you may sell goods (hardware and software) and services (maintenance, troubleshooting, or consulting). While it is very important to get a degree or some level of academic qualification, you can still go into business if you do not have one. Starting and growing your business is very much like having a baby and bringing up the child.
Vanguard, MONDAY, JULY 9, 2012 — 19
This government is walking on a tight financial rope T
HE Federal Government, apparently, is walking a financial tight rope as it will soon be faced with inadequate financial resources to meet its obligations to the Nigerian people. Expectations are that the Federal Government will continue with fuel subsidy. But as it is now, Nigerians may soon find out that this government cannot meet their expectations. The total provision for subsidy payments in the 2012 budget of the Federal Government was N888.1 billion, inclusive of N231.8 billion for 2011 outstanding subsidy claims and N656.3 billion for 2012 claims. It is obvious that the 2012 budget provision will be insufficient given that N451 billion had been spent already for 2011 claims (N241 billion to private importers and N210 billion to NNPC). This government has about three options to choose from. One is the vexed deregulation of product pricing i.e. elimination of subsidy. The attempt to do so brought the nation to a standstill. The second option is increase in the 2012 budgetary provision for
subsidy payments. Reports from international oil market last week indicate deals in Nigerian crude were said to be thin as two Indian import tenders were set to be awarded later this week. A deal for private equity firm, Carlyle Group, to save and expand Sunoco’s 330,000 barrel-per-day Philadelphia refinery in the United States
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Iboe crude one of Nigeria's sought-for crude for August loading was little changed at two-year lows, with differentials assessed at dated Brent plus $1 a barrel and sellers pegged around dated plus $1.40 a barrel. Some traders said August-loading Qua Iboe was offered at dated plus $1.80/$1.90, but the level was higher than where buy-
This is not a cheering news for Nigeria; resources to increase budgetary provision for subsidy may not just be there if the country cannot find ready buyer of crude
failed to provide support to the Nigerian market. Sunoco had been a key buyer of light crude, including Nigerian, but Carlyle and Sunoco now plan for the refinery to capitalise on cheap U.S. domestic shale oil. According to oil report, Qua
ers were based.
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ore than 15 million barrels of Julyloading Nigerian crude have remained unsold. Most of the small cargoes have not found homes. For August loading,
only about 15 cargoes out of about 75, including condensate, have been sold on-spot and into Asian Tenders so far. “The August-loading programme came out very late, and now we have received the term allocation, which listed many companies we have not heard of. These companies do not have track record or experience. This is not a cheering news for Nigeria. Resources to increase budgetary provision for subsidy may not just be there if the country cannot find ready buyer of crude. It is either the government goes borrowing, and internal debt is already at worrisome proportion or may find it difficult to import products which will return the country to the old days of scarcity. The third option is for government to brace up and implement drastic changes to the Petroleum Support Fund scheme by enforcing stringent compliance. But with the monumental fraud in the system, it will be an uphill task to do so. Aigboje Aig-Imuokhude’s committee which reviewed subsidy payment has made recommendations for refund of subsidy payments to the Federal Government up to a
total sum of N422 billion. It has also called for changes in the requirement of oil companies drawing subsidy. But whatever changes are made with the lack of adequate provisions for dealing with violations and a deterrent to prevent oil marketing and trading companies from making false subsidy claims in the PSF guidelines and the inclusion by PPPRA of oil marketing and trading companies that did not meet the eligibility criteria in the PSF guidelines created significant opportunities for abuse of the subsidy process. It is better to do away with subsidy now than attempt to implement the recommended changes. Nigeria does not have a verifiable statistical basis for computing its daily consumption of petroleum products and the absence of this data opened up the determination of the nation’s requirement for imported petroleum products to abuse. This situation cannot continue to drain the nation’s resources. Nigerians should just in one breadth accept deregulation of the petroleum sector as solution to the monumental fraud in the sector.
BUSINESS & ECONOMY
NAIP tasks Nigerians on wealth creation By EBELE ONUORAH HAIRMAN of the Nigerian Association of Industrial Pharmacists (NAIP), Dr Lolu Ojo, has called on Nigerians to rise above the poverty level in the midst of abundant opportunities to create wealth, saying that Nigeria is a land of opportunities. This call was made during the first edition of the distinguished Lecture Series termed: “Business GrowthOpportunities and Strategies in Nigeria” in Lagos. Speaking, Dr Ojo said that the most important thing for Nigerians and pharmacists in particular to note is that our country, Nigeria is a land of opportunities and that is why others are coming to Nigeria to make money and succeed in doing things that we thought and believed are totally impossible. He said that the way forward for the growth of the
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pharmaceutical manufacturing industry in the country is local manufacturing, adding that we need to build and develop an environment that will be favourable to manufacturing; an environment that will make small companies to come up and start doing their own businesses. In his words: “Many of us who go into importation of drugs actually know that it is not the way forward; the way to go is local manufacturing. In doing this, we would also develop job opportunities for the citizens.” He lamented the increasing challenges in the industry saying: “The operating cost is getting higher everyday; each and every one of us produces his own electricity, security, water, etc and these are the challenges of the environment. Pharmacists are very skilled people but we still have a lot of work to do.” He, however, encouraged Nigerians to rise and forge ahead amidst all challenges and corruption, and try to live above
our environment; this way, we get a step closer to making the world a better place. He said that those who are producing drugs in Nigeria today do not get the kind of patronage they need to thrive in business. He called on policymakers to think positively and make things work; by patroniz-
ing the local pharmaceutical manufacturing industry we not only would create job opportunities but also pave way for others to join the business. Guest speaker and Managing Director, Coca- Cola Nigeria, Mr Kelvin Balogun, stated that Nigeria has one of the fastest growing business environments in
Africa and that our environment most often determines how we survive. His words: “Things have really changed but most of us do not realise it because it came suddenly. Come 2020, productivity level will be 30 per cent higher; consumer demands are getting higher and we have to put into consideration their choices, convenience and affordability.”
*From left: Mrs Susan Oremule, Managing Director, AMC Pharmaceuticals; Mr. Kelvin Balogun, MD, Coca-Cola Nigeria Limited; Dr Lolu Ojo, National Chairman, Nigerian Association of Industrial Pharmacists and Mr. Sam Nda-Isaiah, Chairman, Leadership Newspaper at the first Distinguished Lecture series of Nigerian Association of Industial Pharmacists held in Lagos on Thursday. Photo by Lamidi Bamidele.
20 — Vanguard, MONDAY, JULY 9, 2012
Business & Economy BRIEFS Nigerian ports record increase in vessel call … to provide boats for Navy By GODFREY BIVBERE & VICTORIA EDEMA
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IGERIAN ports have witnessed an four percent increase in the number of coastal vessels that called at the nation’s ports in May this year, even as the Authority’s management has said that they would procure security for the Nigerian Navy to help meet the security challenges along the nation’s waterways. The increase shows that the ports received a total of 742, 511 as at May which is 32,746 tonnage above the 709,755 received at the ports during the same period in 2011. A statement signed by the General Managing in charge on Public Affairs, Chief Micheal Ajayi, said that “the total gross tonnage of coastal vessels stood at 742, 511 which showed a 4.6% increase over the same period of May 2011 figure of 709,755. “The number of coastal vessels completed was 1,918 a rise of 2.7% over the May 2011 figure of 1,867.”
N15.6 million tax spat:
Tax tribunal has jurisdiction says Sofola
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AGOS division of the Tax Appeal Tribunal (TAT) has ruled that it has powers to determine the appeal brought by the Federal Inland Revenue Service (FIRS) against a Lagos telecommunications company: General Telecoms. The FIRS in 2002 took General Telecoms Plc to TAT (then Body of Appeal Commissioners) over the latter ’s refusal to pay taxes worth N15.6 million. General Telecoms Plc filed a preliminary objection claiming that TAT does not have the jurisdiction to determine the case on taxation involving FIRS on grounds that the Service “cannot be a judge in it’s own case”. Ruling on the matter, the Chairman of TAT, Chief Kayode Sofola (SAN), ruled the tribunal has powers under the nation’s constitution to determine the case. “Having carefully studied and analysed the submissions of both parties on the several questions raised, we dismiss the preliminary objection for lack of merit.
From left Co-ordinator of HIIC, Baroness Lynda Chalker,Minister Of Agric and Natural Resources Dr. Akinwumi Ayodeji,and Anambra State Governor, Peter Obi, at the 12th meeting of Honorary International Investor Council (HIIC) held at the State House Banquet Hall Abuja. Photo by Abayomi Adeshida
Reps to investigate operations of joint venture agreements HE House of Representa tives mandated its Committee on Petroleum Resources (Upstream) to investigate the operations of the Joint Venture Agreements (JVA) in respect of revenue leakages. The committee would also carry out a forensic review of the JVC books to establish the amount of income that had accrued to Joint Venture partners in the past seven years and the amount remitted to the federation account. The committee is expected to report back to the House within seven weeks. This resolution emanated
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from a motion moved by Rep. Ossai Ossai (PDP-Delta ) which was unanimously adopted without debate. According to Ossai, the Nigerian National Petroleum Corporation (NNPC) on behalf of the Federal Government entered into JVA with all oil companies in Nigeria. He noted that the NNPC and the oil companies were expected to fund the Joint Venture operations. Ossai said that besides the lifting of oil in agreed sharing ratio, there were associated benefits or revenues in line with their interest holdings as contained in the JVA.
The legislator said that government’s contribution to the funding of the ventures were raised in the Appropriation Acts and realised by NNPC through the monthly cash calls. He said that section 162 of the 1999 Constitution as amended required that all revenues accruing to the Federal Government be paid into the federation account. Ossai alleged that income from sale of assets, marine transportation, haulage or pipeline transportation which formed part of the Joint Venture Operations are unaccounted for. “These sources of the Joint
Venture income amounted to billions of naira or dollars, particularly haulage or pipeline transportation as the case may be,”he said. He said that the Operator-Companies netted these income against expenses already settled with the collusion of NNPC to avoid remittance to the federation account. “ The Joint Operating Agreements (JOA) largely favoured the operator-companies to the detriment of the non-operator, NNPC. In another motion, the House urged the Ministry of Communication and the Nigerian Communication Commission (NCC) to direct all mobile service providers to activate the Caller Line Identification (CLI) device system. This, according to the motion, will render ineffective all calls made under the “unknown caller” scenarios or any form of hidden identity. This resolution was sequel to a motion moved by Rep. Yakut Balogun (ACNLagos) which was also adopted without debate. Balogun said that since the advent of the Global System for Mobile Telecommunication (GSM) in Nigeria in 2001, the defunct M-Tel was the only service provider that would not allow blocked numbers make calls. He noted that calls from hidden numbers were dangerous as using un-registered lines to make calls which were an indirect way of undermining the registration exercise. The legislator stressed that some miscreants were still engaged in the act of making calls to intimidate and threaten other citizens. He said that preventing such calls from going through,would further enhance safety of lives and property.
Insecurity no threat to businesses in Nigeria, says DuPont MD By NKIRUKA NNOROM HE Country Manager, Dupont Nigeria, Mr.Alessandro Raemy, has counseled investors - both local and international - that the present security challenges in the country should not be seen as hindrance to business, saying that Nigeria remains a conducive place to invest in. Making the remark recently at the opening of the company ’s head office in Nigeria, he stated that this informed the company’s major reason for choosing to come to Nigeria and making the country to serve as their West African hub. He noted that Nigeria is not
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alone in the security issues’, saying that despite this obvious challenge, Nigeria is s still safer for doing business compared to some Western countries like Parkistan and Paris among others. The Dupont MD insisted that with time, the security challenges would be solved, significantly, if not 100 per cent. He said, “Definitely, we know we have some issues, especially that of insecurity in Nigeria, but let’s be honest also, it is the same in other countries such as Parkistan or wherever. At the end, what we should be thinking about is how Nigeria will progress in the next ten to twenty years. “We strongly believe that in the next ten to twenty years,
Nigeria will be a completely different country. I came here about two and half years ago, and within this period, it is amazing how a lot of things have changed. You may be shocked really, yes, Lagos for instance has really changed. It is cleaner and more organized and all of that. “Let’s be honest, if you go to places like Paris, there are some areas you cannot go to, and I will not go there either. Of course, in the North, you have the Boko Haram problem, but it will eventually be solved. It is just a matter of time.” He maintained that return on investment in the country outstripped that of other developing countries, adding that building a sustainable business does not happen
overnight. According to him, it is pertinent that people think long term when it comes to business, to avoid the error of losing interest within the shortest possible time. “If you come to a region such as Nigeria, you must think long term. For us, it is long term. Of course, we want to make money. it is important that we make money, but we must see where we are going to in the next couple of years because if you look at the government’s vision 20:2020 strategy, you know that this country is a place to invest in. so in the long term, you can do business in Nigeria and you can also make money. This is no doubt,” he said.
Vanguard, MONDAY, JULY 9, 2012 — 21
Business & Economy
Trailer park, permanent solution to Apapa traffic — Port operator By GODFREY BIVBERE ANAGING Director of G r e e n v i e w Development Nigeria Limited, Alhaji Issa Baba Burka, has called for a joint effort by the stakeholders in the maritime industry and the government to create a holding bay as a permanent solution to the problem of perennial traffic congestion in Apapa. In an exclusive chat with Vanguard, Burka noted that several attempts had been made in the past to eliminate the perennial traffic congestion but it has not been successful because trailers are integral to port operations. According to Burka, “Whatever you do, those trucks are an integral part of port operations, we need them but as it is now, there is no truck park around Apapa or around the precincts of Tincan. “The only permanent solution will be to look for a truck park so that you can introduce the call-up system; because the trucks must wait to take cargo. But the highway is not the place for them to wait. So therefore, the government, stakeholders, transport owners must look for a truck park that can accommodate all the trucks so that you can introduce the call-up system.” On the clearance of wrecks from the nation’s waterways, Burka who was a former Port Manager of the then Container Terminal Port, CTP with the Nigerian Ports Authority, NPA, said that both the NPA and the management of the Nigerian Maritime Administration and Safety Agency, NIMASA, have done well for their efforts so far. In his words, “They have done a lot. In fact, there is no impediment to shipping now. There may be some here and there but I think both the NPA and NIMASA have done a lot, especially NPA. They have done a lot clearing the highways, removing the wrecks around the waterways.” The GDNL boss said that there has been a lot of development since the concessioning of the nation’s port terminals. He pointed out that all the issues concerning ship-turn around period, cargo delivery, terminal developments etc have seen a lot of development. “The concession really brought in a lot of efficiency
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to the ports system. It has brought in: business-like developments to the ports; a lot of infrastructural and personnel development. “From my own terminal for example, the shipturnaround time has now reduced from over 10 - 15 days to just about five to six days.” Asked to comment on the areas that need improvement
in the concession agreement between government and the concessionaires, Burka explained that “port operations are dynamic and that it is possible to do one thing today and by tomorrow it has changed. So you have to do another thing. In terms of overall ports development concept in this country, you know Apapa and Tin-can ports in Lagos are
overstretched. There is no room for expansion. You have urban encroachment too. No matter what you inject into that system, the problem will remain,” he added. “One of the major solutions that can bring about overall efficiency will be new ports development; to develop ports outside. Already they are talking about Lekki port and other ports,” he concluded.
