SEPTEMBER 10, 2012
nd *The 52 AGM of Bank of Industry: MD/CEO, Bank of Industry, Ms. Evelyn Oputu (middle), BOI’s pro tem Chairman, Mr. Mohammed Dikwa of the Ministry of Finance Incorporated and the bank’s Secretary, Mr. Waheed Olagunju at the 52nd Annual General Meeting of Bank of Industry at the Transcorp Hilton Hotel.
Controversies trail NSE’s proposed delisting of companies
tantamount to destroying the market. According to him, “The NSE is poised to destroy the market through its obnoxious policies. Our group is set to sue NSE if it goes ahead to delist these companies. Delisting these companies is to destroy the efforts most of us are making towards attracting more investors to the market. We are calling on the Securities and Exchange Commission (SEC) not to approve such plan but to call the Exchange to order.” He suggested that rather than delisting the companies, the Exchange should try to find out their problems and offer useful management tips that will help the companies meet the post-listing requirements. “The NSE needs to encourage those that are already listed so as to attract new ones that have growth potentials.” According to him, “We, at PROSAN, have been spending our own money without government’s support to carry out enlightenment programme at the grassroots. Even at one of our enlightenment programmes, one investor who had invested over N2 million in equities threatened to withdraw his money from one of those Continues on page 18
162.00
+3.80
2,685.00
-6.00
19.23
+0.36
… Shareholders' group threatens to sue NSE
112.45
-1.04
94.94
-0.59
CURRENCY BUYING CENTRAL SELLING BY PETER EGWUATU ontroversies have continued to trail the proposed delisting of alleged moribund companies on the Nigerian Stock Exchange (NSE), even as Proactive Shareholders Association of Nigeria (PSAN) threatened to sue the NSE if it goes ahead to delist the firms. The NSE had announced its intention
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to delist nine companies that have not been meeting its post-listing requirements in November, 2012. To be delisted from the daily official list in November, this year, according to the NSE, are the shares of Aluminum Manufacturing Company of Nigeria Plc, Capital Oil Plc and W.A. Glass Industry Plc. Other companies are; Union Dicon Salt Plc, Hallmark Paper Products Plc, Nigeria Wire Industry Plc, Rokana Industry Plc,
Lennards Nigeria Plc and Udeofson Garment Factory (Nig) Plc. According to NSE’s notice to investors recently, the resolve to delist the companies was endorsed by its council on May 31, 2012, “due to their persistent non-compliance with the post-listing rules of the Exchange.” Reacting to the proposed delisting plan, Mr. Oderinde Taiwo of Proactive Shareholders Association of Nigeria (PROSAN) said the action is
DOLLAR 154.8 POUNDS 246.3487 EURO 195.2802 FRANC 162.0433 YEN 1.9692 CFA 0.2793 WAUA 235.2715 RENMINBI 24.4036 RIYAL 41.2723 KRONA 26.2026 SDR 236.3332
155.3 247.1444 195.911 162.5667 1.9756 0.2893 236.0314 24.4828 41.4056 26.2873 237.0965
155.8 247.9401 196.5417 163.0901 1.982 0.2993 236.7913 24.5621 41.5389 26.3719 237.8599
CBN Exchange rate as at 07/09/2012
18 — Vanguard, MONDAY, SEPTEMBER 10, 2012
Cover Story
Vocation and technical education – A key to improving Nigeria’s development (4) he focus is on the roles previously not seen as T of technology and fundamental for national vocational education in
Controversies trail NSE’s proposed de-listing of companies Continued from page 17 companies flagged off for delisting this year. “This is not good for our market. Furthermore, during our enlightenment programme in Ibadan where over 1,000 people were present, we even invited regulators to come and deliver speeches to the grassroots would-be investors but they did not show up. So, how is the NSE encouraging the existing shareholders? The NSE is just after the foreign investors; travelling round the world and spending investors’ money unnecessarily. It will be recalled that at the last public hearing by the National Assembly, it was noted that there was need for aggressive investor education and that is what the regulators should be doing.” In similar manner, the Chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, argued that delisting of companies would not improve the fortunes of the stock market. He said regulators should ‘first and foremost’ find out why these companies are defaulting in their respective post-listing requirements. According to him, “they should know what is wrong with these companies before
delisting them, but they don’t care what the companies are passing through; they care about money. They should go out and ascertain if it is government’s policy regime that is affecting these companies or whether there is any political interference and not to be in a haste to delist them because at the end of it all, we, the shareholders, will be the ones to suffer, not the Exchange. He further said, “Let us try to use dialogue to resolve issues of this sort and not making haste to delist companies. It is not encouraging at all.” In his reaction, the General Secretary, Independent Shareholders Association of Nigeria (ISAN), Mr. Adebayo Adeleke, said delisting had never been the best option and strategy to protect investors’ interest and encourage more patronage for the market. “Is delisting the best option and strategy? Has it yielded positive results? Has it ever helped Securities and Exchange Commission and the NSE in protecting investors’ interest? This is not the best to do at the moment when there is already apathy in the market. These companies should be encouraged at this moment in whatever form,” he stated. Meanwhile, the Chairman, Advancement of Rights of
Nigerian Shareholders, Dr. Farouk Umar, in an interview with Vanguard commended the move, adding that shareholders suffered losses during the global financial crisis due to failure on the part of the NSE to take proactive measure by delisting defaulting companies before the saga. Explaining further, Umar said, “I commend NSE. I am in full support. We wouldn’t have lost money. They have a time limit to tell shareholders, even NSE, what they are doing but they failed. If they are delisted, it means they have a problem.” The National Chairman, Supreme Shareholders Association, Mr .Owolabi Peters argued that majority of these companies lack good fundamentals. According to him, “Most of the companies are no more in operations while those that managed to survive have continued to record losses in their financials. “The way these companies are going, it is better for them to be de-listed. Most of them are not even producing again while others are not calling for yearly general meetings and these are companies where we invested our money. They are better delisted and anybody that has issues with them should sort him or herself out.”
development, or for the economic development, but for the school dropouts, and other social and political development within the nation and for individuals. Hallak (1990) argues that technology education is also linked to human resources development and that this has an impact on more than just economic growth, but also an impact on the wider development of individuals and societies. According to him, it contributes to: (a). Individual creativity,
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The Honourable Minister of State for the Federal Capital Territory (FCT), Oloye Olajumoke Akinjide (Third from Left) with the Chairman of Bwari Area Council, Hon. Peter Ushafa (right), during an inspection of farm projects of the Millennium Development Goals Project Support of the FCT Administration in Kuchibuyi and Guita Communities of Bwari Area Council.
enhancing entrepreneurial skills that will equip students for entrepreneurship education in Information and Communication Technology (ICT)-driven technological environment. The world has become globalized and the future prosperity depends on comparative advantage. This comparative advantage hinges on people and their technical or technological sophistication. Towards this, some crucial entrepreneurial and technical skills needed by the students in colleges of education (technical), polytechnics and universities to meet the trends in a global economy is analyzed. Technology education is to be considered as the key agent of technology development, either as a way of developing human capacity, increasing the shield work force for m o d e r n i z a t i o n , industrialization, environmental development or as a matter of personnel freedom, developing capability and empowerment. Technology education is increasingly recognized to be central to both the origins of technological development and challenges and to the prospects for successfully dealing with them (Alam, 2009). Decision makers at all levels, need timely, reliable access to knowledge generated by technology and technical education to introduce rational policies that reflect a better global understanding of complex technical, economic, social, cultural and article issues concerning the society, and our environment. Technical decision making and priority setting is an integral part of overall development planning and formation of technology development strategies. Above all, technology education is a human right and, as such, should receive priority in the allocation of national resources. It has become very necessary not to only keep technology education bound to the role of manufacturing skilled manpower but also to economic development and global economy. In Nigeria, technology education was
Towards this, some crucial entrepreneurial and technical skills needed by the students in colleges of education (technical), polytechnics and universities to meet the trends in a global economy is analyzed
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improved participation in the economic, social and cultural roles in society. (b). Improved understanding of an individual and heir respect for others, thus promoting social cohesion and material understanding (c) Improvement in health and nutrition. (d). Improved chances of economic development. (e). Improved technological development. (f). Socio-cultural change. (g). Democracy and equality (h).Ecological development/ quality of life (increasing people’s awareness of their environments). From our analysis so far, it is clear that modernization and economic development, depends on investment and appreciation of modern trends in technology education.
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 19
Last week, this column carried an article titled “CBN currency redesign move is self seeking, no foreseeable gain”. There were several reactions. Today, we bring you one of those reactions. We believe the reading public has right of reply.
By KINGSLEY OMOSE
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he announcement by Sanusi Lamido Sanusi that the Central Bank is to introduce a new N5,000 note and make changes to the security features in all the existing denominations, has been attracting a lot of negative comments with the Senate Committee on Banking coming out with a directive to the CBN to halt the policy, while the House of Representatives has summoned Sanusi to come and brief it further on the move. However, to introduce a cashless policy limiting individual cash withdrawal or lodgement in banks to N150, 000 and then initiate changes in features of all currencies in circulation while introducing a new N5,000 note, means a deadline will be given within which hoarders of cash outside the banking system have to trade their old currencies for the new ones, which they can only do through banks and the cashless policy will be waiting for them. SLS’s objective in using the intending changes to be made in the features of all our existing currencies and using the introduction of the N5, 000 as a sweetener, is to bring all the cash outside the banking system to the deposit money banks thus effectively forcing the informal sector of the Nigerian economy to embrace banking and merging the formal and informal economies. To be mostly affected will be hoarders and dealers of huge cash outside the banking system who will now be forced to bring their cash to the deposit money banks, and when they are restricted by the cashless policy to depositing N150,000 a day, we are going to witness a mad dash to the banks by holders of huge cash, that will be more chaotic than
Lamido Sanusi’s Trap
when Buhari and Idiagbon effected a currency change policy in 1984. The changes in the national currencies implemented by Buhari and Idiagbon, and the short time frame given for the exchange of the old notes for new ones caused massive disruptions to the economy as companies and Nigerians rushed to banks to beat the deadline, and we witnessed massive Naira flowing into Nigeria from different parts of the world, including briefcases from Saudi Arabia. Also to be severely affected by the new policy on changes to the Naira will be millions of Nigerians in the informal sector, which is over 60 per cent of the Nigerian economy, who do not have bank accounts or have never done any banking transactions before, whose fates will be sealed unless conscious and deliberate efforts are made by the Central Bank and deposit
money banks to mobilize them to embrace banking to avoid being cut off from the new singular Nigerian economy that is soon to emerge. With the massive inflow of cash into the deposit money banks that the trading of old currencies for new ones will engender, the introduction of a new N5,000 note is to ensure that the banks are not buried under mountain loads of cash and moderate the cost of handling cash so as not to introduce another demon that will shackle the banks while attempting to solve an existing problem. It is not difficult to imagine what changes the cashless policy and the new policy on changing all our currencies and introducing a N5,000 note will make, especially when the formal and informal sectors of the economy have been merged. All the cash outside the banking system have been deposited with the banks,
Nigerians of 18 years and above now having bank accounts, and the cashless policy is fully implemented across Nigeria. Guess who already has access to view banking transactions and details of bank customers? You guessed right, CBN, EFCC and ICPC, meaning that it will now be easy to track down those with huge bank deposits who cannot explain why they have such huge funds in their accounts (elected politicians and public/civil servants), it will also be easy to track banking transactions of dubious nature and to have records of financial infractions making it easy to prosecute wrong doers. Federal, state and local government tax authorities and agencies will also have access to the banking records and transactions of Nigerians and their businesses, effectively making it easier to
access their true net worth for taxing and other purposes that will in turn generate trillions of Naira for government at all levels which explains why the policy on issuing tax identification numbers to all eligible tax payers is already in place. My counsel to those who are sitting on mountains of cash in their respective homes or offices is to begin immediately to pay in these monies into their various bank accounts so as not to be caught with their pants down when this new policy is implemented despite the protestations and the best efforts of the National Assembly to halt, limit or slow down this train that has already left the train station. My admonition to the tens of millions of Nigerians in the informal sector of our economy is to begin immediately to open bank accounts with deposit money banks, and even better, register business names and incorporate companies to give recognition and identity to their businesses and make them more compliant for the inevitable changes that are coming. Ultimately, the gains of these new policies being implemented by Sanusi Lamido Sanusi outweigh the pains as increased accountability and transparency is injected into the Nigerian economy. That signals our desire to be key players on the world stage, but great effort must be made to carry all stakeholders along, especially Nigerians in the informal sector to reduce to the barest minimum, the pains of transiting to the formal economy. *Kingsley Omose, a Public Affairs analyst, writes from 25 Warehouse Road Apapa.
BUSINESS & ECONOMY Agric Devt: FCTA provides N250m revolving loan for farmers
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he Federal Capital Territory Administration (FCTA) has provided about N250 million community empowerment agriculture revolving loan for 385 poor communities across the six Area Councils of the FCT. The Honourable Minister of State for FCT, Oloye Olajumoke Akinjide, disclosed this while on inspection tour of farms in Kuchibuyi and Guita communities of Bwari Area Council and meeting with farmers in the two communities. The Community Empowerment Agriculture
Initiative is the Millennium Development Goals (MDGs) Project Support of the FCTA under the Department of Economic Planning, Research and Statistics (EPRS). She disclosed that the sum of N60 million was provided in 2010 in the community empowerment agriculture loan scheme, N120 million in 2011 and N60 million in 2012. Of the N250 million available for farmers, including women and youth, the sum of N120 million has been accessed by the beneficiary communities through four Micro-Finance
Banks (MFBs). The MFBs include: EWT Microfinance Bank, Fims Microfinance Bank, Hasan Microfinance Bank and Credit Link Microfinance Bank. ”We are supporting the poor and rural communities through capacity building in modern farming techniques and agricbusinesses to address the issues of poverty, unemployment and gender equality among the rural populace, thereby improving their income and quality of life. This initiative started with 60 communities across the six Area
Councils in 2010 and by 2011, the initiative was scaled up to 180 communities with FCT UNDAF II supporting 60 communities. Presently, the scheme is in 236 communities across the six Area Councils and the remaining communities will be covered before the end of 2013,” said Akinjide, who supervises the FCT MDGs Project Support of the FCTA. The EPRS Director, Ari Mohammed, said the scheme was designed to boost agricultural production, create employment and
reduce poverty in the FCT. He stated that under the scheme, agricultural inputs such as tractors, improved seed, pesticides and fertilizers are provided for the communities for cultivation while extension workers are also deployed to the communities to supervise the various stages of production. “The scheme will help promote value addition technology in agro processing, packaging and quality control and also revitalize the rural economy in these communities,” Mohammed said.
