Capital market probe: I've learnt my lessons - Oteh by Vanguard Media Limited

MAY 14, 2012

Capital market probe:

I’ve learnt my lesson — Oteh •Admits division in SEC •Probe will strengthen capital market — Operators, Shareholders •SEC Commissioners lied By PETER EGWUATU, MICHAEL EBOH, & NKIRUKA NNOROM

ollowing the revelations of the principal officers of the Securities and Exchange Commission (SEC) and the deluge of questions by the ad hoc committee of the House of Representatives probing the near collapse of the Nigeria capital market on Wednesday, Director-General of the SEC, Ms. Arunma Oteh, has admitted that there was division and rancour within the rank and file of the commission, saying that she has learnt

her lesson. Also, in reaction to the on-going probe, stakeholders in the capital market reckoned that the probe is a welcome development and will help in addressing critical issues that had contributed to the near collapse of the market. However, Vanguard gathered that the SEC commissioners lied about some of the issues that were raised at the public hearing. Specifically, it was gathered that the commissioners participated in the project 50, which they claimed they did not know about. Meanwhile, in a statement made available to Vanguard, Oteh said,

“The hearing provides very useful lessons that will guide the Commission’s continuing institutional strengthening programme. The Commission wishes to state categorically that the SEC remains a cohesive institution whose activities are driven by highly professional and patriotic staff under the headship of a very experienced management team and board delivering exceptional service to participants in an envisaged world class Nigerian capital market.” Continuing, she said: “The SEC recognises the challenges to its institutional cohesion arising from the implementation of its on-going

transformational programme. The Commission is fully committed to overcoming those challenges and strengthening the organisation to position it to successfully birth a world class Nigerian capital market which is the object and vision of the transformation project.” She said: “The SEC is not unlike other human institutions; the commission is not immune to common challenges arising from cultural and personal differences.” She remarked that the change project she is leading has the final objective of converting the SEC to a regulator with the best tools, personnel, systems and processes to discharge its regulatory oversight and market development mandate to international best practice standards. She stressed that the multiContinues on page 18

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2,308.00

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CURRENCY BUYING CENTRAL SELLING

*From left: Oxford Business Group Editorial Manager, Rob Withagen, Country Director, Brooke Butler and Executive Secretary and CEO of the Nigerian Content Development and Monitoring Board (NCDMB), Ernest Nwapa

CFA 0.2868 0.2968 0.3068 KRONER 26.9473 27.0344 27.1214 EURO 200.3548 201.0022 201.6495 POUNDS 249.3487 250.1544 250.96 RIYAL 41.2623 41.3956 41.5289 SDR 237.8508 238.6193 239.3878 FRANC 166.7565 167.2953 167.8341 DOLLAR 154.75 155.25 155.75 WAUA 237.2707 238.0374 238.804 YEN 1.9356 1.9419 1.9481 RENMINBI 24.5194 24.5991 24.6787

CBN Exchange rate as at 11/05/2012 C M Y K

18 — Vanguard, MONDAY, MAY 14, 2012

Cover Story

I’ve learnt my lesson — Oteh dimensional transformation process includes Information Communication Technology (ICT) upgrade and migration to a technologically savvy organisation with emphasis on e-culture; personnel recruitment at leadership, middle management and entry levels with emphasis on training and re-training; streamlining of the institution’s value system to make it more evocative; leading to the charge for consistent human capacity upgrade through collaboration with regulators and resource institutions in other jurisdictions and the global financial market place. According to Oteh, a transformation project of this magnitude has culture shock and cultural lag implications which are sure to create feelings of apprehension and even alienation among some members of the SEC family. Such feelings, she pursued, “… are short run and medium term consequences of far reaching institutional change management.” She, however, assured that SEC , having closely followed and actively participated in the on-going House of Representatives public hearing, had noted the frank disclosures at the hearing and intends to factor these into the change management element of the institutional transformation project. Stakeholders’ reactions Reacting to the on-going probe, Mr. Bayo Olugbemi, Managing Director, First Registrars, said: “So far, it has been fair. The Committee and the process are highly rated by me. Hopefully, depending on the results which should be fearless and fair, it will address some of the issues that had hindered growth of the market If the presentations made by SEC and NSE are anything to go by, there is definitely light at the end of the tunnel. What they should focus more on is rebuilding investors’ confidence and investors’ education, not rhetorics." Asked if the probe would affect the market positively or negatively, he answered in the affirmative, saying however, that it would depend on the truthfulness and fairness of the report and if ultimately the recommendations were implemented. In his own submission, Mr. Johnson Chukwu, Managing Director/CEO, Cowry Asset Management Limited, said, “I think the probe has so far

been objective and fair to all the parties. The Committee has largely focused on issues instead of personalities although there is no way such fact-finding mission can completely avoid issues related to personalities that played or are playing critical roles in the capital market crises.” On the way the committee has so far conducted itself, Chukwu said: “I think they should be commended for remaining focused so far on finding the causes of the Nigerian capital market crash and ways to revive the market. I believe that most Nigerians who have been following developments at the Committee’s sitting would rate them to have so far performed above average.” He, however, argued that the on-going probe will likely not have any positive effect on the market, saying that the market has been inundated with negative revelations of the workings of the regulators. “What may affect the market are the final recommendations of the Committee, such as the practicality of rescue or remedial measures and nature/severity of sanctions to market abusers,” he enthused. For him, there was nothing either the NSE or SEC would do to turn around the market in the immediate, even as he urged for maximum cooperation among all stakeholders in revamping the market. “NSE for instance has already announced an elaborate short, medium and long-term programme to turn around the market. These measures are already being implemented. I think that what we need is to support the NSE programme with fiscal policy instruments to make the market more attractive to investors and quoted companies alike. Such policy measures could include waiver of tax on dividend paid by quoted companies, reduction of corporate tax for quoted companies among others.” Mr. David Adonri, Chief Executive Officer, Lambeth Trust & Investment Company Limited, said, “From general issues, I expect the probe panel to drill down to the specific matters that remotely and directly contributed to formation of the asset bubble that wrecked the equities market. “The roles played by the financial regulators, operators, issuers and banks in inflating the asset bubble

should come under intense scrutiny. “The probe offers a rare opportunity for examination of the fundamental weaknesses relating to inability of the capital market to form capital for the strategic heavy industrial and agricultural sectors of the economy. “The migration of trading in Federal Government bonds away from the trading platform of the NSE to the unregistered OTC platform needs to be probed. The action denied retail investors an alternative investment outlet that would have prevented over concentration of assets in equities. “It is my hope that the new panel will avoid sensationalism and dwell on concrete issues like the role of fiscal indiscipline in crowding out the equities market and revival of the equities primary market.” Also reacting, Chief Timothy Olufemi, a shareholders' activist, noted that the current probe panel is okay and is seen to be performing according to the expected standard. He stated that it was particularly commendable that the Ad hoc Committee has been able to uncover a lot of malfeasance in the Securities and Exchange Commission by the way it was being conducted. Olufemi believes that the on-going probe has taken a turn for better, saying that it would definitely affect the fortune of the market if the recommendations by the various stakeholders that have appeared before the committee were implemented. For him, the revelation made about the way the SEC DG, Ms. Arunmah Oteh, has been running the commission was a pointer to the fact that she does not possess the qualities that would elicit success and ultimate turn around in the market. H e s a i d : “ We , t h e shareholders have been complaining right from the time she assumed office that she is not capable of managing an institution like SEC. A situation where she runs the commission like one man show is not good for the market. Things are not done that way. She has officers who have spent over 30 years working for SEC and yet, she does not listen to them."

Developing Entrepreneurial Spirit in Nigeria Part 1

recent collection of es says on entrepreneurial innovation in developing economies, titled ‘Lessons from the Poor’, mentions an aspect of Nigerian clothing design. Examining the traditional adire dye industry, author Thompson Ayodele informs that the bottom 19% of entrepreneurs polled for the study earned more than state and federal civil servants. For the purpose of this essay, the story is significant in more ways than one. First, it is a classic instance of entrepreneurial spirit, describing the transformation of an established Yoruba craft into a venture for wealth creation and employment generation. Second, and perhaps only in between lines, it reflects a measure of the serious imbalances that plague Nigeria’s economy. Africa’s second largest economy is a bundle of extreme contradictions; with billions of dollars in annual oil revenue on one end and pervasive poverty for most of its 148 million people on the other. Relative political stability since 1999 has delivered some reform and regulatory initiatives to correct huge and long-standing macroeconomic disparities, yet the country remains overwhelmed by persistently dismal indicators and human development indices. Nigeria’s current per capita GDP of $1,371.31 ranks it below much smaller African economies like Sudan, Congo and Swaziland. The latest UNDP poverty survey of 108 developing nations placed the country at the 80th position, below Rwanda and Malawi. Achieving the UN Millennium Development Goals and its own, and more ambitious 2020 target require a paradigm shift in mindset and priorities. It also requires the successful engendering of a broad, pan-Nigerian entrepreneurial spirit! A slew of relevant policy redirections have already been initiated in this regard: The government has deregulated oil prices, disinvested public sector undertakings, created special economic zones and passed assorted legislation to encourage enterprise development. While some of these measures are starting to show positive results, many have been largely ineffective while yet others have completely collapsed. For instance, a massive privatisation drive launched after 1999 managed to rake up private sector investment. However, Abuja’s

simultaneous inclination for micro-enterprises, instead of small-scale ventures, did little to curb unemployment. The failure or even inadequate success of these measures is attributed primarily to disregard or ignorance of ground realities, and lack of a coherent, consistent, macro-level vision. Nigeria’s unique set of problems calls for broad-based policy intervention from the bottom up, and any individual law or policy that is not part of a unified effort is unlikely to make much difference. The ‘bottom up’ analogy is pertinent, as one of the first things Nigeria ought to be doing is improving the condition of its roads. The business environment in the whole of Africa is crippled with massive infrastructure shortfalls that result in the continent’s high enterprise

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Nigeria’s unique set of problems calls for broad-based policy intervention from the bottom up

mortality rate. Significantly, the rate of failure affects older and new entrants alike. A leading cause is almost always infrastructure deficits that critically hamper genuine economic growth and productivity. Since 2008 the government has began to show the political will to implement the market-oriented reforms urged by the IMF such as modernizing the banking system, curbing inflation by blocking excessive wage demands, and resolving regional dispute over the distribution of earnings from the oil industry. GOP rose strongly in 2007-10 because of increased in oil exports and high global crude oil prices. Nigeria likewise suffers from endemic infrastructural woes with regards to roads, communication and especially power (small and large businesses alike across the country rely heavily, and at times exclusively, on backup electricity). There have been no worthwhile attempts so far to radically upgrade the power sector, or attract private investment.

Vanguard, MONDAY, MAY 14, 2012 — 19

he bill before the National Assembly to amend the CBN Act is particularly interesting. It seems the lawmakers are bent on castrating the apex bank for what they perceived as an overbearing leadership of the bank. Why have the lawmakers suddenly realised that the CBN Act needs amendment? Last year, the members of the National Assembly and the CBN Governor were

BRIEFS

Bill to castrate CBN: In whose interest? just realizing the need for the CBN to submit its budget for appropriation? If the current Governor is the problem, he is holding a tenured appointment. He will finish his term and move on. The CBN as an institution will remain. Making the Governor of the central bank subservient to a politically-appointed Board Chairman as well as excluding deputy governors who are executive directors as board members will make matter worse and may not be in the best interest of Nigeria. Just as it is undesirable to have a politically controlled Central Bank, the board of Governors of the CBN must also learn to comport themselves and control their public utterances and actions in the interest of the economy. No serious nation will accept a flippant CBN Governor. The global best practice for an efficient and effective central banking is a truly independent central bank with both operational and financial independence. Financial independence involves four aspects, namely: the right to determine its own budget; the application of central bank-specific accounting rules, clear provisions on the distribution of profits and clearly defined financial liability for supervisory authorities. Are members of the National Assembly aware of the possible economic consequences of the CBN budget being tied down for months when the bank needed to intervene in the economy? Given Nigeria’s recent experience with the approval process of the Federal Government budget and the eventual passage of the Appropriation Bill by the National Assembly, it would be disastrous for the CBN in terms of its operations and overall performance, if its annual budget gets bogged down with the usual delays that had attended the Federal Government budget. The unique responsibilities that have been bestowed on the bank require it to act expeditiously should the need arise, without recourse to the political authorities.