From left Business Head, Citiserve, Mr. Jubril Salaudeen; Chief Executive Officer, Citiserve, Lola Ogunbambi; Head, E-Business, Union Bank, Mr. Fatai Baruwa; and Project coordinator, Union Bank, Mrs. Pearl Kanu, during the Citiserve Merchant Congress stakeholders’ forum in Lagos.
Agric funding: NANTS laments noncompliance by state governments By CHINEDU IBEABUCHI HE National Association of Nigerian Traders, NANTS has expressed dismay at the high rate of noncompliance with or delayed payment of agric counterpart funds by various levels of government, especially States in Nigeria. In a statement by its Secretariat President, Mr. Ken UKAOHA, NANTS observed that Donor Agencies and International organizations see the potential of the agricultural sector in achieving poverty reduction, and are therefore interested in and committed to financing Nigeria’s policies and programmes such as the Agric Transformation Agenda. Mr Ken said that similarly, the Federal government of Nigeria through the Central Bank’s economic revitalization intervention
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efforts has been making available some dedicated funds targeting the agricultural sector. “These funding provisions and assistance require the commitment of some level of counterpart finance from the States that wish to access them for the benefit of their farmers and the uplifting of agriculture in their domains. However, whereas many states keep showing interest in these funds, it is rather distasteful that the matching funds from them are either not being provided or unnecessarily delayed,” he said. Mr. Ken said that NANTS out rightly condemns this attitude which is a clear statement of un-seriousness on the part of the political class, adding that it is indeed a despicable exhibition of the relegation of agriculture and its food security component at the local levels of government despite the electioneering
campaign promises and sentiments that swept farmers votes especially to the present crop of Governors. “For the avoidance of doubt, the Government of Nigeria and International Fund for Agriculture (IFAD) funded programs in Nigeria which include the Community-Based Natural Resource Management Programme in the Niger Delta (CBNRMP– ND) and the Rural Finance Institutions Building Programme (RUFIN) present a very vivid illustration of states lack of commitment. “The projects under lucid Financing Agreement are designed with the strategies and objectives of lifting a good number of rural farmers out of poverty. However, the projects are slowed down by the absence of political will and commitment of various tiers of government to pay their counterpart funds in order to enliven the projects.”
BRIEFS Economic expert says decline in oil price will affect naira appreciation EWANE, Managing Di rector, Financial Derivatives Ltd said instability in the price of oil at international market might further put pressure on Nigeria economy and depreciate the Naira. He said this at a lecture organised by International Chamber of Commerce Nigeria (ICCN) to mark its Annual General Meeting in Lagos. “The global price of oil will have adverse effect on the Nigerian economy because of our over-reliance on crude oil. Every one dollar drop in the price of oil will amount to a dollar drop in our external reserve. It will depreciate our exchange rate,” he said. Rewane said that Nigeria was currently producing less than the needed quantity of oil that could sustain the economy. “Our current oil production is too low. For Nigeria to meet her expected budgetary revenue, we should be producing four million barrel of oil per day,” he said. The economist said that Nigerian economy was relatively stable as a GDP of 265.8 billion dollars was recorded in the first half of 2012 as against 265 billion dollars recorded in 2011. He said that the unchecked recurrent expenditure and wasteful spending could create a downward trend in the economy.
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US crop worry to fuel world food prices in July- UN EARING heat in the U.S. Midwest is expected to see global food prices snap three months of declines in July, the UN said. Meanwhile, some international grain prices, skyrocketed as was recorded during the 200708 food crises. Concerns about extreme hot and dry weather hitting U.S. corn and soybeans ignited a grain rally in the second part of June. Again, a series of crop quality downgrades by the U.S. Department of Agriculture has added fuel to the rally which brought Chicago corn futures to a 10-month high this week. Soybean prices jumped to their highest levels since 2008 while U.S. wheat hit its highest price in over a year, tracing corn’s rally. “Corn is such a driver now in terms of market sentiment anything that goes wrong beyond what the market has anticipated would certainly create turmoil in the market.
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22 — Vanguard, MONDAY, JULY 9, 2012
Banking & Finance BRIEF
Unity Bank interacts with customers, holds road shows U
nity Bank is intensifying its engagement with customers in their primary places of business as a means of deepening interaction with them. Head, Corporate Communications of the bank, Aliyu Ma’aji explained the engagement is also aimed at obtaining first-hand feedback from the customers and other people needing banking services. With the plan, the bank will be organizing Road Shows in three cities across the country namely, Abeokuta, Ilorin and Minna. Similar Road Shows have been held in Abuja, Lagos, Bauchi, Katsina and PortHarcourt. This phase of the programme which takes off tomorrow, Thursday (5/07/12) in Ilorin, Kwara State will provide an opportunity for the bank to further showcase its Savings Products which are attracting attention from small scale business men and women. According to the bank’s spokesman, the rest of the Road Shows will take place this month, July within an interval of three days. The bank is running a sixmonth promo on the its saving products such BETA for micro entrepreneurs, Holy Trip for religious obligations and UnityKids for school fees and other educational demands. The bank recently held its 1 st national draw in Abuja under the Savings Promo known as Aim, Save & Win at which 15 customers won different prizes which included a Hyundai saloon car.In the previous zonal draws held in May this year, 160 customers who saved under the Promo were rewarded with various prizes which included motocycles, LCDs and bicycles Unity Bank has indicated that another round of zonal draws will be coming up soon to cater for customers in Lagos & Western states, North Western States, Abuja and North Central States, South South and South Eastern states and North Eastern States.
From right, Unity Bank's Executive Director (Central), I. T. Mohammed, inspecting the two billion naira Abuja Inner Southern Express way FCDA project financed by the bank and being executed by Salini Nig. Ltd. With him are Salini's Technical Engineer, Anthonio Sarini (2nd right), Salini's Admin Manager, Claudio Gaetani (centre), Unity Bank's Garki Regional Manager, Ahmed Umar (2nd left) and the bank's Jabi Branch Manager, Yahaya Usman (left).
Cashlite Lagos stumbles as network failure grounds PoS transactions BY BABAJIDE KOMOLAFE, CHINEDU IBEABUCHI AND AHMED IBRAHIM
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ncessant network failure has grounded e-payment transactions through PoS terminals in merchant outlets thus impeding the success of the cashless policy in Lagos. For example, in the newly opened Ikeja City Mall, investigation shows that though there are PoS terminals in the merchant outlets, they are rarely used to accept payment from customers due to network failure. “We experience network failure frequently. There are occasions when bad network causes double debiting on customers account, which in most cases causes quarrel between us and the customer. We had experienced cases where customers who had earlier used their cards on PoS but could not successfully confirm payment due to bad network, came back to lodge complain that their accounts were debited. And in many cases, it takes long for the banks to correct this.” says Michael, a senior staff in a sport outfit store at the mall. He however commended the cashlite policy saying it is a means of preventing fraud and reduction in cost of handling cash. One of the key strategies of implementing the cashless policy introduced by the Central Bank of Nigeria (CBN) last year to discourage the use of cash for payment, is massive deployment of PoS
terminals across Lagos state. Presently, the banks have deployed about 100,000 terminals to merchant stores in various locations. To complement this, they have streamlined the procedure for issuing payment cards, such that customers can get a card within an hour. Banks have also stepped up publicity campaign on the various electronic payment channels that can be used as alternative to cash for payment and to transfer money. Vanguard investigation however revealed that these efforts are being undermined by poor network services. Transactions via PoS
termianls are mostly affected by this inept network. The PoS are linked to the banks through the network of GSM service providers namely MTN, Globacom. Investigation however reveals that that though these companies are supposed to provide dedicated lines for PoS transactions, the connection via these lines are most weak or doesnt exist. Consequently, most of the PoS terminals have become very unreliable for payment. CSS Bookshop on Broad Street, Lagos Island has three terminals but almost 95 per cent of payments are done in cash, due to failure of the
terminals to connect. Also most of the customers spotted at Shoprite in Ikeja City mail paid with cash while only few requested to pay through PoS. A customer, who spoke in confidence, said she had to opt for cash as the PoS network failed instantly the moment she wanted to pay for her goods. Also, commenting on this, Tochukwu, a dealer in one of the electronic stores at the Mall said at least 50 percent of customers are always eager to use the PoS to pay for items bought but the challenge still lies on poor network connection. He however noted that the cashless policy has boosted the confidence of doing business. “It has been beneficial because it has reduced the high cost of carrying cash. So it gives confidence to doing business. I have discovered that at least fifty to sixty per cent of our customers that come here use it. But the challenge is the network. If the network is good, then there is nothing stopping them using the PoS. Most of the time, customers like paying with their card, but when the network is bad, they find it difficult to do that. Customers want an effective service. I think the CBN should be able to look into the infrastructure surrounding the cashless policy in other to be more effective.” Similarly, Kingsley, a bookshop salesman said, “Infrastructure should be put on ground if the CBN wants the policy to run smoothly. If you rely on it, it fails often and this could be frustrating sometimes.”
Diamond Bank removes fees for offsite ATM withdrawal
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iamond Bank PLC has announced that its customers will no longer pay a fee for withdrawals using a Diamond Debit card on other banks automated teller machines called (ATM). This unprecedented move has again reinforced the bank’s commitment towards customer satisfaction and its frontline role in driving innovation in the banking industry. Bank customers would usually be surcharged N100 for withdrawals from ATMs of competing banks. In a statement issued by the bank, Head, Corporate Communications, Ms. Akpo Daniyan, stated that “the move is part of the bank’s strategic plan towards offering its customers more value for money and making banking more pleasurable and convenient. Only Diamond Bank offers its
customers free withdrawals from any ATM, anywhere in Nigeria. Our customers can carry out transactions with their Diamond bank debit cards without paying a kobo.” Daniyan confirmed that Diamond Bank customers do not pay any fees to sign up for a debit card; “With our savings products, customers have access to a free debit card, they do not pay any monthly subscription fees like most other banks customers do. We have taken it a step further since July 1 by telling our esteemed customers that they can freely use their Diamond debit cards on any other bank’s ATM and save the N100 they would have paid for each transaction. This means more convenience for less for all our customers, another great reason to bank with Diamond Bank.” “At Diamond Bank, we continually seek ways of
providing unequalled customer experience for our customers and the decision to embark on this free ATM withdrawal scheme is one of the ways we are achieving this,” stated Daniyan. Diamond Bank has a wide array of alternative delivery channels and electronic banking services, making the bank a frontline player in driving the cashless economy initiative of the Central Bank of Nigeria (CBN). It will be recalled that Diamond Bank pioneered online real-time banking in 1992 with the introduction of DIBS, the Diamond Integrated Banking System, which enabled customers to conduct banking transactions from anywhere in Nigeria online real time. The bank has remained a leader in technological innovations since then.
Vanguard, MONDAY, JULY 9, 2012 — 23
Banking & Finance
Nigerians should brace up for severe policy adjustments — Rewane STORIES BY BABAJIDE KOMOLAFE
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he decline in crude oil prices and the accompany fall in government revenue may lead to severe policy adjustment, including devaluation of the Naira, removal of fuel subsidy and deferment of capital expenditure projects, to the decline in crude oil prices, said Bismark Rewane, Managing Partner, Financial Derivatives Company Limited
international market. He these two factors have resulted into a gradual slide in Nigeria’s terms of trade from $113.6 billion to $105 billion in 2012 and also a reduction of Nigeria’s share of world exports from 0.63per cent to 0.58 per cent. He said that Nigeria’s economy is highly vulnerable to oil price shocks such that $1 decline in oil price will lead to 0.8 per cent in revenue, 0.1 per cent reduction in external
reserves, and 0.8 per cent depreciation of the naira. He said should the decline in crude oil prices persist, the government would have to make significant monetary and fiscal adjustment to cope with the conc ant decline in revenue. He said, “ When oil prices fall below $100pb, there would be monetary policy adjustment namely, Limited interest rate increases, A depreciation in the official rate of exchange from N156 towards N160/$1 while
Interbank foreign exchange rate and street rates will fall to N165 -170 per dollar “If oil prices fall below $90pb, fiscal adjustment will kick in among which are: Deferring some capital expenditure items; Trimming the recurrent expenditure and cutting waste; Removal of subsidy; Increase in excise taxes and some import duties. “ If oil prices fall below $80pb, expect structural adjustments which will include; Increased borrowing (external and internal); Tinkering with exchange control regulations; And Currency devaluation”
MONTHLY INFLATION RATE
In his monthly economic . news and views presentated last week at Lagos Business School Executive Breakfast Meeting, Rewane noted that the decline in crude oil prices since the beginning of the year persisted in June, with another five per cent decrease. He noted that the price of the nation’s Bonny light has declined by 29 per cent or $35 from its peak of $130 per barrel. This he noted has dented revenue from oil and foreign exchange inflow into the country. He said for example, oil revenue fell by 7.1 per cent to $4.7 billion in April while net inflow of foreign exchange also dropped sharply to $1.49 billion. This he said is compounded by appreciation of the dollar against other currencies in the
Global cooperation needed to ensure future stability — IMF The global community must work together to meet the challenges thrown up by the global financial crisis and to ensure future stability and growth, says the head of the IMF, Christine Lagarde. During a keynote speech in Tokyo—the first stop in a three-country trip to Asia—the IMF Managing Director said in today’s interconnected world, countries could not afford to look only at events within national borders. “This crisis does not recognize borders. This crisis is knocking at all our doors,” said Lagarde. “For make no mistake. This is a global crisis,” she added. Lagarde said over the past few months, the outlook for the global economy had become increasingly worrying. There are signs that activity is slowing across both advanced and emerging
market economies. The IMF is due to release its growth forecast for the global economy on July 16. It is expected to be lower than anticipated in the institution’s April World Economic Outlook. Lagarde acknowledged that major steps had been taken to stabilize the European debt crisis, but warned that without continued, decisive measures, the damaging effect on stability and growth would be felt not just in Europe, but worldwide. To address the common threats facing the global economy, “solutions need to be grounded in cooperation,” said Lagarde. IMF research suggests that a coordinated strengthening of policies across the Group of 20 leading economies (G-20) could raise global GDP by 7 percent and boost jobs by 36
million over the medium term. Lagarde identified major areas which needed addressing to “break the main chains of this crisis: weak sovereigns, weak banks, and weak growth.” By weak sovereigns, Lagarde was referring to the weak fiscal positions and high national debt of some advanced economies. She said countries must deal decisively with the issue of public debt, as well as restoring the health of the financial sector. But in addition, there needed to be structural reforms, whether in labor, service, or product market reforms. The IMF head paid tribute to Japan’s own spirit of solidarity and multilateralism exhibited during 60 years of Japanese membership of the Fund, and the recent crisis.