20 — Vanguard, MONDAY, SEPTEMBER 10, 2012
Business & Economy BRIEFS Fuel scarcity to persist till January, 2013 —OIL MARKETER By ABAYOMI ADESHIDA n oil marketer has implored Nigerians to brace up and be prepared to live with the occasional scarcity of petroleum till the new year, even as he insisted that the approach of the Federal Government to the problem of distribution of products in the country is not the best for the masses. The marketer who spoke to Vanguard on a condition of anonymity disclosed that though petroleum marketers are businessmen and women trying to maintain their businesses, they feel the pains and losses Nigerians suffer due to the problems associated with the scarcity of products, especially petrol. According to the source, “Nigerians should just be prepared to live with this problem of occasional scarcity and return of long queues at fuel stations across the country till January next year. “There are issues on ground and the authorities are aware that the earliest time the clog can be cleared is by January 2013.
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AABSDP confab holds today
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LL is set for the 17th conference of the Association of African Banknotes and Security Documents Printers (AABSDP ) billed for the 9th th 12 September, 2012, in Lagos. The conference with theme, The Use of Cash in Africa and its Integration with Mobile Payments, will be declared open by the Central Bank of Nigeria’s Governor, Malam Sanusi Lamido Sanusi, who is also the Chairman of the association. Over 20 exhibitors and 200 delegates are expected from 50 countries, just as hot-topic conference papers will be presented in the areas of payment platforms in Africa; mobile payments, identification, banknote design and automation. African Banknotes Security Documents Conference, the largest exhibition and a highlevel Security Print in Africa is a forum where operators will meet, interact and discuss with key industry players with a view of harmonizing payment platforms in Africa.
NPA, terminal operators move to appeal new Lagos traffic law By GODWIN ORITSE
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HE Nigerian Ports Authority (NPA) and terminal operators have commenced moves to appeal the new traffic law passed by the Lagos State Government restricting the movement of articulated vessels to certain destinations. At a meeting with some terminal operators recently, NPA’s General Manager in charge of Western operations, Alhaji Mohammed Bulango, asked all operators of terminals to provide details and figures of container delivery before the law came into effect. Already, the terminal operators are counting their losses as a result of the new traffic law as containers do not leave the ports until certain hours of the day and the development has brought about congestion at the various ports in Lagos. Speaking to Vanguard on the development, Mr Emmanuel Ogbor, said that terminal operators are already collating the delivery data and gathering all necessary document with which to tackle the state government over the traffic law which they described as obnoxious. Effort to speak with the President of the Seaport Terminal Operators Association of Nigeria (STOAN), Princess Nikky Hastrrup, was abortive as she was said not to be in the office. STOAN spokesman, Mr. Bolaji Akinola, however, condemned that law, saying that it is inimical to the
progress of not only the ports, but the nation’s economy. It would be recalled that a seasoned freight forwarder and logistics expert, Mr Lucky Amiwero, had told the Lagos State House of Assembly that the move to restrict the movement of containers in and out of the ports was tantamount to bringing the nation’s economy to a halt. Besides Amiwero’s opposition to the law, the National Union of Road Transport Workers (NURTW) had also kicked against the law and have been discussing with government on how best
to manage the situation. Although the new law restricts the activities of members of the National Union of Road Transport Workers to their offices, and forbids the extortion of money from commercial vehicle operators in Lagos, investigations show that the law has not stopped gangs of extortionists at nearly every bus stop in Lagos, as this group of people still operate in different parts of the metropolis unchecked. At Onipanu Bus Stop, some members of the NURTW in uniform were seen operating
outside their offices, collecting levies, and forcefully selling tickets to commercial bus drivers. A similar scenario replayed in Fadeyi and Ikeja areas where touts were busy extorting money from bus drivers. Some commercial motorcyclists popularly called okada riders, have asked a Lagos High Court in Ikeja to void a section of the new Lagos State Traffic Law prohibiting their operations on major highways. The plaintiff, through their counsel, Mr. Bamidele Aturu, filed the suit under the aegis of Incorporated Trustees of All Nigerians Autobike Commercial Owners and Workers Association.
*From left: Hon Olaitan Ogidan, Chairman, Lekki LCDA; Dr. Olajide Ayinla, Value Chain Leader, Fishery, Federal Ministry of Agriculture; Senator Bareehu Gbenga Ashafa, Special Guest of Honour and Prince Gbolahan Lawal, Hon. commissioner for Agriculture and Cooperatives during the distribution of complete fishing gear for the people of Orimedu Beach, Ibeju Lekki on Thursday in the on-going Artisanal Fishing Inputs service delivery programme by the Lagos State Ministry of Agriculture and Cooperatives. Photo by Lamidi Bamidele
Consumer Protection Council resolves 2, 760 complaints By FAVOUR NNABUGWU
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he Consumer Protection Council (CPC), said that it has resolved a total of 2,760 complaints brought to it by different consumers between January and June. CPC disclosed that a total of 3,550 complaints were resolved in 2011. The complaints, according to the agency, were lodged by endusers of goods and services in various sectors of the economy. The resolved complaints were captured in the document entitled; Data of Sectorial Analysis of Complaints resolved by CPC for the first half of 2012. The analysis of complaints resolved were classified into
various categories which include: telecommunications, financial services, health, food, alcohol and beverages. Others are aviation, road transport, automobile, education, broadcast, land, electricity, electronics, accommodation and rent, general products and general services among others. According to the data, financial services sector recorded the highest complaints with 339 in the first six months of the year compared to the 475 that was recorded in the first half of 2011. This was followed by electronics which had a total of 292 complaints in the first half of this year as against 253 recorded in the first half of 2011.
The number of complaints on telecommunications services and products during the period under review was 209 compared to 144 recorded last year. Aviation had a total of 184 complaints in the period under review compared to 139 recorded in the first six months of 2011. In the data, general products, general services and food, drinks and beverages had 114,113,113 complaints in the first six months respectively as against 141, 16 and 53 recorded in the first six months of 2011. In the first half of 2012, accommodation/rent, education, road transport, health had 42, 42, 20 and 7
complaints compared to 71, 29, 4 and 3 in the period under review. Other classifications include: automobile, utilities, and other unclassified areas which recorded 50, 31 and 1,111 complaints respectively between January and June this year compared to 37, 16 and 198 recorded in the first half of 2011. However, Broadcast and land which recorded 40 and 24 complaints respectively in 2011, had yet to record any complaint this year. Ifeyinwa Umenyi, DirectorGeneral, CPC, while commenting on the data, said the number of complaints recorded showed that consumers were beginning to assert their rights.
Vanguard, MONDAY, SEPTEMBER 10, 2012— 21
Banking & Finance
*From left: President and Chairman of Council, Institute of Directors (IoD), Nigeria, Architect Thomas Awagu; Hon. Minister of Trade & Investment, Mr. Olusegun Aganga and Legal Director, British American Tobacco West Africa, Mrs. Sade Morgan at the Institute of Directors, Nigeria Advocacy Roundtable Forum on Cost of Doing Business, held in Lagos.
Nigeria’s economy at risk over composition of reserves — Analysts BY MICHAEL EBOH & RITA OBODOECHINA
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he increased composition of foreign portfolio investment in Nigeria’s foreign exchange reserve buildup will put the economy of the country at risk and leave the country vulnerable to volatility in the global financial markets, according to analysts at Asset and Resource Management Company Limited, ARM.
The Analysts, in their Economic Update for the month of August 2012, also stated that if the trend continues, the Nigerian economy will be exposed to the ever-changing market perceptions, especially about socio-political stability in the country. The analysts are also of the view that the country ’s inclusion in the JP Morgan Government Bond Index would likely alter the bond
market dynamics and outlook significantly. According to the analysts, based on the criteria for inclusion, the 2017 bond could become a strong contender after the implementation of the bond switch programme, especially as Nigeria’s yields significantly exceed the benchmark’s 5.8 per cent average, which suggests that it could attract capital inflows that are likely to be
disproportionate to its 0.59 per cent or $1 billion capitalisation weight in the index. “Moreover, along with more stable currency outlook and a rally in the country ’s Eurobond to an all time low yield of 4.84 per cent at the end of August, this development points to a much stronger impetus for overall bond yield declines and could substantially alter market outlook in the medium term,” the analysts declared. In their analysis for the month of August, the analysts said, “Sustained high energy prices and an increase in volume of oil exports with its attendant accretive value on foreign reserves, which grew by six per cent from the end of July to $38.6billion over August 2012—has seen the official exchange rate remain flat at N155.5 to a dollar through half year 2012. “At the interbank, the naira appreciated by two per cent from N160.74 to the dollar at the end of July to close at N158.1 to the dollar as at the end of August, but had been subject to significant bouts of volatility with changing energy price and global investment outlook. “Official market sales dipped over the three week period supported by increased autonomous supply to the interbank market. Reuters’ reports that this supply is as a result of foreign investor purchase of Nigerian debt which we believe is linked to the country ’s inclusion in the J.P Morgan bond index. “However, we are also of the view that increased autonomous supply reflects a shift away from speculative bets on the naira among local institutions in view of improving crude sales—and dollar revenue outlook. “We believe market expectations for the naira on this basis should remain positive into the medium term.”
ABCON warns against patronage of illegal BDCs BY MICHAEL EBOH & NKIRUKA NNOROM
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ssociation of Bureaux De Change Operators of Nigeria, ABCON, has warned Nigerians against patronizing illegal and roadside Bureaux De Change, BDC, saying that people who patronize these illegal BDCs, risk losing their money. According to a statement by ABCON, signed by its President, Mr. Emmanuel Balogun, licensed BDCs don’t operate on the streets but in offices known and approved by the Central Bank of Nigeria. He said people who operate
illegally in areas heavily populated by licensed BDCs are fraudsters and are not licensed by either the CBN or ABCON. Balogun disclosed that the CBN regulation mandates BDCs to operate only in designated and recognized offices and makes it illegal for any BDCs to operate from the streets or on the roadside. He, however, warned licensed BDC operators to ensure that no individual is allowed to loiter around their business premises. He said, “In recent times, we have received reports of people duped by fraudsters who pose on roadsides as
BDC operators. “We want to categorically say that these fraudsters, who usually operate in areas with heavy population of licensed BDCs, are not licensed by the Central Bank of Nigeria (CBN) and ABCON. “Licensed BDCs are mandated by CBN regulation to operate only in designated and recognised offices and they must notify the apex bank and ABCON whenever they change office location. “Consequently before the CBN and ABCON license any BDC, their officials visit and inspect the proposed office of the BDC and ensure it has and comply with all the
administrative and security measures requirement stipulated in the operating guidelines of BDCs. “Also by extension of this requirement, it is illegal for any licensed BDC operator to operate or transact business on the streets or by the roadside. “This requirement is mandated by the CBN in recognition of the fact that the BDC business, like every business activity is vulnerable to the activities of fraudsters, who may want dupe unsuspecting members of the public under the pretence of rendering that service.
BRIEFS Big banks weigh risks, rewards of California’s new CO2 market ajor banks are weighing whether to wade into the California carbon market, which experts believe could grow into a $40 billion a year market by 2020, but one that is also loaded with risk and uncertainty. Following last week’s successful test of the state’s auction platform, the reality is starting to settle in: California carbon trading has overcome legal and political challenges to position itself a mere 10 weeks away from its first official CO2 permit sale. The carbon market’s success or failure will sway U.S. environmental policy for years to come, and early-moving Canadian banks like Bank of Nova Scotia (Scotiabank) and the Royal Bank of Canada, as well European banks like Deutsche Bank and Barclays, could play a critical role in that outcome. Banks facilitate the purchases and sales of carbon credits for their clients, advise company executives on how to keep their costs down, and ultimately help them meet their environmental goals. But so far, most brand-name investment banks have either kept their distance or already walked away, wary of pumping precious capital into the nascent market, especially in light of their tumultuous experience in the European carbon market.
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Carlyle to buy Cogentrix from Goldman rivate equity firm, Carlyle Group (CG.O ) said its $1.4 billion infrastructure fund agreed to buy U.S. power plant developer Cogentrix Energy LLC from Goldman Sachs Group Inc (GS.N ). Terms of the deal, which is expected to close in the fourth quarter, were not disclosed. Carlyle, the world’s No. 2 alternative asset manager, has been exploring a new initiative for energy investments and using its other funds to invest in the sector after it ended its energy funds joint venture with Riverstone Holdings LLC. The transaction includes significant ownership stakes in coal-fired power plants in Jacksonville, Florida (Cedar Bay) and Hopewell and Portsmouth, Virginia; solar power facilities in Daggett, California (Sunray), and Alamosa, Colorado.
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22 — Vanguard, MONDAY, SEPTEMBER 10, 2012
Corporate Finance BRIEFS Dollar falls on weak U.S. jobs report, shares trim gains
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he dollar fell and U.S. stock futures lost ground after a smaller than expected rise in nonfarm payrolls for August ,last weekend, dented a rally in risk assets that followed the European Central Bank’s new plan to tackle the region’s debt crisis. Nonfarm payrolls increased by 96,000 last month, compared with forecasts for 125,000 new jobs, while the unemployment rate dropped to 8.1 percent from 8.3 percent in July, raising expectations that the U.S. Federal Reserve might be pushed into easing monetary policy. The greenback fell to 80.48 against a basket of major currencies .DXY from around 80.7 immediately before the data emerged, and reached a four-month low against the euro, which was up over 1.1 percent at around $1.2767. “Last weekend report suggests that the economy isn’t strengthening so certainly builds the case for QE (monetary easing,” said James Knightley, senior economist at ING. The futures market pointed to a mixed start on Wall Street after the data, with S&P 500 index futures up 1.3 points, the Dow Jones industrial average futures flat and Nasdaq 100 futures down 1.75 points.