Politicians all over the world appear to have come to appreciate these issues and decided to remove the temptation to pursue shortterm gains and make their central banks independent. Have these honourable members looked at the evolution of the operations of the Central Bank over the years? Are planning for an Idi Amin kind of central Bank where politicians will order the apex bank to print the naira as once advocated by Barrister Jimoh Ibrahim? The Central Bank of Nigeria has had a chequered history of autonomy since its inception in 1958, varying between autonomy and control. In the 1958 Act, the CBN was granted a measure of autonomy, which was

engaged in debate of the burden of overhead cost the members imposed on the nation. The members seem to now want to take a revenge on the bank. What the honourable members should realise is that central banking in developing countries is saddled with responsibility that makes them very key to the functioning of an economy. The Central Bank of Nigeria (CBN), like most others, has the core mandate of maintaining price stability and ensuring a noninflationary growth. The Central Bank is also a regulator, banking supervisor and development bank. It has the responsibility to ensure a sound and stable financial system in addition to other developmental functions. These mandates and functions are peculiar to central banks in developing economies, and no other institution performs such functions. These special responsibilities are enormous and have continued to pose increasing challenges to central banks, largely because developments in the domestic and international economies create intricacies and complexities in the financial systems and the art of central banking. Indeed, the current trend of globalisation exemplified by economic and monetary unions, has increased the challenges of central banking. The effective discharge of these responsibilities requires that central banks be independent in the true sense of it; that is, shielded from political interferences; have administrative independence and instrument autonomy. The new bill before the National Assembly is seeking to have a chairman of the board of the CBN outside the institution. If the National Assembly before passing the bill ensures that those to be appointed to such an office are individuals with impeccable character and are those with vast knowledge of the economy and are apolitical, all well and good. If the law is to curtail what the house sees as the excesses of the current governor, it will be dangerous for the economy to have a political appointee as head of the apex bank. Such political appointee will not have the know-how needed to manage an economy. Like most other institutions of government in Nigeria, their budgets are passed but how far have they utilised such resources in the over all interest of fellow Nigerians? Why is the National Assembly

Algeria owed $250 mln by Switzerland’s Petroplus

The Central Bank of Nigeria requires full independence in the true sense of it to enable it act appropriately according to its expert and independent viewpoint. The global trends have been towards full independence for central banks. Indeed, budgetary and instrument autonomy are the reasons why most central banks are now proactive rather than reactive in the discharge of their responsibilities – central banks are able to anticipate and identify problems and unintended outcomes and respond immediately with appropriate policy actions. This is the trend all over the world – in both developed and developing countries. The National Assembly should not because of the present holder of the

If the law is to curtail what the house sees as the excesses of the current governor, it will be dangerous for the economy to have a political appointee as head of the apex bank; such political appointee will not have the knowhow needed to manage an economy

gradually eroded until 1991 when the autonomy was restored. The erosion of the bank’s autonomy between the years coincided with military interventions in politics in Nigeria. Again, the autonomy was gradually eroded until 1999 when administrative and instrument autonomy was granted to the bank to shield it from political pressures in the implementation of policy. From the inception of the bank, the administrative structure has been that the Governor of the CBN presided over the Board of Directors and Executive Directors or Deputy Governors had always been on the Board. This arrangement had ensured easier, smoother and faster implementation of monetary and financial policies.

office of the Governor of the apex bank hamstring the institution. It will not help the nation. The bill must be subjected to public hearing, expert scrutiny and should be in the best and long- term interest of Nigeria. If the current CBN management has over-stepped its bounds, it is because the President is not interested in what the bank does. When the immediate past Governor of the CBN, Professor Chukwuma Soludo, came with the strategic agenda for the naira and the planned redenomination of the currency, the then President Alhaji Umaru Yar Adua on whose table the buck stopped, simply told him no, the policy was suspended till date. The President has not complained, so let the CBN be.

nsolvent Swiss oil refiner Petroplus owes Algerian state energy firm Sonatrach over 250 million dollars in unpaid bills, an Algerian energy sector official told the Media. Sonatrach has not received payment for several cargoes of crude it delivered to the refiner, the source said, without specifying what action, if any, the Algerian firm planned to take to recover the money. Late last year, Petroplus said lenders had frozen a credit facility which it was using to buy crude for delivery to its refineries. It filed for insolvency protection in January. A lawyer whose firm has been appointed as liquidator for Petroplus entities in Switzerland declined to comment on any unsettled bills with Sonatrach. “We cannot give any answers concerning claims and whether they will be accepted or not,” said Karl Wuethrich from law firm Wenger Plattner. Petroplus has been divesting assets since it became insolvent.

Ibom Power Plant resumes operation

he 190 megawatt Ibom Power plant being promoted by the Akwa Ibom government last week began operation. Mr Offiong Itabong, the Public Affairs Officer at Eket Business Unit of the Power Holding Company of Nigeria (PHCN) confirmed the development in Eket. It was gathered that the independent power plant, located in Ikot Abasi, broke down last month and resulted to prolonged power outage. The outage has been impacting negatively on economic activities in parts of the state. The plant resumed operation following the replacement of a faulty component in the facility. “Ibom power plant has resumed generation and the supply of power in the 12 local governments within Eket Business Unit has improved. When the plant broke down, we were compelled to do massive load shedding because we were receiving a paltry five out of the required 40 megawatts from the national grid”.

20 — Vanguard, MONDAY,

MAY 14, 2012

News BRIEFS Wal-Mart focused on existing Africa markets

al-Mart Stores Inc, is focused on strengthening its existing operations in Africa and not immediate expansion into new markets on the continent, the head of its international businesses said on Thursday. Wal-Mart, the world’s biggest retailer, last year spent $2.4 billion on a majority stake in South Africa’s Massmart, a discounter with a growing presence on the continent. “Massmart is currently located in 12 markets so that’s our focus. Building our business in the markets that we are currently in is our primary focus,” Doug McMillon told Reuters.

Dangote eyes London listing by Q3 2013

igerian billionaire Aliko Dangote said on Thursday he was aiming to list his $11 billion cement company on the London Stock Exchange by the third quarter of 2013. “If the market is good by next year, we will hit the market, sometime. Maybe third quarter ... we will try,” he said on the sidelines of the World Economic Forum in Addis Ababa.

Swiss firm suspended by Nigeria over fuel

wiss-based oil firm Nimex Petroleum has been suspended by Nigeria’s fuel regulator for failing to provide documents for shipments, the company said on Wednesday, a move that suggests the West African country may be taking steps to clamp down on subsidy graft estimated to have cost it billions of dollars. The government department is one of several under fire for overseeing a scheme that paid out large sums in fraudulent subsidy claims for fuel that did not exist or was sold abroad. Nigeria’s corrupt fuel subsidy scheme cost the country $6.8 billion between 2009-2011, according to a parliamentary probe that found damning evidence against the fuel regulator, the Petroleum Products Pricing Regulatory Agency (PPPRA). Nimex Petroleum confirmed PPPRA had suspended its activities in Nigeria in a letter dated May 3 over missing documentation relating to the delivery of two shipments of

NACCIMA tasks CBN, SEC on N52.2bn unclaimed dividends •asks FG to legalise illegal refineries By FRANKLIN ALLI, NAOMI UZOR & OLAYEMI FOFAH

igeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has called on the Central Bank of Nigeria (CBN) and Security and Exchange Commission (SEC) to establish an Unclaimed Dividend Trust Fund as a means to address the problem of unclaimed dividends which presently estimated at N52.2 billion. Briefing the press on the state of the economy in Lagos, the Association also called on the Federal Government to make illegal refineries to become legal instead of destroying them. “The establishment of an Unclaimed Dividend Trust Fund with appropriate legal law to cure the present defects by making it possible for shareholders to recover their dividends however long this may take. This will make it mandatory for companies to hand over unclaimed dividends to SEC for onward transfer into the Fund,” said NACCIMA President, Dr. Ademola Ajayi. “Unclaimed dividends in the Nigerian capital market now stands at N52.2 billion as at December 31, 2011. We are worried that the rising wave of unclaimed dividends in the nation’s capital market may become another thorny issue that seems to have defied all solutions despite the aggressive drive by the regulators to ensure that dividends payout by companies are received by investors promptly. The apex bank, he said, should therefore prevail on banks in the country to accept payment of dividend warrant into savings accounts. “The refusal of banks to allow investors to pay their dividend warrants into savings account (mostly operated by low income investors) is partly responsible for the growing incidence of unclaimed dividends in the country. “Presently, Nigerians are not properly educated on what happens to their unclaimed dividends while accounts of failed banks with unclaimed dividends are also not known. To compound this problem, most dividend

warrants received by Nigerians (i.e. shareholders) get to them after it has been stalled, making it uncollectable. The D-G, SEC has attributed the reason for the accumulation of unclaimed dividends to ignorance or when shareholders change their forwarding addresses without informing the companies’ registrars thus, failing to receive the dividend warrants. While we appreciate SEC’s efforts at ensuring reduction in the amount of unclaimed dividends, we believe that other major factors responsible for unclaimed dividends included shareholders who died intestate and without information on next of kin,

multiple applications by applicants during the investment process, deliberate actions to deny investors their benefit through various unethical schemes by some registrars and companies who lack liquidity to pay and loss of dividend warrants following poor postal system. “To put an end to this unclaimed dividend “palaver”, we canvass as follows: SEC should intensify efforts at sensitization of the public and corporate organisations on the need to provide current postal addresses and make prompt payment of dividends to shareholders; Shareholders should be encouraged to subscribe to or embrace the edividend payment solution, which all the registrars of companies have put in place. Regarding illegal refineries, he said: “NACCIMA believes

if these illegal refineries are made legal and is effectively done, it would boost local supply capacity of petroleum products, create jobs and invariably may also reduce prices when competition fully takes its course. “We have watched with dismay the continuous destruction of small refineries classified by Government as illegal in the country. We believe that the action of Government/Ministry of Petroleum Resource is not the best given the current problem confronting the country in the petroleum sector; as it would further compound the sector’s supply chain of petroleum products. To ensure strict compliance and standards with the laid down criteria by the operators of the small (but now legal) refineries, there is need for the Department of Petroleum Resource (DPR) to assume effective supervisory role,” he said.

*From left: Mr. Robert Rodden, keynote speaker; Mr. Osita Chidoka, Corp Marshall, Federal Road Safety Corps, FRSC; Mr. Frank Aigbogun, Publisher, Business Day and Eng. Chidi Izuwah at the 2012 Road Infrastructure Conference themed: Exploring Cement-based option for Sustainable Road Construction in Nigeria, held in Lagos. Photo by Lamidi Bamidele

Oil marketers begin importation for second quarter — Official

he 42 oil marketers licensed to import fuel for the second quarter of the year have begun importation of the product, an official of the Petroleum Products Pricing Regulatory Agency (PPPRA) said. The official, who pleaded anonymity, told the News Agency of Nigeria (NAN) in Abuja on Thursday that the marketers, who were issued licences in March, had started importing products to avoid scarcity. “The marketers have started importing fuel for the second quarter and this will ensure there is no scarcity of the product in the country,” he said. NAN recalls that 42 oil marketers were granted licence in March by the

PPPRA to import 4.8 billion litres of petrol for the second quarter of the year. The official said the agency had put stringent measures in place that would ensure that marketers were transparent and followed due process in the importation. He said one of the measures was reinforcing the independent inspectors at the ports and ensuring that all imports were accompanied with letters of credit. The official said holders of the permit would also be required to furnish PPPRAwith daily records of products loading, evacuation from designated depots for accountability and effective supply. He warned

that it was no longer business as usual as the agency was ready to sanction any marketer who failed to deliver the approved volume of product. He added that the agency would soon hold its quarterly meeting with marketers and other stakeholders in the sector to fine-tune any grey areas. “We will soon hold our quarterly meeting to finetune all these details. I will be able to give you details of the process after the meeting,” the official said. He expressed optimism that all the measures would ensure better accountability and transparency in the importation process.

Vanguard, MONDAY, MAY 14, 2012 — 21

News

*From right: Vice-President Namadi Sambo; Power Minister, Porf. Barth Nnaji; Permanent Secretary, National Planning Commission, Dr. Kabir Usman and the Minister of State, Finance, Dr. Yerima Ngama during the National Economic Council meeting at the State House, Abuja. Photo by Abayomi Adeshida

FG moves to position SMEs as growth drivers •Creates vehicles for tackling growth barriers

he Federal Government has commenced moves to position the Small and Medium Enterprise subsector in Nigeria as growth drivers of the economy. The Minister of Trade and Investment, Mr. Olusegun Aganga, who disclosed this on Thursday, said, with this move, SMEs in Nigeria would soon become vibrant enough to drive the required level of growth in the economy. He spoke while briefing journalists on the sidelines of the World Economic Forum meetings in Addis Ababa, Ethiopia. Aganga said in the last one year of the President Goodluck Jonathan administration, the results of new SME policies and schemes, in terms of job creation, had shown that if given the necessary support, SMEs would provide the foundation for sustainable growth and poverty alleviation in Nigeria. He, therefore, said that the priority currently, for the Ministry of Trade and Investment was the SME sector, noting that the ministry had put plans in place to remove the major barriers to SME growth (access to affordable finance, low level of business support and high cost of operation) to boost the development of the sub-sector. The minister said a committee comprising experts

in the different fields relating to the major bottlenecks in the sector was already being set up to ensure that the country achieved a turnaround before the end of this administration, adding that vehicles had already been created to achieve this goal. “Micro, Small and Medium Enterprises remain the backbone of the development of any economy and the driving force of national growth. In Nigeria, there are currently over 17 million Micro, Small and Medium

Enterprises in the country, employing over 31 million Nigerians. They account for over 80 per cent of the total number of enterprises in Nigeria and employ 75 per cent of the total workforce,” Aganga said. “But their contribution to the nation’s GDP is still relatively low, due to major constraints in the operating environment, which have limited their abilities to create jobs and perform the vital role of enhancing economic growth and development,” he added, noting that in the next three years, Nigerians should expect more SMEs with enhanced productivity. He said, already, a national

database had been developed in partnership with the National Bureau of Statistics, which was the first step in the effective tackling of the problems of the sector. According to him, there will also be a national SME Policy that will address the major problems in the sector. He said the Bank of Industry was already executing matching programmes with state governments on SMEs and deepening financing penetration, using microfinance banks. The minister said his ministry had also begun regular interaction with SME desks of banks to develop unconventional but workable means of providing affordable finance for SME growth. He said: “For instance, we have started getting round collateral issues related with funding through crossguarantees by members of cooperatives and setting up special intervention funds for critical sectors such as textiles. “We are implementing the One Local Government One Product initiative to open up the rural areas for industrial development, employment generation and wealth creation; and we are partnering the Lagos Business School to develop Business Support Services.” Other efforts, he said, included developing small hydropower plants in strategic areas where they could serve SMEs; creating financial inclusion by setting aside special funding schemes for women and mechanics; and establishing integrated industrial parks to enhance the productivity and profitability of SMEs; among others.