“When the global economy faced its darkest hours, you stood by your fellow global citizens,” she said, recalling that in 2008 and then again earlier this year, Japan was the first country to offer loans to boost IMF resources, and help stave off an even more direct, global economic collapse. Japan has also contributed more than any other country to the IMF’s concessional lending program and its technical assistance and capacity building, as well as supporting more than 660 students through the IMF’s scholarship program. Lagarde said she looked forward to the forthcoming due to take place in Tokyo in October. “All eyes of the world will be on Japan as we seek to find global solutions to global challenges,” said Lagarde.
BRIEF Fidelity Bank secures principal Mastercard licence
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idelity Bank Plc has concluded plans to aid its e-payment solutions and cashless initiatives. The Bank has received a principal license from Master Card Worldwide, which will allow it issue master card solutions to all the market segments in Nigeria. The license also allows the Bank to acquire transactions and bring in other banks within and outside Nigeria. This move further demonstrates Fidelity Bank’s readiness to make financial services easy and accessible to its customers. Speaking at the presentation ceremony at the bank’s corporate head office in Lagos, the Division President, Master Card Worldwide, Sub-Sahara Africa, and Mr. Daniel Monehin said the principal license is the highest form of license, which signifies top partnership between MasterCard, and its customers. “The principal license is also an acquiring license, which means master card customers who might want to extend the partnership to its banks in other African countries, will not need to be sponsored, because the principal license serves as a hub to acquiring another license in other parts of the world”. Monehin explained that Master card is an enabler, and not a single product solution, but a multiple product solution.” From all forms of current accounts, savings accounts, commercial accounts, corporate account, public sector accounts, etc., Master card solutions will be a factor to drive the account to become fully electronic, thus enhancing the cashless initiative in the banks sector”. Country Manger, Master Card Worldwide, West Africa, Mrs. Omokehinde Ojomuyide pledged the support of the group to provide technical support to the bank, “We have a team of very devoted people supporting the card business, and the kind of support we have put together for
24 — Vanguard, MONDAY, JULY 9, 2012
Micro-Finance
Citi clinches BITC’s award for scaling microfinance C
iti Group has been awarded the Business in the Community (BITC) ‘International award’ for scaling microfinance to achieve financial inclusion. Meanwhile, it has promised access to financial services to more than 2.5 billion people in the world, who presently do not enjoy financial services, which in the developed world is considered essential to daily life. The International Award supported by the international leadership team recognizes company programmes that can demonstrate positive impact on those in greatest need globally through one or more of the United Nations Millennium Development Goals.
BRIEFS NMS holds Int’l investors forum
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igeria Microfinance Sector (NMS) will hold an International Investors Forum next week in Abuja. NMS has been going through a period of consolidation and transformation. This two day International investor ’s forum on microfinance would allow international investors on microfinance to meet about 200 microfinance institutions that have been working with the Rural Finance Institution Building Programme. Participants would also use this opportunity to meet key policy makers and stakeholders in Nigeria.
NAMB to create N2m Trust Fund
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he Lagos chapter of National Association of Microfinance Banks (NAMB), aims to raise the N 2 million for on-lending to economically active poor in 2013. The 180-member Lagos chapter of NAMB has created a private trust fund named NAMBLA/BGL to provide short-and long-term liquidity to microfinance banks. Among the fund’s investors is the BGL Group, an investment banking company headquartered in Lagos, Nigeria.
Chief Executive Officer, Citi, Mr. Vikram Pandit, in a statement issued by the bank said, “As we commemorate Citi’s 200th anniversary this year, we continue to champion the core principles that have guided our institution over the last two centuries. By seeking Financial Inclusion, not only through our foundation but also through core businesses and with partners such as OPIC, we reinforce our commitment to responsible Finance and enable microfinance institutions to reach the underserved in communities around the world.” “While the partnership between Citi and OPIC makes business sense for the bank, it also advances Citi’s position in microfinance, expands access to capital at the base of the pyramid, and fosters the economic and social empowerment of women,” Pandit stated. He noted that Citi has a long-standing commitment to expand financial inclusion, also that it has formed a successful partnership with the Overseas Private Investment Corporation (OPIC). “Under this partnership launched in 2006, Citi and OPIC have funded 29 microfinance institutions in 16 countries, directly reaching more than 330,000 local micro-entrepreneurs through small loans, approximately 84 per cent of whom are women,” he said. However, Citi integrates core businesses, a global perspective and local presence to expand financial inclusion and contribute to the UN Millennium Development Goals (MDGs). Citi has a $350 million partnership with OPIC, the U.S. government’s foreign development agency. It provides service to the microentrepreneurs by directly funding microfinance institutions in local currency, in local language, and under local law. This partnership has a wide impact. Microentrepreneurs in Africa, the Middle East, Asia, Eastern Europe, and Latin America have availed loans from Citi. This successful partnership has funded 29 microfinance institutions in 16 countries, having a direct outreach of more than 330,000 loans to micro-entrepreneurs, approximately 84 per cent of whom are women, with average loan size of $414
*Petty trading
MFBs seek one year extension of recapitalisation deadline STORIES BY PROVIDENCE OBUH
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icrofinance Banks in the country have called on the Central Bank of Nigeria (CBN) to extend the deadline for recapitalisation by one year and also review policies affecting the subsector. It would be recalled that the CBN had given all microfinance banks till December 31, 2012 to comply with the revised policy framework The MFBs however asked the apex bank to extend the deadline to December 31st 2013, so as to allow enough time to either recapitalise or enter into merger and acquisition. This was contained in a communiqué issued by participants at the just concluded microfinance certification programme of non-executive directors of microfinance banks organised by CBN, NDIC and FITC in Lagos. The communiqué stated, “The fact that the EFCC considers most of the fraud cases affecting microfinance banks to be below its threshold have emboldened perpetrators of fraud against the sub-sector to continue to exploit the endless adjournment in conventional courts . “There should be further review of some aspects of the regulatory guidelines and policies as follows; sanctions for infringements regarding submission of monthly returns, annual reports etc to be reviewed downward for microfinance banks and to be imposed only after enough warnings have been given, corporate tax for microfinance banks to be reduced to 20 per cent officially with special additional concessions
because of the social nature of the business, and single obligor for microfinance banks to be increased to five per cent and 10 per cent for individual and corporate borrowers respectively.” “The CBN should promote the enactment of a personal securities registration law for personal chattels and movable assets to enhance
the security of microfinance bank loans, usually secured by personal and movable assets. “The CBN should promote the enactment of an effective personal bankruptcy and business rescue laws for individuals as most microfinance bank customers were individuals and not companies.”
Accion assures of improved service delivery, as profit hits N306m
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ccion Microfinance Bank Limited has assured its shareholders of improved service delivery through technology by 2013, as its profit for the financial year ended December 31, 2011 grew to N306 million. Speaking at the company’s 6th Annual General Meeting (AGM) in Lagos, the Chairman, Mr. Patrick Akinwuntan said, “the current global move to electronic and mobile payments and financial services to serve the unbanked and under banked provides an opportunity to improve on our service delivery through technology. Akinwuntan added that the bank would leverage on the POS device, ATMs and ATM cards to ensure that customers have easier access to good quality financial services, and through mobile payment solutions. On the bank’s outlook for 2012, he said that microfinance industry may witness more changes when the Central Bank of Nigeria (CBN) completes the review of the regulatory framework of microfinance banks. To this end, he said “Accion Microfinance Bank is positioned to explore opportunities that may arise in the industry within this
context. “Our strategy for 2012 is focused on expansion. We will be extending to other parts of Lagos to better service our existing clients and address the issue of financial inclusion for people without bank accounts. The bank is making laudable efforts in opening branches at Bariga, Akonwonjo, Alaba, Ajah and Ikeja before the end of 2012. For the financial performances of the bank, the Chairman stated, “Despite the tough operating environment in 2011, your bank recorded significant growth in all key indices. Profit Before Tax (PBT) grew by 103 per cent from N150 million in 2010 to N306 million in 2011, while savings deposits also grew by N46 per cent from N294 million to N431 million.” The bank proposed 18 kobo dividend per share, profit after tax stood at N211 in the year under review compared to N93 million of the previous year. Giving assurance to the shareholders, he said, “Your bank remains true to its commitment of economically empowering the active poor in the pursuit of a brighter future. Your bank also successfully increased its loan portfolio by 56 per cent from N1 billion to N1.5 billion.”
Vanguard, MONDAY, JULY 9, 2012 — 25
Corporate Finance
FG should scrap capital gain tax, reduce income tax By MICHAEL EBOH HE Federal Government has been called upon to scrap the capital gains tax and reduce company income tax applicable to the productive sector of the economy. In an address titled, ‘Consistent Government Fiscal Policy: A Key to Sound Industrial Development’ delivered at the Mid-Year Meeting/Dinner of the Pharmaceutical Society of Nigeria, PSN Board of Fellows in Lagos, Group Managing Director/Chief Executive Officer, UAC Nigeria Plc, Mr. Larry Ettah, urged the government to immediately streamline the various taxes in line with the reality of the cost burden imposed on companies by the absence of critical infrastructure facilities. “Government should reduce company income taxes applicable to the productive economy and scrap capital gains tax. We also hope that all governments will find the political will to actually streamline taxes, charges and rates nationwide as provided by Act 21 of 1998 and improve collection efficiency generally, rather than concentrate tax raising efforts on a few socially responsible individuals and companies,” Ettah said. He listed factors affecting businesses in the country to include tax structure, particularly company tax, Personal Income Tax, unbridled approval of waivers and concessions to groups and individuals to import products at concessionary duty rates. Other factors, he said, are non-inclusion of overhead costs of manufacturing companies in the calculation of input- output VAT, reintroduction of Customs Duty on importation of plants and equipment, which makes retooling and expansion more expensive; absence of incentives for providing owninfrastructure and utilities by manufacturers and the implementation of minimum tax which is inimical to the survival of ailing industries.
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ccording to him, Nigeria’s current tariff structure does not pay sufficient attention to the reality that the productive sector in Nigeria suffers a cost disadvantage relative to other economies that may be as high as 40 per cent due to power, infrastructure, logistics, corruption and other
operating costs. He said, “Consistency of fiscal policy whether relating to taxation, budgets and spending, tariffs and industrial incentives, economic diversification and other elements of government policy are sine qua non for successful industrial development. That way, businesses - local and foreign - can take investment and strategic decisions knowing (rather than praying) that they will stay at least into the
medium and long term.” Ettah called on the government to ensure that it rationalise the cost of regulatory compliance and the conflicts and overlaps between regulatory institutions. He pointed out that the major weakness of fiscal policy in the country was the skewed structure of the budget balance in favour of recurrent expenditure, which tended to average 75 per cent of budgeted expenditure, leaving only approximately 25
BRIEFS per cent for capital expenditure. “The effect of this arrangement has been severe under-investment in infrastructure - schools, roads, rail lines, bridges, power installations etc, while salaries and overheads and running costs of government ministries, departments and agencies consume the bulk of public spending. This unwise structure now accounts for the sapping infrastructure deficit that now plagues the nation,” he noted.
Singapore’s Temasek seeks investment in Europe, commodities
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INGAPORE state investor Temasek Holdings TEM.UL, whose portfolio swelled to a record in the last fiscal year, is looking to acquire assets in Europe and plough more money into energy and commodities after doubling its exposure to the sector. Sovereign wealth funds such as China Investment Corp CIC.UL are struggling to deliver decent shareholder returns at a time when the European debt crisis and an anemic U.S. economy are depressing capital markets from Brazil to Hong Kong. But beaten-down valuations have presented opportunities to investors such as Mexican tycoon Carlos Slim, who recently added European companies to his telecommunications empire. Temasek’s portfolio grew around 2.6 percent in the year ended March to S$198 billion ($156.37 billion), the company, whose assets are mainly in Asia, said in its latest report released on Thursday.
TACLAWNA, Hunter Penrose, partner on printing services By OLAYINKA LATONA
From left: Mrs. Mavi Isibor, Managing Director, Poise Nigeria; Mrs. Folake Ani-Mumuney, Head, Marketing & Corporate Communications, First Bank of Nigeria Plc and Professor Mark Bickerton, Director, International Development, London MET at the Brand Communication Summit organised by Poise Nigeria in Lagos.
Shareholders berate Beta Glass over poor dividend payment policy By NKIRUKA NNOROM HAREHOLDERS of Beta Glass Plc have expressed dissatisfaction over the dividend policy of the company where they are paid almost the same amount every year, describing it as unpalatable. Speaking at the company’s 38th annual general meeting in Lagos, the shareholders said that a situation where the directors’ remuneration skyrockets on annual basis, while shareholders are given paltry returns is not acceptable and called for immediate stoppage. The directors had declared 40 kobo dividend payout for the year ended 31 st December, 2011, representing five percent increase over 38
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kobo paid in the corresponding period of 2010. Speaking on behalf of other shareholders, Mr. Igbrude Moses, explained that the company possesses the financial capacity to conveniently combine dividend with script issue, saying that where the directors do not want to dilute the shareholding structure of members by proposing bonus issue, they should at least give something reasonable as cash dividend. “The general reserve is over N7 billion; turnover is in excess of N12 billion. Considering these numbers, it is high time you give us bonus. If you don’t want to dilute the shareholding by giving bonus, then give good dividend. After all, the money is there,” he enthused.
He further challenged the company to strengthen its sales department, advising the management to expand its operation to production of Cans instead of concentrating on manufacturing of glass bottles alone. Mr. Micheal Koo, another shareholder, specifically demanded for either N1.00 or N2.00 dividend, including bonus issue in the coming year. “Last year, you paid us just 38 kobo and this year, you are proposing 40 kobo, whereas the chairman’s remuneration jumped to N235 million from N150 million in 2010. This is not acceptable. We will not continue to take this,” he said. Responding, the chairman, Chief Joseph Oke, assured that they will consider the payment of more dividends at an appropriate time.
