Financial Vanguard

AUGUST 13, 2012

PENSION FUND:

Contributors protest investment in power, capital market

BY ROSMARY ONUOHA

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gainst the clamour by capital market stakeholders that part of the new pension contributions should be ploughed into the capital market as intervention fund, Pension Fund Operators, PenOp, have kicked against such move saying that it has a moral hazard.

Accordingly, contributors to the new pension scheme have warned their various Pension Fund Administrators, PFAs, not to invest their money in the power sector, stressing that such action will compel them to withdraw their contributions from the scheme.

National Pension Commission,

165.55

-0.90

2,45500

-22.00

20.69

-0.11

112.80

-0.42

92.80

-0.56

PenCom, recently announced that the pension fund has climbed up to N2.6 trillion. The announcement compelled some stakeholders in the capital market to call for the fund to be used as intervention in the capital market. Minister of Power, Mr. Barth Nnaji, went further to say that the federal government might consider investing some part of the fund into the nation’s power industry.

As a consequence of the Minister’s statement, contributors to the new pension scheme besieged their PFAs

offices asking for the refund of their monies if there is plan to invest part of it into the power sector. A source said “When one government official mentioned that pension funds would be used to finance power, there was uproar from contributors. Contributors said their money should be refunded, if it is to be used to finance Power Holding Company of Nigeria (PHCN). You know that in Nigeria, power means NEPA.” A total of 18 Pension Fund Operators were recently given a clean

bill of health of having scaled the recapitalisation exercise in the sector.

It will be recalled that PenCom mandated PFAs to raise their capital base to the tune of N1 billion as the statutory capital base of the sector.

Pension fund Operators said that there is a moral hazard in using pension fund to support the capital market because stockbrokers or investors will take reckless risks knowing that if anything goes wrong, they would fall back on the pension fund and there is nowhere in the world where pension money is used to stabilise the capital market. According to them, government is the only one that can bail-out the stock market.

Continues on page 18

CURRENCY BUYING CENTRAL SELLING DOLLAR 154.83 POUNDS 241.5658 EURO 189.9454 FRANC 158.0866 YEN 1.9759 CFA 0.271 WAUA 232.8827 RENMINBI 24.3408 RIYAL 41.2836 KRONER 25.5171

155.33 242.3459 190.5588 158.5971 1.9823 0.2813 233.6347 24.4198 41.4169 25.5995

155.83 243.126 191.1722 159.1076 1.9886 0.2913 234.3868 24.4989 41.5502 25.6819

CBN Exchange rate as at 10/08/2012

From Left Executive Director, Caverton Offshore Support Group, Mr. Bashir Bakare; Country Chairman, Shell, Mr. Mutiu Sunmonu; Chief Executive Officer, Blueway, Mr. Johnny Skolund; and Logisitic Manager, Shell, Mr. Henry Nwogbolu, during a Business Performance Review Session organised by Shell to review its contract with Caverton Helicopters in Lagos

18 — Vanguard, MONDAY, AUGUST 13, 2012

Cover Story

Vocation and Technical Education – A Key to improving Nigeria’s development Part 2

From left Mr. Stanley Uzoechina, Minister of Communication Technology, Mrs. Omobola Johnson and Chief Executive Officer of Brian Computers when the Minister visited Computer Village at the weekend in Lagos

Contributors protest investment in power, capital market Continued from page 17 Chairman of Pension Fund Operators, Mr. Dave Uduanu in an interview with Financial Vanguard, said, “If the government wants to bailout the stock market, it can.

When the banking market crisis happened, it was the government that bailed out the banks. It is important to make this clear, that pension fund cannot be used to bailout the stock market. The stock market would achieve a natural recovery as the economy continues to improve.”

Uduanu said that there is a bit of a dishonest argument about the stock market recovery because the losses are largely in the financial sector – the banks and insurance companiesbecause of the loss of confidence that happened in that sector.

He said “Companies like Nestle were not that affected by the crisis. In fact, the company share price has achieved an all time high.

Stocks like Nigerian Breweries, Guinness are doing well. Let us separate the problems of the banks and insurance companies from the stock market. If they are isolated, there is no problem in the stock market.

So, we should not use the problem of selected stocks or problems of people who borrowed money and could not pay to say that the stock market is in crisis, there is no crisis in the stock market. It is achieving a natural recovery. If you like, put 30 per cent in the market, it is not going to create one job for you because the companies are already there, they are just going to

continue to trade and a few people will be rich.”

In terms of investing in infrastructure, Uduanu said that there are strict guidelines as to how pension funds should be applied, adding that government cannot force them to investing in the power sector. “We need to stand back and remember that pension fund is not national savings. It belongs to individuals who need it most when they cannot afford to lose the money – when they are 60 years and above. So the first job of every PFA is the security of the pension funds,” Uduanu said.

“Specifically, on infrastructure, what we asked for is that, for us to finance infrastructure, it must be public private partnership projects and those projects must have a guarantee from the Federal Government.

Those are pre-conditions that must be met, before pension funds can be used for infrastructure. If those preconditions are not in place, the fund cannot be used for infrastructure. It is also in the PenCom guideline that the projects must be guaranteed by the federal government because we know that in this our country, one government can give you a concession and another government could come and revoke it. We want an irrevocable guarantee from the federal government that these projects cannot be changed.” Uduanu said.

“Therefore, pension funds can go into infrastructure either through a bond – a dedicated infrastructure bond that is tied to a specific project. Take for example, Lagos/ Ibadan Expressway is a project that is adjudged to be viable because of the traffic

on it. If the Federal Government says it wants to do the road and would give it to a project manager who is reputable, who would employ a contractor, and the government said it wants to issue infrastructure bond of N100 billion to finance the project, and we know that when the project is finished there would be toll which would enable them collect the money, of course, pension funds can be deplored to such a project. Like what they did in Chile, they used pension fund to finance the national housing deficit, but it was through mortgage bonds that were issued and guaranteed by their government. Those bonds meant that pension funds put money in a pool and people borrowed this money to build houses, particularly those that were contributors to the scheme. But there was a guarantee that the money would not be lost. Pension fund can invest in those kinds of projects.

While stating that the number one objective of PFAs is to ensure that when a contributor retires, there is money to finance his pension; Uduanu said “PenCom came up with guidelines on how the pension fund should be invested. The first guideline that was issued was very conservative. It was only money market and bonds with some equities. The guideline has been reversed three times and we are going to the fourth revision. The last revision includes all sorts of instruments. There was inclusion of infrastructure, private equity, mortgage backed securities, real estate investment trust. The Continues on page 19

that allows graduates to become immersed in the global economy right from graduation (Cote, 2007). It is important for these students or graduates to have skills in innovation in technology education and entrepreneurship to be ready to fit into the global market place on which today’s economy depends on. Entrepreneurial Skills Needed by Technical and Vocational Education.

Leadership is not a major cause of Nigeria’s underdeveloped status. Nigeria can become an economic power-house (and realize its visions) only if proper attention is given to education and technological development and promotes and rewards creativity, and channel its material and

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s the Roman Historian, Plutarch (AD 46-120?) had noted “The mind is not a vessel to be filled but a fire to be kindled.” Given their corrupt and greedy lifestyles Nigeria’s leaders do not seem to care about integrity or moral values. They are good at predicting the future without creating it. As Peter Drucker has observed “If you want to predict the future, create it.”

In Nigeria, the growing problem of unemployment in the country has contributed largely to the worsening problem of poverty among the populace. Unemployment according to Olaitan (1996) leads to frustration and disillusionment which may result in crime or drug abuse in a futile attempt to escape from and forget the pains and humiliation of poverty and lack. The problem of unemployment, he further stated, has worsened as millions of school leavers and graduates of tertiary institutions have not secured gainful employment over the years. Unemployment has posed a serious problem not only to the welfare of individuals but also to that of their families. Many able bodied and highly qualified persons who could not secure gainful employment have remained economically dependent on their parents.

This is because they lack the necessary occupational skills to be self employed and to effectively function in today’s world of work. These occupational skills can be provided by technical and vocational education.

According to Abdulahi (1994) technical education is that aspect of education that involves the acquisition of techniques and application of the knowledge of the science for the improvement of man’s surrounding.

Technical and vocational education prepares one for the world of work with which the individual become reliant and can make contributions to the development of the society. As employers look for new talents every year from new graduates, it is important to not only have a solid education but graduates that have features that stand out from the rest of the graduating students. With the economy being more globalized than ever, it is important to have a background and a skill set

The leaders must recognize the relevance of technical and vocational education in national development and adopt and adapt what works in developed nations

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human resources to productive use. The leaders must recognize the relevance of technical and vocational education in national development and adopt and adapt what works in developed nations. The resources being wasted in the on-going false rebranding campaign should have been used to re-brand the nation’s education sector. No amount of rhetoric (or fanciful slogan) would solve Nigeria’s sociopolitical and economic problems. The leaders could salvage Nigeria’s image by re-branding their mentality and doing the right thing: tackle corruption, reform the electoral system and fix the dilapidated institutions.

Thus, without a fundamental shift in values, beliefs and thinking, and without technological capability, Nigeria will continue to dream of becoming a ‘Great Nation’.

Vanguard, MONDAY, AUGUST 13, 2012 — 19

Using our reserves to achieve economic growth and development in the country. What Nigeria needed to do was to assure these institutions of the safety of their investment and the sanctity of the contract they will enter into with the government.

The government, if it has the will power to engage the private sector in infrastructural development, only need to pledge a portion of the nation’s foreign reserve as a form of indemnity or bank guarantee. This will give such foreign institutional investors assurance of the seriousness the government attaches to the development of infrastructure in the country. It does not require rocket science to fix the nation’s power, roads, rail and others if the government transformation agenda is properly packaged and sold to foreign investors.

Pledging a portion of the reserve is just a form of performance bond that the government will keep to the term of the contract it will enter into with such investors. Once government is faithful and committed to such contracts, the reserves

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n traditional economic management, nations build up foreign reserves to back up their currency. In the early stages of macro economic management, gold was used as a standard to back up national currency. All that has gone. It is now how much reserve you have. Nigeria has been building up its external reserves and it has grown to some level that is comfortably above the global benchmark of at least supporting three months of import. But the critical issue is that the foreign reserve is left in the hands of foreign banks and institutional investors to manage on behalf of the country with very minimal benefit.

The rational question is: Can this external reserve be used for the development of infrastructure to fast-track the nation’s developmental efforts. Nigeria has been talking of public-private partnership for years without any serious engagement with foreign investors who have the financial capacity to undertake massive infrastructural development

The government, if it has the will power to engage the private sector in infrastructural development, only need to pledge a portion of the nation’s foreign reserve as a form of indemnity or bank guarantee

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remain Nigerias’.

Dr. Olusegun Aganga knows as an economist and investment banker that no matter how eloquent he is, no matter the number of countries he travels to with his investment sermons in order to sell Nigeria to foreign investors, the question he would always answer is how credible the government’s public-private partnership policy in Nigeria is. He would always be told that Nigeria does not respect private property rights.

Fortunately, African

Development Bank is proposing to raise funds from among African central banks' foreign reserves kept abroad to finance infrastructure. The funds which will come in form of a bond will be issued to central banks in exchange for 5 per cent of their foreign reserves. President of African Development Bank, Donald Kaberuka, said that the funds would be invested in viable infrastructure projects, offering member-states good returns on their investment, adding that the proposal would be put to members in Tokyo during the IMF meeting in October.

According to those close to the planning, it will be Africa’s first infrastructure bond to member-nations to raise up to $22 billion for investments in projects such as ports and airports.

The AFDB president will not mute the idea if it is not feasible. If Nigeria were not an importd e p e n d e n t c o u n t r y, s h e would have had a reserve close to a trillion dollars.

E v e n a s i t i s n o w, t h e nation still boasts of $35 billion. This money is the amount the nation has surrendered to the Central Bank in exchange for naira. The amount is there only for those who want to buy goods in future from

abroad. Other than that, the money is invested in western banks.

Nigeria as a country needs to mobilise huge amount of money to fund construction of roads, rails and energy generation projects. This can easily be done through the use of part of this reserve as guarantee to would-be foreign investors to attract them into the critical area of the economy.

African central banks have generally invested their foreign exchange reserves in northern hemisphere markets where they earn nothing or very little return. The AFDB planned funds-raising would surpass by $3 billion the $19 billion that both the Tunis-based AFDB and the World Bank commit to sub-Saharan Africa every year.

The time has come for Nigeria to tap into the surpluses of emerging countries. That is where the money is. But charity begins at home. So, tap into our own resources.

Central Bank of Nigeria must apply creative reasoning to use the nation’s foreign reserve to fast-track infrastructural development.

Cover Story

Nigeria freight forwarders seek international certificate T

he Council for the Regulation of Freight Forwarding in Nigeria says it has concluded plans to enable its members get diploma

certificates in International Federation of Freight Forwarding. Mr. Alban Igwe, the council’s Director of Education and Research,

disclosed this in Lagos.

Igwe said that the council was in consultation with several schools in Nigeria, through which its members could be

Contributors protest investment in power, capital market Continued from page 18 challenge we have is that in Nigeria, people do not care to read those guidelines before they make pronouncements.

People say we want pension fund to be used for housing, the law has said we can invest in mortgage backed securities and real estate investment trust. However, there are clear guidelines that must be met before we can do that so that the pension assets are

protected.”

He said “Nevertheless, there can be a tripartite meeting between Government, PenCom and PENOP and we would work out a framework for some of these projects on case-by case bases with government guarantees and these things will begin to happen.

Obviously, if we set out five or 10 per cent of pension funds and do demonstration projects that you can say this

road was financed by pension funds that will be good. There is no place in the world where pension fund has been used to stabilize the stock market or to prop up the stock market, it is not done. You cannot use pension fund to prop up the stock market, because we know what happened in the stock market. When the scheme started, we were allowed to invest up to 25 per cent in the stock market.”

trained. According to him, some of the schools are the Federal University of Technology, Yola; the Federal University of Technology, Owerri; the Benue State University; the Maritime Academy of Nigeria (MAN), Oron; and the Nigeria Institute of Transport Technology, Zaria. He said that the council had submitted its proposal to the international body and would be defending this in October in Los Angeles, United States.

Igwe said that the council, with the assistance of experts from Singapore and Nigeria, had drawn up a curriculum of international standard to help the council achieve its aims.

He reiterated that the certificate was necessary to enable the council members practice freight forwarding

anywhere in the world. ”The era we are in now is one in which you cannot do freight forwarding business without education. You need sufficient knowledge, even in information technology, and if our members have the international certificate, it will help enlarge their horizon. Our freight forwarders would be able to practise freight forwarding anywhere in the world— be it in Nigeria, USA, France or elsewhere,” he said.

He said that time was running out on those in the freight forwarding business who do not have the required certificates. Igwe added that a school certificate was no longer enough for a freight forwarder to do business competitively.

20 — Vanguard, MONDAY, AUGUST 13, 2012

Business & Economy BRIEFS Augusto & Co rating agency upgrades banks on stable outlook

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igeria’s main ratings agency, Agusto & Co. upgraded the country ’s banking sector on Thursday by one notch to Bbb from Bb, with a stable outlook, citing improved earnings and capital ratios. In a ratings report on Nigerian banks, the agency said credit growth was gradually returning and risk aversion waning as banks recovered from the shock of a $4 billion bailout in 2009. It said the upgrade was based on the banks’ financial condition and their capacity to meet their obligations, assuming the political environment did not get any riskier.