Gold teeters above $1,700 per ounce after ECB bond plan
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pot gold was higher last weekend, on news of the European Central Bank’s plans for a potentially unlimited bond-buying program although positive U.S. economic data tempered bullion’s gains. While holding just above the key $1,700 an ounce mark, bullion was knocked off sixmonth highs by jobs data that signaled a tentative improvement in the U.S. labor market. Payrolls processor ADP said the U.S. private sector in August added the most jobs since March and a separate report from the government showed jobless claims fell last week. Signs of a stronger economy could weaken the case for a third round of quantitative easing by the Federal Reserve and derail the rally that has pushed gold up 8 percent since mid-August.
WONDER BANKS: Onitsha investors lament ordeal, seek SEC’s intervention BY PETER EGWUATU
I
nvestors in Onitsha, Anambra State, have continued to lament their ordeal with wonder banks in which millions of naira was illegally collected from them under the pretence of investing the money in private placement. The Onitsha investors who were at the Securities and Exchange Commission (SEC)’s investors’ outreach held in Onitsha city recently, after narrating their experiences called on the Commission to intervene and bring the fraudsters to book to enable them recover their money. While narrating their ordeal with the wonder banks, the investors who were mostly traders said, “For over three years that we invested our funds in one of the illegal fund managers, named Mega Assets Limited, we have not received any information from the company. Our money running into millions of naira is still hanging and no dividend or any other forms of returns have been paid. However, we have gone to the company’s office and behold the place was locked with keys and nobody could be traced. “So when we heard that SEC was holding an investors’ outreach, we came to narrate our ordeal and see how the Commission can help us to recover our money. Now we were told that the Mega Asset was not registered with the Commission. How can we invest money in the Nigerian capital market when we don’t know the outcome of the former one we invested? they queried. While responding to the plea of investors for SEC’s intervention, DirectorGeneral of SEC, Arunma Oteh warned the Onitsha investors not to patronize non-registered capital market operators to execute their investment needs. She noted that the total claims against the wonder bank had risen to N106 billion, and warned investors to be wary of people who come to them offering mouthwatering returns that are not tenable. The Director-General, while giving the warning at an investors’ outreach in Onitsha recently said, “The Commission does not recognise non-registered capital market operators who
,
Arunma Oteh, D-G, SEC
If you want to invest in the mutual funds make sure you verify from the Commission if such operator is duly registered
,
they don’t have their track record and may not be able to prosecute in case they go against the rules and regulation guiding the capital market. According to the DirectorGeneral, “Investors should patronize registered capital market operators that are duly registered by SEC, Nigerian Stock Exchange (NSE) and also are licensed by Institute of Chartered Stock Brokers (CIS). If you want to invest in the mutual funds, make sure you verify from the Commission if such operator is duly registered. Just visit our website to know if such operator is registered or come to our office either in Onitsha or Abuja. The Commission had in the past issued public notice, warning investors on the activities of wonder banks. The problem with some of the investors in Onitsha is that you don’t read newspapers. You should spend little money to read papers on daily basis so that you can get information about businesses in which you had invested millions of naira.” Continuing, she said, “The SEC is the apex capital market whose primary role is to regulate and develop the market. It has responsibilities
to protect investors and that is why we are advising them to patronize registered capital market operators that we can easily apprehend whenever they defraud investors or commit other malpractices. We have dragged some of them to Investment and Securities Tribunal (IST) so that they can be punished for defrauding innocent investors.” While explaining the fraudulent practices in the country, she said a Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organisation. In her words, “Ponzi schemes usually attract new investors by offering higher returns, in the form of shortterm returns that are either abnormally high or unusually consistent. The perpetration of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going." She revealed that the Ponzi scheme is otherwise known as Wonder banks in Nigeria, noting that since early 1990’s illegal investment scheme
had continued to exploit the naivety of investors, in their quest to become instant millionaires. She further told investors who were victims of the wonder banks, “The SEC will try to see if the fraudsters will be apprehended because the Commission is there to protect investors, though by the Investment and Securities Act law, the SEC regulates only registered operators in the market.” For investors whose shares were illegally sold by registered stockbrokers without their consent, Oteh advised them to make formal complaints, stressing that the Commission will ensure they are restituted. Meanwhile, the Chairman, Consolidated Shareholders Association of Nigeria, Barrister Arinze Anyiwo, who spoke on behalf of the investors, commended Oteh and her team for the investors’ education brought to Onitsha. According to him, “This is an eye opener for investors in this region. For me, I have been in the capital market and benefited immensely. My mentor in this business is the late Akintunde Asalu who started investment in shares while at school in Kings College. So I am encouraging everyone of us including the children that just concluded the quiz competition organised by the Commission as part of its enlightenment programme, to patronize genuine operators and to join shareholders’ association so that collectively, we can tackle issues whenever they arise. “
1.33
1.19 5.52 0.76 5.81 33.86
26.25 7.21
Livestock/Animal Specialities Livestock Feeds Plc
CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc SCOA Nigeria Plc Transnational Corporation Chellarams Plc UACN Plc
CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc
38.50
6.49 4.40 52.00 1.99 4.90 0.60
16.65 525.06
10.03 36.19 3.01 2.88
23.98 35.24
7.70 0.64 0.57 2.68 10.25 1.30 0.50 13.05 3.00 17.53 1.07 0.70 1.15 2.65 0.88 6.44 1.01 4.29 5.00 0.50 0.50 15.48
0.50 0.58 0.50 0.50 0.50 1.30 0.50 0.56 0.50 1.55 0.50 0.51 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 0.50
0.50 0.50
0.50 2.02 0.50
Beverages-Non-Alcoholic 7-UP Bottling Company Plc
Food Products Dangote Flour Mills Plc Dangote Sugar Refinery Plc Flour Mills Nigeria Plc Honeywell Flour Mill Plc National Salt Co. Nig Plc UTC Nigeria Plc
Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc
Household Durables Beta Glass Co Plc Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc
Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc
FINANCIAL SERVICES Banking Access Bank Plc Afribank Nigeria Plc Bank PHB Plc Diamond Bank Nigeria Plc Ecobank TRANSNATIONAL INCORPORATION Fidelity Bank Plc FinBank Plc First Bank of Nig. Plc First City Monument Bank Plc Guaranty Trust Bank Plc NPF Micro-Finance Bank Plc Intercontinental Bank Plc Oceanic Bank International Plc Skye Bank Plc Spring Bank Plc Stanbic IBTC Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc
Insurance Carriers, Brokers and Sector AIICO Insurance Plc Continental Reinsurance Plc African Alliance Insurance Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guaranty Trust Assurance Plc Guinea Insurance Plc Intercontinental Wapic Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Universal Insurance Plc
Mortgage Carrier, Broker and Sector Aso Savings and Loans Plc Resort Savings & Loans Plc
Other Financial Institutions Crusader (Nigeria) Plc Deap Capital Management & Trust Plc Royal Exchange Assurance
7.39
3.29 249.00 8.42 119.70 0.89
HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers
0.50
Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc
100.00
Real Estate Investment Trusts Skye Shelter Funds CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc
9.70
0.50 30.00 14.89
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
6.04
0.50 2.02 0.52
0.50 0.50
0.50 0.61 0.50 0.50 0.50 1.17 0.50 0.51 0.50 1.60 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.52 0.50 0.50 0.50 0.50 0.50
8.47 0.64 0.55 2.98 10.99 1.55 0.50 14.31 3.03 19.24 1.07 0.70 1.15 2.94 0.88 7.00 1.12 4.65 6.48 0.50 0.50 16.70
23.90 37.43
10.03 36.19 3.10 2.88
22.00 550.00
6.51 4.49 61.89 2.00 4.98 0.60
40.00
3.28 252.00 10.68 127.50 0.93
0.50
100.00
10.00
28.55 6.94
1.35 5.52 0.76 5.81 36.07
1.34
0.50 35.00 14.90
0.50
Closing Price (N)
32,196
512 84,748 52,540
1,000 2,000
3,724,763 20,307,578 1,000 100,000 2,500 250,237 2,000 37,367 2,000,000 1,698,475 7,100 143,699 6,482 1,670,890 6,000 1,551,606 20,050 30,000 40,000 41,670 2,000 534,031 200 1,500 100,300 500 2,000 20,000
22,057,661 646,608 13,287,533 12,267,511 1,143,577 25,611,085 1,000 25,347,297 3,078,695 20,275,582 56,000 73,200 91,000 6,857,711 1,006,032 1,873,815 9,820,825 41,782,482 1,223,629 68,000 13,165 76,038,081
1,582,666 485,202
225 60 974,516 11,923
1,188,185 114,855
788,188 19,288,467 1,177,344 653,850 835,365 253,919
4,324
10,000 187,621 64,325 775,319 500,000
40,000
100,000
1,101,269
67,940 50,000
150,000 700 17,491,400 100 380,168
193,694
909 146,140 688,700
5,000
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
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
186.00 5.23 72.50 0.93
255.00 7.10 100.00 1.01 51.49
2.23
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
4.63
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
0.50
4.90 1.64 6.00
0.50
Road Transportation Associated Bus Company Plc
Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company
1.64 2.03 4.20 4.10
Speciality Interlinked Technologies Plc
0.50 Printing & Publishing. Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press
6.94 1.14
0.50
2.76
1.97 1.61
Media/Entertainment Daar Communications Plc
Hotels/Lodging Capital Hotel Ikeja Hotel Plc
Courier/Freight/Delivery Red Star Express Plc Employment Solutions C & I LEASING PLC
Automobile/Auto Part Retailers Incar Nig. Plc RT Briscoe Plc
Afromedia Plc
SERVICES
0.50
20.50 0.50 20.76 2.28 10.42 111.51 32.29 128.01
Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Eterna Oil and Gas Plc Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc Hospitality Tantalisers Plc
0.61 14.00
Intergrated Oil and Gas Services Oando Plc
3.98 12.71 13.28 4.30 1.05 2.92 0.66
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
1.58 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
5.98
Metals Aluminium Extrusion Ind Plc
Paper/Forest Products Thomas Wyatt Nig. Plc
8.26
NATURAL RESOURCES Chemicals BOC Gases Plc
2.42 1.57
9.50 7.27 26.58 4.12 113.00 0.50 0.66 44.00 2.16 2.12 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
ICT Telecommunications Starcomms Plc
0.50
ICT Computer Based Systems108 Courteville Investment Plc
13.12 2.41
5.05 1.14 0.77 30.52 1.59 0.90 8.59 3.17
Pharmaceuticals Ekocorp Plc Evans Medical Plc Fidson Healthcare Plc Glaxo Smithkline Consumer Nig May & Baker Nigeria Plc Neimeth International Pharm Nigeria-German Chemicals Plc Pharma-Deko Plc
IT Services NCR (Nig) Plc Tripple Gee and Company Plc
0.50
Opening Price N Union Diagnostics & Clinicals Services
1.74 6.00
4.90
0.50
1.64 2.12 4.20 4.54
0.50
6.50 1.15
0.50
2.58
1.97 1.91
0.50
0.50
20.50 0.50 19.75 2.36 11.40 114.50 32.29 128.01
14.10
0.60
3.98 12.71 13.28 4.30 1.05 2.78 0.66
1.44 0.50
1.38 0.58
0.50
1.38
0.50
10.55
5.98
7.85
2.19 1.53
11.75 7.63 29.15 4.75 116.98 0.50 0.74 45.55 3.31 1.90 10.93
0.50
13.12 2.41
0.50
0.50
5.05 1.05 0.89 32.20 1.66 0.85 8.85 3.17
0.50
Closing Price N
254,500 575,341
20
359,8775
7,200 103,908 4,322 2,232,597
5,000
200 231,459
132,400
384,250
240 315,638
450
50
82,191 200 13,543 283,500 22,422 10,076 4,656 139,216
4,696,439
3,373,439
6,888 1,000 100 29,198 200 84,311 2,749,340
2,000 1,000
69,600 15,000
10,000
1,000
55,000
50
100
10,000
250 3,337,942
5,783,368 72,350 199,209 267,623 336,364 10,374 125,416 657,576 216,727 100,000 1,000
2,307,692
47,104 100
500
18,000
91 197,469 266,362 158,076 1,555,680 278,880 1,927 50
100
Quantity Traded
2.78 11.75
5.15
0.80
8.00 6.82
3.68
0.50
400 2.07
1.64
3.67
4.33 3.65
0.72
50,000
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
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
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
Stock Market Report as at Friday, September 7, 2012
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 23
24 — Vanguard, MONDAY, SEPTEMBER 10, 2012
Homes & Housing Finance between developers of home and policy makers.
BRIEF ‘Housing shortage encourage illegal buildings’
T
he upsurge in the development of illegal buildings and cases of noncompliance of town planning process has been attributed to the problem of gross inadequate housing in the country. Chairman, Abuja Chapter of the Nigerian Institute of Town Planners (NITP), Mr. Nathaniel Atebije, said this during the Chapter ’s 2012 Town Planners Day in Abuja. “It is unfortunate that people are building spontaneously without going through the due process because of the challenges of accommodation,” he said. Atebije said the institute has been engaging people on the need to get approval before building a house, adding that it has been able to enforce the use of professional stamps and seal as part of measures to minimise the operation of quacks in the practice. He said the chapter contributed 80 out of almost 400 candidates that attained the professional status in the country this year.
Goldman to face mortgage debt claims
A
federal appeals court in New York has revived a lawsuit accusing Goldman Sachs Group Inc of misleading investors about the risks associated with mortgage securities offerings. The 2nd U.S. Circuit Court of Appeals in New York said lead plaintiff NECA-IBEW Health & Welfare Fund, which owned some mortgagebacked certificates underwritten by Goldman, may pursue claims on behalf of a class of investors in certificates backed by mortgages originated by the same lenders. It also said the fund need not allege an outof-pocket loss to pursue a claim that an illiquid security had lost value. The decision reversed parts of rulings by U.S. District Judge Miriam Goldman Cedarbaum in Manhattan, and reinstates claims related to seven securities offerings in 2007. It is a setback for Goldman, which like its rivals, faces hundreds or thousands of lawsuits by mortgage debt investors. These investors typically seek to recoup losses on securities they bought by claiming they were misled about the risks.