ACLAWNA Printing Press has entered into a partnership with a London based firm, Hunter Penrose to boost printing production services in Nigeria. Chairman Board of Directors of Taclawna Printing Press, Overseer Ephraim Ojo said the partnership will bring about a change in the company ’s operation from analogue to digital printing, position it as a world class printing press and also in the delivery of edge cutting media experience to clients. Describing the partnership as a step in the right direction and in realising the company’s vision, Ojo said Taclawna Printing Press has embarked on constructing a multi-million naira building project which will boost the printing services rendered by the company. He said “In putting Taclawna Printing Press in a group of the world first class printing industry, we have embarked on inviting the Sales Manager of Hunter Penrose Supplies Limited to partner with us in order to supply our newly constructed printing press outfit with modern and sophisticated equipment thus making the company a world class printing press.”
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26 —Vanguard, MONDAY, JULY 9, 2012
Stock Market Last Week BRIEFS Smart Products records N7.424m profit, 15 kobo dividend BY ESTHER ONYEGBULA
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mart products Nigeria Plc has announced a profit after tax of N7.424 million for its 2011 financial year. According to the audited result for the year ended, December 31, 2011 presented to the Nigerian stock exchange NSE, the company’s after tax profit grew by 24 per cent to N7.424 million from N5.368 million in its 2010 financial year. To this end the company is distributing N5.215 million as dividends to its shareholders, representing a dividend per share of 15kobo. Addressing shareholders th at the 46 Annual General Meeting in Lagos, the Chairman, Chief Simeon Oguntimehin announced that in spite of the dimmed economic outlook growth prospects which worsened financial conditions in the world economy and the first half of the year 2011 being an election year was preoccupied with electioneering campaigns and this had negative consequences on inflation and purchasing power of the people, the company fared well with a performance indices recorded an upward trend as it recorded a turnover of N29. 430 million compared to N24.102 million indicating a 22 percent growth while gross profit rose to N9.544million in contrast to N6.401 million representing 49 percent increase. Oguntinmehin, also stated that despite the difficult operating environment in the previous year the company has been able to integrate all its activities by repositioning itself and watching for the right investment signal to embark on any business venture.
Investors gain N163bn on NSE in one week BY MICHAEL EBOH & WILLIAM JIMOH
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nvestors’ holding on the Nigerian Stock Exchange, NSE, appreciated last week by N163.244 billion as the market capitalisation and Allshare index both rose by 2.37 per cent each. The capitalisation closed the week at N7.059 trillion from N6.895 trillion at which it opened, while the index shed 511.34 basis points to close the week at 22,110.91 points from 21,599.57 points at which it opened. Nestle Nigeria Plc led 38 other companies on the price gainers’ category in the week under review, rising by N51.79 to close at N498.04 per share from N446.25 per share at which it opened. Total Nigeria Plc followed with a share price gain of N5 to close at N130 per share from N125 per share, while Nigerian Breweries Plc garnered N4.47 to close at N105.70 per share. On the contrary, Guinness Nigeria Plc led 29 other companies on the price losers’ table, dropping by N3 to close at N225 per share, from N228 per share at which it opened; Dangote Cement Plc followed with a loss of N2 to close at N108 per share and Mobil Oil Nigeria Plc dipped by N1.90 to close at N131 per share. Equity trading, however, depreciated by 81.29 per cent, as investors exchanged 1.007 billion shares valued at N8.507 billion in 18,352 deals, compared to the previous week’s turnover of 5.381 billion shares valued at N22.467 billion in 17,019 deals. The Financial Services sector, driven by transactions in the Banking sub-sector, recorded the highest transaction in the sectorial analysis, accounting for 69.22 per cent of the total market turnover, with 697.202 million shares valued at N4.397 billion in 10,854
deals. The Banking sub-sector accounted for 55.21 per cent of the total market turnover, with 556.01 million shares valued at N4.309 billion in 9,883 deals. First Bank Nigeria Plc’s shares were the most traded in the sub-sector, with a turnover of 87.256 million shares valued at N970.355 million in 2,526 deals; United Bank for Africa Plc followed with the exchange of 83.938 million shares valued at
N330.885 million 1,002 deals and Zenith Bank Plc recorded 68.198 million shares valued at N980.748 million 1,099 deals. The Consumer Goods sector followed on the sectorial analysis, accounting for 7.65 per cent of the market turnover, with 76.921 million shares valued at N2.973 billion in 3,398 deals. Cadbury Nigeria Plc in the Food Products — Diversified sub-sector, recorded the
highest transaction in the Consumer Goods sector, with 19.323 million shares valued at N284.028 million in 326 deals; PZ Cussons Nigeria Plc in Personal/Household Products sub-sector, followed with 18.432 million shares valued at N479.208 in 244 deals and Dangote Sugar Refinery Plc in the Food Products sub-sector recorded 11.501 million shares valued at N46.369 million 263 deals.
FG crowding out private sector on bond issuance — First Bank boss By PETER EGWUATU
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HE consistent issuance of bonds by the Federal Government has been attributed to the slow pace of bond issuance by the private sector. Group Managing Director/ CEO, First Bank Nigeria Plc, Mr. Bisi Onasanya,, disclosed this at the 8th Annual PEARL Awards Public Lecture for Capital Market Development / Public Presentation of the book – “Winning Strategies of Nigeria’s Corporate Giants”
over the weekend in Lagos. According to him, “There is a strong case to be made against the public sector ’s growing borrowing requirement. As the Federal Government has borrowed more it has seen an increase in the yield on its borrowing instruments. These rate rises, in turn, have increased the attraction of government debt instruments, pushed the private sector out of the business of issuing bonds, and diverted domestic savings away from the capital market to the money market.” Speaking on the topic: “Rejuvenating the Nigerian capital market for sustainable growth”, he stressed that lack of confidence has been the major factor affecting the growth of the market since its crash in 2009. To this extent, he said, “A large part of the downward pressure on the market’s numbers has come from a fall in investor confidence. Under the then unregulated and unstructured margin lending regime, credit was freely available to anyone who cared to borrow to buy shares just as more investors, in particular,
retail investors with little or no understanding of the risk of the market, especially Private Placements, were attracted into purchasing both registered and unregistered securities and got locked in as the bear market emerged. Expectedly, to a not-too financially-literate investor community which was unaccustomed to big and prolonged market slides, panic and fear drove confidence to evaporation points. It is therefore a very tough task getting the same hurting investors back to the beat without a firm promise (and perhaps guarantee) of juicy returns. But this is more for the retail end of the market. “For the institutional investors, major confidence challenges still abound notwithstanding certain factors like the establishment of the Asset Management Corporation (AMCON), various regulatory actions and reforms which are aimed at improving financial disclosure, transparency and governance of financial institutions and listed companies and institutionalising effective regulatory oversight.
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0.82 5.52 1.08 6.43 31.90
29.08 8.69
Livestock/Animal Specialities Livestock Feeds Plc
CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc SCOA Nigeria Plc Transnational Corporation Chellarams Plc UACN Plc
CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc
38.31
5.45 4.18s 57.00 2.01 4.48 0.50
14.59 446.25
11.10 36.19 3.29 2.88
25.50 30.01
6.49 0.64 0.57 2.15 10.80 1.14 0.50 10.92 3.23 15.00 1.07 0.70 1.15 2.88 0.88 6.40 1.20 3.66 3.73 0.50 0.50 13.75
0.50 0.79 0.50 0.50 0.50 1.50 0.50 0.54 0.50 1.31 0.50 0.84 0.50 0.50 0.50 0.57 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50
0.50 0.50
0.50 2.02 0.50
Beverages-Non-Alcoholic 7-UP Bottling Company Plc
Food Products Dangote Flour Mills Plc Dangote Sugar Refinery Plc Flour Mills Nigeria Plc Honeywell Flour Mill Plc National Salt Co. Nig Plc UTC Nigeria Plc
Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc
Household Durables Beta Glass Co Plc Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc
Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc
FINANCIAL SERVICES Banking Access Bank Plc Afribank Nigeria Plc Bank PHB Plc Diamond Bank Nigeria Plc Ecobank TRANSNATIONAL INCORPORATION Fidelity Bank Plc FinBank Plc First Bank of Nig. Plc First City Monument Bank Plc Guaranty Trust Bank Plc NPF Micro-Finance Bank Plc Intercontinental Bank Plc Oceanic Bank International Plc Skye Bank Plc Spring Bank Plc Stanbic IBTC Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc
Insurance Carriers, Brokers and Sector AIICO Insurance Plc Continental Reinsurance Plc African Alliance Insurance Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guaranty Trust Assurance Plc Guinea Insurance Plc Intercontinental Wapic Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Universal Insurance Plc
Mortgage Carrier, Broker and Sector Aso Savings and Loans Plc Resort Savings & Loans Plc
Other Financial Institutions Crusader (Nigeria) Plc Deap Capital Management & Trust Plc Royal Exchange Assurance
7.77
3.29 228.00 5.98 101.23 0.89
Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc
HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers
0.50
100.00
Real Estate Investment Trusts Skye Shelter Funds CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc
8.82
0.50 29.50 14.73
1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc
Real Estate Development UACN Property Development
0.50
Oil and Gas and Products Petroleum Products Capital Oil Plc
Company
Opening Price (N)
Capital Market
7.39
0.50 2.02 0.50
0.50 0.50
0.50 0.77 0.50 0.50 0.50 1.55 0.50 0.56 0.50 1.36 0.50 0.76 0.50 0.50 0.50 0.55 0.50 0.50 0.50 0.61 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50
7.50 0.64 0.55 2.28 10.45 1.26 0.50 11.26 3.35 16.00 1.07 0.70 1.15 2.93 0.88 6.64 1.16 4.10 3.81 0.50 0.50 14.49
26.50 31.06
11.10 36.19 3.30 2.88
14.59 498.04
6.55 3.99 56.80 2.01 4.60 0.50
40.12
3.29 225.00 5.98 105.70 0.89
0.50
100.00
8.82
27.63 8.26
0.74 5.52 1.00 6.43 33.00
1.23
0.50 28.00 16.15
0.50
Closing Price (N)
110,000
1,000 84,748 1,081,985
7,478 200,000
17,416,750 670,000 1,000 2,000 100 55,768 1,000 217,700 2,000,000 662,000 900,000 42,136 112,666 1,670,890 353,038 282,804 350,200 30,000 20,000 1,365,180 1,000 59,553 100 3,487,521 550,600 154 200 3,000
19,353,600 646,608 13,287,533 3,055,448 933,874 5,599,613 1,000 10,199,147 683,119 7,764,644 56,000 73,200 91,000 2,912,359 1,006,032 806,195 4,581,566 12,653,313 1,145,209 374,427 598,199 6,921,134
1,436,292 141,876
418 60 51,050 1,000
3,072,585 1,097,676
618,918 1,006,239 79,868 267,813 1,022,602 196,289
4,311
100 62,107 500 483,025 10,000
1,450,600
100,000
56,050
31,790 120,000
1,436,049 1,065 6,325,843 18,198 203,638
159,418
2,500 523,156 435,272
50,000
Quantity Traded
10.54
0.61 2.02 0.66
0.50 0.50
1.06 1.20 0.50 0.50 0.50 3.51 0.50 0.69 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.90 0.50 2.50 0.50 0.50 0.50 0.50 0.50 0.50
11.10 3.39 2.30 9.27 4.30 3.20 9.50 16.12 8.30 20.50 1.78 1.78 13.50 10.17 2.18 11.38 2.91 11.70 5.38 1.92 1.75 16.70
43.50 31.25
15.58 42.66 6.75 3.67
29.20 470.00
19.90 16.20 95.00 6.60 6.70 0.88
51.49
9.52
0.50 2.02 0.50
0.50 0.50
0.50 0.85 0.50 0.50 0.50 2.00 0.50 0.50 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.90 0.50 0.50 0.50 0.50 0.50 0.50
4.26 0.64 0.53 2.05 1.65 1.20 0.00 7.95 3.60 11.64 0.00 0.87 0.00 3.90 0.73 6.30 0.95 2.17 1.96 0.50 0.52 11.45
27.00 22.56
12.71 36.19 4.78 2.66
10.17 367.83
4.31 4.02 57.00 2.31 3.80 0.50
39.00
2.23 186.00 5.23 72.50 0.93
4.63
0.50
97.00
11.59
32.96 3.01
1.45 5.52 0.50 6.43 28.70
0.48
0.50 14.53 6.40
Year Low
255.00 7.10 100.00 1.01
0.50
100.00
20.15
62.26 8.28
2.54 8.28 1.82 7.60 42.50
0.66
0.64 24.58 8.30
Year High
0.00
0.00 0.00 0.03
0.00 0.00
0.09 0.10 0.00 0.00 0.06 0.43 0.00 0.00 0.00 0.08 0.00 0.00 0.00 0.02 0.06 0.10 0.00 0.10 0.36 0.01 0.01 0.14 0.03 0.07 0.00 0.00 0.00 0.00
0.80 0.00 0.00 0.00 0.28 0.22 0.00 1.34 0.69 1.61 0.00 0.18 0.00 0.85 0.50 0.54 0.22 0.13 7.59 0.11 1.34 1.57
1.29 1.32
3.90 1.61 0.70 0.00
0.28 15.94
0.54 0.71 4.50 0.26 0.73 0.06
3.70
12.12 0.35 4.50 0.00
0.00
0.00
11.75
1.66
3.26 3.66
0.28 0.35 0.22 0.31 7.03
0.04
0.01 7.94 1.80
E.P.S.