Nigerian banks have staged a sharp recovery in earnings during the first half of 2012, with mid-tier lender, Diamond Bank posting a four-fold profit rise, while First Bank and UBA doubled profits during the period. Banking sector capital ratio was 25 per cent in 2008.

Nigeria auctions N172bn in Tbills, tightens liquidity

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igeria sold N172.1 billion in treasury bills, more than expected, and increased the yield it offered on the short-dated paper to mop up liquidity to support the currency, the central bank said. The bank said last week it would auction N142.1 billion of treasury bills with maturities of between three months and one year. It gave no reason for the additional N30 billion of issuance. The naira surged 1.1 per cent to a more than two-week high on the inter-bank market following the sale and after NNPC sold $450 million to banks in exchange for the local currency. The central bank said it had sold N50 billion of 182-day Treasury bills at a yield of 15.30 per cent, higher than 14.94 per cent at its previous auction last month. It sold N90 billion of 364-day bills at a yield of 15.38 per cent, compared with 15.60 per cent a month ago, and N32.06 billion of 91-day bills at a yield of 14.5 per cent, higher than 13.94 per cent at the last such auction a month ago.

Potential grows for food crisis as prices surge — UN

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he world could face a food crisis of the kind seen in 2007/08 if countries restrict exports on concerns about a drought-fuelled grain price rally, the UN’s food agency warned on Thursday, after reporting a surge in global food prices in July. A mix of high oil prices, growing use of bio fuels, bad weather, soaring grain futures markets and restrictive export policies pushed up prices of food in 2007/08, sparking violent protests in countries including Egypt, Cameroon and Haiti.

Concern about extreme hot and dry weather in the U.S. Midwest sent corn and soybean prices to record highs last month, driving overall food prices higher again and reversing the Food and Agriculture Organisation’s forecast for declines this year. “There is potential for a situation to develop like we had back in 2007/08,” the FAO’s senior economist and grain analyst, Abdolreza Abbassian told Reuters.

“There is an expectation that this time around, we will not pursue bad policies and intervene in the market by restrictions, and if that doesn’t happen, we will not see such a serious situation as 2007/08.

But if those policies get repeated, anything is possible.” A number of major producers imposed various restrictions on exports in an attempt to control domestic prices in the 2007/08 crisis, including outright bans as well as quotas or higher tariffs on exports of foods including rice, corn and

wheat. The restrictions reduced supply on international markets, helping to drive prices even higher. Grain markets have been boosted recently by speculation that Black Sea grain producers, particularly Russia, might impose export restrictions after a drought there hit crops. Markets drew a little comfort from official Russian comments on Wednesday that the country saw no grounds to ban grain exports this year but did not rule out protective export tariffs after the end of the 2012 calendar year.

The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, averaged 213 points in July, up 6 per cent from 201 points in June, the FAO said in its monthly index update. The rise, which followed three months of declines, was driven mainly by a surge in grain and sugar prices, while meat and dairy prices were little changed, the FAO said. It said the U.S. drought, which is the worst to hit the Midwest in 56 years, had pushed up corn prices by almost 23 per cent in July, and

international wheat prices had followed, rising about 19 per cent amid worsening output prospects.

Although below a peak of 238 points in February 2011, when high food prices helped drive the Arab Spring uprisings in the Middle East and North Africa, the index is still higher now than during the food price crisis in 2007/ 08. Higher food prices mean higher import bills for the poorest countries, which do not produce enough food domestically, and a strong dollar would deepen that impact.

*Mr. Akintola Williams, doyen of Accountancy profession and Doyin Owolabi at the doyen's 93rd birthday on Aug 9, 2012.

Channel funds to sectors with high potentials for productivity —NACCIMA

By NAOMI UZOR

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he Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has urged the Federal Government to channel funds to sectors with high potentials for productivity.

Speaking at a meeting with stakeholders on CBN intervention funds the National President of NACCIMA, Dr. Herbert Ademola Ajayi , said that the funds should be channelled to sectors with high potentials for productivity

and more money should be allocated to existing funds while new funds are created for other sectors considered relevant.

“The top ten sectors the government should focus on include. Agriculture, SMEs, Manufacturing/Infrastructure, Power/PHCN, Education, Health, Entertainment, Transportation, Land & Housing and Security,” he said.

According to him, there is a need to create more awareness of available funds, including detailed information on the

requirements. The proposed tenure of intervention funds should be between 1-10 years and funds should be disbursed through appropriate channels such as Apex registered associations, Cooperatives, Unions, etc, adding that intervention funds are created to stimulate businesses, which will in turn impact economic growth.

Hence, the process for accessing funds should be made easier, while the collateral requirements should be reduced.

He said government should do more to manage funds

efficiently. There should be transparency in the management and disbursement of the funds, with the private sector stakeholders duly carried along. Infrastructure and power supply should be attended to urgently as this hinders business performance and negates the whole essence of the funds and Government/Private Sector need to device means of encouraging/empowering the feminine gender to attempt accessing intervention funds based on existing/generated modalities.

Vanguard, MONDAY, AUGUST 13, 2012 — 21

22 — Vanguard, MONDAY, AUGUST 13, 2012

Banking & Finance BRIEFS Fidelity Bank is helping to build better society — Aliyu

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iger State Governor, Alhaji Mu’azu Bababgida Aliyu, has said that the involvement of Fidelity Bank Plc in community work in the state has helped to improve the welfare and social condition of the people of Niger State.

The Governor who made this statement while commissioning the classroom blocks at Maitumbi Primary School, Minna, that were renovated by the bank said that Fidelity Bank has used its Corporate Social Responsibility (CSR) practice to enhance the lot of the society. Speaking through the state Commissioner for Basic Education, Mrs. Susan Gana, Governor Aliyu said he was impressed by such an initiative where staff would take charge and be responsible enough to make contributions to their immediate environment.

“This is indeed a laudable project. A project that we hope every stakeholder in the state would emulate.

We appreciate your presence in our state and we hope that your stay will remain prosperous and fruitful,” he said.

UBA boss advocates strong ethical standard in banking industry

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he GMD/CEO UBA Plc, Mr. Phillips Oduoza said very high ethical standards supported with robust corporate governance, is imperative to sustain recent positive developments in the Nigerian banking industry.

The UBA boss said this recently when the new President and Chairman of Council, Mr. Segun Aina, and other executive members of the Chartered Institute of Bankers of Nigeria (CIBN), paid a visit to the Head Office of the bank in Lagos, as part of the institute’s stakeholder engagement agenda.

Mr. Oduoza, who noted that the banking industry has been refocused on real sector growth and development owing to the recent regulatory reforms, opined that strict adherence to code of ethics will help sustain the recent gains.

*From left: Ajen Sita, CEO for Africa, Ernst & Young, Tony Elumelu, Chairman, Heirs Holdings Limited, Henry Egbiki, Regional Managing Partner for West Africa, Ernst & Young and Adim Jibunoh, Chief Operating Officer, Heirs Holdings Limited, during a visit to the Corporate office of Heirs Holding in Lagos.

CBN receives N1.02bn from investment in AFC …Six Nigerian banks get N1.053bn

BY MICHAEL EBOH

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he Central Bank of Nigeria, CBN, received about N1.02 billion ($6.375 million) as dividends for its shareholding in the African Finance Corporation for the 2011 financial year.

The amount accruable to CBN was as a result of its 42.5 per cent shareholding in the supranational financial institution.

The AFC, in its annual report and accounts for the 2011 financial year obtained by Vanguard, declared a total dividend of N2.4 billion ($15 million), representing a dividend per share of 1.375 cents (220 kobo).

Also, six Nigerian banks with a combined shareholding of 43.9 per cent received a combined dividend of N1.053 billion. A breakdown of the dividend showed that United Bank for Africa Plc, with 10.7 per cent holding in the AFC, received a dividend of N257 million; First Bank of Nigeria Plc got a dividend of N221 million for its 9.2 per cent stake in the institution and Access Bank Plc received a dividend of N245 million for its 10.2 per cent stake.

Zenith Bank Plc, Union Bank Nigeria Plc and Ecobank Nigeria Plc got a dividend of N110 million each for their 4.6 per cent stake in

the AFC respectively.

The AFC was established, May 2012, and a decision was reached by the directors to commence the payment of dividend to shareholders three years from inception, starting from its 2011 financial year. The dividend for its 2011 financial was paid in 2012, after the approval of shareholders at its annual general meeting in Lagos.

Analysis of its financial statements shows that its interest income appreciated by 54.18 per cent to US$45.368 million, compared to US$29.425 million recorded in its 2010 financial year while it recorded fees and commission income of US$11.862 million, rising by 100.95 per cent from US$5.903 million recorded in 2010.

The AFC recorded operating

income of US$56.945 million, rising by 61.19 per cent from US$35.328 million recorded in 2010; administrative expenses of US$22.196 million, up from US$17.454 million in 2010, while it recorded a profit of US$34.749 million, appreciating by 218.59 per cent from a profit of US$10.907 million recorded in 2010.

Mr. Adebayo Ogunlesi, Chairman of the AFC, attributed the improvement in its bottom line and attractive dividend payout to its prudent and vigorous risk management framework.

According to him, the Corporation’s prudent and vigorous risk management framework has allowed for accurate and efficient pricing of risk in selected projects across geographies.

Ogunlesi said, “In 2011, AFC continued to deliver on its twin objectives of financial stability and profitability. The Corporation remained very liquid in 2011, taking advantage of the stable currency regime in the host country which was bolstered by higher interest rates for USD denominated placements.

“At the end of 2011, AFC’s total asset base was US$1.26bbillion with 93 per cent financed through shareholders equity, which gives the Corporation sizeable headroom to leverage its balance sheet.”

On its strategy for the 2012 financial year, Ogunlesi said, “In 2012, AFC will seek to enhance its level of efficiency in transaction execution, building on the lessons and successes of the last three years.

Liquidated banks: NDIC commences inspection of agent banks are made to the depositors of

BY NKIRUKA NNOROM

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he Nigeria Deposit Insurance Corporation (NDIC) said it has begun onsite visitation to select agent banks to ascertain their level of compliance with processes of ensuring prompt payment to depositors of liquidated Deposit Money Banks (DMBs) and MicroFinance Banks (MFBs).

The exercise, which was kicked off by Claims Resolution Department (CRD) of the Corporation, would cover 93 selected branches of the agent banks spread across the nation.

Hadi Birchi, Head of Communication, and Corporate Affiars, NDIC, said that 93 agent banks have been selected on zonal basis to

allow for an effective conduct of the exercise.

He said that a total of 27 branches of the banks would be visited in the South-West, 24 in North-Central and 13 in the South-South, while 15 branches would be visited in the South-East, eight in the North-East and six in the North-West zones.

The major objective according to him, was to confirm that payment to depositors is carried out expeditiously and in conformity with the operational guidelines already given to the agent banks by the Corporation.

He said that the exercise would help to assess and ensure that payments of both insured and uninsured deposits remitted to the banks

the closed banks without hindrance.

The exercise, according to him, would help to ensure that the banks properly keep the payment documents forwarded to them by the Corporation such as mandate files, signature cards, liquidator’s certificates, deposit registers, to ensure that payment to the depositors are not impeded by the absence of these records.

Apart from using the opportunity to identify and address areas of challenges being faced by the agent banks that might hinder them from making payment to depositors of the closed banks, he said that the Corporation would go further to train the desk officers in charge of payment where the need arises.

Vanguard, MONDAY, AUGUST 13, 2012 — 23

Banking & Finance

FCMB invests N4bn in TPUL power plant in Ogun

By LAZARUS IBEABUCHI & ELIZABETH AMIHOR

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irst City Monument Bank Plc, FCMB, said it has entered an agreement with Tower Power Utilities Limited, TPUL to invest N4 billion in financing the company’s 17.75 Mega Watts capacity combined cycle gas fired power generation plant in Otta Industrial Estate, Ogun State.

According to a statement by the bank, the N4 billion financing was granted through the Bank of Industry’s N300 billion Power and Aviation Intervention Fund (BOI-PAIF), which was launched in August 2009 by the Central Bank of Nigeria to facilitate investment in two of Nigeria’s key sectors which have the potential to drive sustained economic growth.

The statement explained that FCMB refinanced TPUL’s existing non BOIPAIF debt and has subsequently financed increased capacity from

BRIEFS UBA, Benin Republic partner on infrastructure, economic devt

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From left: : Head of Marketing, Interswitch, Enyioma Anaba; Country Director, Students In Free Enterprise (SIFE) Nigeria, Adesuwa Ifedi and Divisional Head, Techquest, Interswitch, Babafemi Ogungbamila at the grand finale of SIFE Challenge 2012 sponsored by Interswitch in Lagos.

8.75MW to 15.75MW owing to increased demand from its customers in the Otta Industrial Estate.

The bank further stated that the company plans to increase capacity to 17.75 MW with the addition of 2MW Waste Heat Recovery Apparatus (WHR) for improved efficiency, the statement said.

The statement noted that power is distributed through

a small 11KV distribution system installed and owned

by TPUL and generated by Cummins-made gas engines.

“The feedstock is gas, supplied by Shell through a pipeline which terminates in the Ota Industrial Estate.

Apart from scheduled maintenance, the gas supply has been uninterrupted since inception,” the bank said.

M r. Robert Grant, FCMB’s Vice President and Group Head, Project and Structured Finance commented that FCMB was proud to support TPUL’s business model as it provided clean, reliable and affordable electricity to manufacturing companies and that removing these potential users from the national grid has reduced the burden on the Transmission Company of Nigeria’s (TCN) thus, beneficially supporting domestic users with more stable power.

Adlevo, Intel Capital pursue African expansion, invest in Rancard

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dlevo Capital Managers, LLC (“Adlevo Capital”), a private equity fund manager focused on investments into technology-enabled businesses in sub-Saharan Africa, and Intel Capital, Intel’s global investment and M&A organization, has announced that they have completed an expansion investment into Rancard Solutions Limited, a provider of cloud based software for mobile content discovery and delivery, focused on Africa.

Commenting on the investment, Kofi Dadzie, CEO of Rancard, said, “Today’s investment will play a vital role in enabling us to expand our footprint across Africa on both a reputational and operational level. We’re delighted that both Adlevo Capital and Intel Capital have agreed to come onboard at a time of such opportunity and are excited about working with such experienced and globally recognized partners.”

Since launching in 2001, Rancard has established itself as a trusted provider of cloudbased mobile software and services which Africa’s mobile operators are increasingly turning to. As voice-based average revenue per user declines, mobile operators are increasingly using Rancard’s content discovery platform to profitably increase data revenues by delivering targeted content to their subscribers.

The company has developed a cloud-based social recommendations engine called ‘Rendezvous’, which maps connections among mobile users and then uses this mapping of shared interests as a basis for recommending content to consumers.

n line with its policy of contributing to the economic development of host economies where it operates in, United Bank for Africa (UBA) Plc is to collaborate and partner with the Government of Benin Republic in infrastructure and other key sectors of the economy.

Facts to this effect emerged when the Group Managing Director/CEO, UBA Plc, Mr. Phillips Oduoza and other Group executives met with the President of Benin Republic, Dr. Boni Yayi in Cotonou.

The President who described the meeting with UBA as a seal on the harmonious relationship between government and people of Benin Republic, called on UBA to explore several ways of helping in the realization of the objective of his administration to grow the economy. “We are currently growing at 3 percent but my plan is to achieve up to seven per cent growth rate,” he stated.

Speaking at the meeting, Oduoza expressed the Bank’s willingness to partner and invest in the infrastructure and economic development of the West African country, noting that as one of Africa’s leading financial services group, UBA has proven ability to finance big ticket transactions across the continent.