NCDMB expresses worry over decaying pipeline network … Seeks renewal by 2017 BY PROVIDENCE OBUH

he Nigerian Content Development and Monitoring Board (NCDMB) has expressed concern over the decaying pipeline network in the country and has proposed its renewal in the coming five years (2017). Executive Secretary/CEO of the Board, Mr. Ernest Nwapa, who stated this during a meeting with the Oxford Business Group (OBG), a global publishing, research and consultancy firm, said “Nigeria’s 5000-km pipeline network is largely dilapidated and in need of renewal in the next five years, adding that

the gas plan will create demand for another 2000km of pipeline. “We are actively encouraging the expansion of existing pipe-mill capacity as well as attracting Greenfield investments.” He revealed that boosting pipe-mill capacity was one of the NCDMB’s priorities for increasing the oil and gas industry’s contribution to economic growth. He told the group that Nigeria is planning to set up its own pipeline industry to boost domestic employment as well as to enhance GDP. “The Board is also spearheading the country’s bid to bring more of the local

population into the industry and build domestic capacity in line with the terms of the Nigerian Content Act (NCA), which became law in 2010. “I believe it is high time Nigeria build its own dry dock, given the recent increase in the country’s fleet, coupled with growing demand around the world for shipyard space. “Vessel ownership is increasingly in Nigerian hands, both through Nigeria Liquefied Natural Gas’s fleet and the Vessel Replacement Strategy, providing the critical base for the establishment of local assembly, maintenance and repair activities. It would also feed into the global demand for dry-dock space, which suffers from frequent shortages.”

BRIEFS Conoco CEO confirms sale of Nigeria assets

yan Lance, the new hief executive officer of ConocoPhillips, on Wednesday confirmed that the U.S. exploration and production company plans to sell its Nigerian assets, but said a deal was not imminent. “We’re testing the market on our Nigerian assets,” Lance told reporters after the company’s annual meeting. Those assets including onshore, off-shore oil and gas fields and a stake in its LNG Brass facility, sources familiar with the situation told Reuters on Tuesday. The assets were expected to attract interest from Nigerian companies such as Conoil and Oando, and Asian players including China’s Sinopec, Indian company ONGC, and South Korea’s KNOC, Reuters sources said. They could help ConocoPhillips raise about $2.5 billion and possibly more if they were sold separately, which is the most likely route, according to the sources.

Greek Coke bottler Q1 net loss widens, misses fcast

oca-Cola Hellenic (CCH) , the world’s second-largest bottler of Coca-Cola Co. soft drinks, posted a wider than expected loss in the first quarter, hurt by austerity in debt-laden Greece and higher commodity costs. The Athensbased company, with operations in 27 countries in Europe and in Nigeria, said on Thursday comparable net loss came in at 19 million euros ($24.6 million), higher than analysts’ average 14.2 million euros forecast in a Reuters poll. The bottler said the volume of unit cases sold dropped by 2 percent yearon-year to 425 million. “We continue to witness macroeconomic uncertainty in all of our EU markets,” the company’s chief executive Dimitris Lois said in a statement. “We are also facing persistent input cost pressures, whose year-onyear growth peaked in the first quarter,” he added. On the other hand, the company said it maintained or increased its market volume share in sparkling beverages in most of its markets, including Italy, Switzerland, Russia and Ukraine. The company reiterated its intention to invest 1.45 billion euros in 2012-2014. It expects to generate the same amount in free cash flow.

22 — Vanguard, MONDAY,

MAY 14, 2012

Money Market BRIEFS CIBN holds AGM, elects new office holders

he Chartered Institute of Bankers of Nigeria (CIBN) will this weekend hold its Annual General Meeting (AGM) and election of new Office Holders who will run the affairs of the Institute for a period of two years. Mr. ‘Laoye Jaiyeola, FCIB, President/Chairman of Council, of the Institute will preside over the Annual General Meeting. In line with the Institute’s tradition, Chairmen and Chief Executives of banks, Past Presidents of the Institute, Presidents of other professional bodies, top Government functionaries, Fellows, Honourary Senior Members, Associates and other relevant stakeholders have been invited to attend the meeting and exercise their franchise to elect new officers.

AfDB launches Oxford Companion to the Economics of Africa

he African Development Bank (AfDB) has launched the Oxford Companion to the Economics of Africa. The Compedium was unveiled at a seminar titled “Avoiding the Fragility Trap in Africa” held in Tunis and hosted by the AfDB’s Chief Economist and Vice President, Mthuli Ncube. The keynote speaker was Shanta Deverajan, Chief Economist of the World Bank’s Africa region. The Oxford Companion to the Economics on Africa, with more than 100 entries from leading economic analysts is testament to the fact that economic analysis plays a central role in helping African policy-makers assess the many trade-offs among interventions, and to formulate and implement policies for Africa growth and development. The compendium presents various perspectives, including country case studies. By doing this, it rejects the “one size fits all” approach that has sometimes been applied to African development. Mr Ncube recognized the contribution made in this compendium by several economists from the AfDB. These included country perspectives across an array of issues including corporate

ICAN reiterates zero tolerance for professional malpractice BY PROVIDENCE OBUH

nstitute of Chartered Accountants of Nigeria (ICAN) has reiterated its zero tolerance stance for professional malpractice by any of its members. “Let me seize this opportunity to stress also that the Institute will not condone any professional misdemeanour on the part of any Chartered Accountant irrespective of how highly or lowly placed in the Profession or Society. Since we do not have any sacred cow, the machinery of the Institutes Disciplinary processes would be brought to bear on all such deviant cases”, said Professor Francis Ojaide, President of the Institute. Speaking at the th 49 Induction ceremony of the institute in Lagos, Ojaide blamed prevalence of corruption for the slow pace of development in the country. He said, “It is the prevalence of corruption and sharp practices in low and high places in the nation that has accounted for the slow pace of development of this richly endowed nation and this is exacerbated by the absence of transparency and accountability. “The recent incidents in our banking sector have again reechoed the need for transparency in our corporate activities. Professionals across a wide spectrum of professions have demonstrated indiscretion in their application of regulatory and ethical standards and within the accountancy profession; there is concern of inconsistencies and failure to comply with accounting and other regulatory requirements.” ”There is a direct relationship between a nation’s value system and ·its level of economic growth and development and this calls for soul searching among the citizens and in particular, among Chartered Accountants whose main strengths are integrity and credibility. We must hold dear to these virtues on which our survival depends.” He enjoined the new entrants into the profession, to strive at all times to faithfully adhere to the ideals of integrity, transparency and accountability, which have

influenced the development of the Accountancy Profession globally and of the Institute. “Indeed, these ideals must not be compromised for any reason, whether monetary or non-monetary. Any deviation from this path will demean not only the hard-earned reputation of our Institute but would also bring the global Accountancy Profession into disrepute. “Thus, as young Chartered Accountants, you are our ambassadors of professionalism to the

business world and to the public service. Since, whatever you do or fail to do have pervasive implications for the image and reputation of both the profession and our Institute. It therefore, behoves on you to conduct yourself, at all times, in a manner that will demonstrate your unequivocal commitment to the ideals of integrity, transparency· and professional excellence. The President reiterated the need for Chartered Accountants to be proficient in

the use of Information Technology (IT), as this will significantly impact their ability to render excellent technical services to their diverse clientele. “As you are aware, the world of global commerce is now profoundly driven by information technology. Any professional who is not “IT-compliant” will certainly be left out of the scheme of things. It is in an effort to avoid this, that the Council introduced the Technology Competence Initiative (TCI).” He said, “It might interest you to know that the Central Bank of Nigeria issued a policy to the effect that only IT-proficient Chartered Accountants will be permitted to audit the financial

L-R: Mr. Bob Nwojo, Head, eChannels Services, First Bank; Mr. Wale Williams, Manager, eBusiness Support, GTBank; Mr. Mike Ogbalu, Head, Cards and e-Product, Ecobank; Mr. Chuks Iku, Group Head, e-Channels, Skye Bank and Mr. Gbenga Osofisan, Cards, Mobile & Internet Banking, First Bank displaying awards for outstanding achievement as recognized by ACI Worldwide recently.

CBN Deputy Governor advocates increase in PPP BY MICHAEL EBOH

eputy Governor, Central Bank of Nigeria, Mr. Tunde Lemo, has called for an increase in Private- Public Partnership, PPP, saying this will help fast track the country ’s economic development. Speaking at the commissioning of a N60 million ultra-modern clinic donated by his foundation, Tunde Lemo Foundation, to the Nigerian Red Cross in Abeokuta, Ogun State, Lemo said Nigerians should not expect government to do everything in terms of driving the growth and development of the country. He stated that PrivatePublic Partnership, PPP, is needed to achieve the much desired rapid economic growth. On the donation to the Nigerian Red Cross, Lemo said the health facility is one

way of assisting humanity, stressing that it would go a long way to meeting the health needs of the people in the vicinity and environs. He explained that the fund was provided by friends of the Foundation, stating that TLF has also acquired five acres of land in the state to construct a project for youth empowerment. “It is time to look back and think of how to bequeath to the next generation a better society than we met it. People should go back to the villages, the schools they attended and rebuild. We should not leave everything for the government,” he said. In his address, the National Vice President, Nigerian Red Cross, Deacon T.O. Oladele lauded the initiative of the Foundation, stating that the facility would be put in good use. He commended the philanthropic nature of the Founder of the Foundation for

responding to their call for public spirited individuals to assist with health facility, noting that Tunde Lemo Foundation Red Cross Clinic is the first to be commissioned in the country. Speakers at the event including Ogun State Governor, Ibikunle Amosun who was represented by Commissioner of Health, Olaokun Soyinka, the National President, Nigerian Red Cross and Governor of Imo State, Mr. Rochas Okorocha who was represented by the State Health Commissioner, Dr. Obi Njoku, including representative of former President, Olusegun Obasanjo and traditional rulers lauded the donor, urging other public spirited individuals to emulate the gestures. Highpoint of the event was the decoration of Lemo as an Ambassador of the Nigerian Red Cross.

Vanguard, MONDAY, MAY 14, 2012 — 23

24 — Vanguard, MONDAY, MAY 14, 2012

Money Market BRIEFS Spain unveils new bank reforms

he Spanish government unveiled a new reform package for its troubled banks on Friday in a desperate bid to convince investors that the sector is solvent and the country has a strategy to avoid the bailout fate of Greece, Ireland and Portugal. Economy Minister Luis de Guindos announced that banks will be forced to set aside a new •30 billion ($39 billion Cdn) financial cushion against bad loans and to separate property assets from their balance sheets. The package is the second by the new conservative government in three months and Spain’s fourth in three years.

Banks prepare for the return of the Greek’s drachma

anks are quietly readying themselves to start trading a new Greek currency. Some banks never erased the drachma from their systems after Greece adopted the euro more than a decade ago and would be ready at the flick of a switch if its debt problems forced it to bring back national banknotes and coins. From the end of the Soviet Union - which spawned currencies such as the Estonian Kroon and the Kazakh Tenge - to the introduction of the euro, they have had plenty of practice in preparing their systems to cope with change. Planning behind the scenes has been underway since Europe’s debt crisis erupted in Greece in 2009, said U.S.based Hartmut Grossman of ICS Risk Advisors who works with Wall Street banks. “A lot of the fir ms, particularly in Europe and also here, have been looking at that for a long time,” said Grossman, who added that the latest Greek political crisis had brought matters “to a little bit of a head”. “But there really has been contingency planning at all of the financial institutions for that to happen ... Greece leaving the euro zone is not a new idea,” he said. The EU says it wants Greece to stay in the common currency, and opinion polls

C M Y K

Africa economy should become a transformation economy —AfDB By BABAJIDE KOMOLAFE “The African economy which largely depends on the exploitation of natural resources should move on to become a transformation economy”, said Donald Kaberuka, President Africa Development Bank. Speaking at on the first day of the World Economic Forum on Africa taking place in Addis Ababa, Kaberu said, “From now on, the president noted, the continent should manage its natural resources better so as to create more wealth, attract investment, and generate employment, particularly by taking advantage of the current salary increases taking place in Asia, and also expand its economic growth base to benefit the poorer sections of the society. During the press conference jointly hosted by the CoChairmen of the Forum, President Kaberuka recalled that Africa has recorded an average economic growth rate of about 6 percent which puts the continent in second place after Asia. He indicated, however, that this level of performance has still not protected Africa from the global crisis as the continent is not as resilient as it was in 2008 in resisting external

shocks. President Kaberuka and former British Prime Minister Gordon Brown proceeded to open the high-level meeting on education and technology in the presence of numerous African ministers of education and representatives from the private sector. President Kaberuka also presided over the launch of the Africa Lions Initiative. For his part, the Ethiopian

Prime Minister, Meles Zenawi, presided over the plenary session which was had the theme: “The place of Africa in the World Economy.” During the session, in which several African heads of state and government participated, the panelists expressed their optimism about the prospects for development and the current crop of leadership across the continent. Innovation, technology,

agricultural transformation, education, governance, infrastructure, SMEs and international partnerships were on the centre stage of the discussions. The 2012 forum is co-chaired by Kofi Annan, Donald Kaberuka (AfDB), Doug McMillion (Wal-Mart), Gao Xiaqing (China), Monhala Hlahla (IDC) and Bekele Geleta (International Red Cross) and Adrian Monck (Moderator).