0.00
0.00 0.00 16.67
0.00 0.00
5.56 10.20 0.00 0.00 8.33 4.88 0.00 0.00 0.00 17.25 0.00 0.00 0.00 25.00 8.33 5.00 0.00 5.00 1.39 50.00 50.00 6.43 16.67 7.14 0.00 0.00 0.00 0.00
5.83 0.00 0.00 0.00 25.91 6.68 0.00 6.96 6.20 8.74 0.00 5.44 0.00 5.07 5.44 14.81 4.68 19.23 0.28 4.82 0.43 7.83
20.93 20.46
3.26 22.48 7.34 0.00
37.57 27.96
16.91 14.38 16.89 16.92 5.75 8.83
13.92
19.98 16.29 22.22 0.00
0.00
0.00
8.51
7.33
10.11 2.26
5.18 15.77 3.64 20.74 4.14
15.00
50.00 2.77 4.37
P.E. Ratio
10.60 0.50
Non-Metalic Mineral Mining Multiverse Plc
00.50
Hospitality Tantalisers Plc
4.90 1.53 6.00
0.50
Road Transportation Associated Bus Company Plc
Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company
1.64 2.40 4.20 4.19
Speciality Interlinked Technologies Plc
0.50 Printing & Publishing. Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press
6.78 1.17
0.50
2.99
1.97 2.11
Media/Entertainment Daar Communications Plc
Hotels/Lodging Capital Hotel Ikeja Hotel Plc
Courier/Freight/Delivery Red Star Express Plc Employment Solutions C & I LEASING PLC
Automobile/Auto Part Retailers Incar Nig. Plc RT Briscoe Plc
Afromedia Plc
0.50
20.50 0.50 19.61 3.00 10.99 132.90 33.98 125.00
Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Eterna Oil and Gas Plc Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc
SERVICES
0.69 13.44
Intergrated Oil and Gas Services Oando Plc
3.98 12.71 13.28 4.30 1.05 2.92 0.63
OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service
1.44 0.50
INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc
1.23 0.50
Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans
0.50
Processing Sysetms Chams Nigeria Plc
1.38
6.00
Metals Aluminium Extrusion Ind Plc
Paper/Forest Products Thomas Wyatt Nig. Plc
8.26
NATURAL RESOURCES Chemicals BOC Gases Plc
3.61 1.93
9.30 8.54 24.00 5.90 110.00 0.50 0.52 41.00 2.38 1.91 10.93
Tools and Machinery Nigerian Ropes Plc
Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company
INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc
0.50
0.50
Computers and Peripherals Omatek Ventures Plc 13.12 2.66
0.50
ICT Computer Based Systems108 Courteville Investment Plc
ICT Telecommunications Starcomms Plc
5.05 0.67 0.94 23.25 1.87 0.80 8.59 3.33
Pharmaceuticals Ekocorp Plc Evans Medical Plc Fidson Healthcare Plc Glaxo Smithkline Consumer Nig May & Baker Nigeria Plc Neimeth International Pharm Nigeria-German Chemicals Plc Pharma-Deko Plc
IT Services NCR (Nig) Plc Tripple Gee and Company Plc
0.50
Opening Price N Union Diagnostics & Clinicals Services
1.27 5.91
4.90
0.50
1.64 2.30 4.20 4.25
0.50
6.94 1.17
0.50
2.99
1.97 1.90
0.50
0.50
20.50 0.50 19.61 2.72 11.41 132.90 33.98 130.00
14.70
0.66
3.98 12.71 13.28 4.30 1.05 2.78 0.6
1.44 0.50
145 0.50
0.50
1.38
0.50
10.60
5.70
8.26
3.10 1.92
9.10 8.54 24.00 6.00 108.00 0.50 0.54 41.51 2.27 2.10 10.93
0.50
13.12 2.66
0.50
0.50
5.05 0.79 0.90 23.10 1.90 0.76 8.59 3.17
0.50
Closing Price N
24,000 2,980,564
20
1,000
1,000 112,142 4,322 192,985
55,000
4,436,500 312,500
282,700
718,520
240 279,611
100
1,000
82,191 2,100 15,355 234,233 7,370 11,312 2 125,193
485,540
3,167,927
6,888 1,000 100 29,198 200 84,311
2,000 1,000
640,862 4,000
300
100
822,500
100
105,000
80
428,200 1,057,010
263,690 2,200 11,143 452,380 43,598 100,000 32 320,678 8,500 27,500 875
20,697,372
3,600 750
1,000
10,700
168 62,703 268,775 582,558 573,175 80,108 12,029 600
480,000
Quantity Traded
2.78 11.75
5.15
0.80
8.00 6.82
3.68
0.50
400 2.07
1.64
3.67
4.33 3.65
0.72
600
1.57 6.50
4.90
0.50
4.60 3.60
3.17
0.48
3.00 1.33
0.90
2.65
1.97 1.30
0.51
141.00 63.86 195.50
163.50 2,100 240.00
27.99 0.50 0.50 5.71 3.89
1.87
3.98 12.71 13.97 3.60 1.05 2.92 0.63
1.33 0.50
1.62 2.58
0.50
1.38
0.50
10.70
6.80
8.26
5.94 1.47
12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93
0.50
3.25 3.25
0.50
0.50
5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28
0.50
Year Low
0.87
0.51 0.80
0.00
0.00
0.00 0.13
0.26
0.00
0.22 0.69
0.08
0.54
0.00 0.16
0.04
13.32 3.32 11.91
4.93 0.00 6.02 0.67
6.95
0.16
0.00 3.90 0.00 1.22 0.17 0.07 0.00
0.05 0.00
0.13 0.00
0.00
0.00
0.00
0.13
0.93
0.00
0.15 0.19
1.59 1.71 1.76 1.80 8.01 0.00 0.00 1.05 0.36 0.18 0.00
0.00
6.49 0.00
0.04
0.05
0.06 0.00 0.27 8.88 0.21 0.08 0.00 0.00
0.00
E.P.S
4.22 8.75
0.00
0.00
0.00 27.69
12.19
0.00
34.09 2.12
11.25
4.91
0.00 8.19
12.75
11.11 19.23 17.07
6.99
7.40 0.00
4.17
6.06
0.00 3.26 0.00 3.52 6.18 41.71 0.00
28.80 0.00
13.15 0.00
0.00
0.00
0.00
85.77
7.37
0.00
39.60 9.16
7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00
0.00
1.43 0.00
12.50
10.00
9.05 14.13 0.00 0.00
88.50 0.00 3.07
0.00
P.E Ratio
as at Friday, July 6, 2012
37.10 0.70 32.60 5.59
78.97
0.97
3.98 15.58 15.03 4.30 1.86 2.92 0.63
1.51 0.99
2.50 2.58
0.50
1.38
0.50
12.39
9.20
8.69
6.91 3.60
30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40
1.47
9.31 3.59
0.50
0.52
5.31 1.45 3.20 23.11 5.61 1.96 12.91 200
0.50
Year High
Stock Market Report
Vanguard, MONDAY, JULY 9 2012 — 27
28 — Vanguard, MONDAY, JULY 9, 2012
Homes & Housing Finance BRIEFS Cross River plans 4,000 houses for workers
C
ROSS River government is embarking on the construction of 4,000 housing units for civil servants in the state in the next three years. Special Adviser to the State Governor on Housing and Mortgage Financing, Mr. Edward Ogon, said this during an interactive session in Calabar. He said the scheme is part of government’s plan to provide affordable housing for residents. Ogon said the houses would be built in major urban centres in the three senatorial districts of the state. According to him, the urban centres include Akpabuyo and Odukpani in the southern district; Ugep and Ikom in the central; and Ogoja in the northern district. He said the government was working with some private developers and a mortgage bank, Aso Savings and Loans Plc, in line with its Public-Private Partnership (PPP) policy.
Lagos urges full compliance with planning laws By YINKA KOLAWOLE
L
agos State government has called on all stakeholders, professionals and property owners to ensure full compliance with the Lagos State 2010 planning laws in the contruction of buildings in the state, in a bid to curtail incidences of building
collapse. Permanent Secretary, Ministry of Physical Planning and Urban Development, Mrs. Olutoyin Ajayi, gave the charge after a successful evacuation of occupants of house No.3, Ajayi Road, off Yaya Abatan, in Ogba area of the state recently. The threestorey building, with about 12 flats, had shown signs of distress before the rescue operation and the eventual
seal up of the property by officials of the ministry. Ajayi said it has become mandatory to ensure that the 2010 planning laws of Lagos State are followed to the letter. She urged stakeholders to avail themselves of planning information as stipulated in the said law from the ministry before embarking on any construction, especially the urban regeneration law and other extant laws conceived
R
eport of officers of the Lagos State Physical Planning and Development Authority and Lagos State Material Testing Laboratory respectively, conducted by Messrs Ayotunde Sodeinde and Shola Famakin, certified that the building was situated in a water logged area and was evidently sinking and that by virtue of the visible diagonal cracks, the foundation had experienced an uneven settlement which shows that the building has been damaged beyond repairs and should therefore be removed. They further noted that in the event of heavy rainstorm, there was the likelihood that the building would have collapsed at any moment.
Saudi mortgage law to boost housing loan AUDI Arabia’s new mortgage law should make home loans a larger part in bank lending portfolios and also tackle the controversial question of default, says Rehan Khan, chief financial officer at Saudi British Bank (SABB). The world’s top oil exporter said last week that its cabinet had approved the legislation, more than a decade after it was first proposed, but did not divulge details of the new regulations. “Mortgage lending is around 6 percent of our overall loans, which is very small by international standards. I’d expect those ratios to change quite a lot over the next five years,” Khan said. Most Saudi banks already offer home-buying loans, but these are secured against salaries rather than property. That makes them restricted to Saudis who work for big companies or the government. SABB caps loans at a debt burden ratio of 50 percent, meaning a customer can not owe more than half his salary each year in loan repayments, Khan said.
to ensure a well-planned and live-able environment where unforeseen occurrences can be forestalled. She said that the building in question had suffered ‘foundational failure’, adding that a monumental disaster was averted by officials from the ministry who acted promptly following a distress call made by one of the residents in the area. Ajayi asserted that the evacuation and sealing of the premises was necessary in order to save lives and property since, according to her, the building has become structurally defective and inhabitable as heavy cracks were seen vertically and horizontally on all the floors, which had tilted the building by about 5-6 inches down to the ground. According her, the exerted pressure on the building was due to multipurpose use of the building, ranging from printing press, recording studio, religious purposes and a diagnostic centre, among others.
S
•A house in Malaysia Gardens, Abuja
Mortgage debt in Britain down by £8.8bn
B
RITONS have reduced their mortgage debt by £8.8 billion (about N2.2 trillion) in the first quarter of this year as the housing market remained subdued, Bank of England figures show. The figures indicate that households are putting more money into the housing market, through deposits or mortgage repayments for example, than they are taking out, with a cumulative £122 billion injected since the summer of 2008. , the Bank said there was “little sign” that households are trying to pay down debt more quickly than in the past, and a lack of activity in the housing market
and a reduction in remortgaging are underlying the figures. Several surveys have forecast house sales to remain sluggish this year, with continued uncertainty over the economy and the Eurozone and lenders predicted to tighten their borrowing criteria further and raise their rates. There has been a general trend towards injections of housing equity since the start of the financial crisis, with a reduction of nearly £8.6 billion in mortgage debt in the final quarter of last year. The latest figure shows that households spent the equivalent of 3.3 percent of their post-tax income on
reducing their mortgages. However, the figure remains below a record net injection of £10.1 billion seen during the spring last year. weak and patchy housing market has left many people with insufficient equity in their homes to withdraw money, while home owners could also find it harder to increase the size of their mortgage due to the tighter criteria being applied by lenders. Analysts said the trend towards an injection of cash rather than a withdrawal seen for 16 quarters in a row could have a restricting effect on consumer spending, affecting the wider economy. Howard Archer, chief UK
and European economist at IHS Global Insight, said that despite the Bank playing down people’s desire to pay down their debt more quickly as a factor, poor returns on savings have “undeniably” made it more attractive for people to use any spare funds to reduce their mortgages. Redwood, chief UK economist at Capital Economics, said: “The low level of transactions has also reduced the opportunity for households actively to withdraw equity when they buy a house or remortgage. And for many households, this will therefore have reduced the funds they have available to spend.”
Vanguard, MONDAY, JULY 9, 2012 — 29
Homes & Housing Finance
•A mansion in Maitama district
FHA sets aside 30% houses for low-income earners ... Delivers houses under PPP in 6 states Stories by YINKA KOLAWOLE HE Federal Housing Authority (FHA) is to dedicate thirty percent of housing units in all its new estates to low income earners as a way of ensuring that all cadres of the society are able to own houses. Managing Director, FHA, Mr. Terver Gemade, who disclosed this in Abuja, also said that 50 percent of houses in such estates would be set aside for allocation to medium income earners. According to him, FHA took the step as a way of offering succour to such categories of Nigerians who would otherwise not be able to buy houses at the prevailing market rates. He said FHA was handicapped in doing more for now due to financial constraints having been taken off government budgetary allocation for over 10 years. He said the authority would be better positioned to serve the underprivileged when the social housing policy being pursued by the Minister of Lands, Housing and Urban Development comes into effect. Gemade declared that the public-private partnership (PPP) deal between the FHA and 27 private developers
T
signed last year has started yielding results, with a set of new housing units in six major cities ready for commissioning. He said that the completed housing units under the schemes, in respect of which a memorandum of understanding was endorsed between both parties, will soon be allocated to prospective buyers. According to him, the new housing estates are located in Osogbo, Osun State; Odukpani, Cross River State; Gombe, Gombe State; Goningora, Kaduna
State; Abesan, Lagos State and; Makurdi in Benue State. The FHA boss noted that the completed housing units were in the first phase of the various estates, adding that work had already commenced on the second phase under the PPP arrangement, at an estimated cost of over N4.5 billion. He further noted that no fewer than eight developers, 200 contractors and subcontractors are working on the various projects. Among the completed
estates, Gemade said Osogbo has 100 units of two bedroom bungalows and three bedroom semi-detached houses, while the estate at Abesan, Lagos, consists of 78 luxury flats in 13 blocks of six flats each; Odukpani, 86 units of two and three bedrooms bungalows; Gombe, 80 units and; Makurdi also has 80 units. He said the deal stipulates that FHA has exclusive right of post sale management of the estate, issuance of allocation papers, issuance of title documents, naming of the estate, numbering of the houses, collection of capital development levies and ground rents as well as any other such charges that it may introduce from time to time. He further stated that for effective management of the estates, the parties to the deal have agreed to put in place sustainable facility management structures on completion of construction work, while they shall also decide and put in place sustainable facility management on agreed terms and conditions. The FHA boss said work had also reached advanced stages on the other partnership estates in Makurdi (Benue State), Yenagoa (Bayelsa State) and Awka (Anambra State), expressed satisfaction with the pace of work. According to him, each of the estates is supported by world-class infrastructure such as roads, electricity, independent water supply, street lights and drainages. Apart from Abuja where the FHA had secured about 1,000 hectares of land for a new town development, Gemade said the authority would in the next few months move to new locations across the country’s six geo-political zones with a view to taking housing to Nigerians wherever they lived.
Oyo targets 10,000 housing units in 3 years
O
YO State government is committed to delivering 10,000 housing units across the state within the next three years in the quest to provide decent housing for its citizens and help decongest the major towns in the state. Governor Abiola Ajimobi, who disclosed this at a Stakeholders’ Forum in Ibadan, said in line with the vision, work has already commenced on the construction 1,400 housing units along the Lagos-Ibadan Expressway under a publicprivate partnership (PPP) arrangement expected to deliver 200 units within the next nine months.