•A refabricated housing, roadmap to affordable housing
Developers blame disconnect with policymakers for housing woes ...hold stakeholders’ parley with FMBN Stories by YINKA KOLAWOLE
P
rotacted disconnect between real estate developers and policy makers in the housing sector have been identified as one of the problems militating against housing development in Nigeria. President of the Real Estate
Developers Association of Nigeria (REDAN), Chief Olabode Afolayan, made this assertion during an interactive session between developers and the management of Federal Mortgage Bank of Nigeria (FMBN) led by its Managing Director Mr. Gimba Ya‘u Kumo, to fashion out ways of tackling the challenges facing
housing development in the country. He said that the Nigerian housing sector is confronted with a myriad of problems, stretching from frustrating land acquisition system to a grossly underfunded mortgage finance sector, which is made worse by a protracted disconnect
According to him, the parley with the management of FMBN was to facilitate the bridging of the long existing gaps between developers and housing policy makers through periodic strategic meetings. “Choosing the managing director of the Federal Mortgage Bank of Nigeria on this debut edition of the Developers Benefit Luncheon (DBL) was deliberate and most instructive. In the Nigerian housing sector, besides land acquisition, the bulk of challenges faced by developers are mortgage and finance related. “This edition of DBL tagged: “the score card” will better inform existing and intending beneficiaries of Estate Developers Loans (EDL), developers needing assistant on offshore loan and those having issues with Primary Mortgage Institutions (PMI), among others,” he said. In his comment, Ya’u Kumo said every effort was being made within the limited funds available to FMBN to assist developers to build more houses in the bid to bridge the huge housing gap in the country. He emphasised the need for adequate government funding for the bank to enable it meet up with the huge financial demands of developers in delivering more houses for the teeming Nigerian populace. He assured that the bank will only deal with developers who registered with REDAN.
Realtors move to tackle building collapse P
rofessional bodies in the built environment comprising of surveyors, town planners, estate surveyors and valuers, architects, engineers, quantity surveyors and builders have agreed to come together under the auspices of Building Collapse Prevention Guild (BCPG) to tackle the recurring incidence of building collapse across the country. Chairman of the Guild, Mr. Kunle Awobodu, said the group has concluded arrangements to set up monitoring teams in Lagos to ensure that minimum prescribed standards in constructions are met to testrun the scheme. “Built environment professionals chose to embark on a voluntary, humanitarian and free service under the umbrella of Building Collapse
Prevention Guild to lay emphasis on mitigation of losses, and promotion of preemptive measures that will avert collapse of buildings,” he said. According to him, Lagos was selected as the commencement point for the initiative because it has been identified as the bastion of construction activities in the country as well as the state with highest incidents of building collapse in Nigeria. Awobodu stated: “Over 90 per cent of buildings constructed in Nigeria, especially in Lagos State were products of these concrete casting gangs. Names and addresses of interested professionals from all the seven professional bodies have been collated. To discourage professional segregation and promote
unison for better results, the various professionals from the built environment professional bodies must constitute a cell team. In this structure, we have zonal
coordinators and team leaders. A member ’s residence or place of work determines the cell or locality he or she belongs.
Affordable housing does not exist in Nigeria – Varsity don
A
university don has declared that affordable housing in the real sense of it is presently non-existent in Nigeria. Professor Abel Olorunnisola, the Dean of Post Graduate School, University of Ibadan, stated this in a lectured he delivered at the university titled, “Looking beyond the challenge of affordable housing development in Nigeria: Capitalising on the engineering opportunities”. He explained that the concept of affordable housing was used to describe dwelling units whose total housing costs are deemed affordable to a group of people within a specified income range. His words: “There is virtually nothing like affordable housing in Nigeria as the system stands today. A key factor that has led to the high construction cost in Nigeria is the cost of cement which constitutes about 40 per cent of building materials. The local consumption of cement in 2009 alone was estimated at 19 million tonnes. Only 9.6 million tonnes was produced locally,
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 25
Famine, Nigeria and global food crisis “No man can get wise on an empty stomach.” George Eliot, I8I9-I880. (VANGUARD BOOK OF UOTATIONS p 274). o this, Napoleon Bonaparte,I769-I82, added, “An army marches on its stomach”. Either as civilians or as uniformed men and women, Nigerians are heading for the worst food crisis in over hundred years. Few people alive in this country today have never experienced such deprivation as is now becoming increasingly imminent; not only in Nigeria, but globally as well. Natural disasters, arising out of two gifts of God to man - water and sun - now threaten mankind on a scale, perhaps unprecedented since the ice age. Let me summarise the worldwide predicament – for those who have either ignored international news broadcasts or/and those who have failed to grasp their significance. “China’s food problems will soon become a global food crisis”, warned the Worldwatch Institute, an NGO based in Washington D.C, in the I990s. At the time, China was not the world’s second largest economy and its ability to pay for large food imports were in doubt. Today, China is the second largest economy and its ability to pay for any amount of food is no longer in doubt. The government of China will soon be shopping for food –worldwide – to feed I.3 billion people. Nigeria’s cassava will be one of the targets. The poor people of Nigeria cannot compete with the newly rich of China. If care is not taken, a few cassava exporters will, for their own benefit, send hundreds of thousands to their graves as serious famine takes hold. WATER “All life is water ” , wrote Thales,640-546 B.C, the
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Greek philosopher; and since mankind developed the skill of organized farming, water has played a prominent role. It was not by coincidence that planned agriculture started around the world’s rivers before moving upland and even into deserts. Without adequate supplies of water, civilization, as we know it would have been impossible. With increasing population, mankind, more than ever, depends on water provided mostly by rivers and rainfall. Farmers, worldwide, have, for centuries planned their cultivation programmes around the, formerly, predictable rainy season. Each year, the season brought formerly predictable volumes of water for planting at predictable periods. Too little water accounts for lower yields and food supply. Abundant water generally meant increased harvests; but excessive water results in inundation of farmlands and crop losses. Optimum yield is achieved when a balance is achieved. That balance has been, and may remain, forever, out of human control. Today, all over the world, on account of climate change, about which scientists have issued warnings for decades, neither season nor volume of water is predictable anymore. The level of rainfall, this year, might be the highest in several hundred years in some countries. Some nations are experiencing unprecedented volumes of rainfall resulting in massive crop losses. China, the world’s most populated nation, with I.3 billion people to feed, is one of them. But, it is not the only one. Nigeria, with an estimated population of I67 million people is also experiencing flooding and farm inundation in the northern part of the country, which account for close to 75 per cent of food production.
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Today, the all over the world, on account of climate change, about which scientists have issued warnings for decades, neither season nor volume of water is predictable anymore
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Adamawa, Plateau and Niger states have been particularly hard hit. Adamawa, in particular, has suffered a double tragedy. In addition to unprecedented high downpour, swelling the banks of the Benue River, farmers in the state have also been wiped out by flood caused by the release of water from a dam in Cameroun. Granted, the dam would have collapsed, anyway, if the water was not released, still, it exacerbated the calamity in the state. Certainly, Adamawa, Plateau and Niger will contribute less to the national food production this year than in 20II. The same might be true of a lot of northern states and some southern states depending on major rivers for food production. But, globally, close to I2.5 per cent reduction in yield is expected this year. Yet, Nigeria is still an import dependent nation with respect to food. We expect to import food from nations struggling to feed their own
people. SUN The sun, as any old school boy knows from our Nature Study, which is no longer taught in primary schools, is not up there just to demarcate day from night. It is a vital component of the agricultural programme as it promotes photosynthesis aiding plant growth and food production. It becomes indispensable at harvest time for fruit production especially. Too short a dry season results in lower yields and too long also reduces output of farm products. However, there is another dimension to the input of the sun – heat. Plants need the sun, especially for heat, but too much heat, if prolonged, leads to drought and crop failures. Until a few weeks ago, the United States of America, the world’s largest food producer and exporter, had been experiencing low rainfall and excessive heat in what is called its “corn belt” – the Mid-West – which feeds America and the world. Wheat, corn, soya beans have shriveled on farms on account of drought. The same is true of parts of Canada, Spain and some states of Nigeria. Already, a sharp rise in the price of food is predicted for the US as well as for the rest of the world on account of the American experience alone. It is not just crops that will suffer price increases, prices of processed food items and animal feeds will also escalate. Whether imported or bred locally, livestock prices will jump dramatically everywhere on account of the combination of crop failures globally and drought in the US in particular. The Outlook for Nigeria Nigeria has been most unfortunate this year – our
misfortune has only been mitigated by the fact that total drought has eluded us, but we have had a combination of flood in the north and insufficient rain in the south. The most dependable barometer of food production has always been vegetables. Usually, from May to September, there has been an abundance of vegetables in the south. That was because the rains started slowly in February/March; increase in intensity through April to June; and peak in July. The “August break” then follows. September and October rains round up the wet season before the sun takes over. This year, we have experienced one long “break” since the third week of June. There has been little rainfall. Crops have suffered, vegetables most of all. Given a bleak July for vegetables, it is clear that the rest of the year is a write off. Nigeria has now been listed among the ten countries most at risk of famine this year and the next. Unfortunately, the calamity brought by nature has been compounded by government policy. Two months ago, the Federal government of Nigeria announced an increase in import duty for wheat –from 35% to 65% — in a bid to encourage the shift from wheat bread to cassava bread. Even the government and the Minister of Agriculture, who aggressively promotes this initiative, know that the aggregate output of cassava, at the moment, is insufficient to support a massive shift from wheat to cassava for bread. But, it is expected that the incremental demand for cassava will stimulate more production. That, in theory, would have been the result in another year or period. As I predicted, earlier in the year, the most likely, short and medium terms, repercussion will be increases in prices of bread and other wheat based products while the anticipated cassava output will take years to materialize.
BUSINESS & ECONOMY
Arik Air, Lufthansa seal partnership deal A
rik Air and Lufthansa Technik of Germany have sealed a new partnership deal that will ensure safe operations and support further growth of the Nigerian airline. Lufthansa is West and Central Africa’s largest carrier and world renowned aircraft maintenance service provider. A statement issued by Arik airline’s spokesman, Ola Adebanji, said the agreement was sealed during a meeting held at Arik Air corporate head office in Lagos where
the organisations agreed to strengthen their partnership concluded about five years ago. Under the new partnership, Lufthansa Technik and Lufthansa Cityline will continue to provide technical support to Arik Air in the areas of line maintenance, base maintenance, and materials and pool spare parts for the next five years. It said Lufthansa Technik would also assist Arik Air in the area of personnel training and the establishment of a
maintenance, repair and overhaul facility in Nigeria. The leader of the Lufthansa team, who is also the Sales and Marketing Director, Mr Clemens Schrettl, said he was impressed with the outcome of the meeting, describing the deliberations as fruitful. “Lufthansa is happy with the partnership we have had with Arik in the last five years and that is why we are here today to renew that cooperation and seek further areas of
cooperation with the airline.We are looking at taking this partnership to the next level,” the statement quoted Schrettl as saying. M r. Chris Ndulue, Arik Air's executive vice-president and managing director, who led the airline’s team to the meeting, thanked Lufthansa for its technical support over the years. “Our association with Lufthansa Technik and Lufthansa Cityline has been of great advantage in the
maintenance of our young aircraft fleet. It also underscores our commitment to ensuring safety of our passengers at all times.” The statement added that both Technik and Cityline have a combined workforce of 50 engineers dedicated to Arik Air ’s aircraft maintenance. It also stated that all expendables and consumables had been certified by Lufthansa Technik and Cityline who maintain operations in the Arik Air hangar.
26 —Vanguard, MONDAY, SEPTEMBER 10, 2012
Insurance BRIEFS NCRIB Lagos Area Committee gets new executives he Lagos Area Committee of the Nigerian Council of Registered Insurance Brokers has elected new executives to run the affairs of the Area Committee in the next two years. In an election held recently, Mr. Patrick Ikponwosa emerged as the Chairman of the Committee while Mr. Ayodele Akande became the Vice Chairman. Mrs. Olubukola Ifemade emerged as the General Secretary. The post of Assistant General Secretar y was won by Mr. Ejindu Ijekpa while Mr. Wale Afilaka became the Honourary Treasurer. The post of Financial Secretary went to Mr. Olusegun Kafaru. Mr. Bestman Abumere emerged as Publicity Secretary, while the post of Internal Auditor was won by Olusegun Ikuyonbo. In a post election speech, the President Barrister of NCRIB, Laide Osijo challenged the new executives to address their minds to the challenges of sustaining the tempo of professional and ethical standards of the NCRIB. She commended the immediate past executives under Mr. Tunde Oguntade for promoting the growth of insurance broking in the Lagos Area. She specifically applauded the immediate past executives for their positive roles in the area of effective information dissemination amongst its members.
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Former annuity agent sentenced for grand theft
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nsurance Commissioner for California, Dave Jones h as announced that
Alvin Leroy Black, 75, of Penn Valley, was sentenced in the Nevada County Superior Court to 180 days in County Jail and five years of supervised probation, for violating Penal Code Section 487(a), Grand Theft. Black must also participate in theft counseling and has been ordered to pay $204,777.93 in restitution. Black pled guilty to a single felony count of grand theft in March of this year. According to investigators from the California Department of Insurance (CDI) Investigations Division, between July 2001 and August 2004, Black sold his 80 yearold victim seven annuity policies with a deposit amount totaling $1,535,000 without fully disclosing the terms of the annuities and without her full understanding of what she was purchasing. Black earned $87,336 in commissions for transacting the annuities. The investigation revealed that in March 2003, Black formed a California non-profit corporation, in the name of the victim, without the knowledge or consent of the victim.
*From right: President of the Nigerian Council of Registered Insurance Brokers, Barr. Laide Osijo, decorating Mr. Anthony Randle, Senior Financial Sector Specialist of the World Bank, during his visit to the NCRIB Secretariat in Lagos, recently. With them is Mr Ayodapo Shoderu, Deputy President of the Council.