GIABA organizes workshop on free trade zones for stakeholders he Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) is organizing a two-day national workshop on Money Laundering through Free Trade Zone for stakeholders in Nigeria in Lagos, Nigeria.

The objectives of the workshop, which is scheduled to take place between August 14 and 15, 2012, include to provide participants with the knowledge and tools required to file mandatory and suspicious reports to relevant authorities; and to afford participants the opportunity to share and listen to practical and live experiences of required FATF recommendations internal control processes, and handson procedures, programs and policies of AML/CFT compliance.

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24 — Vanguard, MONDAY, AUGUST 13, 2012

Micro-Finance Stories by PROVIDENCE OBUH

D

iamond Bank in collaboration with the International Finance Corporation (IFC) has said that it would further strengthen the Micro Small and Medium Enterprises (MSMEs) in the country by making funds available to grow the sector.

This is in line with the $70million 7-year convertible subordinated loan granted to the bank by IFC and Africa Capitalization Fund Limited (a specialized IFC-fund set up and managed by IFC Asset Management Company.

Speaking at a media briefing heralding the signing ceremony of the Tier 2 loan, Chief Executive Officer of the Bank, Dr. Alex Otti said that the facility would go a long way in helping the bank expand its retail banking footprint across Nigeria and West Africa.

Otti describe the instrument as a succour to the bank customers, adding that it would further help in strengthening the bank’s ability to grow its MSMEs banking business.

Accordingly, he said the loan would assist African banks in raising capital to fund growth.

Diamond Bank, IFC to strengthen MSMEs He said, “As the leading SMEs bank, we have indicated in March 2011 that we would continue to make funding available to Small and Medium Scale Enterprises in the real sector of the economy as they are acknowledged as the undisputed engine of economic growth and development.

“With our branches close to 250 around the country, with excellent services driven by innovation and delivered through the most advanced banking technology platform in the market, Diamond Bank

currently offers full range of banking services through its offices in Republics of Benin, Togo Cote D’voire and Senegal. Diamond Bank has over the years leveraged its underlying resilience to grow its asset base and successfully retain its key business relationships.

“We have posted a net profit before tax of N15.4 billion in th the half-year ended 30 June 2012, representing an increase of 413 per cent from the N3 billion it recorded in the corresponding period of 2011.

Total assets stood at N960

billion as at 30th June 2012, a growth of 20 per cent from31st December 2011 position of N802 billion.”

On the other hand, IFC Country Manager for Nigeria, Mr. Solomon AdegbieQuaynor said that the corporation’s capital base outstanding in Nigeria is over N1 billion, while about 70 per cent of that is in the financial sector.

Adegbie-Quaynor said it is increasingly focusing on doing more in the real sector of the economy, saying that it is

interested in the infrastructural and the industrial sector, among others.

“Our partnership with Diamond bank is not only going to be investment in Diamond Bank but is also going to be co-investment or co-financing power project, transport project, oil and gas infrastructure project. Going forward, we are very interested in Nigeria and we do hope that our investment will be primarily in the real sector but in partnership with Diamond bank,” he said.

Why banks decline microfinancing – Industry Captain n Industry Captain in the Manufacturing sector has said that Banks fail to grant loan to most Small and Medium Enterprises due to inability on their part to service loan facility, while some of them are even too small to access credit individually.

The Industry Captain, Mr.

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Muda Yusuf, DirectorGeneral of the Lagos Chamber of Commerce and Industry (LCCI), said, “Commercial banks’ tolerance on the manufacturing sector continues to decline due to the perception of the sector as very risky and SMEs lack of capacity to package bankable credit requests, some are even too small to access credit individually.”

Yusuf noted that most entrepreneurs cannot meet banks’ credit requirement, especially collateral, saying that experience of banks with loan quality of manufacturing and other real sector investors would not dispose them to give further loans.

Decrying the dearth of credit facilities to investors, he said, “it is more attractive to invest in government

securities than to invest in ventures that would create jobs.

“Even banks would rather buy treasury bills and government bonds than give loans to investors. This credit and interest rate structure would continue to create distortions in the economy, and perpetuate the phenomenon of jobless growth and further depress the stock market.

Vanguard, MONDAY, AUGUST 13, 2012 — 25

Corporate Finance

Diamond Bank has no plan for merger, acquisition …To grow organically

BY PROVIDENCE OBUH

D

iamond Bank Plc has explained that it has no plan for Merger and Acquisition (M&A) at the moment, but to concentrate on organic growth.

The bank further promised to excite its investors by paying dividend to them by 2012 and in the future given the remarkable performance for the first half of 2012.

Managing Director/CEO, Diamond Bank, Mr. Alex Otti said: “The bank has struggled in the past, and given that in the last one year it has written off over N44 billion bad debts, as a result, it has not been able to pay dividend.”

To this end he said, “Assuming that it did not happen, we would have been able to pay dividend, so I can assure you that going forward, you will be able to get dividend because you can only make dividend when the bank makes money.

“Our shareholders may not have received good dividend but I do know that the first year I came here, I paid dividend no matter how small.”

He pointed out that in the first half report, it posted a profit-before-tax of over 15 billion, and sustaining the trend means the bank would have made at least N30 billion in terms of profit-before-tax and as a result, there would

be something for the shareholders.

He said, “So I will encourage you not to sell your shares because there is light at the end of the tunnel.”

Speaking on the bank's plan on Merger and Acquisition option, he revealed that more than 60 per cent of Merger

and Acquisition destroy shareholders' value, stressing that the bank is careful not to do anything that does not make sense.

“Our priority is organic growth and we are already on that path, if in the process we see a Merger & Acquisition that make sense, we will look

at it.”

Describing what he called organic growth, he stated that at the moment, the bank is growing organically. “We are not unnecessarily or unduly aggressive about inorganic growth.

“We are the only bank operating a unified licence in the French zones. What that means is that with the licence we got from Benin Republic, we were able to expand to all the French-speaking West African countries without looking for another licence, so recapitalisation in the original bank in Benin Republic is what we are taking into consideration in looking at the bank for recapitalisation.”

*From Left: Director-General, Federal Institute of Industrial Research Oshodi (FIIRO), Dr. (Mrs) Elemo Gloria Nwakaego presenting the ‘Most Endorsed Consumer Packaged Goods Company’ award to Procter and Gamble Communications Manager for Greater West Africa, Ayotomiwa Ajewole at the second edition of the CSR Nigeria Awards held in Lagos.

Fidson Healthcare shareholders endorse N150m dividend … Turnover up by 39%

BY PETER EGWUATU

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hareholders of Fidson Healthcare Plc have approved the N150 million dividend proposed by its Board of Directors for the audited 18 months financials ended December 31, 2011.

The shareholders at the 13th Annual General Meeting (AGM) held last week in Lagos commended the Board of Directors for weathering the storm, given the numerous infrastructure challenges facing the economy.

Speaking at the AGM, Mr. Gbenga Idowu, National Coordinator, Shareholders United Front (SUF), said: “Fidson Products are of high quality and comparable with foreign products. We want the management to keep it up and also do aggressive marketing

to attract more customers’ patronage. The mission statement of the company is good and must be adhered to.

Management should increase its drive to recover debt from debtors so that there will be less provisioning in our financials.”

Mr. Nonah Awoh, another shareholder said, “Management needs to work harder to improve the sales turnover because of the competition in the pharmaceutical industry. Also the company ’s funding formula need to be addressed.”

Mr. O. Arogo, another shareholder commended the company’s performance. In his words, “For getting 10 kobo dividend during the harsh operating period the compan is a boost. We want the company to organise investors' forum so that

shareholders can use such avenue to give ideas that will help push up the company.

Also, the company should collaborate with the National Agency for Food Drug Administration and Control (NAFDAC) to fight fake drugs importation and other mal practices in the industry.”

While commenting at the AGM, Chairman of Fidson, Mr. Felix Ohiwerei, said, “During the period under consideration, the company made history by being at the forefront in the war against faking by introducing the soflet technology for CIPROTAB, our brand of ciprofloxacin. We progressed on the development of Biotech factory and took all necessary steps to comply with the International Financial Reporting Standards (IFRS).

We restructured our sales policy and achieved

considerable reduction in debtors' balances.”

On the financial performance, he said, “Result for the period is a reflection of the challenging operating environment. Turnover for the 18 months ended December 2011 was N7.1 billion. For direct comparison, turnover for 12 months to June 2011 were N4.7 billion as compared with the previous 12 months of N5.1billion.

Profit-after-taxation for the period under review was N312 million.

On future outlook, Ohiwerei said: “Our performance during the first half of the current year is in line with our plan. The Board and Management believe that if there are no major disruptions in the second half of the year, the 2012 results will be an improvement on 2011.”

BRIEFS Tantalizers rewards customers with ‘EASY WIN’ promo

By NKIRUKA NNOROM s a way of identifying with its teeming Customers, Tantalizers Plc, Nigeria’s foremost Quick Service Restaurant, has commenced process of rewarding customers with its 2012 National Promotion tagged ‘Easy Win’ Promo.

The annual promo has become a traditional way through which Tantalizers say thank you to those loyal customers that have kept faith with the brand despite having other options.

According to the Executive Director, Marketing/ Franchise, Mr. Olumide Ale, this year ’s promotion which runs from July through the month of September is one of Tantalizers’ way of showing appreciation to its loyal Customers while, also tying it in with its philosophy of passionately keeping the promise of ‘every bite, a promise kept’.

“This is reflected in the season relevance gifts on offer across the Nation. The promo modalities would ensure that a lot of customers win these items,” he said.

Shedding light on the Promotion modalities, Mr. Ale revealed that, winning would be instantaneous with gifts such as Umbrellas, Family slice bread and hot tea/coffee.

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Knight losses estimated $270m after taxes

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rading losses at Knight Capital Group Inc. were about $270 million after taxes from the August 1 software glitch that sent the firm scrambling for a financial lifeline, Chief Executive, Tom Joyce told clients in a letter.

The brokerage has suffered from a decline in customer confidence following last week’s debacle, which resulted in the trading losses and a $400 million weekend deal for a consortium of financial firms to take a more than 70 per cent stake in the firm for a heavily discounted $1.50 a share.

26 —Vanguard, MONDAY, AUGUST 13, 2012

Corporate Finance BRIEF Schneider Electric invests on new technologies for panel builders

By PRINCE OSUAGWU

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Share value appreciates by N19bn

BY MICHAEL EBOH & CHINEDU IBEABUCHI

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he value of listed equities on the Nigerian Stock Exchange, NSE, represented by the market capitalization, appreciated by N19.15 billion last week to close at N7.397 trillion.

Specifically, the capitalization which opened the week at N7.487 trillion rose by 0.26 per cent to close at N7.397 trillion. Another key performance indicator, the All-share index gained 60.16 points to close at 23,239.03 basis points from 23,178.87 points at which it opened.

Eterna Plc led 30 other

companies on the price gainers’ chart, appreciating by 26.42 per cent or N0.56 to close the week at N2.68 per share; Glaxo SmithKline Consumer Plc followed with a gain of N0.55 or 1.93 per cent to close the week at N29.05 per share, while Union Bank Nigeria Plc garnered N0.47 to close at N4.88 per share.

Other share price gainers include: International Breweries Plc N0.42, Forte Oil Plc N0.42, National salt Company Plc N0.30, Smart Products Nigeria Plc N0.21, Cadbury Nigeria Plc N0.16, RT. Briscoe Plc N0.14 and UTC Nigeria Plc N0.13 among others.

On the contrary, Total Nigeria Plc led 35 other

companies on the price losers’ category, dropping by N4.99 to close at N128.01; Dangote Cement Plc followed with a loss of N3.50 to close at N115 per share and Nigerian Breweries Plc dipped by N3.30 to close at N119 per share.

Other share price losers include: Conoil Plc N2.50, Mobil Oil Nigeria Plc N2.26, Arbico Plc N1.68, Unilever Nigeria Plc N0.95, PZ Cussons Nigeria Plc N0.93, Roads Nigeria Plc N0.60 and Presco Plc N0.51 among others.

Equity trading depreciated by 10.41 per cent in the week under review, as investors exchanged 1.318 billion shares valued at N9.136 billion in 19,200 deals, compared to the

penultimate week’s turnover of 1.471 billion shares valued at N12.350 billion in 19,228 deals.

The Financial Services sector was the most active during the week with 1.113 billion shares valued at N7.055 billion in 11,381 deals.

Volume in the sector was largely driven by activity in the Banking sub-sector, led by trading in the shares of Zenith Bank Plc and First Bank of Nigeria Plc. Trading in the shares of the two banks accounted for 270.345 million shares, representing 35.26 per cent, 24.29 per cent and 20.51 per cent of the turnover recorded by the sub-sector, sector and total turnover for the week, respectively.

Stakeholders condemn NSE management over foreign trips …Kick against neglects of retail investors

BY PETER EGWUATU

S

takeholders in the Nigerian capital market have condemned the continuous foreign trips by the management of the Nigerian Stock Exchange (NSE) in its quest for foreign investors.

A cross section of shareholders who spoke to Vanguard faulted the NSE management for ignoring retail investors who had provided succour to the market during the global financial meltdown that led to the exit of foreign investors.

Reacting, to the development Ambassador Olufemi Timothy, President, Renaissance Shareholders Association of Nigeria, said, “We are disappointed with the management of the NSE for not recognizing local retail investors who had kept the market from total collapse.

The NSE is not interested in retail investors. NSE Believes

that the market is for institutional and foreign investors.

The new management of the NSE had not met with the local shareholders groups to discuss issues that affect the market and seek possible ideas that could be adopted to restore investors’ confidence.

The local investors don’t have any relationship with the Exchange yet. The NSE had even threatened to ban retail investors from investing directly in the market. It is really sad, that people we had expected would bring their expertise to bear are disappointing us.”

In his own response, Mr. Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria (PSAN),who spoke the minds of its shareholders, said, “ As far as am concerned the current leadership in the NSE ve not done enough in terms of meeting with local investors. There is an adage that says, “Charity begins at

home. We have not seen any impact on the stock market since the new management led

by Oscar Onyema took place.

His foreign trips are mere waste of time, it is high time we begin to look inward than outside in growing our economy via capital market which we have not seen since SEC took over the running of the NSE.

I

want to say that Oscar does not know any shareholders association in the Nigerian capital market since he assumed office. So if he is interested in developing the market there is need for him to seek the confidence of local investors than going abroad in search of foreign investors that will not help him achieve his goal if he has any.

The local investors are the one that sustained our market not the foreign investors.”

Speaking as well, Mr. Taiwo Oderinde, Coordinator, Proactive Shareholders Association of Nigeria

(PROSAN), said, “The management of the NSE is deceiving itself. They are only looking for avenue to take money out.

The CEO of the NSE will not succeed in his rescue mission if he does not take actions that will improve the market. It seems that he does not merit that position together with his management team.”

It will be recalled that the NSE recently led top Nigerian companies to London Business Expo in its quest to search for foreign investors.

Specifically, the NSE led 15 companies and some market operators to The African and Caribbean 2012 Business Expo taking place in London from 4th to 9th August, 2012.

The Expo which is a key business related event at the Olympics in London was organized by the African and Caribbean Business Experience Ltd (AACBE) in collaboration with Urban Inclusion and Regenfirst.

lobal energy m a n a g e m e n t specialists, Schneider Electric, has said that it was making very serious investments on new technologies to ensure that Nigerian panel builders in particular, remain competitive among peers in other parts of the world.

The company made the declaration in Lagos recently as it signed Memorandum of Association with about four panel builders to strengthen its commitment towards supporting its partners to increase their capacity and competitiveness.