Ajimobi said on completion, the housing projects would ease the accommodation challenges of the people of the state, adding that a new town was also being created at Elenusonso area of the state capital where luxury houses would be built in conjunction with a private developer. “I can assure you that in the next three years, our administration would have completed nothing less than 10,000 housing units across the state and this will greatly help in decongesting our cities and in the provision of decent accommodation for our people,” he said. He charged the workers in
the state to cooperate with his administration to improve on the internally-generated revenue (IGR) profile of the state so that there would be enough funds to execute development projects after taking care of their salaries and wages. The forum was attended by representatives of various segments of the society including professionals such as engineers, surveyors, architects, professional builders, lawyers, traditional rulers, community and religious leaders, market men and women, as well as students.
BRIEFS Bauchi reviews PPP deal on mass housing
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AUCHI State government has reviewed the terms of memorandum of understanding (MoU) with private developers on mass housing development with a view delivering affordable houses to citizens of the state. Commissioner for Lands and Housing, Aminu Hammayo, who reiterated government’s commitment to providing qualitative and affordable houses under its current mass housing scheme, said the state government has embarked on direct construction of houses. “As part of efforts by the government to provide affordable housing to the people of the state, government was reviewing terms of development with private developers. The state government would provide infrastructure to the public on PPP and ensure better relationship with the Federal Ministry of Land, Housing and Urban Development and other intervention agencies,” he said. Hammayo further disclosed that 500 units of 2 and 3 bedroom houses are currently being constructed at Dungal by Terraquest Limited, in addition to 52 units of 2 and 3 bedroom houses by Laryx Limited.
Mortgage rates fall to another low VERAGE fixed mortgage rates in the US continued to fall to all-time record lows amid stalled consumer spending and manufacturing activity, Freddie Mac has reported. The 30-year fixed-rate mortgage averaged 3.62 percent for the week ending July 5, down from last week’s 3.66 percent. Last year, at this time it was 4.6 percent. The 15-year fixed-rate mortgage averaged 2.89 percent, down from last week when it was 2.94 percent. Last year, the 15year mortgage rate was 3.75 percent. “Recent economic data releases of less consumer spending and a contraction in the manufacturing industry drove long-term Treasury bond yields lower over the week and allowed fixed mortgage rates to hit new alltime record lows,” said Frank Nothaft, Freddie Mac Vice President and Chief Economist.
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Insurance BRIEFS Government announces flood cover initiatives
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he Federal Government of Australia has revealed more measures aimed at making flood insurance simpler and more effective following last year’s floods. From September the Government will publish quarterly data on the uptake of flood insurance, with the aim of increasing flood cover in the community. The new statistics will be based on Insurance Council of Australia (ICA) data and will give a state-by-state breakdown of the number of policies that include flood cover, as well as those that provide flood cover on an optout basis. “The data will be published as it is one of the many ways of reminding and prompting households to assess their risk and take appropriate action such as taking out flood insurance,” Federal Treasury said in a statement.
Commercial renewals show few signs of market hardening, say brokers
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ates on commercial insurance renewals at the end of the financial year can be best described as “patchy”, brokers say. Despite insurers’ best efforts to talk the market up, brokers said that on the whole, rate rises of any significance have failed to eventuate. “Patchy is the best word; it’s not been consistent,” JLT Australia and New Zealand CEO Leo Demer said. “Some businesses with lousy claims history got good renewals and others got hit pretty hard.” Bob Mann, Aon’s Head of Broking and Chief Broking Officer, Pacific, describes risk selection by insurers as “discerning” and the current market as “tempered”. “The rate increases insurers would like to get they just can’t get,” he said. He said there is little difference between SME, corporate and global business, with good risks attracting flat to single-digit increases across all sectors. “Some companies are trying to increase rates and other companies are actively chasing business,” broker Steve Hamill, the CEO of Brisbane-based Comsure, stated.
L-R, Managing Director, Shell Nig. Closed Pension Fund Administrator Ltd, Yemisi Ayeni; Chairman, Pension Fund Operators Association of Nigeria (PENOP), Dave Uduanu; Managing Partner, Brandzone Consulting LLC, Chizor Malize at the press conference organised by PENOP recently in Lagos.
How big operators can transform pension sector — Pen Op By ROSEMARY ONUOHA
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ith the coming into force in July 2004 of the Pension Reform Act 2004, a new pension scheme known as the Contributory Pension Scheme (CPS) was established to replace the previous Defined Benefit scheme, DBS. And as at July this year, the scheme has existed for eight years. Although the CBS is still battling with some teething problems, pension fund operators are of the opinion that what the pension sector needs is big Pension Fund Administrators, PFAs, and Pension Fund Custodians, PFCs, to effectively cover the entire country. According to the Chairman, Pension Fund Operators Association of Nigeria, PENOP, Dave Uduanu, the country needs strong pension fund operators so that they can adequately rule the market. Uduanu said “The pension sector needs big PFAs and PFCs to take up this market. Right now the sector is very small and fragmented. With ten big PFAs we will have a sector that will rather give comfort to contributors who are the owners of the money.” The CPS The CBS as the name suggests is contributory in nature and is mandatory for every employee in the Federal Public Service (including employees of the
Federal Capital Territory) and employees in all Private Sector organisations. Employers are expected to deduct 7.5 per cent of the employee’s total emolument and also provide a counterpart funding of 7.5 per cent to be remitted into a Retirement Savings Account, RSA, which the employee is expected to open with any Pension Fund Administrator (PFA) of his choice. This makes up a minimum of 15 per cent to be paid into the employee’s RSA. However both the employer and the employee may opt to fund the RSA above the mandatory minimum of 15 per cent. Employers may also opt to bear more than half of the mandatory minimum of 15 per cent. Challenges of the CPS Although the CPS is well regulated by the National Pension Commission, PenCom, the scheme is still facing some challenges. According to Idu Okwuosa of PenOp, one of the challenges of the CPS is that many employees are yet to register coupled with the fact that some employers fail to remit or default in remittance. Others are that more enlightenment about the scheme is still required as well as the fact that the five per cent of Federal Government monthly wage bill is insufficient to meet the outstanding pension liabilities. Government’s assistance In terms of how government
can assist in the development of the CPS, Okwuosa said that strict enforcement of the provisions of the PRA 2004 should be maintained, even as government should consider the option of instituting tax incentives to encourage participation in the scheme. According to her, the government should entirely phase out the non-contributory scheme as anticipated under the Act. Various arms of the sector It would be recalled that the National PENSION Commission, PenCom, regulate and supervise the scheme established under the Pension Reform Act 2004 as well as issue guidelines for the investment of Pension Funds. It is the job of PenCom to also approve, license, regulate and supervise PFAs, PFCs & other institutions relating to pension matters; Establish standards, rules and guidelines for the management of pension funds under the Act; ensure the maintenance of a National Data Bank on all pension matters; formulate, direct and oversee the overall policy on pension matters in Nigeria. The PFAs on the other hand oRetirement Savings Accounts, RSAs, for employees with Personal Identity Number (PIN) attached; invest and manage pension funds and assets in accordance with the provisions of the Act; maintain books of account on all transactions relating to
pension funds managed by it; provide regular information on investment strategy, market returns and other performance indicators to the commission and RSA holders; provide customer service support to employees; including access to employees account balances and statements on demand; pay retirement benefits to employees in accordance with the provisions of the Act. The PFCs rthe total contributions remitted by the employer on behalf of the PFA; notify the PFA within 24 hours of the receipt of contributions from any employer; hold pension funds and assets in safe custody on trust for the employee and beneficiaries of the RSA; on behalf of the PFA, settle transactions and undertake activities relating to the administration of pension fund investments including the collection of dividends and related activities; report to the Commission on matters relating to the assets being held by it on behalf of any PFA at such intervals as may be determined, from time to time, by the commission; undertake statistical analysis on the investments and returns on investments with respect to pension funds in its custody and provide data and information to the PFA and the Commission. According to Okwuosa, the CPS is user-friendly as the new system allows contributors access to their account balances through the internet and other technology driven platforms. It provides for efficient customer service and good investment returns; give employees the freedom to choose a PFA; is fully funded as well as enhances labour mobility. The CPS also has instilled a savings culture among Nigerians; provides for life insurance cover for employees; provides protective fund withdrawals modes as well as ensures that invested funds are secure. CPS impact on the economy On ways in which the CPS can impact on the economy, Okwuosa said that it has introduced a nation-wide mass savings culture, allowing PFAs accumulate assets that can be invested in financial markets with the potential to promote depth and liquidity in the financial markets which is critical to the success of any economy. Pension fund activities, according to her, are capable of inducing financial market development through their substituting and complementary roles with other financial institutions, specifically commercial and investment banks.
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have directed that henceforth, only cassava bread should be served in government house”. President Goodluck Jonathan As a demonstration of personal preference for cassava bread, the President is in order. And as the transient occupant of Aso Rock, he and Mrs Jonathan can eat whatever they choose. But, it is a grave error to mistake what is a personal preference for a sound national food policy. It is almost certain that cassava bread, as staple in the Presidency, will not outlast Jonathan himself. Viable agricultural and, particularly, food policies must be based on more than whims and caprices. My experience milling wheat flour and rice would suggest that the shift from wheat to cassava on a national scale is not feasible in the foreseeable future and any attempt to base food policy on it might be at best counter-productive; or, at worst disastrous. WATER “All life is water ” said the Greek philosopher, Thales, 640-540 B.C. Nigeria, we know is the world’s largest producer of cassava; mainly because Green Revolution techniques developed by Dr Borlaugh, for increased yield of wheat was extended to rice, maize and to some extent cowpeas and cassava. We also know that apart from fertilizers, herbicides and pesticides, most new varieties of
Mistaken notions about food policy – 1 (CASSAVA BREAD AS CASE STUDY) seedlings developed by the research institutes worldwide perform best when the water supply is controlled. Too much or too little water at critical times would invariably result in low yield or total crop loss. Our control of water supplied to crops is still primitive, for the most part. Nigerian farmers still largely depend on rain-fed agriculture; which is uncontrolled water supply. Despite our lead in cassava production, we are still far from achieving sufficiency in the product for the basic uses to which Nigerians put the crop. Even now, the price of the product, to the average consumer is still very high. One thing is certain; it has never been considered as a raw material for making bread. Nigeria, like most tropical countries and poor nations, had been contented to leave wheat growing to those countries which have the comparative advantage in growing that crop and whose research and development, as well as water control, place them light years ahead of us in the cultivation of wheat. Those with long memories will recollect our failed attempt under President Babangida to grow wheat in parts of
Northern Nigeria. It ended in dismal failure after consuming millions of naira. In fact resources which should have been used to grow rice or sugar cane or sorghum went into wheat with disastrous results. I was a rice grower and miller at the time. Bread remains the staff of life for billions of people worldwide and Nigeria as
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because they are actually often cheaper and more convenient to prepare and serve. But, price is key to the preference we have demonstrated for those food items. The question is why? And what would be the consequences to Nigeria if the massive shift to cassava bread, which government is promoting, succeeds. Perhaps, two reasons
Despite our lead in cassava production, we are still far from achieving sufficiency in the product for the basic uses to which Nigerians put the crop.
well; and wheat- based products – spaghetti, noodles etc are rapidly becoming another source of wheat based products which constitute our routine diet. Surely, there is hardly any home where they are not now available – especially in homes where there are young kids. We cling to wheat based products, not necessarily because we like then better than cassava based foods, but
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account for the price advantage enjoyed by wheat based products. First, is the low yield per hectare of Nigerian cassava compared to the yield of wheat in the nations producing the largest quantities of the crop. Second, farmers in all leading wheat growing countries are heavily subsidized by their governments; whereas our farmers do not enjoy any support; not for maize, or rice
and certainly not for cassava. Subsidised fertilizer, like fuel subsidy, has been a longstanding fraud by government officials. Consequently, the price of cassava is also correspondingly high compared with wheat. Obviously, if the price of cassava is higher than that of wheat, the price of cassava bread will also be higher than that of wheat bread. However, price is not the only impediment standing between us and the change to cassava bread on a massive scale. There are several other problems which have to be overcome before we arrive at our destination. The Minister of Agriculture, who introduced the product to President Jonathan, as well as the UTC Plc which is acting as the technical partner, have probably failed to fully inform Jonathan about the fine details – which are vital for success. None of our existing flour mills are equipped to mill cassava; they mill wheat, and with slight modifications, they might mill other grains (rice, sorghum etc). Cassava on the other hand is a tuber and the process of turning it to flour is quite different from that of grains. To get existing mills to produce cassava flour, everything from silos to conveyor belts will have to be replaced or modified. In short, we will have to build new mills to produce cassava bread on the same scale as we produce wheat flour now. The cost will run into trillions of naira.
BUSINESS & ECONOMY
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HE Senate President, Dr. David Mark, has said that he is unequivocally opposed to aid because of the unfavourable strings invariably attached to it. Speaking at the National Assembly and private sector Partnership forum organised by the Lagos Chamber of Commerce and industry (LCCI), he said government alone cannot provide all the needs of the people and that is there is need to look else where for development funding but that he is opposed to aid because of the unfavourable strings invariably attached to it, adding that there is no free launch anywhere. ”On the other hand, if we go the route of Public Private Partnership (PPP), it requires the support, collaboration and cooperation of private sector. I believe that PPP will will deliver more sustainable development solutions than most of the current development aid interventions we have in the country. This is
Foreign aid has unfavourable strings attached — David Mark By NAOMI UZOR principally because more attention will be given to sustainability and return on investments than the regular aid interventionists” he said. According to him, if the PPP is properly managed, many unemployed youths will be off the streets, children will have access to quality education; fewer rural dwellers will struggle to come to urban areas in search of white collar jobs and that it will introduce or increase mechanized agriculture in rural areas. He said another option for Nigerians, is to attract Foreign Direct Investments into the country, but must not seek just any kind of foreign investment. ”We want investment with a
difference; an investment that is humane, people-oriented, sustainable, symbiotic and not parasitic. We need investments that are not only focused on profit-making but also seek to
promote economic and social development in host communities and the country at large. Of no less significance is the fact that each of us in the National Assembly is elected by
the people from different communities and on different political platforms, representing different political views and perspectives.
FG establishes Nigerian National Competitiveness Council
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HE Federal Government has approved the setting up of Nigerian National Competitiveness Council to drive healthy competition in business. President Goodluck Jonathan announced the decision at the 12th meeting of the Honorary International Investor Council (HIIC) at the Banquet Hall of the Presidential Villa in Abuja. HIIC, coordinated by Baroness Lynda Chalker of Wallasey, was inaugurated in 2004 to attract global fi-
nancial players to the Nigerian economy. Jonathan told the local and international business moguls that make up the HIIC that creating the agency was in line with the recommendation of the World Economic Forum. “This council shall be the focal body responsible for creating awareness on national competitiveness in the country, It would coordinate the efforts of both the public and private sectors to improve Nigeria’s competitiveness,” he said.