Insurance college opens window of opportunity for admission seekers STORIES BY ROSMARY ONUOHA
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he Chartered Insurance Institute of Nigeria, CIIN, said it set to fill the admission gap created by higher institutions in the country when the College of Insurance and Management becomes fully operational. Director General of the Institute, Mr. Adepegba Adegboyega, who disclosed this to Financial Vanguard at the Institutes Head Office in Lagos, said that the College of Insurance and Management will be a window of opportunity for individuals who have difficulty entering higher institutions. Adepegba said “We have discovered through research that Nigerian universities cannot admit 15 per cent of those who qualify to be given admission. We have seen a window of opportunity in the admission gap. If somebody cannot go into the university directly instead of writing the examination year-in-year-out, the individual can start a programme we designed for school leavers. With five credits including English and Mathematics, an individual can enroll for the programme that will run for nine months and obtain a certificate that would cover the first stage of the professional exam of the institute. Once that is done, the student would start with exemptions of six subjects
from 12 subjects. We are starting the college with the school leavers’ programme.” Adepegba also said that there are various levels in the college and one of them is the school levers programme for those who have finished their Senior Secondary Certificate Examination (SSCE) and are trying to go into the university. “We still have refresher programme that allows people have lectures before the main examination. The programme is designed to help prepare our students for the institutes’ exam. We also have refresher programmes for middle level managers,” he said.
The CIIN DG said that the College of Insurance and Financial Management is evolving and that its blue print is ready. “I do tell people that the college is not the building – the number of classes we have, but the blue print which we have been able to develop and within the next few months, we would be admitting students. Whether we admit them in the permanent site or somewhere else, would not be the most important thing now, but the important thing is that we have a blue print and we are bringing in people that would run the college.”
Adepegba said that they would be bringing experts from the industry that would form the faculties of the college. According to him, the administrative block of the college is completed, the restaurant is 90 per cent completed, and seven chalets have also been completed. “With the complement of buildings we have in there, we can start. We have made tremendous progress on the college. We have completed the administrative block that houses the class rooms and can sit about 2000 students. We have admin offices for the college rector and other staff. We have a restaurant and seven chalets for people who may want to stay overnight. The next stage is for us to build the halls for residents and that I think before the end of the year, we shall lay the foundation for that.” Adepegba said that as many professionals gradually age and retire from the insurance industry, the institute has continued to educate young people to take its examinations to boost their performance. “We have improved on our awareness drive and there are more people coming in to register for our examination, but there is still the need to fast track it. I believe we must be able to match the number of people coming in two times over and above those going out. However, we have not been able to achieve that. There is a danger if we have for an example 30 people retiring every year and we cannot find about 40 or 50 people replacing them by way of qualification. Exit can be as a result of death, retirement, loss of jobs and other factors, whereas, the only entrance into the profession is the CIIN which monitors those who come into the industry. “
Guinea Insurance to institutionalise global best practice
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he Board and Management of Guinea Insurance Plc has said that it is determined to institutionalise a global best practice risk management framework that aligns to its business strategy and is consistent with the business philosophy. In achieving this, Akintola Williams Deloitte has been engaged to develop a risk management framework that addresses the full spectrum of risks faced by the company. The implementation of the framework will be internalised such that it will align with our
strategy, values, attitudes and shared beliefs across the company and this will result in profit for the shareholders. According to the company, the concept of Enterprise Risk Management framework has become a tool for business survival, a benchmark for measuring operational efficiency as well as enhancing profitability of any entity. The pursuit of such initiative should be consistent with a genuine desire to embed sustainable practices towards preserving the value of an entity. “We live in a world driven by risks and
uncertainties and we must continually ask “What can go wrong? Risk is anything that can go wrong,” the company said. The Board and management of Guinea said that they are confident and more importantly committed to ensuring that effective risk management framework is implemented to mitigate any going concern threat and uncertainties so as to achieve sustainable growth and profitability through continuous improvement in operations and processes.
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 27
Micro-Finance
Academy addresses unemployment as Yabatech enjoys entrepreneurial programme Stories by PROVIDENCE OBUH
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he Academy for Entrepreneurial Studies (AES) has embarked on enlightenment initiative to address unemployment, as the Yaba College of Technology (Yabatech) students enjoyed its Operation 500 Students entrepreneurial programme. Speaking during the Academy ’s Operation 500 Students entrepreneurial programme per campus, held in Yabatech premises in Lagos, President of the Academy, Dr. Ausbeth Ajagu said that the programme initiated by the Academy is basically to redirect students of the Nigerian Tertiary Institutions to their innate wealth creating potentials, explore the vast wealth creating opportunities that abound in their respective communities and engage themselves in productive economic endeavours while on campus, in preparation for the world of work outside the campus. Ajagu, represented by Chairman Caniz Limited, Dr. Austin Izagbo, said, “Poverty is a factor of poor economy and that is why we are compelled to generate a program like this aimed at poverty eradication in our land. Strictly speaking, poverty in Nigeria is a silent killer, a daily growing cankerworm that is gradually drowning our nation. “The problem of unemployment has also been traced to the inability of our educational system to produce
graduates who can discover themselves and convert their acquired knowledge and skills into entrepreneurial ventures. This challenge is the basis for the Federal Government’s directive, that every Tertiary Institution in Nigeria should incorporate Entrepreneurship Education in their curricula at all levels. “As Nigeria’s foremost entrepreneurial development institution, we believe that if the avalanche of wealth creating potentials dotting the entire landscape of our dear fatherland - Nigeria, are well harnessed by the citizenry, we would be having over
employment rather than the debacle of underemployment or unemployment as the case is today. “Imagine if about 150,000 graduates leave schools as wealth and employment generators rather than job seekers, the advantage is that they automatically become catalysts in our employment generation drive.” Meanwhile, the programme is aimed at the following: to inculcate entrepreneurial skills and culture in the students, create and stimulate entrepreneurial awareness and culture in institutions and in general, promote self
discovery, self development and self expression in entrepreneurial activities among students. He emphasized that the high moral decadence amongst youths today is a product of poor upbringing as well as negative peer influence that exists in tertiary institutions. He noted that to achieve a virile and productive Nigeria and Nigerians, there is the strong need to re-orientate and inculcate best practice principles in the future leaders “our today’s student via total positive mental transformation because “as a Man thinks, so
*From left: Olu Ajayi, one of the frontline artists received Joe Obiago, an art collector and businessman to his studio at the National Arts Theatre, Iganmu, Lagos
Small aircraft owners benefit from Conoil aviation fuel
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part from major airports and airlines that enjoy Conoil's aviation fuel supply, the small aircraft owners also enjoy from the millions of tonnes supplied in the industry, Vanguard gathered. In a statement from the company, the supply is made to small aircraft owners all year round to enhance the flying experience of local and international air passengers. Conoil Aviation, leading fueller to leading airlines of the world said, “The role of Conoil Aviation in the Nigerian civil aviation industry is historic and critical, as the nation’s largest supplier of aviation fuel, Conoil is present at major airfields across the country, providing millions of tonnes of fuel to airports, airlines and small aircraft owners all year round to enhance the flying experience of local and international air passengers. The statement explained that the company is described as fueller to the leading airlines of the world as a result of its sophisticated laboratory,
reputed for testing and certifying Jet-A 1 in the country and also due to trust reposed in the company by its airline customers. According to the statement, “We continually upgrade our aviation depots and invest in modern infrastructures, including state-of-the-art bowsers and dispensers with a pump speed of 3,500 litres
per minute. In addition to high-tech facilities of international standard, we have a technical agreement with MS Flightline Support Limited for the purpose of enhancing service delivery and building personnel competencies through training. “We remain the trail-blazer
in the sector, with the largest spread of aviation fuel depots and an enviable comparative advantage in terms of national presence, storage capacity, quality control, well-trained fuelling operators, round-theclock engineering and maintenance support, and prompt, efficient service delivery.”
Steel firm advocates cost effectiveness for construction projects
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as and Steel Limited (NGSL), has called on stakeholders in the building sector (architects, structural engineers, fabricators and consultants) to consider cost advantage when using building material for clients. Speaking during a press parley, Managing Director, Mr. Hasib Moukarim, said that using the right steel for the construction of warehouses and buildings, the client gets the cost saving and the professionals get the credit. Moukarim explained that the right steel as described by the
Steel Tube Institute of North America is a ´Hollow Structural Sections´ (HSS), a type of steel tube that has greater strength to weight ratios than wide flange beams. He stated that the steel, st a design material of the 21 Century is a replica of that produced by his company, pointing out that NGSL is a company known for manufacturing and marketing of steel pipes and tubes for the construction and furniture industries. He, however, said that all the new airport terminals and
shopping malls in the world are built by HSS, because of its cost saving and superior strength, saying “since less steel is needed to do the same job, then less weight and less cost, he exclaimed. “HSS have excellent compression characteristics and exceptional forcibility added that it is available for the construction of warehouses, terminals, billboards, bridges, malls and towers and also used in casing boreholes and for piling soft grounds.
BRIEFS Small traders shun loans from microfinance institutions
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xpensive microfinance loans in Kenya are driving small-scale business people away from the same institutions that are supposed to boost businesses and help in eradication of poverty. Most business persons are shunning loans from the institutions due to high interest rates and strict repayment conditions, which make the loans hard to service. Most micro-finance institutions in Kenya charge interest rates that range from between 1.8 per cent to 2.5 per cent per month. Others, on the other hand, charge at least 0.5 per cent per week. This translates to between 21.6 per cent and 30 per cent per year. The institutions have repayment periods of weekly and monthly depending on the size of the loan, lending rules and how one agrees with other members of the group ran by the micro-finance institution, who jointly act as guarantors of the loan. Moreover, since most of the loans offered by the institutions do not have grace period, borrowers start servicing the loans as soon as they receive them.
BoG urged on regulating microfinance industry
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he Ghana Association of Micro-finance Companies (GAMC) has expressed worry over the process of licensing micro-finance companies under the Central Bank’s new regulatory guidelines. National President, Collins Amponsah-Mensah, observed that a number of firms are venturing into the sector without due consideration to the regulations. He therefore wants the regulator to tighten entrance for new businesses in the sector until it completes the licensing and regularization of those already in operation. “As it is now, as they [Bank of Ghana] try to process those who are already in operations, others are coming in and so the number gradually becomes overwhelming and that makes it very difficult for the regulator to work on”, he observed. Mr. Amponsah-Mensah also charged the Central bank to be bold in closing down firms flouting the regulatory guidelines early enough to protect public interest and image of the sector. He suggested that commencement of operations should be suspended temporarily after business incorporation at the Registrar General’s Department.
28 — Vanguard, MONDAY, SEPTEMBER 10, 2012
Interview
We want to deliver solutions to small bus By OMOH GABRIEL, Business Editor
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r Segun Odusanya is First City Monument Bank's Deputy Managing Director / Executive Director. He joined FCMB in August 2011 with over 18 years of experience garnered across key banking functions, including Client Relationship, Sales, Corporate Banking and Operations. His most recent experience prior to joining FCMB was as the Regional Executive Dir ector, Client Relationship: Standard Chartered Bank, East Africa, covering Uganda, Kenya and Tanzania, a position he had held since 2009, with major responsibility for driving the group’s agenda and strategy for Client Relationship in East Africa. Prior to attaining the aforementioned role, Segun had occupied different positions in Standard Chartered Nigeria, Zenith Bank and erstwhile Chartered Bank. Segun holds a bachelor’s degree in Banking and Finance, as well as a master’s degree in Finance from the University of Lagos. He has attended various managerial courses, including The General Management and Leadership Course at Said Business School, Oxford University. In this chat with Financial Vanguard, he spoke on various issues. Excerpts If somebody meets me somewhere and says ‘do you know the DMD of FCMB?’ Who will I say he is? Segun Odusanya is a very simple, honest, highly professional and solution driven banker. I have been around for about 20 years. During this period, I have worked in four institutions starting with Chartered Bank for about two years, Zenith for about five years and Standard Chartered Bank for about 12 years before I moved to FCMB mid last year. My last posting in Standard Chartered Bank was as Regional Executive Director for Wholesale Banking for East Africa (covering three presence countries and about 4 nonpresence countries). Why FCMB? had always admired FCMB. One, because of their history and two because I always looked at FCMB as a highly solution-driven bank (especially within the Corporate space); a bank that is able to offer solutions at the upper level of Corporate customer ’s pyramid of needs. For example, Mergers and Acquisition, Capital raising, Structured Trade Finance, etc. These were complex transactions that not every bank could provide. The bank was also able to create a niche for itself within the high networth and upper middle market space. With my long years of experience as a corporate banker both in and outside the country, I wanted to work in a bank with a clear focus/strategy of providing solutions to this segment of the industry.