Point of sale (PoS) terminals deployed by banks 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0

8th of 15th of 22nd 29th of 5th of 12th of 19th of 26th of 4th of Jan Jan of Jan Jan Feb Feb Feb Feb Mar

source: nibss

FIRS arrests officials of three firms over N2.17bn taxes By AHMED IBRAHIM

he Federal Inland Revenue Service (FIRS) has arrested top officials of Sweet Sensation, UTC and Pivotal Engineering in Lagos for alleged failure to remit taxes totally N2.17 billion. The arrest were made during an enforcement drive led by an Assistant Director of Legal and Prosecution Department of the Service, Mr. Abu Stephen, Speaking to journalists, Stephen said that the enforcement drive aimed at recovering arrears of taxes accruing to government from Company Income Tax (CIT), Education Tax (EDT), Withholding Tax (WHT) and Value Added Tax (VAT). He said prior to the exercise, the Service had served series of notice on the companies, including four

others to pay their outstanding tax liability or being compiled to do so. He said that Pivot Engineering owes N609.911 million while Reliance Telecommunications is owing N592.756 million. HITV Ltd, he said is owing N309.500 million while UTC Nigeria Plc is owing N277.589 million. Others include Sweet Sensation Confectionary Ltd, N155, 483,013:00, Entertainment Highway Ltd, N197, 444,964:55 and John Holt Nig. Ltd, N33, 073,487:52. During the exercise, some of the companies admitted their outstanding tax liability when the enforcement team called at their offices. For instance, Mr. Opedemowo Olayemi, the Chief Accountant of Sweet Sensation Confectionary Ltd, said the company was owing

to the tone of N60 million for VAT alone. Also, Mr. Dada Arokoyu of UTC and Mr. Muyiwa Fojude of Pivot agreed that their companies had outstanding tax liability to settle with the FIRS. Similarly, when the team visited HITV Ltd, Entertainment Highway Ltd and Reliance Communications Ltd, their offices were under lock and key, but security at the gates attended to the enforcement team. At HITV and Entertainment the team was told that the GTBank sealed up the premises following a court order, while at the Reliance Communication on the directive of the Chairman of the company. Stephen said, “ The arrest is a warning to other organisations and individuals in the country on the need to

ensure deductions and remittance of their tax obligation as provided by the FIRS Establishment Act 2007. “Any person who being obliged to deduct any tax under this act or the laws listed in the First Schedule to this Act, but fails to deduct, or having deducted, fails to pay to the Service within 30 days from the date the amount was deducted or the time the duty to deduct arose, commits an offence and shall, upon conviction, be liable to pay the tax withheld or not remitted in addition to a penalty of 10 per cent of the tax withheld or not remitted per annum and interest at the prevailing Central Bank of Nigeria minimum re-discount rate and imprisonment for period of not more than three years,” the section stated.

Vanguard, MONDAY, MAY 14, 2012 — 25

Capital Market

Mutual funds value rises by N1.26bn in April BY MICHAEL EBOH

Founder of Tunde Lemo Foundation (TLF), Mr. Tunde Lemo, handing over the keys of the ultra-modern clinic he donated to Nigerian Red Cross in Abeokuta, Ogun State.

By MICHAEL EBOH

C M Y K

The Net Asset Value, NAV, of mutual funds listed on the M e m o r a n d u m Quotation segment of the Nigerian Stock Exchange, NSE, appreciated by N1.264 billion in one month, between March and

April 2012. Specifically, the mutual funds’ value rose by 1.46 per cent to close at N88.1 billion for the month of April 2012, from N86.836 billion at which it ended the month of March. The funds also appreciated by N525 million in one week, rising by 0.6 per cent

from N87.575 billion at which it closed for the week ended, April 20, 2012. Equity based funds, with a total NAV of N40.618 billion, recorded the highest valuation in April, followed by Real estate funds with a NAV of N16.334 billion and balance based funds recorded a NAV of N12.356 billion. Money market funds’ NAV stands at N7.01 billion, Ethical funds recorded NAV of N5.741 billion while Bond funds trailed with a total NAV of N5.428 billion. Union Homes Real Estate Investment Trust Scheme, managed by Union Homes Savings and Loans Plc, recorded the highest NAV of N14.108 billion, followed by Stanbic IBTC Nigerian Equity Fund, managed by Stanbic IBTC Asset Management Limited with a NAV of N12.464 billion and Stanbic IBTC Money Market Fund also managed by Stanbic IBTC Asset, with a NAV of N6.79 billion. ARM Discovery Fund, managed by Asset and Resources Management, ARM, Company Limited recorded a NAV of N4.637 billion; FBN Heritage Fund, managed by First Bank of Nigeria Plc, recorded NAV of N4.122 billion; SIM Capital Alliance Fund, managed by SIM Capital Alliance Limited’s NAV stood at N3.453 billion and Zenith Equity Fund, managed by Zenith Bank Plc posted NAV of N3.448 billion. Others are: Coral Growth Fund, managed by FSDH Asset Management Limited - N3.282 billion; Kakawa Guaranteed Income Fund, managed by Kakawa Asset M a n a g e m e n t Company Limited N2.936 billion and Stanbic Ethical Fund, managed by Stanbic IBTC Asset - N2.849 billion among others.

26 —Vanguard, MONDAY, MAY 14, 2012

Capital Market Analysis BRIEFS NACCIMA tasks FG on commodity exchange market

Stock market: First Bank’s shares become toast of investors … First quarter profit doubles

By Olayemi Fofah

he Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, has called on the Federal Government to urgently pursue the development of the commodity exchange market if it is serious about increasing the country’s agricultural output and guaranteeing food security. “This has become necessary in order to get the best out of our agricultural productivity, guarantee food sufficiency and stable income for farmers in the country,” said Dr. Herbert Ajayi, President, NACCIMA. According to Ajayi, who was speaking in Lagos, agriculture is being made the next prime sector and mover (in place of oil) of the economy, to restore Nigeria’s lost glory. He also recommended that Government should, without delay, understudy and adopt the strategies of how India and China exited from being food importers to become food exporters during the last 30 years, adding that if sincerely adopted and implemented, it will boost agricultural productivity and promote employment opportunities for over 10 million people.

Ex-Goldman Flamand’s hedge fund misses rally

doma Partners, the hedge fund run by exGoldman Sachs star , PierreHenri Flamand, has lagged behind rivals this year after a “frustrating” period when it missed out on a rally in stock and bond markets, a letter to its investors showed. The $1.8 billion Edoma fund, founded by Flamand to make bets on corporate events like mergers, bankruptcies and restructurings, was down 0.85 percent at the end of the first quarter, bringing its losses since inception to 3.1 percent, according to the letter obtained by Reuters. Flamand, formerly one of Goldman’s most senior proprietary traders, started London-based Edoma in November 2010 in one of the most eagerly awaited launches since the financial crisis. A recovery in dealmaking has helped eventdriven funds this year, with the average fund in the sector up 4.84 percent during the first quarter, data from Hedge Fund Research shows.

C M Y K

Stories by PETER EGWUATU

ollowing the i m p r e s s i v e performance of First Bank Nigeria Plc in the first quarter 2012 and full year result of 2011 recently released on the Nigerian Stock Exchange (NSE), the bank’s shares have continued to be the toast of investors in the stock market. First Bank’s profit doubled, while revenue jumped by 42 per cent in its first quarter financial year ended March 31, 2012. This is coming after the bank recorded a significant growth in its performance indicators for the full financial year ended December 31, 2011 A review of the bank’s performance on the stock market show that its shares gained 14.2 per cent from N9.72 per share on17th April 2012 to close at N11.10 per share at the end of trading on Thursday, May 10, 2012. Specifically, on April 17, 2012 when the bank released its full year audited result to the market, the market value of the stock rose by 4.97 per cent to close at N9.72. Also at the end of market transactions on May 3, 2012, the bank’s stock rose to N10.99 pr share, a whopping 18.68 per cent increase. While commenting on the performance of First Bank, Executive Director, Market Operations and Technology of the NSE, Mr. Adeolu Bajomo said, “The market has continued to respond positively to First Bank’s stock with added interest developing as its first quarter interim report was released on May 2 2012 with gross earnings having risen by 42.5 per cent in the first three months of the ongoing accounting year. This is an indication that investors of the bank will have cause to smile at the end of the current accounting period.” Bajomo, commended the management of First Bank for building an institution which over the years, has purposefully transformed into a national pride. A cursory review of the performance shows that First Bank’s profit doubled, while revenue jumped up by 42 per cent in its first quarter financial year ended March

31, 2012. This is coming after the bank recorded a significant growth in its performance indicators for the full financial year ended December 31, 2011 The first quarter result made available by the NSE showed that the bank’s net income rose to N24.5 billion for the three months through March from N12.2 billion in the corresponding period 2011. It will be recalled that First Bank, which in October 2011 agreed to buy Congo’s Banque Internationale de Credit, is looking to acquire another lender this year in West Africa, Chief Financial Officer, Adebayo Adelabu has said. The bank, as gathered is planning to add 120 branches in Nigeria to make a total of 750 branches. Other performance

indicators shows that Bank’s loans and advances increased 12 per cent to N1.89 trillion , compared with a year earlier. Its deposits climbed 8 per cent to N2.29 trillion. Meanwhile, it will be recalled that the bank in its full year result ended December 31, 2011, recorded 27.6 per cent growth in gross earnings to N296.3 billion from N232.1 billion in the corresponding period of 2010. Operating income grew by 45.6 per cent to N259.2 billion in 2011, from N178.1billion in 2010. It also recorded 92.9 per cent growth in profit before tax and exceptional item to N65.6 billion as against N34 billion in the corresponding period of 2010. Profit before tax grew by 48.2 per cent to N50.1 billion from N33.8 billion in 2010.

Other performance indicators show strong improvement in cost to income ratio to 56.8 per cent from 67.0 per cent in 2010, while 55.1 per cent ratio recorded in the Bank from 65.8 per cent in 2010. Provision for losses of N44.8 billion was recorded in 2011, as against N21.6 billion in 2010, of which loan loss provision was N32.9 billion as against N22.4 billion in 2010. Commenting on the results, Bisi Onasanya, Group Managing Director of First Bank said: “We have made significant progress in achieving our strategic goal of being the number one financial services group in Nigeria. Our results are reflective of the benefits being reaped from the implementation of our transformation agenda which has improved customer focus, acquisition, satisfaction, business generation and enhanced the sustainability of our earnings base. This has brought about

From left: Mr. Lere Odusote, Head Business Development, Oando Gas and Power Limited; Mr. Solomon Adegbie-Quaynor, Country Manager, International Finance Corporation, IFC and Mr. Onajite Okoloko, Group CEO, Notore Chemical Industries Limited at the power conference organised by Ecobank in Lagos. Photo by Lamidi Bamidele.

Sterling Bank gross earnings up by 79% in first quarter

terling Bank Plc has recorded a gross earning of N17.2 billion within the three months ended March 31, 2012, representing a growth of 79 per cent from the corresponding period of 2011. Interim report and accounts of the bank for the first quarter ended March 31, 2012 released weekend, showed impressive growth in all key profit and loss indicators while the bank maintained a healthy balance sheet. The first quarter report, presented in the International Financial Reporting Standards (IFRS) format, showed that the core interest income doubled by 116 per cent to N13.6 billion while net interest income jumped by 73 per cent.

Operating income grew by 49 per cent just as profits before and after tax rose by 24 per cent and 16 per cent respectively. Gross earnings stood at N17.2 billion in first quarter 2012 as against N9.7 billion recorded in the corresponding quarter of 2011. Net interest income had risen from N3.6 billion in 2011 to N6.3 billion in 2012. Operating income rose from N6.1 billion to N9 billion while profits before and after tax increased to N1.6 billion and N1.3 billion respectively. Key balance sheet items also improved during the period with total assets adding N17 billion to close the quarter at N521.4 billion as against N504.7 billion in December 2011. Customer deposits

increased from to N412 billion as against N392.1 billion in December 2011 while net loans and advances grew from N164.3 billion in December 2011 to N177.8 billion in March 2012. Commenting on the first quarter performance, managing director, Sterling Bank Plc, Mr. Yemi Adeola, said with the completion of the integration of the Equitorial Trust Bank, which it recently acquired, the bank has realigned its business to deepen customer relationships and enhance market penetration. According to him, the enlarged branch network provides a platform for low cost deposit mobilization, the result of which is evident in the 400 basis point improvement in deposit mix during the first quarter.

0.92

1.23 5.52 0.57 6.43 34.01

30.00 8.69

Livestock/Animal Specialities Livestock Feeds Plc

CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc SCOA Nigeria Plc Transnational Corporation Chellarams Plc UACN Plc

CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc

5.73 3.60 62.00 2.25 5.90 0.50

14.74 439.95

11.68 36.19 3.51 2.88

23.30 29.51

6.65 0.64 0.57 3.00 11.50 1.33 0.50 11.10 5.40 16.30 1.07 0.70 1.15 3.60 0.88 6.60 1.37 3.63 4.89 0.50 0.50 15.00

0.50 0.82 0.50 0.50 0.50 1.75 0.50 0.50 0.50 1.60 0.50 0.56 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

0.50 0.50

0.50 2.02 0.50

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 Comp Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guaranty Trust Assurance Plc Guinea Insurance Plc Intercontinental Wapic Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Universal Insurance Plc

Mortgage Carrier, Broker and Sector Aso Savings and Loans Plc Resort Savings & Loans Plc

Other Financial Institutions Crusader (Nigeria) Plc Deap Capital Management & Trust Plc Royal Exchange Assurance

7.77

41.70

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

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers

3.29 240.00 5.92 112.00 0.89

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

7.77

0.50 2.02 0.50

0.50 0.50

0.50 0.82 0.50 0.50 0.50 1.80 0.50 0.55 0.50 1.55 0.50 0.56 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

6.70 0.64 0.55 2.96 11.50 1.33 0.50 11.30 5.25 16.25 1.07 0.70 1.15 3.35 0.88 6.62 1.31 3.81 4.99 0.52 0.50 14.99

23.20 29.00

11.10 36.19 3.51 2.88

14.86 439.95

6.01 3.78 62.00 2.25 6.00 0.50

0.50

100.00

0.50

100.00

11.01

30.10 8.69

1.17 5.52 0.59 6.43 34.01

0.96

0.50 36.39 13.65

0.50

Closing Price (N)

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

11.01

0.50 36.39 13.00

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

660

500 89,900 1,020

1,360 1,080,000

1,188,562 320,000 5,000 10,000 200 300,000 800 100,000 500 1,803,880 30,146 101 96,166 1,670,890 856 1,140,000 73,000 44,345 50,000 13,292 52,000 1,001,000 170,500 2,000 10,000 34,000 15,700 384

3,531,375 646,608 146,538,502 3,350,048 1,272,298 4,280,287 1,000 17,802,188 7,722,214 62,412,435 500 73,200 91,000 4,689,522 1,006,032 191,965 6,982,549 6,982,549 1,158,012 1,343,022 632,000 59,023,023