In his presentation at the event, the country president of Schneider Electric Nigeria, Mr. Marcel Hochet, said the company is ready to provide technical support and training to panel-builders by leveraging on its global wealth of experience. He stated that between the period the last forum was held and now, Schneider Electric had developed new products and invested in new technologies aimed at making the panel building business more competitive and profitable.

The signing of the MoU’s with four partner panel-builders he explained marks the commencement of a new level of partnership and capacity enhancement for the partners.

“We will continue to offer strategic partnership through technical and business support via requests for quotes or business redirection by our clients as well as training of partners’ employees to increase their competence and enhance profitability in their business”, he said.

He assured the panelbuilders that Schneider Electric will continue to explore opportunities to ensure that their interests are protected at all times. He disclosed that the company would soon launch some new products that will further increase the capacity of panel-builders. He also stated that there are plans to strengthen Schneider Electric’s operations in Nigeria in the area of manufacturing.

Also speaking at the event, Mr Ajay Shroff, Vice-president, Power & Buildings Business, reiterated Schneider Electric’s preparedness to render technical support to the panel builders. He revealed that the panel builders are strategic to the operations of Schneider Electric and advised them to route all purchases through approved distributors. “Our

1.37

1.05 5.52 1.03 6.43 33.61

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

40.12

6.51 4.94 52.50 1.91 4.46 0.67

14.90 500.00

10.55 36.19 3.13 2.88

25.00 36.46

7.44 0.64 0.57 2.68 10.21 1.29 0.50 12.00 3.04 17.60 1.07 0.70 1.15 2.97 0.88 7.00 1.10 4.40 4.41 0.50 0.50 14.95

0.50 0.65 0.50 0.50 0.50 1.35 0.50 0.56 0.50 1.55 0.50 0.72 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.51 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

0.50 0.50

0.50 2.02 0.58

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

3.29 242.20 5.93 122.00 0.89

Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers

0.50

100.00

Real Estate Investment Trusts Skye Shelter Funds CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc

9.85

0.50 29.60 15.35

1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc

Real Estate Development UACN Property Development

0.50

Oil and Gas and Products Petroleum Products Capital Oil Plc

Company

Opening Price (N)

Capital Market

7.39

0.50 2.02 0.53

0.50 0.50

0.50 0.65 0.50 0.50 0.50 1.29 0.50 0.50 0.50 1.60 0.50 0.55 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.51 0.50 0.50 0.52 0.50 0.50 0.50 0.50 0.50

7.50 0.64 0.55 2.71 10.33 1.31 0.50 12.08 3.09 17.70 1.07 0.70 1.15 2.65 0.88 6.55 1.09 4.30 4.88 0.50 0.50 15.00

24.07 35.50

10.03 36.19 2.95 2.88

15.06 500.00

6.51 4.50 52.00 1.97 4.76 0.80

40.12

3.29 242.20 6.35 119.00 0.93

0.50

100.00

9.85

26.25 7.21

1.14 5.52 1.05 5.81 33.52

1.37

0.50 29.60 14.85

0.50

Closing Price (N)

1,500

512 84,748 62,400

419 62,400

10,991,429 661,500 1,000 2,000 100 1,287,070 893,577 489,000 2,000,000 1,698,475 7,100 86,200 100 1,670,890 80,000 140,000 1,000,000 100,000 206,500 1,300 2,000 5,776 200 500 100,000 56,050 112,000 100

7,927,321 646,608 13,287,533 11,576,998 618,258 4,160,901 1,000 11,402,231 8,766,723 22,251,789 56,000 73,200 91,000 12,239,501 1,006,032 9,694,209 4,071,384 11,443,807 988,716 504,850 10,000 15,801,264

329,069 321,750

120,500 60 997,949 50

309,336 31,783

952,358 3,089,888 426,853 221,780 560,980 162,350

1,750

100 93,347 792,987 792,987 500,000

183,000

100,000

34,509

10,680 2,500

126,848 700 12,999,854 100,100 477,853

1,133,566

909 40,350 219,218

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

51.49

9.52

0.50 2.02 0.50

0.50 0.50

0.50 0.85 0.50 0.50 0.50 2.00 0.50 0.50 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.90 0.50 0.50 0.50 0.50 0.50 0.50

4.26 0.64 0.53 2.05 1.65 1.20 0.00 7.95 3.60 11.64 0.00 0.87 0.00 3.90 0.73 6.30 0.95 2.17 1.96 0.50 0.52 11.45

27.00 22.56

12.71 36.19 4.78 2.66

10.17 367.83

4.31 4.02 57.00 2.31 3.80 0.50

,39.00

2.23 186.00 5.23 72.50 0.93

4.63

0.50

97.00

11.59

32.96 3.01

1.45 5.52 0.50 6.43 28.70

0.48

0.50 14.53 6.40

Year Low

255.00 7.10 100.00 1.01

0.50

100.00

20.15

62.26 8.28

2.54 8.28 1.82 7.60 42.50

0.66

0.64 24.58 8.30

Year High

0.00

0.00 0.00 0.03

0.00 0.00

0.09 0.10 0.00 0.00 0.06 0.43 0.00 0.00 0.00 0.08 0.00 0.00 0.00 0.02 0.06 0.10 0.00 0.10 0.36 0.01 0.01 0.14 0.03 0.07 0.00 0.00 0.00 0.00

0.80 0.00 0.00 0.00 0.28 0.22 0.00 1.34 0.69 1.61 0.00 0.18 0.00 0.85 0.50 0.54 0.22 0.13 7.59 0.11 1.34 1.57

1.29 1.32

3.90 1.61 0.70 0.00

0.28 15.94

0.54 0.71 4.50 0.26 0.73 0.06

3.70

12.12 0.35 4.50 0.00

0.00

0.00

11.75

1.66

3.26 3.66

0.28 0.35 0.22 0.31 7.03

0.04

0.01 7.94 1.80

E.P.S.

0.00

0.00 0.00 16.67

0.00 0.00

5.56 10.20 0.00 0.00 8.33 4.88 0.00 0.00 0.00 17.25 0.00 0.00 0.00 25.00 8.33 5.00 0.00 5.00 1.39 50.00 50.00 6.43 16.67 7.14 0.00 0.00 0.00 0.00

5.83 0.00 0.00 0.00 25.91 6.68 0.00 6.96 6.20 8.74 0.00 5.44 0.00 5.07 5.44 14.81 4.68 19.23 0.28 4.82 0.43 7.83

20.93 20.46

3.26 22.48 7.34 0.00

37.57 27.96

16.91 14.38 16.89 16.92 5.75 8.83

13.92

19.98 16.29 22.22 0.00

0.00

0.00

8.51

7.33

10.11 2.26

5.18 15.77 3.64 20.74 4.14

15.00

50.00 2.77 4.37

P.E. Ratio

10.60 0.50

Non-Metalic Mineral Mining Multiverse Plc

0.64 14.00 20.50 0.50 25.50 2.12 10.00 118.75 32.29 133.00

OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service Intergrated Oil and Gas Services Oando Plc 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

0.50

4.90 1.81 5.82

Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company

0.50

1.64 181 4.20 4.13

0.50

6.94 1.16

0.50

3.00

1.97 1.56

Speciality Interlinked Technologies Plc

Road Transportation Associated Bus Company Plc

Printing & Publishing.

Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press

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

3.98 12.71 13.28 4.30 1.05 2.92 0.66

Hospitality Tantalisers Plc

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

1.66 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

5.70

Metals Aluminium Extrusion Ind Plc

Paper/Forest Products Thomas Wyatt Nig. Plc

8.26

NATURAL RESOURCES Chemicals BOC Gases Plc

2.42 1.80

9.75 7.33 24.12 4.45 185.50 0.50 0.50 43.50 2.87 2.27 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 2.66

5.05 1.00 0.76 28.50 1.62 0.76 8.59 3.17

Pharmaceuticals Ekocorp Plc Evans Medical Plc Fidson Healthcare Plc Glaxo Smithkline Consumer Nig May & Baker Nigeria Plc Neimeth International Pharm Nigeria-German Chemicals Plc Pharma-Deko Plc

IT Services NCR (Nig) Plc Tripple Gee and Company Plc

0.50

Opening Price N Union Diagnostics & Clinicals Services

1.81 5.78

4.90

0.50

1.64 1.81 4.20 4.20

0.50

6.94 1.14

0.50

3.00

1.97 1.70

0.50

0.50

20.50 0.50 23.00 2.68 10.42 116.49 32.29 128.01

14.01

0.61

3.98 12.71 13.28 4.30 1.05 2.78 0.66

1.44 0.50

1.66 0.58

0.50

1.38

0.50

10.55

5.98

8.26

2.19 1.78

9.46 7.29 24.12 4.38 115.00 0.50 0.54 43.00 2.16 2.12 10.93

0.50

13.12 2.41

0.50

0.50

5.05 1.05 0.86 29.05 1.71 0.79 8.59 3.17

0.50

Closing Price N

5,000 523,689

20

1,000

1,000 65,000 4,322 24,339

100

50 338,850

200,000

651,000

240 151,850

1,600

50

82,191 10,300 17,754 1,714,971 7,860 344,075 4,500 6,543

1,476,014

3,321,014

6,888 1,000 100 29,198 200 84,311 2,749,340

2,000 1,000

300 15,000

50

1,000

7,500

50

500

1,550

5,310 1,383,481

399,800 562,213 21,349 93,954 454,849 10,374 5,000 169,555 500 360,015 1,000

2,307,692

33,850 3,850

500

10,000

168 14,641 314,380 54,741 837,163 106,296 1,927 50

100

Quantity Traded

2.78 11.75

5.15

0.80

8.00 6.82

3.68

0.50

400 2.07

1.64

3.67

4.33 3.65

0.72

600

1.57 6.50

4.90

0.50

4.60 3.60

3.17

0.48

3.00 1.33

0.90

2.65

1.97 1.30

0.51

141.00 63.86 195.50

163.50 2,100 240.00

27.99 0.50 0.50 5.71 3.89

1.87

3.98 12.71 13.97 3.60 1.05 2.92 0.63

1.33 0.50

1.62 2.58

0.50

1.38

0.50

10.70

6.80

8.26

5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

0.50

3.25 3.25

0.50

0.50

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

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 Low

0.87

0.51 0.80

0.00

0.00

0.00 0.13

0.26

0.00

0.22 0.69

0.08

0.54

0.00 0.16

0.04

13.32 3.32 11.91

4.93 0.00 6.02 0.67

6.95

0.16

0.00 3.90 0.00 1.22 0.17 0.07 0.00

0.05 0.00

0.13 0.00

0.00

0.00

0.00

0.13

0.93

0.00

0.15 0.19

1.59 1.71 1.76 1.80 8.01 0.00 0.00 1.05 0.36 0.18 0.00

0.00

6.49 0.00

0.04

0.05

0.06 0.00 0.27 8.88 0.21 0.08 0.00 0.00

0.00

E.P.S

4.22 8.75

0.00

0.00

0.00 27.69

12.19

0.00

34.09 2.12

11.25

4.91

0.00 8.19

12.75

11.11 19.23 17.07

6.99

7.40 0.00

4.17

6.06

0.00 3.26 0.00 3.52 6.18 41.71 0.00

28.80 0.00

13.15 0.00

0.00

0.00

0.00

85.77

7.37

0.00

39.60 9.16

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

0.00

1.43 0.00

12.50

10.00

9.05 14.13 0.00 0.00

88.50 0.00 3.07

0.00

P.E Ratio

as at Friday, August 10, 2012

0.50

Year High

Stock Market Report

Vanguard, MONDAY, AUGUST 13, 2012 — 27

28 — Vanguard, MONDAY, AUGUST 13, 2012

Interview

Only sacked employees can access pension layoff benefits —Uduanu S

everal sacked employees who have requested for 25 per cent of their contribution to the new pension scheme after six months have been unable to access the fund as stipulated in the Pension Act 2004. However, in this interview, Chairman of Pension Fund Operators,Mr. Dave Uduanu, said that their employers must sack them and not compel them to put in their resignation as is mostly the case for them to benefit from the new pension arrangement. He also revealed that next-of-kin of many dead retirees have not come forward to claim their entitlements

By ROSEMARY ONUOHA Your view on the justconcluded recapitalisation exercise PenCom has concluded the first phase of the recapitalisation exercise.

They have said it would be in two phases and the first phase was to state the number of Pension Fund Administrators (PFAs) that have in principle met the new minimum capital requirement and the number are 18. What they have also said is that they are going to do verification on the capital contributed by other PFAs. The verification exercise is a throw-back of the banking recapitalisation days where, Nigerian Deposit and Insurance Commission (NDIC) used to do verification of capitals to ensure that they were sourced genuinely. It is just to ensure that operators do not contravene the Anti-Money Laundering Act. We do not expect that number to change.

So, I would say, today, we have 18 PFAs. And we do not expect that number to reduce because we believe that a lot of the PFAs are owned by corporate institutions and individuals of high pedigree.

The check is not about whether the money came in, but to ensure that there is no issue of money laundering.

The Recapitalisation was seamless; there is nothing to worry about. Some PFAs were bought over by others, and there were two PFAs that were adjudged not to meet the minimum capital and are not

bought over by anybody. And after 28 days, if nothing happens, their licences would be revoked. The Law stipulates that every PFA should be given 28 days' notice of intention to revoke their licence. We believe that by the end of August, the approved 18 would become the conclusive list and that would draw the curtain on the consolidation. We used to have 27 PFAs; now, we are 18.

Consolidation happens in phases. While some people were expecting 10 PFAs and others 15 PFAs; people should note that the pension industry is a bit different from banking. I do not think we were expecting anything significantly lower just like other people. You really need certain number of pension fund administrators to go round the country, doing registration, canvassing for new members, because this is pension not banking. Also, the industry is stratified already and there are 10 top

’

*Mr. Dave Uduanu... In the pension industry, once someone completes the documentation, he or she would be paid within one week PFAs and others, depending on how one looks at it. I think that consolidation would take its natural course. There

PenOp is an association of willing members of the industry; whilst everybody is supposed to be a member of PenOp, the association is not the regulator

’

would be mergers and acquisitions over the next one or two years, but they would not be induced by regulation, but by competition. People would decide that rather than being alone; let me come together with one or two pension fund administrators so that we would be stronger and bigger. Remember also that in the pension industry, once one crosses a certain number of assets under management, you can run a fairly decent business. It now depends on the ambition of the owners of the company.

The outcome is not different from what we had expected.

Can PenOp interface for a company that failed to recapitalise ?

PenOp is an association of willing mem of the industry. Whilst everybody is supp to be a member of PenOp, the associati not the regulator. So, it is not really business to deal with whether a comp recapitalises or not. It is the duty of National Pension Commission (PenCom) are not at liberty or allowed to s interfacing. What we know is that, today have 18 PFAs, if PenCom says tomorro is 19, so be it. So, members of the indu are those that have been cleared and h clean licences from PenCom. To what extent will the new capitalisa impact the economy?