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FCMB used to be a merchant bank and its niche is corporate banking, so you fit into corporate banking or is FCMB changing focus now? What we are doing is expanding our focus to create a more robust and stable bank. We want to drive solutions across the various segments (corporate, commercial, small enterprises and consumer segments) of the economy. We have been doing this organically in the last five years, and have seen steady growths in all these segments. The acquisition of Fin Bank is expected to give two/three years leap (especially in the area of branch network, liquidity, and balance sheet size). With the acquisition, we have been able to double our branch network, more than double our customer base, improved the liquidity position of the bank, and also create a very good platform to be able to provide more client-centric products in the consumer space. We also will now be able to provide our expertise to more commercial and small enterprises. We will be able to help these clients grow their businesses with not just the banking products we offer, but also with our expertise in corporate and financial advisory. We want to help create more Dangotes in this country and the opportunity to do this is enormous. Not looking at the retail side of the market? s I said, our focus cuts across all the segments. We are aggressively driving retail, but in doing this, we are not de-emphasizing corporate. We have made a lot of investments in people, products, systems and branches (from the acquisition) in both segments. We understand that both segments complement each other, and for us to continue to survive as a universal bank, we needed to provide services across all the segments. When you look at it, majority of the retail customers
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•Segun Odusanya...As I said, our focus cuts across all segments. are key stakeholders of the corporates. They are suppliers, distributors, staff etc. of the corporate. Our focus therefore is to provide services to all these stakeholders. We are also currently having discussions with the central bank to further extend these services to the mass market. How equipped is the FCMB to do this? As a commercial bank, we have the licence to do all these and over the last five years, we have been steadily expanding our business to cover all
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With the acquisition we have been able to double our branch network, more than double our customer base, improved the liquidity position of the bank, and also create a very good platform to be able to provide more client centric products in the consumer space
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these segments. The acquisition just provided an opportunity for us to fast-forward by two-three years. With the doubling of our branch network, we are now able to serve more customers, we now have the scale to launch more value added products to our customers, and we are now also able to operate more efficiently as a bank. All these definitely will translate into overall savings for our customers. Let’s come to the merger itself. What is the stage of the merger? Have you concluded or when are you concluding it? I will say we are 95 per cent complete. Hopefully, the two banks will be fully merged by end of October. Our initial target was second quarter of the year, but we got delayed by issues around the Capital market probe and the sacking of the SEC Board. Things are now back to normal, and most of the approvals have been obtained. All regulatory approvals on the acquisition have been sorted out? Most of it. An acquisition like this usually has cost implications. What are the cost implications for FCMB and what value has it actually added? When you talk about your customers, what value are the customers actually expecting from this acquisition? his and the other two (Access and EcoBank) acquisitions were highly supported by Central Bank. So we got a lot of comfort especially around the bad assets and contingent liabilities in the balance sheet. Specifically on our acquisition, I think we chose the right bank both in terms of scale and value addition for all our stakeholders. Whilst driving the acquisition, we also needed to ensure that we did not create
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•Segun Odusanya
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 29
Interview
sinesses to make them bigger here, do you have such issues and how are you dealing with them? If you look at the two banks separately, there are two managing directors but you can only have one in a company so definitely, a lot of functions will go and ours is not an exception. We have, however, done ours in a very transparent manner, and with a lot of empathy. The redundant staff were adequately catered for – both in cash and noncash benefits (such as medicals and entrepreneurial training). So ours was a win-win for everyone. Win for us because we have been able to reduce overlapping functions and therefore, come next year, the bank will not have to pay huge salaries. There will also be huge savings in operating expenses as a lot of overlapping and excess assets and costs will be eliminated. The lasting benefit for us, will be how we are able to leverage the combined business to improve service experience and cost of doing business to customers, achieve sustainable profit for our shareholders and become a great place to work for our staff.
distractions to our normal business. The key is to ensure we create value for all our key stakeholders: for shareholders by ensuring a better return on equity; for customers by offering a compelling proposition and for staff by creating a great company to work for that provides solid career aspirations. In essence, we must aim to be simply better than the rest, build on that and then become the best. Specifically for customers, the merger will provide the customer with increased touch points to the bank – more branches, more ATMs and a wider range of alternative transaction points.We will be a stronger bank with increased liquidity and the ability to support client activities through increased loans. We will offer better products, better service levels and an outstanding client experience. From the efficiencies and synergies created, we will be able to deliver our services and products at highly competitive pricing to the customers. I do know that FinBank used to have a very good product, the Flash me cash and people were running after it so how do you intend to deal with that. Is that part of the things you are going to cash in on? Absolutely! FinBank had that product and I tell you, the product was well received but because of the issues in the bank,, they were not able to take advantage of the product. With the acquisition, one of the things we did was to audit all the products and processes in FinBank and I can tell you categorically that Flash me cash is one of the products we will be enhancing to improve its efficiency in terms of delivery and reach. From all the acquisitions we have seen in the industry, any bank that has acquired another usually has issues with staffing ie, staff redundancy, overlapping functions etc. For FCMB in particular, in the head office
What mechanism are you putting in place to ensure lower charges to customers. There is talk about unnecessary charges in the industry so in terms of value addition, customers don’t like unnecessary charges or higher charges. So how will FCMB tackle this? ccasionally, systems or processes do fail, and this could sometimes mean frustrations and extra costs to customers. However, we have developed a robust feedback/tracking mechanism in the bank to take care of this. In addition to the internal tracking system, we have also recently launched a customer feedback process called Net promoters scores). This enables us to get regular feedback from our customers on all our touch points. The feedback is used to improve our service, process and also introduce new products.
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The merger will provide the customer with increased touch points to the bank – more branches, more ATMs and a wider range of alternative transaction points
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by about 30 or 40 per cent. If insecurity is tackled, cost of moving cash will be reduced. The combination of all these affect the way banks charge. Banks are not out to kill businesses because we need them to survive to sustain our operations and profitability. I read a report by Fitch on Nigeria banks that banks declare dividends in order to placate shareholders and
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The margin between interest rate charged by banks and deposit rate is very wide. You are charging 22 per cent interest rate and paying 5 per cent for deposit. That is what people are complaining about. They are saying that the regime of interest rate is very unfavourable to the real sector of the economy... The interest rate is always a function of the structure of the economy. It is a function of government monetary policy, a function of cost of doing business, inflation rate, among others. People complain because they don’t have full information on all these. The amount banks spend on powering their branches 24 hours and the cost of moving cash around, among others, are enormous. So, interest rate is dependent on the structure of the economy. If power is stable 24 hours, the cost of doing business will crash
•Segun Odusanya
that non-performing loans are also going soon after AMCON bought the non-performing loans of banks. What do you have to say? ividend payment is a decision of directors and shareholders. Directors and shareholders have to put a lot of things into consideration before deciding to pay or retain. Such decisions will normally be driven by regulatory requirements on capital, dividend policy, growth opportunities and the opportunity costs of funds. The good thing about Nigeria is that there is some statutory retention that banks must make unlike some other countries where banks are allowed to have a 100 per cent payout as long as they have met the regulatory capital. On bad loan, I think Nigerian banks have learnt some lessons and you could see some restraints in the way loans are analysed and disbursed. For us in FCMB, we are doing something different because we are not overconcentrating our portfolios. We are diversifying our portfolios and spreading our risk. That is expanding more into commercial and SME space. We appreciate that the individual company risk in these segments may be higher than corporate, but it is better on a portfolio basis. Also, we are developing a robust risk management mechanism to help control and manage the risks. Why are banks not lending much to manufacturers? We are actually lending. There is always room for improvement. Also, some of these manufacturers also have to help themselves. Some of them are not business savvy. They need to improve on their corporate governance. One of our core businesses is lending, but in doing this, we also must ensure that the borrowers are of good character
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and also have the capacity to repay. Where do you want to see this bank in the long run? We want to see this bank in the top three in the creation of value to all our key stakeholders (customer, staff, community, shareholders). Our focus is not on size, but in value creation across the spectrum. What are the opportunities available to take you to your destination? The opportunities are internal and external. We just did an acquisition. So there are a lot of efficiencies that will improve service delivery to our customers, giv e h i g h e r r e t u r n s t o o u r shareholders, make FCMB a great place to work for staff, and make us good partners with the community and also the government. Those are the internal. Looking at the external, there are massive opportunities in this country. This is a country with a potential GDP growth of over 10 per cent per annum if the basic infrastructural gaps can be fixed. Fixing power alone can add over 40 per cent to the economy. There is absolutely no reason why manufacturers should be moving their plants to Ghana, with a population of just 20m. We have the population, and the market. So fixing the infrastructure gaps will create growth potential all across the economy.
30 — Vanguard, MONDAY, SEPTEMBER 10, 2012
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32 —Vanguard, MONDAY, SEPTEMBER 10, 2012
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Vanguard, MONDAY, SEPTEMBER 10, 2012 — 35
People in Business By EBUN SESSOU
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t 24, Al-Hassan Mohammed, a Ghanaian, popularly known as Classic, came to Nigeria in search of greener pasture. He was optimistic that his desires would come to pass and that his mission would be fruitful. He wouldn’t give a chance for distraction of any kind and so, he embarked on a lonely journey. He came to Nigeria without his family. In what could be described as “survival of the fittest,” he started his life in Nigeria as a barber under the CMS bridge in Lagos. Perhaps, he was fulfilling one of the scriptural texts, Zachariah 4 vs 10a which says, “Do not despise these small beginnings..” He started his barbing profession with the sum of N70 and today, he is an entrepreneur. He has trained many young people on the job. Currently, he is building his school in Ghana, all thanks to the noble profession. In an encounter with Vanguard, he explained why he came into the profession and what he has been able to achieve for himself. Excerpts: “I came to Nigeria in 1986 in search of white collar job. This was during the regime of General Ibrahim Badamosi Babaginda. I graduated as an accountant and a certified book keeper. I thought that with my level of education and exposure, I could secure a job in Nigeria. I went through all the nooks and crannies of Lagos in search of job but all efforts to no avail. “I was frustrated and didn’t know what to do. People that could have helped me turned me down and so, life was miserable. “And because it was a taboo for me to engage in some violent acts, I picked up this barbing profession. At first, it was ridiculous. There was not enough money to kick off. There was no money to rent a shop. I became a wanderer on the streets of Lagos looking for where to work. Then, I got to the CMS Bridge where someone introduced me to those who were managing the place. “There, I was given a space to start up my business and I invested all the money on me into it. I started with the sum of N70. I rented a space under the bridge and used the rest of the money to purchase some tools including blades, hand clippers, powder, combs, scissors, chairs, mirror amongst others. “At first, it was tedious because I had to convince people that I am an expert in the profession and so, I was rendering both free and bonus services to people. It took a while before I could stabilise but I was optimistic. “I proceeded to acquire
*Al-Hassan Mohammed at work
Unemployment forced me into barbing --- Al-hassan Mohammed
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I was frustrated and didn’t know what to do. People that could have helped me turned me down and so, life was miserable
more knowledge on t h e profession so as to boost my career and so I became an expert. “Today, I have trained so many young people who are now experts on their own. Some of them have travelled out of the country and are living comfortably,” he said. Asked why he didn’t bring his family with him to Nigeria, he said, “I was just 24 years old, a young man who was full of life. I wanted to know what it was to be independent. Although I was married, I wanted to give my family the best of life. “I know what it is to be poor, I don’t want my children to go through what I had gone through. And so, I came to Nigeria to get the best of life and I thank God that I am fulfilled. This is my 26th year in the profession, I give glory to God." On why he couldn’t go
r i g h t n o w, I a m i n t h e process of building. I have been living in this country for the past 26 years and I have no regrets whatsoever. Nigerians are respectful provided you reciprocate." Asked about the price he paid to own a shop in a popular place like CMS, he said, “I am a man of honour and respect. For 26 years, I had no cause to engage in physical combat with people and that is what is required of you. “I do my job with all sense of dignity and I respect customers’ opinion. Since I started this business, I have been using one blade on one man. I don’t use clipper so as to prevent contraction of
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back to Ghana to start up the barbing profession, he said, “Life in Ghana is good but because of the population in Nigeria, I decided to stay in Nigeria. This business is more lucrative and profitable than what is obtainable in Ghana. I have plans to go back to Ghana because I have a project at hand. I am building a school in Ghana although it is not easy to build a standard school. It takes determination and lots of money to own a standard school in Ghana. "Acquisition of land in Ghana is easy provided one has the m o n e y. I t i s m o r e affordable than what is in this c o u n t r y. Anyone with N50,000 can acquire land in Ghana and I have *Al-Hassan Mohammed acquired the land,
contagious diseases. I choose to use blade for convenience. I only use manual or automatic clipper based on request by customers. “It is cheap to have a nice cut in my shop depending on the individual. I have people of high calibre who patronise me. And that is why I chose to be called Classic Ultimate. I don’t condone any act of indiscipline in my shop and everybody knows me for that." On what it takes to have a shop under the bridge, he said, “Life under the bridge has been interesting. It depends on the individual. Anyone who wouldn’t accommodate indiscipline must be disciplined in return. I can live with different people from different backgrounds. I am a peaceloving man, I don’t appreciate cruelty within my environment and that is my principle and I don’t keep grudges. “I am acquainted with this job and that is where I derive my satisfaction now. At my age, there is limit to the amount of stress I can engage in.” Asked on the challenges of living without his family in Nigeria, he said, “Out of sight is not out of mind. The distance between Nigeria and Ghana is just a stone throw and I don’t have any problem living alone in Nigeria. Communication has also helped in building the bond. I visit my family on a regular basis. I have a wife and she is everything to me and I don’t intend to get a second wife. I cannot stop this profession because it is lucrative and profitable. I intend to inculcate it into my schooling business. I can’t do without this barbing profession. This job gave me a new life and today, I am comfortable.” On profit made so far, he said, “It is difficult to state the exact profit but I thank God, although I still need more money to move on.” Lamenting the challenges, he said, “P r e s e n t l y, housing in Nigeria is expensive. An individual can use the same amount of money in renting a house in Nigeria to build a befitting house in Ghana. A jobless man in Nigeria is dead. And that is what the economy has caused. “Things are no longer the same as it used to be in the past. People are no longer concerned when it comes to looking good. There is no money and everybody is managing.” On how he entertains his customers, he said, “I have a transistor radio that keeps the environment lively. We listen to news on a daily basis. I started using transistor about ten years ago. And to complement my business, I also engage in charging phone batteries,” he concluded.
36 — Vanguard, MONDAY, SEPTEMBER 10, 2012
Aviation BRIEFS Bi-Courtney appoints new CEO for MMA2 i- Courtney Aviation Services Limited (BASL) has appointed a new chief executive officer for the Murtala Muhammed Airport Terminal Two, Lagos. He is Mr. Christophe Penninck. According to a statement by the company, Mr. Penninck, a Belgian and Polish, is joining the organisation with a wealth of experience spanning over a decade in global aviation, including airport operations, passenger safety, as well as airline and safety management in different countries. The statement added that Penninck, a graduate of Embry-Riddle Aeronautical University, Daytona Beach, US and multiple award winner in the global aviation industry, has a passion for aviation that has earned him several senior management positions in various airlines, such as Swissair/Sabena Belgian World Airlines, Kenya Airways, Aero Contractors, Lagos, among others.
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SSS at MMIA impound journalists' passports here was a mild drama at the Murtala Muhammed International Airport (MMIA), Lagos last Wednesday when officials of the State Security Service (SSS) stationed at the airport impounded the passports of about 50 Nigerians, including journalists who were returning from the 18th Aviation and Allied Business Leadership Conference in Windhoek, Namibia via Accra for about one hour. Daily Independent correspondent who was an eye witness observed that after passengers arrived at the arrival hall of the MMIA, on board Overland Special Flight at about 12.10 a.m, the two entrances leading to where the Nigeria Immigration Service (NIS) stamps passports were locked and it took more than 20 minutes for the Federal Airports Authority of Nigeria (FAAN) AVSEC, to open the gate. According to the correspondent, when the door was finally opened, the N I S r e s p o n d e d s w i f t l y, stamped the passports without delay having carried out their checks. When the NIS officials completed their job, the SSS officials, whose names could not be ascertained because they hid their identity cards from the passengers, told the Immigration officers to hand over the passport to them that they want the data page of all the passports.