74,376 423,860

358,924 6,600 47,833 800

518,391 34,144

1,043,147 30,853,148 411,418 2,200 839,897 124,000

6,321

104,948 138,479 216,900 1,359,161 200

50,000

1,500

109,025

109,025 200

50,500 200 12,694,295 1,000 307,005

300,176

4,800 229,775 3,075,902

1,010

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

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

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

00.50

Hospitality Tantalisers Plc

4.90 1.80 8.25

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

0.50

Road Transportation Associated Bus Company Plc Speciality Interlinked Technologies Plc

0.50 1.90 2.80 4.20 3.60

Media/Entertainment Daar Communications Plc

6.78 1.18

0.50

2.62

1.97 1.45

Printing & Publishing. Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

Courier/Freight/Delivery Red Star Express Plc Employment Solutions C & I LEASING PLC

Automobile/Auto Part Retailers Incar Nig. Plc RT Briscoe Plc

Afromedia Plc

0.50

20.50 0.50 25.46 3.40 10.80 129.16 36.50 138.95

Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Eterna Oil and Gas Plc Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc

SERVICES

0.61 16.99

Intergrated Oil and Gas Services Oando Plc

3.98 12.71 13.28 4.30 1.05 2.92 0.63

INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service

1.44 0.50

1.45 0.50

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans

0.50

Processing Sysetms Chams Nigeria Plc

1.38

0.50

Paper/Forest Products Thomas Wyatt Nig. Plc

Non-Metalic Mineral Mining Multiverse Plc

6.00 10.60

Metals Aluminium Extrusion Ind Plc

8.26

NATURAL RESOURCES Chemicals BOC Gases Plc

3.98 1.83

10.15 8.44 24.30 5.20 120.00 0.50 0.74 44.94 3.42 1.00 10.93

Tools and Machinery Nigerian Ropes Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc

0.50

Computers and Peripherals Omatek Ventures Plc

ICT Telecommunications Starcomms Plc

0.50

ICT Computer Based Systems108 Courteville Investment Plc

13.80 2.66

5.05 0.50 0.97 19.00 1.56 0.74 8.59 3.50

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

1.80 8.16

4.90

0.50

1.90 2.80 4.20 3.60

0.50

6.78 1.16

0.50

2.71

1.97 1.50

0.50

20.50 0.50 25.46 3.40 10.80 132.90 36.50 138.95

17.30

0.57

3.98 12.71 13.28 4.30 1.05 2.78 0.6

1.44 0.50

1.45 0.50

0.50

1.38

0.50

10.60

6.00

8.26

3.79 1.77

10.49 8.44 24.30 5.01 121,738 0.50 0.74 44.94 3.42 1.00 10.93

0.50

13.80 2.66

0.50

5.05 0.50 0.96 19.00 1.49 0.71 8.59 3.50

0.50

Closing Price N

18,114 702,575

500

2,000

1,000 40,000 4,322 25,370

7,000

50 520,000

81,990

596,400

240 3,604,472

50,039

2,000

82,191 5,000 37,611 36,600 100,627 208,428 1,550 7,828

2,115,702

931,950

6,888 1,000 100 29,198 200 84,311

2,000 1,000

37,200 4,000

250,000

150

9,450

57,930

100

272,000 582,901

606,878 27,404 21,518 290,800 25,817 17 1,273 101,777 10,140 1,000,000 875

160,000

15,225 330

403,000

500

143 10,000 1,060,524 13,439 4,594,636 2,000 10 100

12,000

Quantity Traded

2.78 11.75

5.15

0.80

8.00 6.82

3.68

0.50

400 2.07

1.64

3.67

4.33 3.65

0.72

600

1.57 6.50

4.90

0.50

4.60 3.60

3.17

0.48

3.00 1.33

0.90

2.65

1.97 1.30

0.51

141.00 63.86 195.50

163.50 2,100 240.00

27.99 0.50 0.50 5.71 3.89

1.87

3.98 12.71 13.97 3.60 1.05 2.92 0.63

1.33 0.50

1.62 2.58

0.50

1.38

0.50

10.70

6.80

8.26

5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

0.50

3.25 3.25

0.50

5.31 0.70 0.83 23.11 3.61 0.95 0.95 4.28

0.50

Year Low

0.87

0.51 0.80

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

0.13

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 2.58 0.21 0.08 0.00 0.00

0.00

E.P.S

4.22 8.75

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

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

88.50 0.00 3.07 8.88 9.05 14.13 0.00 0.00

0.00

P.E Ratio

as at Friday, May 11, 2012

37.10 0.70 32.60 5.59

78.97

0.97

3.98 15.58 15.03 4.30 1.86 2.92 0.63

1.51 0.99

2.50 2.58

0.50

1.38

0.50

12.39

9.20

8.69

6.91 3.60

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

1.47

9.31 3.59

0.50

0.52

5.31 1.45 3.20 29.65 5.61 1.96 12.91 200

0.50

Year High

Stock Market Report

Vanguard, MONDAY, MAY 14, 2012 â&#x20AC;&#x201D; 27

C M Y K

28 —Vanguard, MONDAY, MAY 14, 2012

Tax Platform

* Revenue - it is generally believed, that the main purpose of taxes is to raise revenue for use by Government; * Redistribution - taxes may be used to transfer wealth from one section of the society to another; *Repricing -taxes may be used to address externalities i.e. fiscal policies may be used to affect some area of the economy, which cannot otherwise be done; and * Representation - this is historical and implies that taxes are imposed to assure citizens of representation in the Governance of the society. In this regard, rulers impose taxes and citizens demand accountability in return. Of the above, revenue generation is viewed as the primary and most important role of taxation. Taxation is however not

National Tax policy guidelines and rules (2)

•Ifueko Omoigui-Okauru only a means of revenue generation for Government, it can also be used to stimulate other sources of Government revenue and develop other areas of the economy from which Government can realise revenue. Distinction between Taxation and other components of Revenue A further but brief discussion may be necessary on the distinction between taxes and other internal revenue items such as charges, levies and penalties. Such other revenue items are not usually income or transaction based, but may be imposed for the use of utilities or infrastructure, or the right of way or simply imposed on certain category of persons, activities or persons within a particular area. As a definition of taxation has been provided above, a working definition of similar items is provided below; * Charge - a charge is an amount paid for the use of goods, services or infrastructure provided by the Government; * Fee - a fee is a payment for the labour or services provided by a public body, such as a Government entity or agency. Examples of fees include payments for use of utilities and for obtaining Government documents such as passports and visas. * Fines - these are sums of money imposed by the Government as penalties for an offence or indiscretion by a person within the jurisdiction of the Government. Examples of fines include Court fines, fines imposed for traffic violations, unauthorised usage of Government property e.t.c. * Penalty - this is similar to a fine and is usually an amount paid or forfeited for not meeting a particular con-

dition or fulfilling an undertaking. Examples of penalties include payments for late filing of returns, or the late or non-provision of information at the time required to Government agencies. * Rates - these are usually imposed on property or other assets and are usually determined with reference to the value of the property or in relation to some other thing. Examples of rates include tenement rates and rates on shops and kiosks. The above is not intended as an exhaustive definition of the above concepts, but merely a working guide to enable a proper distinction between taxes and these other components of Government revenue. In practice, there may be little distinction between what constitutes a tax or charge or fine, as these concepts can sometimes be interchangeable, however, it is still necessary to keep in mind the distinction as set out above. It has also been noted, that under the current structure of Government in Nigeria, taxes at the Federal and State level are usually more efficiently collected and utilised than

Assets:This includes taxes, such as property tax and other such taxes imposed on land or landed property. The above list illustrates the different bases upon which taxes may be imposed, as discussed above. Having provided a working definition of taxation, there is a need to differentiate taxation from revenue for a proper understanding of the role of taxation in the development of the Nigerian economy. This is particularly necessary, as there is usually the misconception that every form of revenue obtained from the public is a tax. Revenue is defined as income received from all activities engaged in by the receiving entity. In Governmental terms, revenue is the entire amount received by the Government from sources within and outside the Government territory. In Nigeria, Government revenue includes proceeds from sale of crude oil .taxes (including import and excise duties), penalties, interests, fines, charges and other earnings received from Government investments (bonds, dividends e.t.c.), and the like. Revenue therefore encompasses the entire gamut of Government income, which is realised and available for expenditure by Government within a particular fiscal year or period. Taxes are therefore, a subcomponent of Government revenue, but they are not the only revenue item, which is internally generated by Government. Other sources of internal revenue include fees, rates, levies, fines, tolls, penalties and charges. Taxes are however a major contributor to Government revenue and ideally should be a major source of revenue. In discussing taxation, there are usually four (4) “R”s linked with taxation and its purposes, namely:

Generally, taxation is looked upon as a sustainable source of Government revenue due to the stability and certainty of the tax system. Unlike other sources of revenue, taxes are constantly available in so far as economic activity is carried on in the society.

most of the other revenue sources highlighted above. However, unlike other revenue items, tax officials do not exercise custody or control over taxes, which they collect and are not involved in the allocation or expenditure of the taxes. This distinction between those who collect and those who utilise is important for control purposes and also because the manner of utilisation of revenues collected impacts

directly on the ease with which such revenues are collected. Sustainable Development and Healthy Competition as the overriding Philosophy of the National Tax Policy Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. In this context sustainable development refers to the pattern of revenue generation, which is able to meet the needs of the present generation of Nigerians, without negatively impacting the ability of future generations to meet their own needs. Generally, taxation is looked upon as a sustainable source of Government revenue due to the stability and certainty of the tax system. Unlike other sources of revenue, taxes are constantly available in so far as economic activity is carried on in the society. Recent developments in the global and local economy which have significantly impacted Government revenue has directed focus on taxation as a sustainable source of income. It is in line with this that the National Tax Policy intends to create awareness on the importance of the role, which taxation can play in securing a stable flow of revenue for the Government. Nigeria is currently viewed as a mono-product economy with significant reliance on oil revenue due to historical developments in the Nigerian economy. However, taxation has been identified as an alternative to oil revenue and a more reliable source of revenue. The tax policy shall therefore promote and encourage a shift in focus from non-tax revenue to tax revenue by Governments at all levels of the Nigerian economy. Following from the above, the tax policy shall also promote and encourage healthy competition amongst tax and revenue authorities in Nigeria at the Federal and State level to facilitate rapid development of the tax sector in Nigeria. The focus of the competition shall be to maximise tax revenue within the jurisdiction of each Government in line with Constitutional and statutory provisions. It is expected that there would be increased collaboration as a result of the need to grow tax revenues by each level of Government and that improved collaboration would enhance tax yield - between and amongst Federal, State and

Local Government authorities. The concept of sustainable development and healthy competition shall be upheld as underlying philosophies in the development of Nigeria’s tax system. It is however important to note that even as healthy competition is encouraged, this should be balanced with the need to have an effective and efficient tax system. Several jurisdictions have different ways of striking that balance. In Nigeria, that balance will be achieved by ensuring that those ratios that drive allocation of revenue collected from any source has built in mechanisms for rewarding and recognising arms of government that demonstrate effective utilisation of revenues, investment promotion, infrastructural development and economic activity amongst others. The role of Fiscal Federalism Fiscal Federalism is expected to play a major role in Nigerian tax policy and administration. In this regard, it is intended that the concept of Fiscal Federalism would be the common thread holding the National Tax Policy together. Nigerian tax policy would therefore uphold the application of fiscal federalism in the generation and expenditure of revenue by Government at all levels in accordance with the tenets of the Nigerian Constitution. There should be strict adherence to the tenets of fiscal federalism, which will include the basic understanding of which revenue functions and agencies are best centralised, which should run concurrently and which are better placed under the sphere of decentralised levels of Government. In this regard, it is expected that the Tax Policy and other tax legislation, would resolve the issue, of who collects what, how it is collected, who controls what is collected, how is what is collected shared, who is responsible for spending what is collected and who is ultimately responsible and accountable to the tax payers for the revenue collected and its expenditure. The Tax Policy would provide a workable and acceptable platform which should be adopted by all tiers of Government for the proper application of the doctrine of separation of powers in relation to taxation. It is believed that adherence to these principles which would be discussed in the National Tax Policy would bring an end to disputes on the limits and powers of the tiers of Government in our Federation on fiscal matters. It will also bring clarity and certainty to tax administration and the entire Nigerian tax system.

Vanguard, MONDAY, MAY 14, 2012 — 29

30 — Vanguard, MONDAY, MAY 14, 2012

Vanguard, MONDAY,

MAY 14, 2012 — 31

32 — Vanguard, MONDAY,

MAY 7, 2012

Interview

We are concerned about substa

he Minister of Trade and Investment, Olusegun Aganga, recently disclosed plans by his Ministry to improve the countr y ’s global competitiveness ranking from its current position of 137 to 34th by 2015. He said that his Ministry is working to ensure that Nigeria occupies the topfive position in Africa in this regard, and also increase manufacturing contribution to GDP to eight per cent from the current 4.5 by the same year. Excerpt: By Babajide Komolafe & Franklin Alli

M Y K

•Olusegun Aganga with us on the Ease of Doing Business. Also, we are looking at areas we have 100 per cent comparative and competitive advantage. In

What steps are you taking to achieve your targets? There is no reason why we can’t achieve our goals; when we started, we worked together with the Organised Private Sector (OPS) and we came up with a number of recommendations which we are implementing now. We also have a team working, precisely, on the World Bank’s recommendations on the ‘Ease of Doing Business and Competitiveness’ and we have Inter-Ministerial Committee who are also working on the ‘Ease of Doing Business and Competitiveness.’ In 2010, we invited the Competitiveness Office of the World Economic Forum and we told them to go through our recommendations and tell us what other countries that were in similar positions did to achieve economic transformation. So, I think if those three groups did what they are supposed to do, there is no reason why we should not achieve the goals we have set for ourselves. For instance, when I talked about increasing Nigeria’s global competitiveness ranking by 103 positions over the next four years, this will catapult Nigeria from its current 137thposition to number 34, in global competitiveness by 2 0 1 5 . We also intend to occupy the top five position in Africa by that year; improving Nigeria’s ranking in the Ease of Doing Business by 103 positions and enabling trade ranking by 75 positions, increasing manufacturing contribution to GDFP from 4.5 percent to 8 percent, among other measurable targets. We have already inaugurated the Doing Business and Competitiveness Committee and the InvestorCare Committee as the first step in a series of well laid out plans. We are also working with the World Bank‘s Competitiveness Office and we have agreed on specific steps to take. The World Bank is C part of the team working

your

speech,

you

returns, the chances of attracting FDI will be hampered. So, it is important to look after those that have already invested in the economy through appropriate policies and incentives.