The industry’s shareholders’ fund is m than N18 billion. N1billion is the minim for a PFA, but some PFAs have N2 bil while others have N3 billion. The capit the PFAs is not what determines the im of the pension in the larger economy. the size of the pension fund which is a N2.6 trillion. It is this N2.6 trillion tha

Vanguard, MONDAY, AUGUST 13, 2012 — 29

Interview

’

The biggest PFA manages assets in excess of N500 billion, while the biggest insurance firm may be N50 billion; this shows the role of PFAs in an economy

invested in the various instruments, whether it is the money market, bond, capital market, infrastructure and others that would impact the larger society. Pension fund administrators need capital to run their business. They need capital to rent an office, employ staff and do marketing and branding activities. It is not really the capital of the pension fund administrators that matters; it is the size of the pension assets. As the pension assets grow, the PFAs become stronger. This is because they would have more assets to look after technically. We are going to see better services from PFAs, we would also witness recruitment of quality staff, have good offices, move outside main areas of Lagos, Abuja and Port Harcourt to other areas of the country. In Pension Alliance Pensions Limited, for instance, we would be opening offices in other parts of the country. Pension f u n d administrators are being repositioned

mbers osed on is y our pany f the ). We start y, we ow, it ustry have

ation

more mum llion, tal of mpact It is about t are

Mr. Dave Uduanu

’

to play a better role in the larger economy. By way of rivalry, the only financial institution that is bigger than the PFAs today are the banks.

PFAs are now bigger than insurance companies, because they manage bigger assets. So, the size of a company is not dependent on its shareholders’ funds, but the assets it manages. The biggest PFA manages assets in excess of N500 billion, while the biggest insurance firm may be N50 billion. This shows the role of PFAs in an economy. However, the role of insurance is different from that of a PFA so I don’t think that we are comparing the two.

How would the increase in capital impact pension contributors?

It is not the capital that the pensioners are relying on; it is the pension fund or the assets which the PFAs are managing. A well capitalised pension fund administrator would be able to g i v e

better service to pensioners.

If an operator does not have enough capital, he would not be able to open offices across the nation. Part of the emphasis that the regulator and operators are placing on servicing the retirees is to ensure that we take our services close to the retirees.

This is because we know that when people retire in Lagos, they often do not stay in Lagos. So, when most people retire from cities, they go back to their states and start something else. The point is that with stronger capital base, the PFAs would be able to provide services very close to the retirees and that gives them assurance that their pension assets is available and they can access it any time they need it.

Will contributors benefit from investment of pension fund?

Every profit made from investing in pension assets goes to the contributors. The only thing we collect is our management fees. We need to distinguish between the capital and the fund. The fund belongs to the contributors while the company raises capital to run their businesses. And from the fund, we collect our management fees which belong to the shareholders and are used to run the company. The statutory fee is 2.25 per cent.

Why do PFAs focus on programmed withdrawal than annuity?

Both are retirement exit plans. It is natural to sell what you would benefit from. That is human nature. What happens practically is that when someone retires, he/she is given an option and told the features of annuity a n d programmed withdrawal.

A lot of p e o p l e c h o o s e programmed withdrawal because the money is with the pension system which is regulated b y PenCom and they feel their money is secured.

Insurers still have a lot to do i n building public confidence. As t h e c o n f i d e n c e improves over time, people would

begin to go for annuity. In fact, insurers market more aggressively than the pension operators, but a lot of people still choose programmed withdrawal.

Why has collecting money from RSAs by contributors been difficult?

Nobody can collect his or her benefit until time of retirement. The scheme is Retirement Savings Account (RSA) not a bank account.

What the regulator said is that if an employee loses his or her job – if you are sacked not when you voluntarily resigned, before age 50, six months after the employee loses the job and does not find another job, he or she can apply to collect 25 per cent of the balance on his or her account. But the PFA has to prove that the person was dismissed and that his or her company has remitted all the contributions. Otherwise, the employee has to wait until he or she is 50 years.

Challenges confronting the new pension scheme We have two major challenges. We have people that have died but their nextof-kin have not shown up for their benefits. We want the next-of-kin of those that died to come and claim their

’

documentation, he or she would be paid within one week. Another problem we have is that in Nigeria, when a company wants to sack somebody, he or she is asked to resign. When an employee resigns, he or she cannot get 25 per cent of the contribution. A lot of banks staff that were sacked were asked to resign; now they cannot get 25 per cent of their benefits. It is important to let people know that their employer must sack them for them to get 25 per cent of the benefit. If your employer tells you to resign, tell him to sack you because it is better than forceful resignation.

How does PENOP check ethical breaches by members?

We are moving towards that.

Remember that we are fairly young. We are moving towards what we call Self Regulatory Organisation (SRO). However, it is important to make the point that though we can intervene, we do not have the powers to mete out any sanction. It is only PenCom that can do that.

What we do is to use moral suasion to talk to our members. As the industry matures, PENOP would be a bit more involving to ensure

If one's biometric data is not captured, because it was done manually, we are going to do electronic capture of the biometric data; I expect that to commence as soon as possible and would be concluded very quickly

benefits. Next-of-kin are normally the spouse, but some people use their children. If a child is below 18, he/she needs a legal guidance to get the benefit.

People should also prepare their will, so that when they die, the benefits would be disposed according to the will.

We also have people that have retired and relocated from where they used to live to places where their PFA cannot reach them. We have the money of these classes of people, either their dead benefits or terminal benefits.

We still have those that have not submitted their documents. Their money is ready, we are appealing to them to come to their PFA to complete their documentation and collect their money. In the pension industry, once someone completes the

’

that erring members are brought to book. Even if we do not do it directly, we can do it liaising with PenCom. How soon can contributors begin to make use of the transfer window?

We have commenced the initiative that would lead to the opening of the transfer window. Where we are now, is working out collaborative bases to capture the biometric data of everybody that have a pension account in Nigeria.

If ones biometric data is not captured, because it was done manually, we are going to do electronic capture of the biometric data. I expect that to commence as soon as possible and would be concluded very quickly. Once that biometric enrolment is complete, the transfer window would be opened by PenCom.

30 — Vanguard, MONDAY, AUGUST 13, 2012

Vanguard, MONDAY, AUGUST 13, 2012 — 31

Homes & Housing Finance

•Aerial view showing a portion of reclaimed land for the proposed Eko Atlantic City

Eko Atlantic City: Developers, stakeholders differ on safety

By YINKA KOLAWOLE

C

ontroversies have continued to trail the development of the multi-trillion naira Eko Atlantic City project, with the developer along with the Lagos State government, on the one hand; and some residents and other stakeholders, on the other, disagreeing on the safety implications of the development for the people and properties situated within the vicinity of the project.

The ambitious real estate project which commenced in 2006 is being developed on an expansive parcel of land reclaimed from the Lagos Bar Beach, and is expected to cover 10 square kilometres of land on completion, which is three times the size of Victoria Island. A ‘plot’ of land, measuring 2,000 square metres, costs between N260 million and N490 million in the city. The cost of land ranges between $850 and $1,600 per sqm for a minimum purchasable land of 2,000 sqm, amounting to between $1.7 million and $3.2 million.

A visit by Vanguard to the project site revealed that massive reclamation work is continuing despite criticisms and environmental concerns being expressed by these stakeholders.

Developers and city planners of the project, South Energyx Nigeria Limited, and the Lagos State government recently announced that the Environmental Impact

Assessment (EIA) report on the project showed that the ongoing work at the site is in compliance with regulations, noting that the envisaged dangers have been taken care of. This assurance however seems not to have assuaged the feelings of residents within the vicinity of the project and other stakeholders who have continued to express concerns about the possible impact of the development on the safety of lives and properties around the area. Royal Haskoning, the Dutch marine experts commissioned to carry out the environmental and social impact assessment on the Eko Atlantic reclamation project,

,

Navigation; Fisheries; Cultural heritage; and Landscape character.

Highlights of the report noted that: the project will provide a long-term solution to the coastal erosion at Victoria Island; given the urban nature of the project area and extent of planned activities, the effects on terrestrial ecology would be very low or none at all; and that impacts on the majority of communities and businesses located near the coastline are anticipated to be of minor significance. The overall conclusion was that the project would not significantly contribute to incombination effects within the

,

You cannot displace that quantity of water from the Bar Beach and not expect it to find another place to percolate

concluded in the EIA report that the project will have major positive effects in restoring and protecting the shoreline and minimal side effects. It noted that ebaseline studies were completed to collect relevant information for the EIA, encompassing all areas within the potential impact footprint of the project and investigated environmental and social parameters such as: Meteorology; Coastal and sediment processes; Water and sediment quality; Groundwater; Air quality; Noise environment; Marine ecology; Terrestrial ecology; Socio-economic environment;

study area. However, at a roundtable on climate change and impact of the massive project on coastal communities organised by Heinrich Boll Stiftung Foundation recently in Victoria Island, Lagos, stakeholders lamented that work started on the project before the people were consulted contrary to the provisions of EIA Act 86 of 1992. At the event tagged: “Roundtable on Climate Change Adaptation in Lagos tagged: “Eko Atlantic CityDream for Few or Nightmare for Many?”, residents of the surrounding coastal communities narrated their

harrowing experiences with ocean surge which they partly attribute to the Eko Atlantic project.

Mr. Azuka Ezemakam who lived in Alpha Beach Estate in the Lekki Peninsula area of Lagos until June last year, said he was forced out of the estate due to coastal erosion.

“I didn’t pack out of Alpha Beach Estate but was displaced from there.

Sometime in May last year, coastal erosion swept through the estate and this was happening almost on a daily basis. This happened at the time the first phase of Eko Atlantic City project was being commissioned. I left for my safety because the surge was too much. We lost lives in Alpha Beach because of the ocean surge.”

Gbenga Okunsanya, a resident of Goshen Estate, also narrated the predicament faced by residents of the estate as a result of ocean surge, leading to massive erosion rates, the like of which, according to him, had not been experienced in the past decade. He noted that like the Eko Atlantic project, the design and construction of Goshen Estate were done by a property firm and funded by two banks. “All known scientific methods such as construction of groins, sand filling and others, employed by the Ocean Surge Committee constituted by residents of the estate have failed to curtail the sea incursion,” he said, adding that the ocean has eaten about 12 feet of sand deposited to fight the surge.

Professor Emanuel Oladipo, international Climate Change expert and one of Nigeria’s negotiators at the United Nations Framework Convention on Climate Change (UNFCCC), said it is wrong to attribute the plight of residents of both estates solely to the ongoing reclamation of land for the Eko Atlantic City project, noting that coastal erosion had started in both estates prior to the commencement of the project. Oladipo however reiterated the cliché that water must find its level, explaining that you cannot displace that quantity of water from the Bar Beach and not expect it to find another place to percolate. According to him, it is important that the Eko Atlantic City Project and other federal and state projects along the Lagos coast undertake sea level rise risk assessment that will model the predicted sea level changes in a range of scenarios (time series, incremental climate change, shear events, and storm frequency and intensity). He decried the use of only engineering approaches in determining the construction of Eko Atlantic City, contending that other approaches like the biological and socio-institutional approaches should have also been taken into consideration.

BRIEFS Lagos urges residents to obtain approval before building

L

agos State government has advised residents in the state to seek planning information with a view to obtaining approved development plan before building to avoid contraventions.

Commissioner for Physical Planning and Urban Development, Mr. Olutoyin Ayinde, gave the advice during enforcement and monitoring exercise in Iba Local Council Development Area of the state. He decried the practice of erecting buildings on major roads without due consideration and regard for the required setbacks, noting that where such setbacks were available they are being used for economic activities, which creates traffic congestion blockage of drains and other developmental challenges.

Ayinde warned that government would no longer tolerate flagrant violation of the laws of the state.

COREN moves against defective structures

C

ouncil for the Registration of Engineers in Nigeria (COREN) has initiated moves against builders of defective structures as part of measures to forestall recurrence of building collapse.

COREN’s Deputy Director, Alhassan Aliu who led a team on an inspection tour of construction sites in Abuja, said the council would henceforth sanction builders of defective structures. He noted that the enforcement drive is aimed at reducing the incidence of building collapse in the country.

According to him, all building sites must have registered engineers and other professionals supervising construction work in accordance with laid down standards. While inspecting work at the site of a mass housing estate along Airport Road, Aliu criticized the quality of job done, describing the column of a bungalow as defective and of low quality and also complained about the absence of registered engineers and builders at the site.

32 —Vanguard, MONDAY, AUGUST 13, 2012

Vanguard, MONDAY, AUGUST 13, 2012 — 33

Insurance

Managing Director/CEO of Niger Delta Development Commission’s (NDDC), Dr. Christian Oboh, welcoming Mr. Austin Enajemo-Isire, Managing Director/CEO of Standard Alliance Life Assurance Ltd to his office during the presentation of claims’ cheques to the Commission on behalf of beneficiaries of its affected deceased staff

A&G faults operating licence suspension …NAICOM points at poor corporate governance Stories by ROSMARY ONUOHA Management of Alliance and General Insurance Plc has denied allegations of any wrong doings leading to the suspension of its operating license by the National Insurance Commission, NAICOM, insisting that its operations are fully in line with good corporate governance and the interest of its clients and shareholders.

However, NAICOM has insisted that the company was suspended based on late or non-rendition of annual returns and audited financial statements contrary to Section 26 of the Insurance Act 2003; shortfall in minimum capital base contrary to Section 9 of the Insurance Act; deficit in policyholders’ protection assets contrary to Section 25 of the Insurance Act; nondisclosure of significant transactions that could materially affect the true and fair view of the 2010 financial statements and; as well as misrepresentation of audited financial statements of the company for the year ended 31st December 2010.

In a statement, Divisional Director, Corporate Planning and Strategy of A&G Mr. Dotun Onipede said that the company still wonders how the allegation of insolvency came up given that it had paid out more than N20 million for claims in the last two weeks

e.g. CBN Dana Air Crash Victims Group Accident Claim and over N1.20 billion to Nigerian College of Aviation Technology, Zaria and others.

He said “The Financial Reporting Council, FRC, was not thorough enough in recommending to NAICOM to suspend the management teams of Alliance & General Insurance Limited and Alliance & General Life Assurance Plc from operation and also panelise over N100 million, because they no longer exist and the account in question had been withdrawn by the board.”

“The two companies do not exist. Following satisfactory due diligence, both of them were NAICOM approved for merger into one strong entity. NAICOM duly approved the merger under the new name Alliance & General Insurance Plc. It therefore implies that NAICOM suspended two companies that no longer exist.

Onipede said the company cannot be said to be insolvent because the merger was with intent to strengthen the entity financially, managerially and technically. “So is NAICOM saying that the company that emerged from its approval of the merger of two others is suddenly insolvent after a month? Moreover the solvency margin of Alliance & General Insurance

Company Ltd for 2010, Alliance & General Life Assurance Plc for 2009 stood at N6,317,314,326 and N8,068,614,944 respectively and was fully approved by NAICOM. It follows then, that NAICOM’s scrutiny capability is in question. In fact, we paid more than N1.2 billion as claims within the last few months, which is not the mark of an insolvent company.”

However, NAICOM on the insolvency issue stated, “There is a difference between solvency and liquidity. A company can be technically insolvent and yet liquid. Solvency is prescribed by law and it is usually tied to a minimum amount; in this case N3 billion or 15% of net premium (whichever is greater) for non-life business.

Anything short of this amount would make the company technically insolvent.

Solvency looks at the totality of the company’s liabilities to the policyholders compared with available admissible assets to meet same. So it is not just a one shot payment of claim as is the case here.”

On the merger of the two companies NAICOM replied “The merger they are relying on is a post-2010 event. The issues in contention are on the 2010 financial statements of the companies. So their defence does not add up at all. Again, as at 2010, no merger had been consummated. Even now, only approval-in-principle was granted by the Commission as no final approval has been granted.”

NAICOM further said “The fact was that the companies submitted two different sets of audited financial statements for each company for the year ended 31st December, 2010 and could not provide satisfactory explanations/ justifications for this action, which clearly shows irregularities in the companies’ financial reporting format. Apart from that, the companies could not provide relevant support to validate most figures reported in these financial statements.