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*Special Technical Assistant, NCAA, Group Capt. Sola Adetu addressing Air Nigeria's protesting staff at the Murtala Mohammed Airport Ikeja, Lagos on Friday.
DANA CRASH: Foreigners sue airline over accident Stories by LAWANI MIKAIRU & DANIEL ETEGHE
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ver 20 relatives of foreigners involved in the Dana Air ill-fated flight on June 3rd 2012 that killed all 153 passengers on board and 10 on the ground, have sued the airline in their different countries for negligence. The Director-General of the Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, who disclosed this development to newsmen last week at the NCAA headquarters in Lagos, pointed out that the foreigners involved were from the United States, United Kingdom, China amongst other countries. Dr. Demuren noted that some of the foreigners and some Nigerians had dragged Dana Air to court to press charges against the airline adding that until that was settled, the families could not be compensated. Asked whether he knows the outcome of the litigation, Dr. Demuren declined to comment on it. Dr. Demuren, however, stressed that apart from the foreigners dragging the airline to court, Dana Airlines was expected to pay the sum total of $350m as compensation to the families of 153 victims onboard the airline noting that the amount of money to be paid excludes those who were killed on ground by the aircraft. According to him,”the meeting we are holding today
is about Dana Air, although as you know money cannot replace lives that were lost due to the crash, people have lost their loved ones. The law is very clear that we need to pay the money that is required.” Debunking some media reports, not Vanguard, that the airline was not adequately insured, Dr. Demuren insisted that the airline was
adequately insured as at the time of the crash. He, however, explained that only 62 families had been paid so far due to the stringent measures involved in assessing the funds stressing that there were multiple claims from some family members which dragged the process backward. He said, “The aircraft was adequately covered by
insurance and I can tell you that the whole money for the settlement of the families according to the law, is on ground, but we have to say it here that money cannot replace lives because so many people have lost their loved ones. Money is the smallest thing and the law is very clear on compensation. “We had to do a lot of DNA tests to know who to pay to in case of multiple claims. It is very important for us to move forward. That was why we called Dana management, NAICOM and representatives of Lloyds Insurance Company.” Meanwhile, the Deputy Commissioner, Technical, National Insurance Commission (NAICOM), Mr. Ibrahim Hassan also affirmed the statement of the D - G, NCAA that Dana Airlines was adequately insured as at the time of the crash adding that they had been insured even before the said crash. According to him, ”30 per cent of the risk was domiciled in Nigeria by various insurance companies while Llyods of London bears the remaining 70 per cent risk.The issue of 70 per cent has already been resolved. You really have to carry out who the next-of-kin is. Again, some people have already gone to court to challenge the airline on the amount of money they are being paid. “The compensations of those people who lost their lives and properties on ground have not even commenced. We should not sensationalise the issue, but be responsible. However, I can assure you that all the issues would be settled,” Mr. Hassan added.
Make workplace safe for employees —Owolabi
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he Managing Director of Skyway Aviation Handling Company Ltd (SAHCOL), Alh. Oluropo Owolabi, has urged employers in the aviation industry to make their workplace safe for their employees by safeguarding their health. This was also corroborated by the Manager of Safety and Quality Department of Aero Contractors Airlines, Mr. Victor Dauda who said that for safety to be in all aspects of aviation business, airline operators must co-operate in sharing vital information to enhance safety of their passengers as well as its workers. Alhaji Owolabi made this disclosure at the closing ceremony of the company’s Safety Week at Ikeja.
He said that employers should be highly committed to a safe work environment, which would go a long way to boost employees' moral and increase effectiveness.”We believe that safety is a management function; we have a responsibility to make the workplace safer for our employees and thus safeguarding their health. This ensures that an employee can feel secure about undertaking his routine tasks with complete determination and confidence.” He noted that most Nigerian organisations overlook the fact that safety is vital in the work environment, urging them to imbibe a safety culture. He advised employers to put in place a well trained and supported Safety Department in their organisations.
The National President of the Association of Foreign Airlines in Nigeria (AFAN) also noted that safety begins with an organisation management. He said that the aviation industry was like the medical sector which safety and health were made supreme and mistakes were avoided at its minimal level. ”We have to put ourselves together to get it right and remind ourselves if they are not doing right in the workplace concerning safety and security. We must be safety-conscious in everything we do, including on the ramp and how we handle our machinery,” he said. He urged business organisations to apply the right solutions to safety.
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 37
Agric
On the state’s policy on agriculture When we came in, we decided that we needed to develop a policy and strategic plan that will be a kind of roadmap that will help us develop agriculture in Edo State so as to make agriculture a major employer of labour and guarantee food security. When the governor came in, he made it clear that his vision for Edo State is that of a state that will become a leading economic centre in Nigeria, where the people will live in dignity, powered by a government that is responsive to the people. He promised to fight corruption in the state by using a combination of tools and one of them is to develop agriculture which we know has the ability to employ a lot of people. We also know that through agriculture, we can develop a lot of value chains through processing, improved inputs and marketing through which the income of farmers will improve greatly and also develop an agro industrial base. Edo State has about 1,156,916 hectares of arable land, and 584, 645 cultivable land for tree crops plus arable cultivation of 182, 170 hectares and we have flood plains that are good for production of rice and other cereals that stretches to about 73,000 hectares. The weather in the state is good, the rainy season has been very consistent over the years; we have not experienced any period of drought; you see that this is probably the best place you want to invest . In doing our strategic plan, we looked at the past. Before now, Edo State was involved in direct farming, we had the Agbede-Wareke farm, the Cassavita plant in Uromi, we had farm settlements which started from the Awolowo days. We created communal farms under the military and other initiatives, but we discovered that we were not
Edo State will no longer be involved in direct farming —Abdul Oroh
*Hon. Abdul Oroh
equipped to manage them and run them efficiently, as we discovered that the most successful agro-based enterprises in the state are run by the private sector, especially those that have been privatized. If you go to Presco oil, that is one example, then the rubber estate, Okomu Oil etc., in these companies, the government has less than 10 per cent stake. We have withdrawn from direct participation substantially to encourage private initiatives. For us, that is the best approach, because those run by the private companies are making profit, sometimes, more than 100 per cent profit annually and they employ thousands of people as well as pay their taxes. What else do we want as government? We believe that is the way to go. Edo State now has it as a
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do State Commissioner for Agriculture and Natural Resources, Hon. Abdul Oroh, did not mince words when he said the state is moving away from growing chickens and eggs for government officials to eat or raise cattle for government functionaries and individuals. In a chat with JIMOH BABATUNDE weekend in Benin, he said as a way of bolstering agric business in the state, the government will no longer own farms but will encourage the private sector to invest in the sector. He also took time to speak on other agricultural issues in the state. Excerpt:
From Agenebode to Ilushin down to Ovia South-East, we can produce rice in commercial quantity
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policy not to run new farms. We will not establish new farms. What we can do under our private–public sector arrangement is to join the private sector. We are not
pulling out of agriculture, but just that we are not going to say this is Edo State-owned farm where we will be growing chicken and eggs for government officials to eat or cattle for government functionaries and individuals. We are going to partner with the private sector, provide the land; if we have the means or if possible, construct access road to the farms and then give the private sector practitioner C of O for free and then expect you to employ people to develop the farm in full and develop the value chain. On what the state is doing to encourage small scale farmers in the state In the state, the farmers are well organised. We have farmers' co-operative societies in almost all communities here, not just general cooperatives. We have cassava growers, we have cocoa growers, we have oil palm small holders association and then we have another cooperative at the state level that is more like an umbrella group for all the cooperatives. So it is to bring all the farmers in the state together. They are very well organised and this is an advantage for us. Right now, we have registered about 32,000 farmers, we want to hit 120,000 next year, so that we will be able to reach them directly. We have their phone numbers and we know their communities, their villages and wards, including fishermen. We are now in a position to give them inputs directly or assist them to get inputs directly from genuine agrobased dealers. The farmers we registered are real farmers. We distributed forms to the farmers. Initially they thought it was for tax purpose, but when they realised the objective, they started coming out to register. We have also launched the various growth enhancement schemes in the state and they are running. We are subsidizing to the tune of 25 per cent. The Federal Government buys at 25 per cent and the farmers buy at 50 per cent once they keyed in; but before then, our farmers only heard of fertilizers being bought by politicians who take them elsewhere to sell at prices
twice what they would sell in Edo State. So our farmers did not know what fertilizer was. So, for the first time last two years, we set up a committee that created selling points all over the state, people were coming to buy at those selling points and paid straight to the banks. They did not pay through ministries and nobody was allowed to take a trailer-load of fertilizer out of the state. Now, our farmers are using fertilizers for the first time. Before, they had the notion that if you use fertilizers, the yams will be rotten; or the weather is good, so we don’t need it. Now, they know that as you cultivate the land, the quality of the soil depreciates and if you enrich it with fertilizers, you can regenerate it and get higher yields. We are also trying to revamp our ADP to be able to provide extension services to farmers and we are working on that right now. We used to have some equipment and we are advertising for procurement of more and this is on. We have about 15 functional tractors and one bulldozer, these are not enough. We want to buy more and other farm implements. We are also planning to develop agro centres in the three senatorial districts where the farmers can have access to equipment provided by the private sector. What we have will not be able to go round and we don’t have the capacity to buy what will go round. Buying these equipment that are not produced here is not easy, so we need to involve the private sector. That is the way forward. On his projection for the sector My projection is that we want to increase cocoa production in the state. Right now, it is about 52,000 metric tonnes per annum to about 150,000 metric tonnes between now and 2020. We want to be number two if not number one. We want to also raise oil palm and be number one in rubber.We are aiming to be number one in cassava. We want to dominate the cassava sector and develop the value chain. We want to produce high quality cassava flour, starch, chips, etc. Nigeria spends about N1.3 trillion importing flour, fish, rice etc. If Edo State can produce a quarter of that or even 10 per cent of that to help reduce it, it will be a major boost to our economy. Rice is also critical to our strategic plan. We want to produce rice of 200-250,000 metric tonnes in the next three years. From Agenebode to Ilushin down to Ovia SouthEast, we can produce rice in massive commercial quantity. This is one goal we want to achieve.
38 — Vanguard, MONDAY, SEPTEMBER 10, 2012
ICT BRIEFS SImtech to sell Siemens software in Nigeria, Benin, Togo, Ghana IGERIA’S Simtech Technologies Ltd has announced a partnership agreement with l Siemens to sell its Software solutions in Nigeria, Benin, Togo, and Ghana. The agreement is expected to strengthen Siemens PLM Software’s market presence and customer service in these West African countries. Siemens said that the choice of Simtech was for its depth of industry expertise, adding that combining that with the Software’s lifecycle management technology, will provide customers with high quality products and services to maximize their investment. According to the vice-president, Channels, EMEA, Siemens PLM Software, Mr Tony Jolly, “Siemens PLM Software is committed to using our channel-centric strategy to continually enhance customer access to our industry leading PLM technology. Our partnership with Simtech Technology Ltd expands our reach and execution capability in West Africa to help customers leverage PLM solutions in an effort to capitalise on growing market opportunities.” This is also as General Manager of Simtech Technologies, Mr Olusegun Dogbey also said that the agreement “ is a great opportunity for our region’s industrial development and we are excited to be part of the momentum. Local engineering and manufacturing will now have access to PLM tools that will help enhance innovation and reduce time to market,” said According to the agreement, Simtech Technologies will now become a member of the Siemens Solution Partner Programme. Part of the solution Simtech Technologies will offer include the Femap software, a leading pre- and post-processor for engineering; Finite element analysis (FEA); NX software, the company’s fully integrated computeraided design, manufacturing and engineering analysis (CAD/CAM/ CAE) solution; NX Nastran software, a premium computer-aided engineering (CAE) solution; Solid Edge software, a complete hybrid 2D/3D CAD system for the mainstream market; and Tecnomatix portfolio for digital manufacturing, automation and simulation.
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Galaxy S3 cruises past 20M sales
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espite court action against Samsung which may see it cough out a whopping $1.05 billion to pay Apple for infringing on its patents, the South Korean company has, however, managed to push Sales of its Galaxy S3 smartphone beyond 20 million units just 100 days after the device was first launched.
Network congestion gets dynamic solutions ... as operators adopt special tariff slash methods By PRINCE OSUAGWU
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HE two most important demands Nigerian subscribers make of their service providers are tariff reduction and improved quality of service. However, the two demands would appear to be mutually exclusive, going by the country’s level of infrastructure development. Meanwhile, as the operators try to yield to these demands without growing adequate capacity, there is strain on service quality, particularly when reducing tariff. In fact, it is estimated that GSM operators need to roll out additional 50,000 base stations to match the demand for service at the marketplace. This is even when the challenging operating environment inhibits the base station roll out. It is, therefore, no coincidence that most massive slashes in tariffs by telecom operators in Nigeria in the last few years have been attended by a period of sub-par quality of service across the nation. In most of these cases, the regulator wields the sledge hammer. However, the operators have also realised that satisfying these demands, hold the key to their breakthrough in the ever competitive Nigerian telecom market and therefore have started seeking cutting-edge solutions for local challenges. Part of the innovative solutions they believe could meet the two topmost demands all at once, is the Dynamic Pricing solution. Dynamic pricing makes it possible for telecom operators to reduce tariff without necessarily compounding network congestion. It is a solution that offers subscribers generous tariff discounts in areas where demand on network resources is low, and offer marginal or no tariff discounts in busy network areas. That way, subscribers in a busy or high traffic network area will be encouraged to defer their calls till they get to low traffic network areas where they can enjoy generous discounts. In a nutshell, the solution tries to impress upon telecom users that making calls during busy hours from a busy business area, will make them pay more than those who would delay the calls till they get to less busy locations. With this message in mind, customers generally seek low
traffic areas to make their calls, thereby helping to reduce congestion in busy network areas. Consequently, this solution creatively avails subscribers the much desired tariff reduction, while creating an avenue to control the perennial issue of congestion in certain areas within the network. The solution is a feature of Next Generation Prepaid platform made possible by the technology backbone called Intelligent Network, IN. Almost all the telecom operators have adopted this solution with different names and various tariff discounts. Second National Operator, Globacom tagged its own dynamic pricing platform as Glo Flexi, Etisalat calls its own HomeZone while Airtel Nigeria said its own is 2Good Time. Just recently, MTN Nigeria also introduced its own. Tagged MTN Zone, the network said its own package creates a slightly different scenario, giving subscribers as much as 100 per cent tariff discount, depending on where they are making their calls. Chief Marketing Officer, MTN Nigeria, Mr. Larry Annetts, described MTN Zone as “a product of our desire to continuously delight our customers and give them much more value for their money. The service offers attractive discounts to our customers depending on the prevailing discount rates available on the cell site from which they receive signal.” MTN said it had previously run the service on a successful pilot phase in select locations in the country before fully developing and activating it in Lagos, Rivers, Imo, Anambra, Ogun and Bayelsa States. Annets said that once activated, the screen of the subscriber’s phone will subsequently display available discounts wherever he or she moves to. The broadcast messages are updated and transmitted regularly to keep customers abreast of prevailing rates where ever they may go within the area of coverage of the service. Another interesting feature of the service is the ability of customers to receive discounts for calls and short messages they send to friends, business partners and loved ones on other networks and even on international lines. The service allows customers to have control over their
*Telecom mast spending on calls. They can decide to delay certain calls till they get to their homes or offices where they usually enjoy generous discounts on calls. The service comes as an added value to customers who are already enjoying some level of discounts on bouquets like Pulse and Family and Friends. Meanwhile the company’s
Corporate Services Executive, Mr. Wale Goodluck, said that the introduction of MTN Zone and other dynamic tariff plans have proven that the service providers are not leaving anything to chance when it comes to customer satisfaction.