Jonathan said the council would also recommend relevant policies and monitor and evaluate the progress being made at the national and subnational levels. The president disclosed that a bill, Competition, Anti-Trust and Consumer Protection Bill, would soon be forwarded by the National Council on Privatisation to the National Assembly for consideration. “These are all efforts aimed at improving the competitive landscape.
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Aviation Uproar as Freight forwarders reject illegal demurrage charges by Nahco Stories By LAWANI MIKAIRU & DANIEL ETEGHE
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ver 500 freight forwarders under the aegis of the Association of Nigerian Licensed Custom Agents (ANCLA) and the National Association of Government Approved Freight Forwarders (NAGAFF) last Tuesday defiled the heavy rain as they protest the increase of clearing fee allegedly imposed on them by the Nigerian Aviation Handling Company plc, Nahco at the Murtala Muhammed Airport Lagos. The protest is coming just two weeks after the agents had down tools following the plan by the Federal Government to evacuate them from the cargo village at the airport. Speaking at the Nahco office, Vice Chairman of ANCLA, Mr. Tope Akindele said that after the two weeks that the agents went on strike over the planned evacuation by the Federal Airport Authority of Nigeria (FAAN) , the Nacho officials came up with new charges on the goods which they already have in their warehouses claiming that they should pay for both the storage of the goods as well as demurrage. He further noted that Nacho was wrong to increase fees paid on
goods. The agents were paying N8,50k per kilo on goods but this has been increased by Nacho to N41,00 per kilo on goods and no justification for the increase. Also speaking, the Chairman of NAGAFF, Mr. Segun Musa said “what we are fighting for is not for our personal interest but for the interest of the generality of Nigerians and most especially the importers.The charges imposed on us by the Nacho officials will definitely affect and cripple the economy because most of these charges will bear on the goods after clearing and get to the market while the consumer will be at the receiving end of it all.” Mr. Musa further stressed that the charges imposed by Nacho on the clearing agents was not the problem but added that they did not have anything on ground to justify the money accrue to Nacho. He however noted that the Commissioner of Police Airport Command had gone into a close door meeting with the agents to see how they would resolve the matter with the Nacho officials. According to him,”what we are asking for now is for Nahco to give us a waiver for the two weeks that we went on strike and that is all that we want Nahco to do for us so we hope that by this week everything would have been resolved amicably”
FG should force local airlines to consolidate, says Pam
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or sanity to prevail in the aviation industry, the Federal Government must be ready to force all local airlines operating in the country to consolidate into five formidable airlines that can favourably compete with other airlines in the world as well as enhance safety. President of the Nigerian Aviation Safety Initiative ,NASI, Captain Dung Pam ,last week made the call following the ill-fated Dana Air plane crash that killed all 153 passengers on board at Iju-Ishaga area of Lagos. Captain Pam further stressed that for Nigerian aviation industry to be safe and buoyant, the Federal Government has a duty to regulate all the airlines economically even as they are force to merge together stressing that anyone that is not ready to merge should be left to die a natural death. He said”We need to do something to change what is happening in the aviation industry, one thing is still missing and that is accountability, so the Federal Government should compel these airlines not only to merge , but also to publish their financial account, their plans and expenditure on their website for people to see because there is no transparency in the system at the moment and that is really affecting safety. So the Federal Government should force the airlines to consolidate and give them good policies to enable them operate well because this is one of the major solutions to the numerous problems that we are facing in the aviation industry”. Asked what is the way forward for the aviation industry at the moment, Captain Pam said”The Federal Government should get the stakeholders together to form an
advisory council that is strictly made up of professionals who have enormous experience in the aviation industry to make plans and monitor it in a transparent manner as this will take us a long way if fully implemented” Captain Pam however pointed out that NCAA was also responsible for the rot in the aviation industry as the agency has relaxed in enforcing strict sanction against erring airlines which has given room for airline operators to cut corners. According to him, there is a problem with NCAA because if the agency cannot effectively monitor the airlines not only in the area of safety but particularly in the area of controlling them financially then that will impede the safety of the Nigerian flying public.
Aero commences flight operations between Uyo, Abuja
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ero Contractors, Nigeria’s leading regional airline, has announced that effective July 9, 2012, the airline will commence flight operations between Uyo and Abuja. The flight from Abuja to Uyo and Uyo to Abuja which will be operated with a Boeing 737 will depart at 12:45pm daily from either location. Captain Akin George, Aero Managing Director said “We are very excited to be launching these new routes and frequencies, which give our customers even more travel options to and from Uyo. In addition, the launch of these new routes and added frequencies further underscores the importance of our interest in the dynamic city of Uyo and our commitment to its growth.”
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Agric
Obasanjo calls for investment in agricultural research BY JIMOH BABATUNDE WITH AGENCY REPORTS
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igerian government and African nations have been urged to invest in international agricultural research by supporting the International Institute of Tropical Agriculture (IITA) to tap into the opportunities offered by the vast arable lands in the continent. Former Nigerian President, Chief Olusegun Obasanjo made this call weekend at an event marking the 45th anniversary of the biggest international agricultural research center in the continent, IITA.”This is an important institution for us in Nigeria and Africa and we need to support it.” Food insecurity and poverty remain on top of the agenda of African governments but not many of them have been able to meet the Maputo declaration of allocating 10 percent of budgets to agriculture. Obasanjo said that for Africa to maximize its full potential, the governments on the continent must support institutions such as IITA to acquire the technology and knowledge needed to create wealth. He said that Africa needed to think about the next generation as the population is expected to hit 9 billion by 2050. “The point is that the tools used 45 years ago are likely to be obsolete, unless we rejuvenate,” he said.
On the benefits of IITA to Nigeria in particular and Africa in general, Obasanjo said varieties from IITA helped save his farm and that of other farmers from the cassava mealybug pandemic in 1979. “My farm was heavily infested until IITA brought cassava-resistant varieties,” he said. According to him, at the moment more that 70 percent of improved maize varieties grown in Nigeria today have come from IITA-developed varieties. “We are lucky to
have the largest research institute in our backyard and we should take advantage of it,” he said. The president of the All Farmers Association of Nigeria, Senator Abdullahi Adamu, called on Nigeria to meet its statutory financial obligation to IITA. “As a Nigerian I will encourage the government to henceforth begin to meet its financial obligation,” he said. He pledged to initiate laws that would support research activities in Nigeria, stressing
that ‘research is a component of the value chain that demands attention.’ The Director General of IITA, Dr. Nteranya Sanginga, said rejuvenating the institution would be of benefit to Nigeria in particular and Africa in general. He said the battle of tomorrow will be food and water, explaining that IITA is well positioned to offer technologies that would improve agricultural productivity and create wealth. Of the 60 percent arable land on the continent, only 33 percent has been cultivated.
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he Growth Enhancement Scheme (GES) of the Federal Government , which is part of the Agricultural Transformation Agenda (ATA), has been described as a policy that can trigger a business-oriented agricultural investment and growth in the country. Agricultural Policy Research Network (APRNet) in a release made available to the press by its president, Professor Eric Eboh, said the vision, mission and strategy of the Agricultural Transformation Agenda (ATA) are well articulated and timely in the country’s quest for becoming among the topmost 20 economies by the year 2020. He added that ATA is sufficiently holistic, wide-
Lagos cassava flour processing plant ready soon 2, 000 square metre tomatoes green house too By Olasunkanmi Akoni s part of effort in boosting local production of foodstuff for its teeming populace, the Lagos Government disclosed that the ongoing construction of a cassava flour processing plant located in Araga, Epe Local Government Area would be ready for operation by November, 2012.Similarly, at Araga, a 2, 000 square metre green house that will produce tomatoes in large quantities, has been slated for commissioning in September, 2012.In the cassava sector of the Transformation Agenda, TA, a lot of work had also been done. The state government had delineated areas around Ikorodu, Epe and Ibeju Lekki axis as Cassava Production and Processing Belt (CPPB), where incentives for cassava production, processing and marketing would be concentrated. This, it was stated aimed at promoting employment, rural development and reduce poverty through the economics of cassava production.
Cassava growers target 44m tonnes annually Newly commissioned10,000 capacity Broiler House, Erikorodo Ikorodu (Day old Birds)
'GES can change the face of agro-business’ BY EGWIM MELVINE
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ranging. It contains integrated set of measures and policies to re-orientate and optimize the agricultural sector of the Nigerian economy. Eboh, a professor of Agricultural Economics at the University of Nigeria, Nsukka (UNN), added that the component features and design of the Growth Enhancement Scheme are good for solving the bottlenecks against private investments in agriculture, agribusiness and agricultural productivity. ”The fertilizer subsidy reforms are rightly addressing the lingering weaknesses and bottlenecks in the fertilizer supply chain. It provides the opportunities to improve efficiency, outreach and impact of the fertilizer subsidy programme. “The reforms of the
commodity marketing system and the proposed marketing corporations are a welcome development. For long, there has been absence of organized marketing for commodities, and it has impacted negatively on agricultural incomes and productivity” Eboh added “The fiscal incentives and investment promotion strategies (e.g. tariff realignments, tax holidays) enunciated under the Agricultural Transformation Agenda are pragmatic measures for improving the business environment for investments in agricultural value chains in the country. In particular, the Nigerian Incentive-based Risk Sharing Agricultural Lending Scheme is a significant boost for the agricultural financing and investment landscape in the country.” The Don described the
current value chain approach to commodity development adopted by the Federal Ministry of Agriculture and Rural Development as a welcome departure from past approaches which tended to be supply-driven, without commensurate strategies to develop market linkages. He said the use of staple crop processing zones to target value chain development is a widely applicable international best practice and should be pursued. Eboh called on the Federal government to pay more attention to human capacity development as a critical ingredient for agricultural growth and prosperity. He said, “main targets for human capacity development include policy implementers, farmers, service providers and farm managers. In particular, the capabilities of the Planning,
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hief John Okocha, the Chairman, Nigeria Cassava Growers Association, Rivers branch, during the week said the association planned to produce 44 million tonnes of cassava in the country annually. Okocha who made this known in an interview in Port Harcourt, Rivers, said the association would mobilise one million farmers to produce cassava nationwide and that those to be mobilised would include peasant farmers in the rural areas and youth farmers. He said that the young farmers would participate in promoting mechanised farming. Okocha said the planned production of 44 million tonnes of cassava in the country could be achieved because the association had keyed into the Transformation Agenda of the Federal Government. “Our intention right now is to produce about 44 million tonnes of cassava annually, Nigeria as a whole.
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ICT BRIEFS eTranzact lands PCIDSS certification
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n an apparent move to strengthen its stronghold in the card and e-payment industry eTranzact Plc, last week announced that it has been awarded the Payment Card Industry Data Security Standard (PCIDSS) Certification. The company said that the certification has proven its commitment to advancing security capabilities and willingness to reduce financial fraud on the electronic payment systems. According to the company, the certification, which it received last week, makes it the first licensed mobile money operator to achieve the PCIDSS. PCI DSS is a binding collection of due diligence practices that promote IT security. Its focus is to reduce financial fraud through heightened security capabilities built around the network, Data, Vulnerability Management practice, and the governance of IT processes. With the PCI DSS certification, eTranzact users would experience improved security on all payment channels such as ATM, Point of Sale (POS) terminals, mobile banking services, Pocketmoni services, and WebAccess.
Visafone fetes South-South, South-East with unlimited Talktime
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isafone Communications Limited has launched Visafone Blast, an unlimited voice offer with affordable tariffs for new and existing subscribers in the South-south and South –east regions. Visafone Blast is a prepaid package that allows customers in the South-south and Southeast zones to make unlimited Visafone to Visafone calls on low tariffs. The cities to enjoy the unlimited talktime package are Aba, Abiriba, Asaba, Awka, Enugu, Nnewi, Onitsha, Owerri, Umuahia and Uturu. Others are; Bonny, Calabar, Ikot-Ekpene, PortHarcourt, Sapele, Tinapa, Uyo and Yenegoa. MD/CEO Visafone ,Mr. Sailesh Iyer, said the launch of Visa Blast in these regions is in line with the network’s drive to bring communication nearer and more accessible and affordable to millions of subscribers.
WACS now carries traffic in Nigeria … powers MTN broadband, B2B solutions By PRINCE OSUAGWU
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igeria’s road to ubiquitous broadband regime is getting shorter. This is as the country has experienced additional broadband capacity from the level injected by MainOne , Glo1 and SAT3 submarine cables with the announcement that MTN facilitated West African Cable System, WACS, has started carrying traffic. MTN Nigeria, at the weekend announced that it has rolled out a bouquet of services running on the new ultra-high capacity submarine cable. The services according to MTN, are being rolled out and managed by MTN Business, a division of the company, focused on business-tobusiness solutions. The 17,200 km submarine cable system which MTN was said to have committed over $100m, takes its course from Europe through West Africa to South Africa. It has 15 established terminal stations along its route, including Ghana, Nigeria, Cameroon, Cote d’Ivoire, Republic of Congo and Namibia. Incidentally these are countries where MTN has roots. Although WACS services were made commercially available at launch in South Africa in May, 2012, Chief Enterprise Solutions Officer, MTN Nigeria, Mr. Babatunde Osho, at the weekend revealed that riding on the back of the cable system, the company would now be able to service broadband needs of both SMEs and large Nigerian organizations. According to him, “ we are now in a position to offer large organizations and SMEs reliable high capacity connectivity for all their needs. We have capacity to provide high quality, low latency internet access to wholesalers such as ISPs, Internet Bandwidth Resellers and Carriers, as well as endusers anywhere in the country.” Osho also said that WACS’ 15 landing stations along its route has put MTN in a vantage position to deliver International Private Leased Circuits to additional locations worldwide. He added that MTN has a unique advantage of a preexisting extensive terrestrial Internet Protocol (IP) and broadband backbone infrastructure, enabling the company to deliver high grade and highly-available Internet capacity to anywhere and everywhere in Nigeria.
For Osho, there is the belief that WACS would bring the much-needed boost to the growth of many businesses whose requirements for data have continued to be on the rise in the last few years, adding that the coming of WACS is yet another way of MTN keeping its promises. The West African Cable
System (WAC S) is a consortium of 11 network operators across 15 countries, including Telkom, Vodacom, MTN, Tata Communications (Neotel), Broadband Infraco, Cable & Wireless, Portugal Telecoms, Congo Telecoms (formerly Sotelco), Telecom Namibia, Togo Telecom, Office Congolais des Postes et
Telecommunications (OCPT) and Angola Telecom. But MTN is said to be the single biggest investor in the group. WACS connects South Africa with the United Kingdom along the West Coast of Africa, landing in South Africa, Namibia, Angola, the Democratic Republic of Congo, Cameroon, Nigeria, Togo, Ghana, Cote d’Ivoire, Cape Verde as well as the Canary Islands, Portugal and the United Kingdom.