If we don’t work and make sure that people that have already invested actually operate well and generate returns, the chances of attracting FDI will be hampered.

emphasised so much on FDI, what about domestic investment? We are interested in Foreign Direct Investment, FDI, and we are also interested in Local Direct Investment, LDI, because, if we don’t work and make sure that people that have already invested actually operate well and generate

Some o f the local investments on ground is the Dangote. You have already seen what the Group has invested across different sectors, and by next week, they will be commissioning the third phase of Obajana Cement in Kogi State. Nigerian Breweries Plc has also expanded their

investment in the economy. Recently they commissioned their new brewery plants in Lagos; so too is Flour Mills of Nigeria PLC; BUA Group’s $5 billion Pasta plant in Lagos, are among other examples of domestic investments. You were recently in Brazil. What was the highlight of the trip? Brazil, as you know is one of the BRICS (Brazil, Russia, India, China and South Africa) economies, and they are doing extremely well. Nigeria has so many things in common with Brazil in terms of natural resources, culture and language (Yoru b a ) . Brazil is the largest country in Latin America by size, and Nigeria is the largest country in Africa by population, although they are remotely bordered across from one another by the Atlantic Ocean. For centuries, Brazil and Nigeria have enjoyed a warmly, friendly and strong relationship on the bases of culture (since many AfroBrazilians trace their ancestry and religious practices to Nigeria) and commercial

•Fake goods being destroyed. trade. More importantly, Brazil has grown very successful companies like Petróleo Brasileiro or Petrobras, which is doing very well. So, we have a lot we can learn from Brazil. So the synergy is very strong and very key to what we can do in Nigeria. However, in order to facilitate trade and investment between the two countries, we need to make sure we

Vanguard, MONDAY, MAY 7, 2012 — 33

Interview

andard goods from China —Aganga

of the secret of their industrialization. It is not just people who went to universities and thereafter started struggling for job in the labour markets. That is what we must do in Nigeria. That is part of my industrial revolution plans- select the right sectors that have competitive and comparative advantage, bring in innovation and skills.

have a logistics structure. If you are going to Brazil from Nigeria, if you look at the map, a journey that should have taken you a minimum of six hours will take you 24 hours. Why? Because you have to fly from Nigeria to Dubai for seven hours, and then you wait for eight hours to catch the next flight to Brazil, and that flight now fly over Nigeria airspace and goes to Brazil. 14 hours is wasted; so it really doesn’t make sense. Nigerian and Brazilian government have both agreed that they must do something about it. Again, if you look at Brazil’s economic growth, industrialization is based on a well structured Skills Acquisition Development Programme and it is being run by the countr y ’s Industrial Association. They have about 90 skills centre spread across the country and you have students who are being trained from fourteen years of age. The skills development centres are very well structured and are very effective. In fact, each year, they create three million jobs of highly skilled workers. They also have government policy to back the establishments. That is part

If I want to play your game, I would say two million jobs, but that is not me. If I say things, I have to defend it. What I can tell you is, our programme is geared towards job creation.

So, that’s the highlight of my visit to Brazil. Did I sign any bilateral agreement in Brazil? If I told you that I did, you should be worried because I had only gone there for three days. If they gave me document to sign, I have to give it to our lawyers to review it and it is only when my lawyer tells me to sign the document that I will do that. When signing document you have to be careful of the legal implications. So, I don’t sign any document without our lawyers advising me to do so. What are you doing about companies that relocated to neighbouring countries? I know some of them that have started coming back to Nigeria. Part of the study that

I ordered my ministry to investigate was ailing industries that closed down and those that left Nigeria to other countries. We did a study on why they left, what the issues were and how we can attract them back into the country and we have worked on their recommendations.

What’s Nigeria’s relationship with China? At the political and economic level, we are enjoying good relationship with China, but the area we are concerned is “substandard goods.” The Director General of SON, Dr. Joseph Odumodu, will be here to present a paper on “Tackling the Menace of Substandard Products in Nigeria.” He‘ll tell you that 75 percent of products circulating in the economy today are substandard. He will also tell you that a large percentage of that figure comes from China; he will also tell you the action he has already taken to curb the menace. So, we are aware of the issue and we have already taken action. We have devised a system that is now working and the incidence of substandard goods is coming down. We have a target of bringing it down further every year for the next four years. So we are addressing the issue already. What’s your take on the Power sector and infrastructure? We have a Roadmap on Power sector. However, if we look at power from an industrial perspective which is very relevant to your question, there is short-term, medium-term and long –term plan we have put in place. But we will not achieve the target if we want to be honest to ourselves in the next one or two years. That is why the Minister of Power, Barth Nnaji, has made it absolutely clear that by the end of this year, he will re-direct power to nine industrial cities. That is one big news/policy we are waiting to see the implementation. There is nothing we look at in the economy that infrastructure does not touch in one way or the other. We have trade-related

infrastructure, tourism related infrastructure, export related infrastructure, etc. Recently, I visited a state in the southsouth part of the country and I was told that it is cheaper to export goods from there to China than to sending it to Maiduguri; the cost of sending it to Maiduguri is higher. We will work closely with the Minister of Transport to address the challenges. What are the measures to promote SMEs and create job? There are a number of initiatives on that. We are also going to put them in clusters and make them have power and other infrastructures. The Bank of Industry is involved in that and is working with states government to develop their SMEs sectors. Now If want to play your game, I would say two million jobs, but that is not me. If I say things, I have to defend it. What I can tell you is, our programme is geared towards job creation. We are monitoring it and as we do our regular press conference, we will be able to tell you how many jobs have been created. For instance, in the case of local sugar production, we have concluded work on a National Sugar Master Plan (NSMP) that would save the

about two percent of the sugar it consumes. The NSMP will ensure on an annual basis local production of 1 ,797,000 tonnes of sugar; 161.2 million litres of ethanol, 4000MW of electricity, 1.6 million tonnes of animal feeds, 37,378 permanent jobs and 79,803 seasonal jobs. Today, if anybody sits in front of you and say we have created so and so number of jobs, they are lying. What is take on state of security in the Country: I have observed that Nigerians at home and in the Diasporas talk more about security than foreign investors. But when you meet with foreign investors the issue of security does not always come up; none of the foreign investors I have met talked about security problem but when you meet with the Diasporas group, it is security they talk about. I am not saying that security is not an issue. The point I am making is, Nigerians talk more about security than foreigners. Foreign investors take a long-term view not a shortterm one. What they look at is if I can invest today, I will make more money in the future. And when the return is much higher than the risk, they invest. That is the reason why I don’t lay much emphasis on security when talking to investors. On theLocal Content Law? At the moment, it applies to

•Olusegun Aganga economy $416 million (N68.6 billion) in foreign exchange and generate over 100,000 jobs from local production of sugar by year 2015. I am glad to inform you that with the proven potential for wealth creation and high employment generation in the sugar industry, a Nigerian Sugar Master Plan, NSMP, have been produced which provides the Roadmap for at least 100 percent local production in sugar. As of today, Nigeria produces only

the oil and gas sector. We are going to extend it to other sectors where we have competitive advantages. We are actually coming out with a local patronage Bill that will encourage patronage of quality Made –in – Nigeria products like the Local Content Bill; because the patronage of what we produce locally is abysmally low. Meanwhile, I want to ask for your contribution. In your own opinion, tell us what we can do to encourage the patronage of local products. C M Y K

34 — Vanguard, MONDAY, MAY 14, 2012

Mortgage Finance BRIEFS Lagos designs prototype building to boost housing

n a bid to make its new home ownership scheme to be sustainable and homogenous, Lagos State government has developed a prototype building which is to be replicated across the state. Special Adviser to the State Governor on Housing, Mr. Jimoh Ajao, said the rent-toown policy initiative was, in the first place, planned to commence with existing stock of houses provided by the ministry. He said that the state government will continue to intervene in the sector with policies aimed at addressing housing challenges through mortgage finance. “Our policy on housing is to provide opportunities for the construction of houses at affordable prices; initiate programmes to address the demand and promote supply of housing through the Lagos Homes Scheme,” he said. According to him, so far, one-bedroom and twobedroom flats are available under the scheme at Oba Adeboruwa Housing Estate, Igbogbo, while three-bedroom flats are ready at Hon. Olaitan Mustapha Housing Estate, Ijaiye-Ojokoro, Iloro Housing Estate, Agege, and Hon. Rotimi Sotomiwa Housing Estate, Igbogbo, Ikorodu. He also said that room and parlour, one-bedroom and two-bedroom bungalows can also be acquired under the plan at the Sir Michael Otedola Housing Estate, Odoragunshin, Epe.

Bauchi warns against illegal structures

auchi State government has warned residents of the state against illegally erecting structures that are not in conformity with the approved plan of government. Commissioner for Special Duties, Alhaji Bappa Azare, gave the warning while inspecting some projects in the state. He directed management of the State Development Board (SDB) to pull down all illegal structures to pave way for proper road layout and water ways, while inspecting a 2.5 kilometre road and drainage in Dumi village of Bauchi local government area. “Henceforth, affected land owners will be required to present certificate of occupancy to all their lands,” he added.

Government still seeking suitable mortgage system for Nigeria —Minister G

overnment is yet to fashion out a suitable mortgage finance system that will ensure improved access to housing for Nigerians. Minister of Lands, Housing and Urban Development, Ms Ama Pepple, stated this at a Mortgage Finance Roundtable recently held in Abuja, organised by the Central Bank of Nigeria (CBN) in collaboration with the World Bank and the United Nation’s Department for International Development (DFID). She noted that mortgage finance remains a serious challenge affecting housing delivery in the country. “We, therefore, need to ponder on how to improve accessibility to mortgage finance in order to stem the present trend whereby most home owners in the country rely on their personal savings to build their houses,” she said. According to the minister, Nigeria has one of the lowest mortgage penetration in Africa in terms of mortgage to debt at less than four per cent, adding that government needs to ponder on how to improve accessibility to mortgage finance in order to stem the present trend whereby most home owners in the country rely on their personal savings to build their houses. “In spite of the growing mortgage market in Nigeria, the mortgage to debt ratio, which is a factor of mortgage penetration, is less than 4 percent. Using the figures published by the Africa 2011 Year Book of the Centre for Affordable Housing in Africa, Nigeria has one of the lowest mortgage penetrations on the continent in terms of mortgage to debt at less than four per cent. This is in comparism to South Africa at 30 per cent, Namibia at 20 per cent, Morocco at 15 per cent and Tunisia at 13 per cent. “Other countries, such as Kenya, Rwanda, Botswana, Senegal, Algeria and Uganda also fared better on the scale in spite of their low ratings. The comparative figures for some developed countries and emerging economies are the United States, which is 82 per cent, Singapore 34 per cent and Malaysia 24 per cent as at 2009. “In terms of income disposition, less than seven per cent households can afford to obtain mortgage loans even if it is spread over a period of 20 years, in view of the high

poverty level. The funding of mortgages from short term deposits in the banking systems leads to the enthronement of high interest regimes and wide

affordability gap in home ownership. Though loans sourced from the National Housing Fund (NHF) are much cheaper at six per cent interest, this is still considered

high relative to what obtains in developed countries. “Other challenges in the mortgage industry include undercapitalised primary and secondary mortgage institutions, lack of vibrant secondary market, and lack of common underwriting standards, low inflow of direct foreign investment, which is in favour of oil and gas, agriculture and solid minerals among others,” she stated.

•Blocks of luxury apartments

‘Indigenous technology key to tackling housing crisis’

rofessionals in the building sector have declared that the housing crisis in the country will persist if deliberate measures are not taken by stakeholders to ensure the use of indigenous building technology and materials. At the just concluded Lagos Housing Fair (LHF) held in Lagos, with the theme, “Indigenous Technology and Housing Delivery”, professionals in the housing industry and relevant organisations submitted that all efforts to tackle the housing crisis confronting the nation will prove abortive unless government and all stakeholders embark on backward integration in housing delivery technology. They called for the commencement of in-depth research into indigenous technology in housing development, noting that this is the roadmap to effectively confronting the housing challenge facing the country. Speaking on a paper titled, “The Nigerian Civil Engineers in Quest for Indigenous Technology ”, National Chairman, Nigerian Institution of Civil Engineers

(NICE), Mr. Ade Omopeloye, noted that the development of most advanced countries all over the world is based on the level of their indigenous technology. He noted that the public infrastructure that enhances the quality of the living environment is the result of well researched and implemented technological ideas. “For a developing economy like ours, the quest for indigenous technology cannot be over-emphasized,” he said. Omopeloye lamented that Nigeria is yet to attain the stage of self-sustained developmental goals, even though a lot of appreciable efforts have been channeled into research works on indigenous technological development. He said militating factors include: lack of well established standards to facilitate improvements in newly discovered idea; discovery in local technology marred with skepticism and sometime with scorn; lack of government policy to encourage the implementation of researched indigenous technology; lack of funds and; lack of enabling environment to translate

results of research into productive processes. “However, in spite of discouraging factors working against this quest, the Nigerian Civil Engineers continues to wax stronger and make remarkable achievements in the practice of civil engineering,” he said. Earlier, in his opening address, Chairman, Lagos Housing Fair Committee, Mr. Moses Ogunleye, said it was high time policies were put in place that would aid the research, development and promotion of indigenous technology. Ogunleye, who is also managing partner, Beachland Resources Limited, noted that countries like China, Japan and others in the Asian continents have proved beyond reasonable doubt the success in the use of indigenous technology. He urged government and other stakeholders to ensure that all hands are on deck to bail out Nigeria from acute shortage of housing provision. “The only positive approach is the use of indigenous technology that would not only be cheaper, but would be environmentally friendly”, he said.