Non-disclosure of liabilities of N507million due to Corporate Affairs Commission in respect of its staff retirement benefits scheme and the pending legal action on the Company; nondisclosure in 2010 audited accounts, the company’s tax liabilities as well as liabilities on bank loan/overdraft facilities taken over by AMCON; clearly the companies had issues with AMCOM, FIRS, CAC, FRC to attend to.”

“Rather than deal with the issues raised in the accounts

by NAICOM, the companies decided to cancel them forthwith and commissioned a new Auditor to prepare a set of fresh audited accounts for 2010. They also applied to NAICOM to withdraw the 2010 audited accounts and the restated version earlier submitted to the regulator.

Does this not speak volumes of the way the companies are run,? NAICOM asked.

BRIEF UnityKapital declares N514.2m profit in 2011

By FAVOUR NNABUGWU

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nityKapital Assurance Plc has declared a profit for the financial year ended December 2011.

The insurance company under the leadership of the Managing Director, Mr. Kins Ekebuike, raked N413.6 million profit after tax in the year under review 2011, stating that the company is now poised to take the Nigerian insurance sector by storm. This recorded profit is against a negative profit of N190.234 million recorded in 2010.

Ekebuike said that the company has declared a profit before tax of over half a billion Naira for 2011, the first year of the operation of the Cautious Dynamism policy.

He said, “With the new Broker-centric thrust of the company, whereby the brokerage arm of the Nigerian insurance industry has become the centerpiece of marketing in the company, UnityKapital Assurance Plc has recorded a tremendous continuous increase in profitability”.

“The company declared a profit before tax of N514.2 million in 2011, almost a miracle, compared to the N6.6 million in the same period of year 2010 showing an increase of over 7000 percent” “This performance was destined to be vastly improved upon, as the new and improved growth strategy implemented by Mr. Ekebuike and his Management team, has reaped immense benefits for the company’s shareholders”.

“This is surely going to be good news for the shareholders of the company who have waited over five years for the company to declare dividends”

Experts urge Nigerians on the usefulness of Will

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t has been disclosed that only one per cent of urban literate Nigerians write Will, out of which 90 per cent of them are over 60 years.

This revelation was given by Mr. Rotimi Edu, a Lagos lawyer and insurance practitioner while delivering a lecture on Will and Testament: tool for estate management, at a public forum recently in Lagos.

Mr. Edu noted that writing of Will was germane to

peaceful transfer of wealth from parents to wards or children and other beneficiaries, but had been grossly under utilised due to some noxious traditional beliefs that must be discarded.

He said that transference of wealth had generally been a problematic issue in the African society, due to the reticence of many towards writing of Will and its administration.

Edu knocked the bottom off

the popularly held notion that only the affluent needed write Will, stressing that anyone above the age of 40 years must accord the posthumous instrument premium attention.

“It is always advisable not to die intestate, given the fact that obtaining a probate document for such individuals are quite cumbersome with its attendant discomforts and delays” Edu asserted.

34 — Vanguard, MONDAY, AUGUST 13, 2012

Time to go, Dr Okonjo-iweala –1 “Nobody steps into the same river twice.” Chinese proverb.

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o this, Albert Camus, 1903-1960, Algeria born French philosopher and Nobel Prize Winner, in Return to Tipasa, added. “It is a mistake, almost often punished to return to a place one once loved and hope to regain the same ardour.”

Madam Ngozi OkonjoIweala, Minister of Finance, is like a “fish out of water; flapping on the pier.” She does not belong in this government and her reputation is being rubbished everyday she stays longer. It is time to go. Before providing the reasons, let me take our readers down memory lane; to last year when Dr Okonjo-Iweala was first unveiled as the Finance Minister. In an article titled WELCOME DR OKONJOIWEALA, I made certain predictions about her fate the second time around which are coming true right before our eyes. Please read on.

WELCOME DR OKONJOIWEALA; YOUR COURAGE IS ADMIRABLE. – 1 “Let me say this first, the whole thrust of what the President wants for now is the creation of jobs. So, everything that we do in terms of pushing the economy has to be geared at how we can have true job growth in the economy”.

Dr Okonjo-Iweala, Federal Minister of Finance, August

17, 2011 at Aso Rock, Abuja.

“The outstanding faults of the economic society in which we live are its failure to provide full employment and its arbitrary and inequitable distribution of wealth and incomes [underlining mine].

John Maynard Keynes, 1883-1946, in “The General Theory of Employment, Interest and Money” published in 1936.

The topic of this series of essays is EMPLOYMENT, whose synonym is “creation of jobs” as you announced after you were sworn in as the Federal Minister of Finance for the second time. To be quite candid, I don’t envy you; whether you are paid in dollars or even your weight in gold. As a practitioner of the dismal science, called economics myself, and being aware of the global situation on unemployment, I really admire your courage which borders on martyrdom. To start with, one remembers the warning by Albert Camus, 1903-1960, the Algerian born existentialist philosopher who wrote that, “it is a mistake almost always punished to return to a place which one once loved and hope to regain the same ardour.” Only time will tell if you made the right decision to return. It is doubtful if it will be as successful as the first time for reasons too numerous to disclose. A few will serve for now..

Your first turn as Minister of Finance in 2003, occurred

under totally different circumstances and it was a situation tailor-made for some success. You met $36 billion in external reserves, thanks to sudden upsurge in the price of crude oil and Nigeria’s external debt was less than that amount. So you convinced the government to pay off the debt. Granted, it was not a universally endorsed decision (I was opposed to it), but even your severest critics must acknowledge that, at least for a short spell, Nigeria got off

’

satisfied collecting their interests once they are assured that the lender has the capacity to pay. Nigeria in 2003 had the capacity. But, why cry over spilled milk?

As you resume office, you will find in the handing over note given to you that the country has rejoined debtor nations despite record crude oil prices since your departure. Like Sisyphus, in Greek mythology, the rock you rolled up hill has been allowed to roll down again by your predecessors with

It is a mistake almost always punished to return to a place which one once loved and hope to regain the same ardour. Only time will tell if you made the right decision to return.

the list of debtor nations.

Because history never tells us its alternatives, only God knows what your recommendations would have been if the debt in 2003 was $36 billion and the external reserves only $10 billion. One thing is certain, no private businessman would have made that decision for the simple reason that creditors don’t want the loan to be totally repaid; they are

’

nothing to show for the indebtedness. Perhaps you will help Nigerians to find out what was done with all the new funds borrowed on our behalf.

Having, more or less, extended my hand to welcome you back, let us very quickly move to discussions about your core mandate – job creation. Several individuals had taken it upon themselves to set agenda for you. Not

being your direct bosses, it would appear presumptuous for anybody other than President Jonathan to hand you a job description.

However, now that you have announced the programme yourself, anybody and everybody who has an idea on the matter can now participate in the debates that will surely follow.

Prior to your arrival, the Minister of Trade and Investments, your immediate predecessor in the Ministry of Finance had taken a luxury busload of people to a picnic, masquerading as retreat, which ended by issuing a communiqué which is as timely as one issued in 1990.

In other words, the document was a bloody waste of everybody’s time and public money. The holiday makers, however, made a promise on job creation. They will create three million jobs in three years. Now with a 24-member Economic Team, headed by the President, and you as the “Coordinator”, the first and most urgent question is: is the team committed to the three million job target set by Mr Aganga and Co or are we supposed to expect another target figure? By the way, three million jobs in three years translates to 2,800 jobs everyday. Never mind for now, answering questions regarding the nature of the jobs promised; although Aganga’s fun seekers give the impression that all the jobs will be in agriculture or agroallied industries. Nigerians simply want to know if you are operating from the same blueprint as the Minister of Trade or you have your own ideas.

BUSINESS & ECONOMY

Operator decries discontinuity in leadership in aviation sector

BY NKIRUKA NNOROM

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he Managing Director/ CEO of the Aviation Services Logistics Plc, Mr. Richard Akerele, has identified lack of continuity in administration and improper planning as some of the major hindrances militating growth in the aviation sector.

This is even as he said that various concessions in the aviation industry, especially that involving Maevis and BiCourtney did not follow the internationally accepted standard process of executing such deals. Akerele, who spoke in an interview with Vanguard, stated that constant change in leadership slows progress.

Though he agreed there was issues bordering on infrastructural development, he

noted that lack of planning was the key issue. Akerele observed that the Aviation/Transport Ministry has had about 10 ministers in the last twelve years when the Ministry of Transport was managing aviation, ‘equating to almost one minister every 1.3 years.’

“Over there in the Federal Aviation Authority, I believe we have had something like six managing directors in twelve years, which is one DG every two years. Again, it does not lend itself to continuity and therefore becomes a problem and can be confusing,” he stated.

‘What I have experienced in the last 15-20 years is that every new administration brings in new idea and always has a winning formula. We are yet to stick to a continuous

programme,’ he lamented. He maintained that there should be a well thought out plan, taking

account of where the country is at the moment and we where it plans to be in the next thirty

years, saying “I think this road map is important to give us direction.

Abayomi Fashe, Dealer Specialist, Lagos South, Etisalat Nigeria, Ebere Chibunze, Managing Director, EBBY Store and Etisalat Sub-distribution Partner, Sina Adegoke, Head Distribution, Emmanuel Ilori, Regional Distribution Manager, Lagos North, both of Etisalat Nigeria and Edward Molokwu, General Manager, Kenneth & George at the prize presentation for highest product sales in the Q2 2012 Sub DP Trade Promotion in Lagos recently.

Vanguard, MONDAY, AUGUST 13, 2012 — 35

Aviation

We spend about $6m annually on training —Bristow Helicopters ... advocates speedy passage of PIB bill Stories By LAWANI MIKAIRU & DANIEL ETEGHE

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anaging Director of Bristow Helicopters Nigeria Ltd, Captain. Akin Oni has disclosed that his company spends more than 6 million dollars annually on training of its staff, especially Nigerians , in a conscious move to increase the skill of its workforce and make Nigerians take over most of the management positions in the company. This is coming as he advocates speedy passage of Petroleum Industry Bill,PIB. Speaking to journalists during an interactive session at the Protea Hotel Ikeja, Captain Oni said “In 2015, we hope to change at least 90 percent of our staff to become Nigerian both in the management level, engineers as well as in other departments. Currently, we are training 6 pilots in Florida in the USA and another 6 more pilots will be joining them in a next couple of weeks, so we are really training Nigerians to take over the running of Bristow Helicopters and that is what local or Nigerian content is all about” He however stressed that there was a big gap in the area of man power development in the aviation industry as that was posing as a major challenge not only to Bristow Helicopters but to all players in the aviation industry. Asked about the cost of training, he said” we spend N250 thousand dollars to train one pilot so if you put those six together, we should be talking about 1.5 million dollars but basically we spend about 6 to 7 million dollars annually on training” Captain Oni has also called on the Federal Government to speedily pass the Petroleum Industry Bill ,PIB, stressing that if passed into law,the bill will serve as a catalyst for growth in the aviation industry particularly in the area of helicopters operations in the country. He said the state of helicopter operation has gone down in the country when compared to the past adding that when the PIB bill comes into full effect, a lot of off shore exploration will be carried out by the oil companies which will eventually boost helicopter

operations in the sector.

He said “My prayer daily is that the PIB bill will be passed because with it comes a lot of opportunities for us and until that happens, I don’t think the level of activities in the industry that we see in the past, that we saw in the early 2000 will come back into Nigeria. But I have got to be positive about what I have seen now, we see green shoots hopefully this will grow and I think it will grow very rapidly and the fertiliser will be the PIB, so there is opportunity out there, there is opportunity coming and we know it is there, we are just praying that the PIB will be passed” According to him, when the PIB is passed into law, there will be more exploration activities in the off shore region by most of the oil companies and of course they often make use of helicopters and ‘’that will enhance and boost our own business to a very large extend’’.

Oni said that the company was committed towards delivering a qualitative service to its customers, he however urged the Federal Government to reduce the burden on airlines operators in the area of aviation taxes and levies in the country.

Hajj Operation: Med-View to airlift 2,000 pilgrims to Mecca

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eneral Manager, MedView airline, Mr. David Babatunde has reaffirmed the airline preparedness for this year’s Lesser Hajj Operation saying that the airline is expected to airlift about 2,000 pilgrims to Mecca, Saudi Arabia for this year’s exercise in the holy land from Lagos, Ilorin, Maiduguri and Abuja zones. Speaking to newsmen at the Murtala Muhammed International Airport Lagos, Mr. Babatunde however noted that, so far about 1,000 pilgrims have been airlifted for the exercise which the airline hopes to conclude by the end of this month.

According to him, the airlifting of pilgrims to Mecca for lesser Hajj started last week in Lagos zone. The first phase of the exercise would end by 11th August, 2012 while the return leg would commence on the 19 th August, 2012.

He however cautioned that pilgrims who regularly use the period of hajj operation to run away from the country should desist from such act. “For our pilgrims, we have really sensitized, advised and appealed to them the implication of running away when they get there. However, Medview Air carrier is very selective when it comes to picking pilgrims.

We don’t just get involve in airlift without knowing who they are. At times, when we are in doubt, we ask them to provide us with guarantee just to ensure that they don’t disappear from Saudi Arabia”.

“As you are aware, lesser Hajj as the name suggests is preparation towards the main Hajj exercise. So, this period, a lot of Muslims will want to visit Mecca most especially during the last 10 days of Ramadan fasting and that is why we are involved in the airlift. We also have package for those who want hotel accommodation, surface transportation and even visas. That makes a complete package” he stressed.

36 — Vanguard, MONDAY, AUGUST 13, 2012

People in Business local and international market, adding that the firm is different and unique brings professionalism to the modeling industry.

He said, “O’m models are well trained and equipped with the right tools to become top models. We achieve this by having periodic photo shoots for our models as well as in house training on how to walk the runway and strike that gorgeous pose for the camera.

“We aim to be one of the top agencies in Africa and our mission is to supply the best trained and exceptional models in the entertainment field. We make it convenient and easy for our clients to book a model just by the click of a button. O’m Management is a place where polished talents meet forward thinking clients and magic is made.”

On his decision to run a modeling agency, Okwudinma said, “Over the years, with the experience I have gained through traveling, I have come to realize how a typical modeling agency runs and getting back home, I noticed that most of our beautiful and innocent boys and girls are getting ripped off by so called

BRIEF Citiserve eyes innovative POS service delivery

BY RITA OBODOECHINA & MAIMUNA MOHAMMED

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itiserve, a national service provider for e-products, said it will continue to be innovative in fi nding solutions to different e-payment challenges being experienced by both merchants and card user.

Speaking at the product launch of the new Orange Box Point of Sale (PoS) in Lagos, the Managing Director and Chief Executive officer of Citiserve, , Mrs. Lola Ogungbambi, said that Citiserve developed the product to bridge existing gaps in e-payment in areas of settlement, logistics and support, merchant issues and connectivity.

She said “connectivity hitches being experienced by merchants have led to poor and delayed signals in key locations in the country and have to be addressed” Continuing she said, connectivity hitches have been the most frequent reason for low adoption rate of the epayment policy especially the cash-less Lagos project. We have had over 10 years experience in testing communication signal strength to determine which solution works best for given area.

According to her, there are certain areas, blind spots where traditional GPRS connectivity does not work effectively for PoS terminals; the areas include Aspanda, Compute Village, Oke-Arin and Trade Fair Centre.