Vanguard, MONDAY, SEPTEMBER 10, 2012— 39
Advertising, Media & Marketing Stories by
BRIEF
PRINCEWILL EKWUJURU
For Nigeria to flourish, leaders must go back to basics —Gov Akpabio
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s Nigerian businesses are grappling with the reality of digital marketing, WSI-Axon West Africa has expressed its readiness to lend a helping hand. WSI-Axon, a Canada-based internet provider has promised Nigerian businesses affordable digital marketing and innovative website solution through an integrated approach that will rob off on businesses' return on investment (RoI). The company indicated that its interest is premised on the explosive internet connectivity and the growing power of various gadgets, computers, smartphones and their applications. The company through its Chairman, Mr. Edirin Abamwa, agreed that to access the web means that more businesses now take place online, for this reason, the company is now in Nigeria to give a helping hand. Explaining further, Abamwa said, “it is no exaggeration that any organisation that has no online strategy in the world of today is not worthy of being taken seriously. “You are aware as how this is shaping the industry of publishing. But it is not limited to that. The world’s most valuable companies are not necessarily those in the time honoured businesses of banking or the extractive industry. Companies such as Apple, Google and Amazon
ESTHER ONYEGBULE
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*Chief Edirin James Abamwa, CEO, WSI West Africa flanked by Amara Nwankwo, Head, Digital Marketing (right) and Soyem Osakwe, Executive Digital Marketing Consultant, all of WSI West Africa during a briefing introducing WSI-Axon to the media in Lagos.
Digital Marketing: WSIAxon offers new line have become global behemoths by exploiting the amazing power of digital marketing to build their brand and push their products.” He went on to explain that the traditional industries are left behind, referring to the
last Olympic where he said the event was marketed so much online that it had the sobriquet of internet Olympics. Continuing, he said, “No, matter what business you are involved in or whether you
are a multinational or a onestop shop, it is absolutely crucial you have an internet strategy. As a matter of fact, a small operation that takes early advantage of digital marketing will overhaul a bigger organisation that had no coherent online strategy.”
LOYALTY: Heineken takes distributors on Olympics tour
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n celebration of its customers' loyalty for the Heineken brand in Nigeria, marketers of the brand; Nigerian Breweries (NB) Plc recently sponsored five of its distributors to the just ended 2012 London Olympics to have a firsthand experience of the games. M r. Jacqueline Van Faarsen, Senior Brand Manager, Heineken, t o l d journalists in Lagos that the company is not insensitive to the brand’s success story in the market and this had necessitated the massive support it has generated overtime from its consumers, especially its trade partners. Conversely, he said Heineken was appointed the Official Lager beer and sponsor of the London 2012 in a tier three sponsorship deal, which extended to the
“If Nigeria must flourish, leaders must develop love for the country.” his was the advice of Chief. Godswill Akpabio, Executive Governor of Akwa Ibom State, while speaking at the Nigerian Institute of Management (NIM) Fellows Award and Spouses Day luncheon, where he urged Nigerian leaders to go back to basics if they have the love of the country at heart and want the country to flourish. The governor who was among others inducted into the Fellows fold of NIM, were charged by the President/ Council Chairman of the institute, Dr. Michael Olawale-Cole to see their induction as a call to duty, to work for the upliftment of the profession, Nigeria and Africa as a whole. “As Fellows you are therefore expected to devote more of your time, talent, treasure and thinking to the service of the institute and mankind.” He further reminded them that as intellectuals, their skills are needed in the socioeconomic re-engineering of the nation. Contributing, Sir. Peter Edeghon, guest speaker, who spoke on the topic, The challenge of a nation where nature speaks the language of Order and abundance, noted that Nigeria as a nation, is big and complex and requires leaders that act in the consciousness of regarding the common man as both a beneficiary of government development programme as well as co-drivers of the process of development. “It is, therefore, time for leaders to avail the common man the freedoms that will enable him to contribute meaningfully and positively to the advancement of our nation.” Others inducted as Fellows include; Mrs Modupe Abibat Adekule, Brig.General Abiodun Bashir Adewinmbi, Mr. Gabreil Adebayo Afolayan, Dr. Jacob Olusola Agboola, Dr. Lambert Agua, Dr. Olusola Aina, Chief Michael Kayode Ajayi, Pastor Olufemi Michael Ajila, Prof. Ishola Rufus Akintoye, Mr. John Gbadewole Akinwande, Mr. Moday Daniel Akpan, Dr. Abdullahi Awelenje, Dr Muiz Adeyemi Banire, Mr. Ibrahim Yaya Bawa, Chief Fadiji Fategbe, Engr. Isiaka Bisiriyu, Princess Inneh Ekiuwa, Mr Olusola Ijitimehin, Mrs Olayinka Ojolape Kukoyi, Dr. Lucy Newman and others.
Paralympics Games. “To celebrate this iconic status, we considered it necessary to coopt our trade partners, who have consistently stood by the brand over the years,” he said. Accordingly, the trade partners, who embarked on the journey include: Mr. Banjo Onanubi, Mr & Mrs. Obor, Mr. Nseobong Dickson Ibanga, Mr. Sunday Afurobi and Mrs. Anulika Philimina Aladinbili were all delighted with the offer given to them by Heineken to be part of the exclusive hospitality and marketing opportunities associated with the journey. Reacting to the gesture on behalf of other beneficiaries, Onanubi said the experience was a unique opportunity provided by NB. “They have shown us why they would always be the leader in the
market. I am delighted to be part of the biggest sporting event in the world because I
never had the thought that one day, this special opportunity will come my way,” he said
X3M Ideas opens shop X
3M Ideas, a creative advertising agency has opened shop. The acronym X3M stands for “Extreme”. The Steve Babaeko-led agency which opened for operation in Lagos according to findings, is obsessed with the vision to cause a creative revolution in the Nigerian advertising industry. The agency located in Opebi area of Ikeja, displays youthfulness and modernity in all its forms, with cutting edge equipment and gadgets in a seamless office setting. The promoter of the new agency, Steve Babaeko, who wears the tag of CEO/Chief Creativity Officer, was not
available but it was gathered that the agency already has its application with the Association of Advertising Agencies of Nigeria (AAAN). The CEO/Chief Creativity Officer has 17 years hands-on experience in the industry working on brands in some of the most challenging industries like telecoms, pharmaceutical, Foods & Tobacco, broadcasting amongst others. Babaeko started his advertising career in 1995 when he joined the now defunct MC & A Saatchi & Saatchi working under the tutelage of Victor Johnson and Busola Williams.
40— Vanguard, MONDAY, SEPTEMBER 10, 2012
0817 002 3569
“N5000 note will reduce inflation!” says CBN
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he Central Bank of Nigeria and its agents have been very active, as should be expected, in promoting the merits of the proposed N5000 note. To this end, the apex bank also set out to dispel what it alleges to be disinformation regarding the proposed exercise. In its widely published one-page advertorial titled, False Rumours on Currency Restructuring, CBN refutes the reported vote of N40bn set aside for this exercise. It is not clear why the CBN waited so long before it refuted the widely quoted value of N40bn in the media; regrettably, however, the apex bank still failed to reveal the estimated cost projection for the project, so that its cost/benefit can be appropriately publicly evaluated. Central Bank was also eager in its advertorial to confirm that the contract for the proposed currency restructuring has not been awarded. In reality, the issue of contract award is neither here nor there, since CBN appears to have made up its mind, in spite of public opinion. In earlier press releases, CBN indicated that the concept and designs were completed locally at minimal cost. CBN’s cause might probably have been better served, if it had also transparently declared the originating cost as well as the expected savings on the cost of currency management in the country. Nonetheless, it will be hard to fault the public’s lack of
CBN’s cause might probably have been better served, if it had also transparently declared the originating cost as well as the expected savings on the cost of currency management in the country
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confidence on any promise of benefits from such cost savings; for example, the adoption of the cashless programme was touted to reduce banks’ operation cost by over 30 per cent, so that ultimately, the banks could support the real sector with single-digit borrowing cost. Inexplicably, this expectation has remained unfulfilled! Incidentally, in the advertorial under reference, CBN recognises that our currency management costs are influenced by frequency of usage and poor handling. However, CBN’s belief that a promo campaign would, on its own, lead to greater respect for the naira and better currency handling, is
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however, patently unfounded. In truth, adoption and respect for currencies everywhere is based on the recognition of the purchasing value of the currency unit. In a situation, for example, where N50, the least note denomination, under the proposed restructuring, cannot even purchase one finger of plantain, it is most likely that the funds spent in the production and promotion of the new N20, N10, N5, N2 and N1 coins would be money down the drain! It is also surprising that CBN identifies the possibility of more precise rounding up as an advantage of the proposed new coin profile;
this is, undoubtedly a tongue in the cheek claim, as the new profile has already inherently rounded up primary kobo denominations!! Nigerians who can remember clearly recognise that coins fell out of favour because they lost any meaningful purchasing value, and it was no surprise when they ultimately found favour with metal brokers. Besides, it is clear that the initial cost of production and destruction of the existing currency profile has not been consciously captured as added cost to the projected expenditure on the new currency structure. Furthermore, the apex bank’s advertorial maintains that “currency restructuring does not cause inflation in any form whatsoever, as it will not increase money supply.” This observation, of course, is unassailable, if all things remain equal; in other words, so long as the velocity or the speed of spending money remains the same, there will be no increase in money supply. If on the other hand, the N5000 note, for example, is speedily offloaded on receipt in order to unbundle the value, there is no doubt that the velocity of currency
in circulation would increase and create the same impact as increase in money supply; so, CBN’s claims that the N5000 note will not induce inflation needs to be qualified! Inexplicably, the CBN advertorial further stretches the argument on inflation, when it suggests that “currency restructuring may actually help in tackling inflation”! If indeed reduced inflation rates coincided with the introduction of higher denomination notes in the past, the apex bank has not provided evidence that the drop was the direct result of higher denominations introduced. Indeed, any insistence of a causative relationship will be an outright contradiction of CBN’s open admission that inflation is the product of increase in money supply, as the converse of that is that lower inflation rate is the product of reduction in money supply. In other words, if higher denominations do not increase money supply, CBN cannot also prove that higher denominations will reduce money supply and lower the inflation rate, especially when it is incontestable that the proposed higher denomination, in conjunction with the cashless programme and coin profile, will ultimately increase the velocity of money in circulation with the same result as increasing money supply. SAVE THE NAIRA, SAVE NIGERIANS!
BUSINESS & ECONOMY
Microsoft releases windows server 2012 to power cloud OS from the cloud up for the modern datacenter. In his keynote speech at a global online event, Nadella stated that Windows Server 2012 was a cornerstone of the Cloud Operating System (OS) that provides customers
By EMEKA AGINAM
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he president of Microsoft Server and Tools Business, Satya Nadella, has announced the general availability of Windows Server 2012 built
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
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with a modern platform for the world’s applications. ” The operating system has always been the heartbeat of IT and is now undergoing a renaissance in the new world of continuous cloud services, connected devices and big data,” Nadella said, adding that, “Microsoft’s unique legacy in the most widely used operating systems, applications and cloud services positions us to deliver the Cloud OS, based on Windows Server and Windows Azure, helping customers achieve a datacenter without boundaries.” The software, Microsoft explained, expands the definition of a server operating system and adds significant new advancements in virtualization, storage, networking and automation. Hundreds of new features, according to him, can help customers achieve a transformational leap in the
speed, scale and power of their datacenters and applications. He added that Windows Server 2012 empowers customers to manage and deliver applications and services across private, hosted and public clouds in combination with Windows Azure and System Center. He further explained that customers can use their existing skills and investments in systems management, application development, database, identity and virtualization to take advantage of Windows Server 2012 and realise the promise of cloud computing. Many enterprise customers are already seeing tremendous value in early deployments. “A survey of 70 early adopter customers from across the globe revealed that they expect, on average, 52 per cent reduction in downtime, 41 per cent reduction in workload
deployment time, and 15 hours of productivity time saved per year, per employee. About 91 per cent of the companies surveyed expect a reduction in server administration labour, and 88 per cent expect reduction in network administration labour,” he said. Already, the Nigerian Airspace Management Agency (NAMA), the government’s safety authority for commercial flight operations, chooses Windows Server 2012 to utilise the existing IT infrastructure within the agency as well as create a fully scalable and high density cloud environment. “Deploying Windows Server 2012 has enabled us to do more with less, thereby reducing cost and enhancing considerably the ICT ROI for my organisation and bringing efficiency in the use of technology to value-centric proportions,” said Mr. Ogochukwu I.F., CIO of NAMA.