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Agric

Lagos disburses N32m worth of agricultural inputs to farmers ...Acquires land for farming in other states By OLASUNKANMI AKONI

overnor Babatunde Fashola of Lagos State led administration has done a lot to make the transformation agenda in the state a success. The present administration has built a 20,000 metric tonnes per annum Rice Milling Plant at the Agro-Industrial Park, Imota to boost capacity of the local rice production and have tremendously increased the hectareage rice plantation from 30 ha to 450 ha and is planning to increase production to 1000 ha. A lot of work had also been done in the cassava sector of the Transformation Agenda. It had delineated areas around Ikorodu, Epe and Ibeju Lekki axis as Cassava Production and Processing Belt (CPPB), where incentives for cassava

production, processing and marketing would be concentrated. This is to promote employment, rural development and reduce poverty through the economics of cassava production. A modern cassava processing plant to produce High Quality Cassava Flour (HQCF) has been processed for construction in the CPPB. In the Aquaculture valuechain the state government aimed at creating an enabling environment to achieve one million metric tons of fish sustainability within five years and to generate five hundred thousand jobs within Lagos State that would lead the nation. Being the foremost state with the greatest potential in aquaculture, the state has invested in the following areas: Hatcheries development, cage and pen

culture using water bodies, fish estate and clusters, fish processing plants, fish feed milling and inputs development, research and extension among others. Thus, as part of effort to boost local production of various agricultural produce, the state government has acquired land from neighbouring states for framing purposes for the ever increasing populace in the state. Fashola, who was represented by his deputy, Mrs Orelope AdejokeAdefulire, disclosed this at the official presentation of farming equipment to beneficiaries and commissioning of farm service centre, Oko-Oba, Agege, Lagos. The event which also marked the 2012 Farmers Appreciation Day, the second of its kind, to celebrate and appreciate the efforts of farmers and fishermen in the state witnessed the

distribution of various agricultural inputs worth over N32 million at 40 percent subsidy by the state government to beneficiaries. According to Fashola, who stated that the measure also aimed at bringing service closer to farmers and stakeholders, promised that by year 2025, the state would produce at least 20 to 25 percent of its food needs locally and 60 percent target by 2050. He noted that the centre had trained 1000 farmers since its inception in all aspect of livestock, poultry, piggery and snail production, noted that the country was faced with the challenge of feeding its huge population and food security was being threatened by rising food prices, which is a major sign of food crisis in Nigeria. “Food security which is one of the cardinal programmes of the ten-point agenda of my administration is also an integral part of the Lagos

State Economic Empowerment and Development Strategy (LASEEDS) document as well as the resolutions of the Ehingbeti summit and the Millennium Development Goals (MDGs). It also tallies with the objectives of establishing the farm service centre to train more people in sustainable food production”, he added. He said that the state government had commenced the process of decentralizing the entre by replicating it in the five divisions of the state in order to bring service closer to the people. “The state has commenced the purchase of land from other states in order to achieve its food security agenda. An example is Oshogbo, where we would soon commence the planting of cash and food crops like pineapple, citrus and other high value crops to sustain our people.

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Talking Insurance

Insurance

WITH

YnikaBoa lrniwa Reforms and the insurance industry (1)

N 2009, Sanusi Lamido Sanusi was appointed governor of the Central Bank of Nigeria and he immediately went to work with more reforms in the financial services sector. It should be noted that that sector was just settling down with the reforms instiuted by his predecessor, Professor Charles Soludo. Sanusi unveiled a ten-year reform plan based on four points for the stabilization of the banking sector and the finance sector in general. According to him, the four programmes for the sector’s transformation involves enhancing the quality of banks; establishing financial stability; enabling healthy financial sector evolution and ensuring that financial sector contributes to the real economy. In the insurance sector, capital base requirement for life insurers was raised from 150m Naira to 2bn Naira, general insurers to 3bn Naira from 200m Naira, and for reinsurers it moved from 350m to 10bn Naira. This sub-sector offers insurance cover for various types of risks. Most non-life businesses cover risks such as fire, burglary, marine, accident, engineering, workmen’s compensation and loss of income; while most life businesses offer life assurance. By raising the bar thus, the industry has been successfully rid of players who had ben sucking the life blood of the industry. This is even more graphically reflected on the number of insurance companies operating in the country. Hitherto, there were about 128 insurance companies in Nigeria and everywhere you looked there was an insurance firm. But after raising the bar, the number went down to 62, and many of them are not stand alone companies; some are dual companies. If you are talking about insurance companies we don’t have more than 29. That is the effect of the action of government raising the bar of capital and, since then, we have begun to have a semblance of sanity in the insurance industry. We now have the emergence of serious companies that are listed on the Stock Exchange. We have over 30 insurance companies listed on the stock market now, and they are doing very well despite the global meltdown that has affected global investments worldwide. The composite business, which has a new minimum capital base of N5bn Naira (2bn Naira for life assurance and 3bn Naira for general insurance), is growing rapidly with significant number of insurance companies now underwriting both life and non-life risks. The business is expected to grow even more with the passage of the oil and gas local content policy, as the insurance companies are expected to handle a huge part of the underwriting in Nigeria.The financial services industry is highly regulated by the following bodies: The Nigerian Accounting Standard Board, Central Bank of Nigeria, Nigerian Deposit Insurance Corporation, National Insurance Commission, amongst others. Despite the work done and still being done by these bodies, problems still persist, chief of which is poor perception of the industry by the public, which in turn has led to poor patronage. As a result, things taken for granted by insurance firms in other climes look like innovation here. If a man tells his friend or wife that he wants to take a life policy, the response would be that he just wanted to waste his money, and if he had no use for it, could he give it to them who can use it better, rather than “dash”an insurance firm! Also, relative to the population, very few people here take life policies. Apart from that, the closest the ordinary man comes to the insurance sector is when he buys a car; it is only in Nigeria that some people buy brand new cars and take out third party covers for them.

The business is expected to grow with the passage of the oil and gas local content policy, as local insurers are expected to underwrite much of it

Pix from left Ms Foluke Aboderin, Executive Director, Corporate Banking, Ecobank Nigeria; Eng Husein Labo; Managing Director, Power Holding Company of Nigeria (PHCN); Mrs Olusola Oworu, Commissioner for Commerce and Industry, Lagos State and Mr. Jubril Aku, Managing Director, Ecobank Nigeria at the Ecobank Nigeria’s Customer Forum and Launch of Ecobank OMNI in Lagos. Photo by Lamidi Bamidele

Report suspicious transactions, NAICOM urges insurers Stories by ROSEMARY ONUOHA

he National Insurance Commission, NAICOM, has charged insurers to always report suspicious transactions to the Commission in line with the Anti Money Laundering/Combating Financial Terrorism, AML/CFT directive. The Commission described suspicious transaction to be premium payment above N1 million for individuals and N5 million for corporate organisations. Assistant Director (Inspectorate), Head AML/CFT Unit of NAICOM, Mr. Sam Onyeka, who gave the charge, said that insurers should always look at the possibility of fraud and take precaution because the world environment has become so bad that underwriters must do something to protect themselves. Onyeka who said that insurers must do it for their business to survive noted that the Commission have information that people transfer funds from abroad through brokers, agents who use such funds to buy security. He said “If a broker said you can’t have access to their clients and some documents then send suspicious transaction report to the Commission.” Onyeka said that brokers don’t file suspicious report to NAICOM only insurers do, so the insurers must make sure that brokers collaborate with them stating, “The way to protect yourself is to send alert because there could be problem someday.” Onyeka said that any insurer that is not ready to abide by the directive should close shop stating “For so long in Nigeria we have left what we are supposed to do. We cannot continue to wait. We have to leap frog so that we can do other things.” Onyeka added that policyholder identification otherwise called “Know Your Customer (Policyholder) requirement is probably the most important requirement and underpins all anti-money laundering procedures and that companies are required to obtain satisfactory evidence of identity of all proposers while the evidence

must be satisfactory from both objective and subjective standpoints. He said “Where it appears that the applicant is acting for another person, it is required that the company should take reasonable measures to establish the identity of the

principal. Companies should take reasonable steps to find out the identity of their client, and they are able to establish that the client is who he claims to be only when there is sufficient evidence of his identity.”

STI supports reforestation project

overeign Trust Insurance Plc has extended its Corporate Social Responsibility efforts to the International Institute of Tropical Agriculture (IITA) on the reforestation project recently embarked upon by the Institute. In a statement made available to Vanguard, the company said that the focus of the project is to promote conservation of the secondary rain forests in the country, monitor the bio-diversity of the nation’s vegetation. It will also create awareness on the need to protect the remaining secondary forests at local, regional and national levels. The Principal Consultant for the Project, Deni Brown, said “The reforestation project sets out to restore the secondary rainforest and to plant on approximately 300 hectares of degraded land using indigenous trees”. According to her, the tropical rainforests support the greatest diversity of living organisms on earth. Rainforest deforestation has a devastating impact on both flora and fauna. She reported that as far back as 1995, Nigeria had lost over 56 per cent of its rainforests and

deforestation continues at a rate of 3.5 per cent per annum. Currently, only 9.6 million hectares remain unaffected by deforestation; which invariably is less than 10 per cent of the total land area in Nigeria. Going by this figure, Nigeria has the highest deforestation rate on the planet and this is considered highly dangerous according to experts. Hence, the need for a proactive measure as expounded in the reforestation project. The Head of Corporate Communications and Brand Management of Sovereign Trust Insurance Plc, Mr. Segun Bankole stated that Community development and enhancement is one of the platforms on which the organisation’s Corporate Service Responsibility is hinged upon. He said the deforestation rate is quite alarming and if positive measures are not urgently put in place, the country might be worse off for it. According to him, the company understands clearly the need to have a safe and habitable environment which informed management’s decision to support the reforestation project.

Vanguard, MONDAY, MAY 14, 2012 — 41

Economy

The Nigerian Stock Market: Strategies for recovery, rebound and practical bailout options By PROF. NDI OKEREKE-ONYIUKE

Brief Perspectives

•Okereke-Onyiuke tax revenue, enhanced employment opportunities and transaction fees that went to the Securities and Exchange Commission (SEC) as the Government regulator of the capital market. During the period (performance measurement introduced); Market Capitalization of the Nigerian Stock Exchange rose from N800 million in Year 2000 to N13.3 trillion at the beginning of 2008; The All-Share Index hit an all-time High of 58,990.22 basis points in 2008 from 100 points in 1984 when I introduced Index in the Nigerian market; Annual capital raised by companies and Government on the Stock Exchange rose to the peak of N2.8 trillion at the end of 2008. All of this was as a result of a combination of factors, including experienced and effective Stock Exchange leadership. There were a lot of new entrants – issuers and investors alike; local investors and foreign investors. There was investor confidence and the Middle Class re-emerged... in Nigeria.

Margin Loans by Banks

he indiscriminate granting of margin loans by the banks to all manners of investors and market operators caused the market bubble. This is similar to what happened in the US mortgage industry. Margin loans by themselves are not bad, because they help to create more liquidity in the market, globally. However, in the case of Nigeria, the banks gave out these loans indiscriminately, and in most cases insisted that such margin loans were used to purchase their own shares. Some banks

were deeply involved in granting margin loans that were not properly structured and this created excess cash in the market, and the share prices got bloated. The Nigerian Stock Exchange Management at several occasions WARNED market

he global financial meltdown which started from the US, in 2006 as a result of the glut in the mortgage industry, spread like a contagion to Europe, Asia, and then to the emerging markets in Africa, including Nigeria. That ill wind got to Nigeria in 2008 and no stock market was spared of the catastrophic meltdown, just like the Great market crash of 1929. Even though it was a global financial meltdown, the Nigerian market was insulated until about 2008. The effect was mainly in the banking sector. This is because banks account for about 60% of the listed securities. Therefore, whatever affects the banking sector has profound impact on the market capitalization. It is a known position that the Nigerian Stock Market has been slow to recovering, after the Global Financial Crisis which hit the global stock markets, commencing from the US mortgage industry and other corporate entities. Furthermore, I wish to state that the stock market is cyclical with boom and burst periods. This is normal in all stock markets. However other markets are now moving upwards while the Nigerian market is still southwards. In order to have a thorough understanding and a holistic position of the current problem, it will be absolutely necessary to briefly outline the primary causes of the down turn and thereafter suggest remedial actions that will help to halt the freefall of the market; restore investors’ confidence and prevent further losses to the investing public. Between January 2000 (when I became the DirectorGeneral) and December 2008, there were a lot of positive developments in the Nigerian Capital Market as exemplified by activities and transactions both in the primary and secondary market of the Nigerian Stock Exchange. In emphasis, issuers of securities had a ready market. The market truly lived up to its functions as a more prudent financing window for individual, corporate, state, federal and foreign investors. Apart from enjoying the benefits of the function of the market as a financing window, Federal and State Governments in Nigeria also benefited enormously from the boom in the market through

Exchange. The truth of the matter is that most of the issuers of these private placements MISLED the public via the style of placing and also wanted to list their shares at very high premium, instead of listing at the prices the securities were issued. The Management of Nigerian Stock Exchange objected and rejected any attempt of listing any shares above the price they were issued at private placement offer. The NSE took this stand so as to protect innocent investors who would buy the listed shares at the secondary market level. The NSE took this step because it noted that immediately after the listing; the directors and officers of the issuing companies are usually the first to off-load their holdings, while they deliberately withhold the release of shares certificates to other subscribers. For all intents and purposes this is market manipulation on the investing public. The NSE does not regulate Registrars of companies (SEC does); however persuasive advisory was at different times advanced by NSE against the practice of

There were a lot of new entrants – issuers and investors alike; local investors and foreign investors. There was investor confidence and the Middle Class reemerged... in Nigeria.

operators, that Regulators i.e CBN and SEC had not issued Guidelines on Margin Loans. Subsequently, it became quite evident that the margin loan facilities had been abused. However, they are off balance sheet items, not easily detected. (CBN/SEC recently issued the Guidelines on Margin Loans).