She said, the Dual-SIM enabled NEW Orange Box makes use of two SIM cards from different networks, It has been enhanced to ensure that if the primary network is down for any reason, the terminal switches to secondary network in approximately 10.3 seconds How ever she said, for merchants that have preexisting wireless modem can switch to Wi-Fi enabled Orange Box even as LAN enabled NEW Orange Box can be used to take advantage of pre-existing LAN connection The product, which was introduced alongside the Orange kiosk,has global certifications of Europay, MasterCard and VISA (EMV) standardization, supports multiple applications with transceiver that captures weak radio signal.

Uchenna Okwudinma

Effective regulation of modelling industry’ll boost professionalism, profitability — Okwudinma

BY RITA OBODOECHINA

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chenna Okwudinma is Marketing Manager and cofounder, O ’m Modelling Management. In this chat with Financial Vanguard, he talks about the rising profile of the modeling industry, challenges facing agencies and the need for effective regulation of the industry to encourage professionalism among others.

Excerpts: Commenting on his background, Mr. Uchenna Okwudinma, said, “I am the marketing manager and the talent scout director for O’m modelling management. I started O’m modelling management with my childhood friend Miss Celia Bissong, Most Beautiful Girl in Nigeria, 2003.

I have always wanted to change something, change my life. When most people say they want to ‘change their lives’ they stop drinking alcohol or take up a music class, but for me, I moved into a new organisation and started a whole new life. I am just a regular lad. I adore fashion and style. I was born on 29th May, 1983 in London, by a Nigerian father and a Zimbabwean mother. I am the sixtth child in a family of nine.

I have five brothers and three

’

A legitimate agency should only make profit from agency commissions, but due to lack of regulatory oversight in Nigeria, scams can be easily carried out and sustained; Making it difficult for real agencies like O’m modelling management to excel, but we will make our models proud.”

very beautiful sisters. My father is a retired naval personnel who served the country in diplomatic missions abroad, while my mother is a farmer and a petty trader.

I attended Nigerian Navy Secondary School, Ojo and went to Auchi Polytechnic, Auchi where I gained a Higher National Diploma, HND, in Mass Communication. I later went to the copy school, orange Academy in Maryland for a course on copy writing and strategy.

Then again, I did marketing at the Boston College in South Africa. I also did some short courses on customer service, fire fighting etc both in Nigeria and abroad.”

Okwudinma said O’m modelling management is one of Africa’s most prestigious agencies committed to serving both the

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agencies.

“I have always wanted to right the wrongs in whatever I adore. Fashion is a passion, just like writing too. I used to think I don’t have a talent but being able to promote talents to me is a talent now and I decided to make use of it.

That’s why I decided to go into the industry, to set the pace and also allow others to learn from the best.”

He further stated that the Nigerian modelling industry is a growing industry, adding that despite the fact that success has been recorded in the past and Nigerian models being recognised internationally, the future still has some uncertainties which O’m is here to correct.

“There are a lot of beautiful girls and well groomed boys in the country. All of us meet these people who touch our lives with their beauty. We hope that, one day, our industry will be at par with the

biggest in the world. The fact that agencies are now springing up is a good thing.

Hopefully, we are growing,” he said.

Continuing, Okwudinma said, “The agency is a young one but we are in business to lead and others will follow our footsteps. My goal is to provide models of quality for fashion and glamour photography assignments within Nigeria and Africa to advertising agencies, photographers, publications and companies and also provide a service tailored to suit specific requirements.

“The modelling industry in Nigeria will live up to that expectation but at the moment it still hasn’t gotten to that point. We need to conform to the modern day realities as applicable in the western world where aspiring and established models see it as a profession and not something they gamble into because they were bored.

“In Sudan for instance, modeling is becoming a source of income for the country. Their models are found in New York, Paris, Milan and South Africa flying their country ’s flag. These girls are not as pretty as our girls. Nigeria is the only country where we have different looks to match every market. I see a brighter future.

“Because of the necessity for an agency in a constantly changing industry where old agencies close and new ones pop up in their place, scam agencies have many opportunities to prey on new, unsuspecting models.

“In Nigeria there are dishonest business practices and these untrustworthy agencies generally demand money from would be models.

A legitimate agency should only make profit from agency commissions. But due to a lack of regulatory oversight in Nigeria, scams can be easily carried out and sustained.

Making it difficult for real agencies like O’m modelling management to excel, but we will make our models proud.

“A modelling agency is a company that represents fashion models, to work for the fashion industry. These agencies earn their income via commission, usually from the deal they make with the model and or the head agency.

“The top agencies work with big budget advertising agencies and fashion designers. They invest money into developing their talent so they can increase their status within the industry.

Modelling agencies will help train models, get test shoots, layout portfolios, and put together composition photo cards and other printed materials models need.

“The agencies find work for models by presenting them to designers, photographers, and ad agencies. The agencies are also responsible for booking the jobs, billing for the jobs, and eventually paying the models for their time.

Vanguard, MONDAY, AUGUST 13, 2012 — 37

Technology news & reviews

FG sets 5 year rural ICT dev plan through USPF STORIES BY PRINCE OSUAGWU

Mobile Innovation Awards debut in Nigeria pparently trailing same success of the Ghana Telecom Awards in Ghana recently, organizers, MobileWorld Magazine has launched another, tagged the Mobile Innovation Awards (MIA 2012).

The magazine said it was to celebrate excellence in the mobile sector and related industries in Nigeria.

Announcing the awards, Group Executive Publisher of MobileWorld, Mr Akin Naphtal said that “the mobile revolution has triumphed in Nigeria, and now needs regular and industry driven peer-acknowledged awards to highlight the best successes and point the way towards the future. Today, Nigeria is not only an investment haven for investors but also emerging as a testing ground for product innovations.

“So, Mobile Innovation Awards has been created to promote excellence in Mobile technology in Nigeria and recognize the achievements and accomplishments in the telecoms industry. The awards will bring the spotlight to the mobile operators, VAS providers, ICT companies and banks pushing boundaries and shaping the industry”.

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he Federal Government has designed a five year programme for the Universal Services Provision Fund, USPF, to develop rural ICT connectivity across Nigeria.

This is coming at the heels of recent pronouncement by the Minister of Communications Technology, Mrs Omobola Johnson that something must be done to address the country ’s low Information and Communication Technology penetration particularly in the rural areas.

Apparently to fast track the idea, the USPF organised a one day stakeholders consultative forum in Lagos, Thursday, to provide stakeholders with an opportunity to make inputs and help properly define the direction of the Fund’s activities in the next five years.

Speaking at the event, Johnson who is also the Chairman of the Fund’s board revealed that the Nigerian Communications Act 2003 placed significant responsibilities on the Universal Service Provision Fund not only to facilitate universal access to communication and applications services, but to also promote greater social and cultural development in Nigeria.

Represented by the Chairman of Nigerian Communications Commission Chairman Mr Peter Igho, the Minister said that “the USPF’s role has never been more crucial as Nigeria is poised to create an Internet and broadband revolution, so the programmes considered by USPF could give our country the push it needs to become a truly digitised nation.”

In shouldering that responsibility, the USPF developed new Strategic Management Plan, SMP, which it is sharing with renowned strategic management partners, KPMG to ensure fast achievement of target aims.

With the new SMP, the USPF board said it would provide subsidies or other forms of incentives to telecoms companies and eligible service providers to extend ICT penetration to under-served areas in the country.

Presenting the roadmap tagged “overview of the SMP 2013-2017, KPMG’s Mr. Joseph Tegbe said the aim of the USPF’s strategic plan was

BRIEFS

Putting Heads together: USPF Executive Secretary Mr Abdullahi Maikano trades ideas with his staff on the new SMP to ensure that Fund continued to stimulate creative use of ICT in the country.

He added that, “in response to some of the challenges faced by the USPF in implementing the SMP 2007 - 2011, emphasis will be placed on carrying out the following key activities in the execution of the new SMP: holistic approach to project selection, engagement of stakeholders, qualification of minimum allowable subsidies, and subsidisation of operational cost, among

other issues.”

He however admitted that central to achieving these goals, would be to identify the market efficiency and access gaps as well as design incentives that would promote the rollout of sustainable ICT services in rural, un-served areas and underserved areas.

This is also as the Senior Manager, Management Consulting, Mrs. Yetunde Kanu, corroborated him, saying that the goal of the USPF based on the new SMP were to facilitate an

enabling environment for ICT and promoting universal access and universal service that facilitate connectivity for development.

According to her, the USPF would facilitate the availability of transmission infrastructure and connection to the national backbone in all local government areas in the country.

For her, that would drive increasing access to community-based data and voice services on a shared basis and provide a platform for universal services.

eHealth: INTEL to bail out Nigeria’s health services with digital training pparently worried by A recent world health report which rated the Nigerian health care delivery system 187th out of its 192 member countries, Global Technology giant, Intel corporation Nigeria has provided a bail out option with free computer training for all key staff of the National Orthopedic Hospital, Igbobi.

Intel says its gesture was a strategic bid to scale up digital healthcare awareness in Nigeria and build capacity for health workers. The training series according to the chip company, was designed to further educate and equip workers to use digital technology in the everyday delivery of healthcare services across Nigerian hospitals.

Intel is however partnering with a medical network firm, Synapses Limited to facilite the training and the National Orthopaedic Hospital Igbobi is the first in the series of

Health workers...There's need for quality ICT training hospitals that will benefit from the Easy Steps training.

Synapses will therefore deploy approprriate ICT infrastrusture in major hospitals across the country starting with the Orthopaedic Hospital Igbobi.

Explaining rationale behind the gesture, Corporate Affairs Manager of Intel Nigeria, Mr. Osagie Ogunbor said that “Intel is a company with a

long track record of bringing different firms with different strength and resources together to find mutually beneficial solutions for people, communities and the environment. We are glad that by this training, we are able to contribute significantly to the improvement of the Health care delivery system in Nigeria.” According to him, “Intel sees problems as opportunities to solve the

unsolvable and collaborate in new and unexpected ways.

We are excited at the impact this training is having in the lives of the health workers of the National orthopedic hospital who can now see how digital technology can be deployed to improved health care delivery through the trainings they have received,”.

Meanwhile, Managing Director, Synapses, Dr Segun Ebitanmi, described the collaboration as a response to the poor state of ICT infrastructure in most hospitals. He said in this information age, access to information through internet connectivity has become imperative to keep doctors abreast of latest developments and technologies in health care delivery. Dr Ebitanmi noted that Synapses medical Networks has signed a Memorandum of Understanding with the Federal Ministry of Health to deploy adequate ICT infrastructure for all teaching hospitals across the country.

38 — Vanguard, MONDAY, AUGUST 13, 2012

Appointments & Promotions vicahiyoung@yahoo.com 08033348923 BRIEFS Nigerian airspace is safe —ATSSSAN

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he President of Air Transport Services Senior Staff Association ATSSSAN Comrade Benjamin Okewu last week said Nigeria airspace is safe, compared to the past when the country witnessed series of air crashes. He however blamed the present predicament in the aviation sector on neglect by previous governments.

Speaking with aviation reporters in his office at Ikeja airport, Comrade Okewu noted that the country ’s airspace was safer than what it used to be in the last few years adding that all aircraft in the country ’s airspace were air worthy. He lamented the neglect of the over twenty years old Nigerian College of Aviation Technology Zaria On the declaration of emergency in the sector, Comrade Okewu declared that such emergency should not be politically motivated by laying off workers but should be an emergency in a positive light to save the aviation sector.

“Well, there is nothing wrong in declaring a state of emergency in the aviation sector if you are looking at it from the positive point of view.

EBRD loans $10m to MFI he European Bank for Reconstruction and Development (EBRD), a London-based International Finance Institution has signed a five-year, $10 million loan agreement with Access Bank, an Azerbaijani microfinance institution (MFI).

Access Bank will use the loan to widen its funding base, increase credit to small businesses and expand its lending portfolio for micro-, small and medium-sized enterprises (MSMEs) outside of Azerbaijan’s capital Baku.

EBRD and Access Bank closed another loan of $15 million in April of this year that was used to finance micro and small businesses.

As of December 2011, Access Bank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of $488 million, a gross loan portfolio of $378 million, approximately 120,000 borrowers, return on assets of 4.47 percent and return on equity of 20.24 percent.

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Ezekwesili heads new Africa economic initiative

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ORMER World Bank Vice-President, Mrs. Oby Ezekwesili has been appointed to lead a new economic initiative for Africa termed Africa Economic Policy Development Initiative.

The new initiative it was announced would operate under the aegis of the George Soros funded Open Society for West Africa.

Ezekwesili who is to operate from Abuja in Nigeria, is to advise “the leaders and policymakers of the countries on their economic strategy and policy reforms that can help boost investment and create job growth in the Mano River region,” it was announced.

The initiative over the next three years will expand to include other countries across Africa.

Speaking, Chairman and founder of the Open Society Foundations, George Soros, said “I am delighted for Oby to join our team working on

Oby Ezekwesili Africa. My foundations have long been committed to fostering economic development in post-conflict countries and nations transitioning to democracy.”

Similarly, Christopher Stone, President of the Open Society Foundations, said

“Oby has dedicated her career to the proposition that governments in Africa, as elsewhere, can achieve equitable growth when they are open, honest, and disciplined. Oby get things done. She is the right person to lead this new initiative.”

In her role as Senior Economic Advisor, Ezekwesili will oversee the creation of a public policy advisory center in Abuja that will collaborate with Paul Collier, the professor of economics who focuses on developing countries, and others to provide economic policy solutions to pro-reform governments starting with Guinea, Liberia, and Sierra Leone.

She also will help establish a separate Africa-wide graduate school of public policy, based in Nigeria that will collaborate with leading universities including the School of Public Policy at the Central European University.

Inone, Sufianu emerge President, Deputy President of NIWELFA

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HIEF Awala Joseph Inone and Comrade Taiwo Sufianu, have been elected National President and Deputy National President of Nigeria Welders and Fitters Association, NIWEFA, respectively.

At a joint Delegates Conference and merger meeting of the Welders Association and Nigeria National Fitters Association, in Asaba, Delta State, while Comrade Derek Sokari Harry, was elected General Secretary, Comrade John Okpokpo, was elected Deputy General Secretary.

Other elected officers are Comrade Emeka Ogbowu; Vice President, Comrade Sola Ogunowo; Assistant General Secretary, Comrade Peter Iniobong nyang; National Treasurer, Comrade Innocent Adimoha; National Financial Secretary andComrade Joseph Odjomah; National Public Relation Officer, P.R.O. Also elected are Comrade Gomba Osaro Prosperous; National Auditor, Comrade Saladi Pepple; Deputy Auditor, Comrade Joseph Ighoavwogan; Assistant Auditor, Comrade Sunday James; National Provost, Comrade Mike Igwe; ExOfficio, Comrade Ambrose Evughaye; Ex-Officio and Comrade George Djupkan; Ex-Officio.

In a communiqué issued at

the end of the conference, delegates said “Consequent upon a unanimous decision, the Nigerian welder association and the Nigeria national fitter association merged to become one corporate entity known as the Nigeria welders and fitters association (NIWELFA). It was unanimously agreed that the national Headquarters of the Nigeria welders fitters association be situated in Abuja, while state council and Units offices be maintained in different parts of the federation. The national leadership of the Nigeria welders association and the Nigeria national fitters association were dissolved

Comrade Taiwo Sufianu and a 16 member new national executive council of the Nigeria welders and fitter association was elected. The asset and liabilities of the Nigerian welders association and the Nigerian national fitters association shall be

ILO urges Nigeria to adopt ways to deepen industrial relations HE International Labour Organisation, ILO, has asked Nigeria to adopt strategies that can deepen social dialogue to pave way for healthy industrial relations.