•WACS route in a map
Time to move to technology-based planning, Amana tells FG BY EBUN SESSOU
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resident of the Nigerian Academy of Engineering, Dr. Edet Amana has used the opportunity of the academy’s Dinner/Technology evening held in Lagos recently, to call on Nigerian government to drop its focus on economic based planning and move to technology based planning. Amana said that the economy of the country has often been described as one which has seen some growth but little development because the growth is driven by oil production while sale is sustained by foreign technologies. For him the development is low because of the near absence of local indigenous technologies which is why he advocated for improved technological know how of the country as the only way forward. “ Te c h n o l o g y - b a s e d planning is now being used by China and India to make themselves superior. If we do
not adopt technology-based planning on our national economy planning, there would be little hope for Nigeria’s economic development”. Corroborating Amana was the COO of Commonwealth Te l e c o m m u n i c a t i o n s Technology, Mr Bashir Patel, who in his paper at the event, titled “Telecommunications Technology and Infrastructure: The Pivot of National Economic Advancement” said that
considering that ICT has changed the way people think, relate and do business globally, governments should also change the planning styles. According to him, “in the past 10 years, ICT has helped structural changes in telecoms markets through increased competition and market deregulations. There are also changes in services and users perceptions. So, there is every need for thorough technological evolution” he added.
Dr. Ernest Ndukwe, Mr. Bashir Patel, Engr. Edet Amana and Prof. Ogunye at the just concluded party by the Nigeria Academy of Engineers in Lagos.
Vanguard, MONDAY, JULY 9, 2012 — 47
Advertising, Media & Marketing
OYSAA, pushing Oyo outdoor for viable business environment Stories by PRINCEWILL EKWUJURU cademic studies agree that an ameliorative business environment enables entrepreneurial activity and boosts enterprise performance. So when businesses talk about the Outdoor advertising industry they talk about aesthetics and this means re-positioning, which brings about a relaxed business environment. That was why at the first stakeholders meeting organised by the Oyo State Signage and Advertising Agency (OYSAA) through its Director General, Mr. Yinka Adepoju, where he said, “you will agree that before now, the state of outdoor in Oyo State was nothing to write home about because of the indiscriminate way of erecting billboards which had little or no consideration for order, public safety and aesthetic beauty of the environment.” Going further, the Director General said that with the transformation and restoration agenda of the incumbent administration, it’s imperative that the face of outdoor practice through the length and breadth of the state will take a change. “We cannot continue with the haphazard erection of billboards and signs of all forms as it were.” Continuing, he said, “The deplorable state of many billboards and signs on our highways is something to worry about. We are not happy that a good percentage of billboard structures are displaying torn posters, some already dilapidated, broken down, while some are with faded posters.” To bring the state to its dream aesthetics, the Director General promised, saying OYSAA will ensure outdoor structures are compatible with surrounding land uses and environment and will further ensure the beautification of the immediate surrounding and vicinity of the advertisement is attained. “We will ensure that our streets are well lit by providing street light poles on all major roads within the state; control the pasting and display of posters and banners on public structures and highways.” According to him, “This thinking has already been demonstrated in the sanitasation exercise the agency had carried out in the last couple of weeks with focus on fallen billboards,
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•Gov Ajimobi badly positioned boards and illegally placed billboards in various parts of Ibadan.” Further, Adepoju said the agency will embark on enumeration of billboards
•Yinka Adepoju, DG, OYSAA and signs to determine what is left in terms of; First party signage, Second party signage, Third party signage, mobile and Kiosk adverts. The Oyo state Governor Sen
Abiola Ajimobi, while addressing the stakeholders said “apart from your weight credentials as major contributors to the economy of the state through the practice of your profession, you provide aesthetic contribution to the well being of the environment” “What your contribution has demonstrated is that you as stakeholders and the government are on the same page in the efforts at turning around the outdoor environment in the state for the benefit of all. He said the task of restoring the glory of state must be achieved and standards would not be compromised.” Ajimobi assured that OYSAA will continue to receive support from the government for thorough sanitisation and changing the deplorable landscape of the state.
AAAN calls for clear national direction through effective communication th rising from its 39 congress Advertising practitioners under the aegis of Association of Advertising Agencies of Nigeria (AAAN) has called for clear national direction as they push for a national agenda driven by effective communication. With the believe that such national agenda will contribute to shaping attitudes and behaviours of Nigerians, as obtainable in other nations, Mr. Jimi Awosika, CEO of Insight Communications, who spoke at the 39th congress of AAAN at Ibadan, Oyo State recently, said that as a nation,, Nigeria desperately requires a national agenda. The national agenda, he said will spell out what Nigeria want to become as a nation and it must be simple, iconic, believable and compelling and as well become the bedrock of policies, legislation and acts of government”. Speaking on the topic ‘engaging the nation constructively: He said that the role of strategic marketing communications, in national governance’, the agenda must therefore inform the adopted communication model, and drive consistent communication of the agenda. Continuing, Awosika said,”If there is one thing that Nigerians need to rediscover today, it is a sense of national pride and agenda that lifts the spirit. It must be the end
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result of the proper articulation and engagement of the Nigerian citizenry and it must be delivered across relevant communication channels, and consistently too”. He said further that the prevailing thinking among African leaders that they can continue to rule their countries as usual, no longer holds true as communication has always been, and will remain a powerful tool for effective leadership. The adverting expert said communication itself is a critical organ leadership must employ to engender followership as the premise of leadership is actually followership. To his colleagues in advertising and communication business he challenged them to turn their skills towards aiding the government in building the Nigerian brand. “This government needs
help to inspire the Nigerian Spirit again. Truly we are best positioned and equipped to help the government in this regard and stop being seen as those who are just publicity men, and nothing more”. Also speaking, past president of AAAN, Rufai Ladipo, acknowledged that agency role in national development goes beyond offering marketing communication services to the private sector. He said it extends to fully engendering proper understanding of government policies and revealing to the public ways by which they can participate and contribute to the growth of the economy. He said the critical objective of the association annual meetings is to evolve policies, articulate options and identify strategies for addressing national issues, particularly those that border on marketing communications and Nigerian economy at large
Left: Mr. Adewunmi Okubote, Regional Controller - Central Business Unit, Nigerian Breweries Plc presenting the prize of a brand new 32 inch TV to Mr. Attah Festus (right) in the on-going Legend Real Deal Promo
BRIEFS NB reward Legend Real Deal promo winners
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nother set of Nigerian Breweries Legend Real Deal promo winners have been rewarded for their participation in the going promo. From presentations so far, over 200 Blackberry phones and generator sets, as well as close to 300 TV sets have been won, while about 100, 000 recharge cards, as well as more than 6000 T_Shirts and Face caps have been won even as thousands of ATM cards preloaded with N5,000 as well as free drinks are won daily. Speaking on the promo, Mr. Funso Ayeni, Senior Brand Manager, Legend_Nigerian Breweries Plc., described the promo as one of the most successful in the history of the brand. “This promo goes to show why Legend is a strong player in the market. Indeed, it has been a resounding success and we are proud to say that it is one of the most successful promos in the life of the brand,” he stated. While explaining that the promo was conceived to reward loyal consumers of the brand, Ayeni stated that Legend stout would continue to evolve ways of reaching out to its consumers. “The whole point of the promo is just to say thank you. And we are not saying thank you to just anybody but to loyal consumers of this brand.
Police Chief laud Airtel for support to Lagos Police
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agos state Commissioner of Police Lagos State, Alhaji Umar Manko has commended Airtel Nigeria for partnering with the Lagos State Police Command to maintain peace and orderliness in the state. Manko who was speaking during a courtesy visit to the Chief Executive Officer and Managing Director of Airtel Nigeria, Rajan Swaroop at the Airtel Headquarters thanked Airtel for its support and assistance to the Lagos State Police Force, saying the Police values its cordial relationship with the telecommunications operator. “I value the relationship the Lagos State Police Command has with Airtel Nigeria _ that is why I decided to make Airtel my first place of courtesy call. Indeed, this is a testimony to the shared relationship with Airtel and I want to thank them for their assistance, thus far,” he said. Manko also urged Airtel to render more help in terms of mobile telecommunications partnership, saying this will go a long way in assisting the police deal with crime and other vices plaguing the society.
48— Vanguard, MONDAY, JULY 9, 2012
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Six new refineries hurray! But not yet Uhuru! M
any Nigerians believe that the ever-present challenges of fuel scarcity and subsidy could be conveniently resolved if new refineries are built, as national demand cannot obviously be met from the antiquated facilities available in existing government refineries. In recognition of this inadequacy, 23 licences for new refineries were approved by the authorities; 20 of these went to investors from the private sector, while the federal government and Chinese investors undertook to build additional refineries in Kogi, Lagos and Bayelsa States respectively. Surprisingly, no licencee has begun construction; initially, licencees decried the huge upfront start up fee requirement. Ultimately, the government reconsidered and accordingly reduced the fee in line with investors’ expectation; in spite of this concession, the investors still failed to show serious commitment; raising funds locally was obviously a problem, as bank interest rates of 20% and above would make borrowing for such a project a suicidal mission! On the other hand, much cheaper foreign loans required certain sovereign guarantees that government did not consider necessary. Other investors demanded a free market pricing policy that eliminated subsidies, as the uncertainty and time lag related to subsidy refunds could jeopardise the ultimate success of such ventures.
Over the years, fuel importation has risen above 80% of local demand, but government is unable to muster the will to consolidate funds for building new refineries, because of the poor performance and management of the existing ones. Incidentally, the huge import volumes also translated to controversial subsidy values of N1 – 2 trillion in 2011. Consequently, many Nigerians happily welcome the ‘Memorandum of Understanding’ (M.O.U.), between a partnership of a private United States and Nigerian company with the federal government. Under this M.O.U., six refineries would be constructed in modular forms within 30 months at a cost of $4.5bn; each refinery would process 30,000 barrels of crude oil per day; thus, the six refineries would process 180,000 barrels of crude oil with total output of 30 million litres of fuel produced daily. If extrapolations of international fuel consumption patterns are anything to go by, output from these refineries may just be sufficient to meet our domestic needs, and reduce any possibility of scarcity. We recall that a similar memorandum for sourcing of funds for the construction of three Greenfield refineries and a petrochemical plant was also endorsed with China State Construction Engineering Corporation
Limited In May 2011; regrettably, the Chinese are yet to move to site. In view of such antecedent, why should Nigerians be more confident this time around that the new memorandum would materialise in actual construction? Even though the Minister has assured cooperation with the Ministry of Petroleum Resources and the NNPC to ensure the actualization of the projects, the terms of the new M.O.U., endorsed by Segun Aganga, the Federal Minister for Trade and Investments, are not yet in the public domain. Nonetheless, the Nigerian representative of the consortium, Mr. Edozie Njoku, expressed their hope that government would be promptly forthcoming with the
for total export of their refined products, subsidy would be inapplicable, as the owners of the refineries would be free to export their output at more profitable international benchmark prices. Although such a scenario may be perfect for investors, it may not resolve our challenges of constant fuel availability, if subsidy remains in petrol pricing structure. According to Mr. Mansfield, the modular construction process for the refineries, , entails six months of construction work in the US, (including all piping and electrical work), one month for test-running and dismantling the refinery, another month for transportation to Nigeria, and four months to reassemble the plants and commence production. Regrettably, the local host communities for these refineries and domestic suppliers and contractors would enjoy little or no benefits from such modular construction process; as such contracts and related employment opportunities would be lost to the United States. Besides, most of the income from the successful operation of the six refineries may become domiciled in the U.S., with minimal impact on our exchange rate, reserves, employment generation and ultimately on our economy.
issuance of all necessary permits, while Jim Mansfield, the representative of the U.S. firm indicated that the funding for the project will be from a non Nigerian source! One may deduce there from, that the government has no equity in this project. It is not yet clear why the government singled out this new consortium instead of the 20 other licencees for a formal commitment. In other words, would similar M.O.Us. With the 20 previously licensed investors also have galvanised their actualization of the refineries? We do not also know if the M.O.U. included government commitment to allay concerns on the prompt payment of subsidy. Alternatively, if the terms of the M.O.U. allowed
SAVE THE NAIRA, SAVE NIGERIANS!
BUSINESS & ECONOMY
Groups partner to launch Nigeria Fast Growth 50 By CHINEDU IBEABUCHI HE Tony Elumelu Foun dation and the Allworld Network Inc. have announced the launch of the Nigeria Fast Growth 50 (Nigeria50). This is a pioneering effort to showcase and rank the most innovative and dynamic fastgrowth private companies in Nigeria. In a statement by the Foundation, the Nigeria50 project will give global visibility status to emerging companies in Nigeria that are contributing significantly to the economy. “Nigeria is soon expected to become the largest economy in Africa and is home to one-fifth of Sub-Saharan Africa’s population. With a 10-year
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track record of GDP growth at almost 9 per cent, it is increasingly becoming a destination for global investment. Information on Nigeria’s larger companies and conglomerates is readily available. “However, younger and smaller companies suffer from a profound lack of visibility. Yet this mediumscale enterprise sector is the engine of future economic growth, creating the next wave of employment and innovation, and driving the economy and fostering social and economic prosperity. Many smaller and dynamic companies, which may now only be employing 20 people, could grow to 200 or 2,000 if they had global visibility and investors,” the statement said. According to the statement,
the Nigeria50 will be published nationally and globally, giving visibility to emerging company stars, adding that with a spot on the list, companies will gain global recognition, a network of growth entrepreneurs and an invitation to the AllWorld Summit at Harvard University. The Nigeria50 application process is open to private companies in Nigeria who have been able to grow revenues 100 per cent or more in the past 3 years. To be eligible for the Nigeria50 ranking, prospective companies are expected to meet the following criteria:Minimum 3-year audited operating history with revenues/turnover of at least N80 million/$500,000 as at
2011; be an independent, private, non-listed, for-profit
corporation or partnership or proprietorship.
Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Yemi Adeoye Oscarline Onwuemenyi Franklin Alli Michael Eboh Amaka Abayomi Ebele Orakpo Ifeyinwa Obi
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Group Business Editor Acting Finance Editor Energy Editor Head, Capital Market Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Energy Correspondent Energy Correspondent Industry Reporter Capital Market Reporter Money market Reporter Energy Reporter Maritime Reporter
CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT
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Media/Marketing Industry Capital Market Graphics Department