The organisation equally urged government, organised private sector and labour to initiate actions aimed at securing and sustaining industrial harmony that would be beneficial to the Nigerian economy.

Ms Sina ChumaMkandawire, ILO Country

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Office Director for Nigeria, Ghana, Liberia, Sierra Leone and the Gambia, gave the advice in Abuja, at a seminar organised by the Ministry of Labour and Productivity for its senior staff.

She noted that in any economy, government, organised private sector as well as labour needed one another for sustainable development, saying “this explains the importance of social dialogue as one of the pillars of decent work.”

Dr. N.C. Merenu

UI Alumni gets new leaders EMBERS of the M University of Ibadan (U.I) Alumni Association have elected a new National Executive to pilot the affairs of the association for the next two years.

At the 2012 congress held at the university premises in Ibadan, Oyo state, the newly elected National Publicity Secretary of the association, Chief Solomon Egwuenu, named the new executive to include National President, st Dr. N.C. Merenu; 1 National Vice President, Otunba Stephen Ogundipe; nd 2 National Vice President, rd Dr. Uche Uzokwe; 3 National Vice President, Pastor Mike Ejikeme; National Secretary, Mr. Sam st Obiyan; 1 Assistant National Secretary, Mr. nd Okezie Agbugba and 2 Assistant National Secretary, Mr. Olumoyegun A. Temidare.

Egwuenu who is the Principal, State School of Nursing, Agbor, in the release said others included the National Treasurer, Dr. (Mrs.) Funke Adewoye; National Publicity Secretary, Chief (Hon.) Solomon E.O. Egwuenu; National Financial Secretary, Mr. Joseph Akannah, National Social Secretary, Mr. M.A. Bello and the National Legal Adviser, Eno Ekaeba.

Also elected were the National Ex-officio members and they were Mr. A.U. Tagbo; Dr. Kemi Emina; Mrs. Eugenia Damjor as well as the immediate past National President, Mr. Hyacinth A. Kyaagba.

The release added that during the congress, a panel of Screening Committee headed by Prof. J.C. Ogbonnaya and that of Electoral Panel headed by the Deputy Vice Chancellor, Academics, Prof. Idowu Olayinka were constituted while six members were honoured with the Most Distinguished Alumnus award even as some members of the association were, also honoured the Worthy Ambassadors award.

Vanguard, MONDAY, AUGUST 13, 2012 — 39

Advertising, Media & Marketing Stories by

BRIEFS

PRINCEWILL EKWUJURU

2012 SERA Award to focus on business creation, value sharing

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limatic change is a global issue that requires an intensive attention. With current realities like flooding, heat wave, extreme cold, landslides, it is difficult to ignore what the earth is telling us today.

In Nigeria, the recent floods that ravaged communities in Jos, Ibadan , Lagos and Cross River resulted in a huge loss of lives and property, several families were rendered homeless as a result of these disasters.

These extremities in recent climatic conditions have been linked to human activities; and in order to prevent global environmental and economic collapse, adequate measures have to be taken by groups and individuals to stem the tide of green house threats by taking new trajectories that will bring about renewable revolutions and guarantee a sustainable future for the earth and the people who live in it.

Today with the new focus clearly pointing to the ongoing destruction of our natural resources, it is widely acceptable that what can be done to remedy the situation is to plant trees. Corporate bodies have taken it upon themselves to set up programmes and projects that will reduce the onslaught of global warming. One of such organizations is LG Electronics with its treeplanting campaign.

Trees are important to human existence, as they produce oxygen without which we cannot exist. A mature tree with leaves produces as much oxygen in a season as 10 people inhale in a year. What many do not know is that forests act as massive filters that clean the air we breathe.

LG Electronics over the last

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Mr. Charles Asinugo, Marketing Director of LG Electronics, West Africa receiving an award from the Governor of Lagos, Mr. Babatunde Raji Fashola, as the corporate organization with the best nurtured trees in Lagos State during the recent kick-off of the 2012 tree-planting campaign in Lagos.

Global warming challenge and LG’s remedy few years has been at the forefront of fighting climate change. Annually, the company marks the world environmental day with a tree-planting activity in partnership with the Lagos State Ministry of the Environment. It is always a pleasurable moment as staff of LG Electronics Nigeria, the Lagos State Ministry of the Environment, Fouani Nigeria Limited and the media come out in their numbers to plant trees in support of the “Going green” initiative and in fulfillment of its commitment towards giving back to the society where it operates.

The tree-planting activity was established to highlight LG’s commitment to

contributing to a sustainable future.

In recognition of LG’s pioneering work in the area of tree-planting and environmental protection initiatives, the company was recently honoured as the corporate organization with the best nurtured trees by the Lagos State government. The award was presented to LG Electronics by Governor Raji Fashola at an elaborate ceremony to officially kick off the 2012 Lagos tree-planting campaign.

LG Electronics, through its green initiatives, has shown its commitment towards ensuring the healthy state of the environment where it operates in. Beyond planting

trees, the company ensures that its products are ecofriendly.

Worthy of note is the fact that the use of LG Electronics’ products guarantees safety of consumers’ health and lifestyle. For example, an LG SolarDOM light wave oven compared to an electronic oven is equivalent to planting 140 trees; using an LG LCD TV is equivalent to planting 7 trees; using an LG Refrigerator is equivalent to planting 39 trees; using an LG Air conditioner is equivalent to planting 2 042 trees and using an LG Home Theatre system is equivalent to planting 2 trees.

capabilities will use its Nigeria’s office located in Lagos as its hub for the West African region. This is part of the company ’s continued growth strategy in key developing markets.

“Global companies cannot afford to neglect a fast_growing market such as Nigeria. The country ’s current population is estimated at 167 million and it will increase by more than half within the next 40 years.

This makes it one of the fastest growing populations globally,” said Alessandro Raemy, Country Manager DuPont Nigeria while declaring the office open.

Raemy said “ with this new

ultra_modern office in Lagos, we have brought our services closer to the Nigerian people and have solidified our presence as stakeholders in the country’s economy _ one that we are confident, will continue its robust growth in the coming years,” He stated that DuPont was eager to contribute towards uplifting the local economy by bringing DuPont products and solutions to the market, and helping to advance the agriculture, solar energy, oil and gas, communications, transportation, as well as safety and protection industries. He emphasised that within the medium term, the company projects to invest

BA launches summer special for First, Business Classes ritish Airways (BA) has announced special price B discounts for Nigerian

Dupont sets aside $150m for investment in Nigeria, Africa By setting aside an investment outlay of $150million for Africa in the medium term and setting up its office in Nigeria, Dupont has further lent tcredence to the fact that Africa is the next point of call after the saturation in Europe. Dupont, a conglomerate is presently penetrating the energy sector in parts of Africa which are characterised by lack of access, low purchasing power, low energy efficiency and an over-dependence on the traditional biomass for meeting basic energy needs.

The organisation which is assessing Nigeria’s energy sector, agriculture, infrastructure and other

rganisers of the Social Enterprise Reports Award (SERA), a Corporate Social Responsibility(CSR) awards, said this year’s edition will explore issues pertaining to how businesses share and create value in a new economy which thrives on doing business with minimal harm to the environment.

Speaking, Dr. Ken Egbas, Managing Partner, Trucontact, organisers of the award said at the sixth edition press briefing of the award that the call for participation from all sectors of corporate Nigeria will focus on issues pertaining to sustainable community engagement. He said that the award committee will ensue a self appraisal to audit own performance and thereafter, respective organisations will package and submit entries in compliance with the ISO 26000 set of baseline standards.

According to him, “ we received 60 entries in total.

And it does please us that the major brands in Nigeria have finally heed to the CSR sermon. In terms of representation, this is our best in six years yet.”

$150 million into Africa.

“We must invest and partner with key customers and stakeholders in Nigeria to support what we hope will continue to be the long term sustained growth of the local population and economy in the coming years”, he continued.

A recent United Nations forecast has estimated that Nigeria’s population will hit 390 million by 2050. Various reports have projected that the country will be among the top 10 economies globally by that time. Citi Financial, for example, places Nigeria’s GDP at number 6, with $9.51 trillion, by 2050. Further, the National Bureau of Statistics recently disclosed that Nigeria ’s GDP during the first quarter of 2012 grew by 6.17 per cent.

customers travelling to the United Kingdom and New York in its award-winning Club World and newly refurbished First Class cabins.

Fares to London start from $2160 in Club World and $6610 in First. Flights to New York are priced from $2960 in Club World and $6720 in First.

The special offers which are available from both Abuja and Lagos went on sale on August 1 and lasts until 31 August for outbound travel before 1 September.

Mr. Kola Olayinka, Country Manager, British Airways/ Iberia, Nigeria urged customers to book soon as the fares are extremely competitive and likely to be snapped up fast.

As part of its £5bn investment in new aircraft, technology and services, British Airways has invested £100 million in its new First Cabin.

The special fares are exclusive of all taxes, fees, charges and surcharges and subject to availability.

40— Vanguard, MONDAY, AUGUST 13, 2012

0817 002 3569

AMCON is Time-bomb

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ne of the conclusions reached by the House of Representatives Ad hoc Committee on the Capital Market was the shrill alarm that the Asset Management Corporation, AMCON, was a time bomb waiting to explode. Consequently, this week’s article is a brief overview of AMCON, the ‘toxic’ bank.

AMCON was created by the Central Bank to soak up toxic debts and avert the adverse collateral of loss of depositors’ funds and instability in the banking subsector, to avoid the threat of collapse of the sub-sector. It was also expected that banks would be positioned to meet the low-cost funding requirements of the real sector, particularly the Small and Medium Enterprises, SMEs. To the extent, therefore, that, so far, no bank went under and no depositor has lost any kobo, it may be suggested that AMCON has achieved part of its set objectives.

To the extent, however, that the SMEs (which are the major drivers of employment in any economy) still remain comatose, and to the extent also that lending rates remain above 20% (a level that is unsupportive of growth for both commercial and industrial enterprises), we may also say that AMCON has failed. Besides, some analysts would argue that the apparent partial success of

AMCON was created by the Central Bank to soak up toxic debts and avert the adverse collateral of loss of depositors’ funds and instability in the banking sub-sector, to avoid the threat of collapse of the sub-sector

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bank rescue may be overstated; such analysts may identify increasing level of inflation and rising unemployment as the price Nigerians have had to pay just to save the ‘bacon’ of some people from getting burnt. Therefore, we may, safely conclude that the failure of the real sector far outweighs the gains of saving the banks.

However, it was also worrisome that AMCON appeared to have been stampeded to pay for the toxic debts before it even considered the need for proper valuation of the acquired assets; the way things currently stand, we are aware AMCON has only lately begun ascertaining the real values of the toxic asset acquired almost three years thereafter.

Considering the widespread corruption and level of impunity and insider

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trading in the banking subsector, Nigerians will not be surprised if it is revealed that AMCON may have grossly overpaid (rather than underpaid) for the redemption of the ‘toxic’ debts.

Indeed, in addition to raising issues with the modus operandi of AMCON, the House Committee also questioned the rationale for the different methods in loans valuation and expressed its disappointment that CEO of AMCON, Mustapha Chike Obi, could not defend the modalities.

Incidentally, the House Committee equally observed that the source of AMCON’s funding was far from transparent! Nigerians do not seem to recognize that net product of AMCON’s redemption efforts would be deepening the scourge of excess liquidity with the distressing reality of so much

more money chasing less goods and services in the domestic market. Some analysts would recognise AMCON’s N3tn or so cash injection as extra-budgetary expenditure; in other words, since AMCON’s cash injection was never accommodated in any federal budget at any time, AMCON’s spending must therefore, be, by definition, an unconstitutional extrabudgetary expenditure, which inevitably increases budget deficits and debt service costs!! Instructively, debt service charges have risen from around N200bn to over N500bn in the 2012 budget.

Indeed, AMCON may have saved some banks from going under, but the cost of doing so is the collateral of doubledigit inflation rate, high cost of borrowing (which inevitably crowds out the real sector), increasing debt accumulation, rising debt service charges, a weaker naira, and ultimately a prostrate economy that has become immune to the inappropriate selective bailout packages of government.

Notwithstanding, AMCON has not yet been able to distinctly articulate its strategy for sustaining its

operations; for example, the House Committee noted that “as at date, AMCON claims to have issued bonds worth N4.5tn, but only about N1.7tn is guaranteed by the Federal Government. The real challenge of AMCON bonds is the bonds’ ability of being converted into liquid cash. A good number of the AMCON series bonds have yet to be registered at the Central Securities Clearing System (CSCS).” The Committee is of the opinion that, “the analysis of the potentiality of the bonds were based on wrong premise which tends to mislead investors because, AMCON bonds which would mature in three years may now mature in seven years, making the maturity to run into a total of ten years” .

Some analysts may have advised that AMCON’s cash injections should have been better recognized as equities in the rescued banks; although this arrangement may not have had considerable impact on restraining inflation, it would have presented a better exit strategy for AMCON’s incursion in the banking subsector.

However, the apparent CBN reflex action in creating AMCON may have been avoided if the apex bank conducted its regulatory and supervisory functions with more sense of responsibility and discipline.

SAVE THE NAIRA, SAVE NIGERIANS!!

BUSINESS & ECONOMY

Car imports rises 15% as bank credit recovers N

ew car imports into Nigeria rose 15 per cent in the first half of 2012, compared with the same period last year, as credit flows recovered in Africa’s second-biggest economy, dealers said on

Monday. Car sales in Nigeria are a proxy measure for consumer purchasing power and analysts see them as a good indicator of economic growth in the country.

Nigeria’s economy grew 6.17 per cent in the first

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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quarter of this year, down from 7.68 percent in the fourth quarter last year, according to official figures.

Nigerian port figures showed new vehicle imports increased to 24,158 units in the first six months to June, from 21,024 units in the same period of last year, as bank credit started to trickle in, according to vehicle importers.

Bank credit to the private sector grew 48 per cent at the end of June, compared to the same period a year ago, Nigeria’s central bank figures showed, boosting demand for big-ticket purchases including vehicles. Credit flows grew less than 2 per cent in 2010 at the heat of Nigeria’s banking crisis. Car dealers said vehicle imports had started to recover, driven by an increase in passenger cars, after it took a hit at the start of the crisis, with credit sales then almost at zero.

Passenger vehicles accounted for 54 per cent of new car imports in the first half, while the remaining

were commercial, port figures showed. Nigerian banks have all turned a profit in the first half, driven by increased lending, after a 2009 bailout and subsequent sell off of bad loans to a government-owned entity AMCON balanced their books. Car dealers said most consumers in Nigeria rely on bank financing to purchase vehicles and

estimated the pent-up demand meant sales could recover sharply as credit recovers — although central bank measures to tighten liquidity last week have pushed up inter-bank rates, which could hurt lending.

Credit accounted for around 22 percent of a total 75,000 new car imports in 2008, before the bailout.

NASENI, NMTL sign MoU on tools manufacturing wo Federal Government agencies have signed a Memorandum of Understanding (MoU) for the manufacturing of technical tools and machines to equip science laboratories in the country. The agreement was signed by the National Agency for Science and Engineering Infrastructure (NASENI) and the Nigerian Machine Tools Ltd. (NMTL).

The information is contained in a statement signed by Mr Segun Ayeoyenikan, Chief

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Information Officer of NASENI in Abuja.

The statement explained that machines and tools would be used to equip science laboratories and workshops of technical institutions, including secondary schools in Nigeria. It said the move was part of government’s efforts to revive technical education through teaching and learning of science and technology subjects as prerequisite for actualising the Vision 20:2020.