Numerous Unlisted Private Placement, IPOs.

nother factor militating against the Nigerian stock market’s rebound is the problem of unlisted private placement issues. Several companies undertook private placements which were NOT LISTED ON the Nigerian Stock Exchange. This had negative effect on investors’ confidence, because many of the subscribers bought the shares with the hope that they will be listed on the Stock

Public Offering by Banks

ollowing CBN directives to banks to capitalise from N2billion to N25 billion as minimum share capital, almost all banks utilized and accessed the capital market to raise funds. Within two years, many of the banks besieged the capital market falling over one another to raise funds through mega offers in a single tranche. The banks competed in mopping up every liquidity from the stock market, thus crowding the market. A total of about N2.2trillion was raised through various public offers dominated by the banks in 2008, via Listing on the Nigerian Stock Exchange.

Divestment by Foreign Portfolio Managers

issuers using their in-house registrars and issuing houses for their public offers. The problem of unlisted private placement of shares can be solved if SEC (who approves private placement) compels all the companies to list those shares at the prices the shares were issued, or at a marginal premium, because of the time value for money. This will bring some respite to the market and will enhance market capitalization, in addition to boosting investor’s confidence. If not, the issuers must be made to refund monies to investors, with interest.

Insider dealings

Companies) a crime, the proof of insider trading is usually very difficult to establish and prove, therefore the law needs to be revisited to make it more effective. This is a crime that is not easy to establish even in the more advanced stock markets. As a criminal offence, the standard of proof is “Proof beyond reasonable doubt”. This is a very ‘tall order’ for market regulators the world over, therefore some jurisdictions have shifted emphasis from criminalising market insider dealing infraction to “market abuse model” which emphasises civil liabilities and the encouragement of voluntary compliance with the market laws, rules, regulations, practices and conventions.

he above connotation is a well known practice in Stock Market the world over. Although S.111 (1) and (2) of ISA, makes Insider Trading (by Directors of Quoted

his is another factor that seriously contributed to the continuous fall of the Nigerian Stock Market. Many foreign investors that already had troubles in their home economies pulled out of the Nigerian Stock Market leading to dumping of shares beyond the ability of domestic investors to absorb.

The way out / forward For the market to recover and start moving upwards, I wish to professionally suggest that the following palliative measures be considered for implementation. The Nigerian Stock Exchange Transformation Document 2010-2015 which the Council, Management and Accenture worked on 2008-2010 contains the solutions for our capital market to bounce back. The synopses are as follows: Federal Government Intervention via AMCON / Ministry of Finance Incorporated. Only direct physical injection of funds can change the direction of the capital market just as AMCON did for the Money Market. No amount of “Workshops and Discussions” will avail.

42 — Vanguard, MONDAY, MAY 14, 2012

BRIEFS Brick moulders appeal for link roads in Makurdi

urnt Brick Moulders Association in Makurdi, Benue, on Thursday appealed to the state government to rehabilitate the access roads to the Agboghuul Business Community to boost their production. Mr Iornongu Atsue, the Chairman of the association, told the News Agency of Nigeria (NAN) in Makurdi that the members were not producing optimally due to the deplorable roads. Atuse said that the government would generate higher revenue from the business community if it provided the community with basic amenities. Apart from the large sales from blocks, there are other businesses that are carried out here such as the production and sale of stones, sharp sand and others. “The government will rake in huge revenue in form of taxes and levies on such businesses by simply providing regulatory guidelines on the conduct of the business at the sites.

SWAN urges women on national devt BY PROVIDENCE OBUH

o further minimize the level of poverty in the Nigerian homes, the society of Women Accountants of Nigeria (SWAN) has called on the Nigerian women to engage in active labour, to accelerate national development. SWAN Chairperson, Mrs. Tokunbo Adegbola who spoke during a Lunch in Honour of the 47th ICAN President said, “The ordinary Nigerian woman out there should see herself as a citizen that has right and exercise that right, these are the right to live, the right to work, the right to do everything that a man does. “She should not be inhibited by being a married woman, do not say because you are married to one man, that man can seat on your lap, No! Tell the man that with two working it is better than one working, do not fight him, because we do not encourage fighting, but you must let your spouse know the benefit of two hands rather than one hand.” Asked about the society, Adegbola said the society of women Accountants is that section of the Institute of Chartered Accountants of Nigeria (ICAN) that is mainly women.

FDI: Our own worst enemy (Asaba Airport as case study) — 1

nless we stop this nonsensical and n e e d l e s s controversy about the Asaba Airport, we run the risk of missing FDI which it is designed to attract and the employment opportunities it will provide. The world is watching us. Read on. To state that Foreign Direct Investment, FDI, is a global scarce resource eagerly pursued by all nations and even sub-sections of countries is to state the obvious. Its major benefits include, but are not limited to, employment generation, economic and social development and, even, technology transfer. Increasingly, as the global village shrinks in scope, thanks to advances in ICT and aviation, investments in aviation have become one of the leading areas for business people, even as the land available for constructing airports is also dwindling worldwide. The Environmental Impact Assessment studies that have to be undertaken and the more stringent safety requirements for the location of airports have made it more difficult to build them; as the need for them multiplies. The reason is simple. Air travel saves time and, although most people don’t know this, time is an economic resource very much at par with capital, labour, and raw materials. The Far Eastern countries, led by the Japanese, pioneered the concept of Just-In-Time, JIT, delivery of raw materials, components and other inputs to manufacturing and construction sites and effected substantial savings in inventory management, warehousing costs associated with rent, losses and pilferage. The back bone of JIT was air cargo which made it possible for parts manufactured in one plant to be available at another plant within hours – not days as was the case before. he Japanese, the South Koreans and Taiwanese exploited that strategic advantage for decades until the rest of the developed world caught on to the game. Now, the Chinese are doing the same thing. Sub-Saharan Africa remains the only region of the world where raw materials are trucked over thousands of miles to be deposited in warehouses for months before being put on the production line. We run twelfth century plants in the

twenty-first century and hope to compete with the rest of the world. Nigerian manufacturers cannot practice JIT for many reasons, which will be explained later and that accounts for the almost total location of all manufacturing and commercial activities in Lagos. Why site your plant in Akwa Ibom or Kogi or Taraba when all your raw materials and components land at Apapa Wharf in Lagos and have to be trucked inland over uncertain roads and safe arrival is not assured – let alone Just-In-Time. The growing population explosion occurring in Lagos State is partly a result of our refusal or failure to encourage the development of air cargo from airports based inland which can then promote the growth of manufacturing for light

the airport, it was clear to me that this is IT! This is the airport that will meet all the requirements of the investors – if only it could be made to accommodate bigger aircraft. I arrived at this conclusion without consulting any official of the Delta State government and without any attempt or opportunity to look into the issues now generating controversy. The idea was to determine first if this airport has potential to attract foreign investment and it does. A report was filed to that effect in March and I was asked to obtain more information from the Delta State government about the future development of the airport and the time table for each phase of development. Everything was going smoothly, I was persuading the potential investors that Asaba is viable, even though I am from Lagos State and will never be employed there. But, I know

power and who constitutes the opposition. Ask PDP or ACN members about Mimiko in Ondo State and you would conclude that the man should be shot on sight. Turn to Edo and ask the same question of PDP about Oshomhole and the fellow deserves to be guillotined. That’s politics Nigerian style. But, when the issue at stake is long term economic development of Nigeria, a region, a state or even local council, the media practitioner must be totally non-partisan when commenting on any controversy. So let me start by taking on the issue of N7.5 billion spent to “level a few ant-hills” just because President Jonathan was expected at the BRACED Summit at Asaba. The way I understand it those “few anthills” presented a hazard to the landing of the President’s aircraft in Asaba. The other options were Benin (130 km away); Enugu (125 km away), Warri (130 km away),Owerri (165 km away); Portharcourt (over 200km away) by road. Who in his right senses would suggest that the President of Nigeria should travel these distances by road. He had to land in Asaba; it was as simple as that. And, at whatever cost to us. Unless, of course, anyone is broaching the idea that he should not respond to the call of the “hands that feed the nation”. or the umpteenth time, it needs to be repeated that I never voted for Jonathan; in fact I campaigned against him. But, by overwhelming majority vote, he was elected. That is a fact which nobody in his right senses will deny. That election had raised a lot of demons in the polity which are threatening, not only the economy, but the unity of the country as well. Given that scenario, the only person who cannot or should not die, by any means, today in Nigeria is President Jonathan. Anybody else can die. His death, through carelessness, on our part, or the deliberate actions of terrorists will plunge this nation into such turmoil that within the first two days of the occurrence Nigeria would have lost over N1 trillion. So, if the Delta State government had decided to spend N7.5 billion to safeguard Jonathan’s life, to me, it was cheap insurance policy. That is not supposed to mean that I believe that the cost of the project could not have been less. But, all things considered, Jonathan, wherever he goes, from now until 2015, is insurable for N7.5 billion or more; anytime, anywhere and any day.

weight items numbering millions in virtually every state of Nigeria. The recent development of airports at Gombe and Uyo and, now, Asaba, to add to Benin, Warri, Portharcourt, Enugu, Owerri and Calabar, in the fastest growing region of Nigeria – the South East and the South South has opened up enormous opportunities in this regard, which, incidentally, had been noticed by foreigners more than Nigerians. In fact, the Asaba airport is the last piece in jigsaw puzzle revealing a cluster of airports which can be reached very quickly and easily irrespective of take-off point. Interest is developing; so much so that a group of investors asked me to conduct a survey of the airports for them to determine which is the best for their venture. I landed at all the other airports in the cluster several times in the past; but I still visited them all. The only one, and the last to visit was the Asaba airport. Half an hour after arriving at

that the venture will generate thousands of jobs and that is all that mattered to me. uddenly, a controversy had erupted about the leveling of “some ant-hills at N7.5 billion” as the critics allege; and the nervous potential investors are frantically asking me: Dele, what’s going on? From my point of view, what is going on is quite clear. We are allowing a needless controversy, “a tempest in a tea pot”, to jeopardize investments at the airport that will eventually dwarf the N7.5 billion reportedly spent leveling the ant-hills. To begin with, it is doubtful that any government, Delta or not, will spend N7.5 billion just to level ant-hills. Political opponents of governments always exaggerate the corruption attributable to the particular government. Truths, admittedly, are provided; half truths, not often are added; and outright lies top the bundle of what is offered to the public. That is true irrespective of party in

Vanguard, MONDAY, MAY 14, 2012 — 43

ICT

‘Two tech revolutions’ll change the world in 2016 ‘

“Lets also remember that the networks that are carrying these services were based on voice. Apps, data, smart phones were not intended when these networks were built, but in 2016, the network will be in total change and that is what we call technology revolution. It has two phases. First is the deployment phase, where infrastructure is deployed and the other is installation phase, when consumers would use technology in different ways”.

By PRINCE OSUAGWU

Benefits of the revolution very revolution brings with it a change and the two revolutions Vestberg predicted would also introduce a couple of changes in service delivery and consumption from what is obtainable at the moment. For instance, the consumers will change in the way they use phones. 26 percent of time used on phone would be for voice call while 74 percent will be for data related usages. This is in sharp contrast to, for instance, the past three years, where 90% of time spent on phone was voice call and 10% was for SMS and data. The Ericsson boss said that the revolution would transform education in a way that in the next ten years from now, printing books will no longer be in vogue. Also giving the broad spectrum of coverage, speed and data possibilities, digital healthcare would be possible and this would transform healthcare and make it

•Hans Vestberg govern the telecommunications industry. He threw up some statistics which have ruled the dynamics of the industry for over a century and painted a picture of why Ericsson recently rolled out the multimillion dollar project tagged Networked Society. The project is aimed at ushering in a new era where technology would enable more people to interact, innovate and share knowledge in whole new ways and creating a dynamic shift in mindset. Ericsson would like to see a world where more people are empowered, more businesses liberated and the society more connected than ever. Statistics that shaped technology revolution n Vestberg’s statistics, “it took some 100 years to get 1 billion fixed lines but it took 24 years to get 5 billion mobile subscriptions. Last year end, there was about 6 billion mobile subscriptions in the world. 85% of that population are on mobile coverage. “If you take that and think about what will happen in the next five years, then you will have mobile subscription in the world, come up to about 8 billion. Now the most

important point in these figures is that considering that about 500 million people on earth today are on fixed broad band while that of mobile broadband is 1 billion, in 2016, if the fixed broadband will grow, it would not be much, but in line with trend of growth, the mobile broadband will grow tremendously”.

resident and CEO of Ericsson, Mr Hans Vestberg has peeped through the Ericsson crystal ball, and predicted that two technological revolutions would change the world between now and 2016. However, Vesteberg was not just predicting. He has statistics which he has followed religiously and if their antecedents are to be relied upon, the future could hardly do without them— the technology deployment and installation revolutions. For him, these two systems would change the way telecommunications services are delivered in the near future. Vestberg made the disclosures exclusively to Vanguard in Ghana recently when he visited the SubSaharan Africa to preach preparedness for new ways of delivering services in line with new and emerging technologies. From his explanation, the deployment phase looks at what kind of infrastructure could be deployed in the near future, while the installation phase, deals with a period when consumers would naturally use technology in different ways than they are used to. The implication of these revolutions is that only those who understood their dynamics, tailor services towards them would be in business within the period under review. Vestberg was so emphatic on these revolutions perhaps on the back of his company’s long history of shaping the future of world telecommunications industry through research and development, R&D. Ericsson has distinguished itself as a clear leader in the telecommunications infrastructure business not only for the efficiency and reliability of its equipment and services but also due to its ability to predict the future and prepare operators ahead of time. According to Vestberg, Ericsson spends a whopping 8 billion dollars every year in Research and Development, R&D, to clearly understand the dynamic and change pattern of technologies that

Already, roughly, 40% of mobile infrastructure in the world is on Ericsson traffic and still we are building more and upgrading those others that need latest standardization.

What to expect in 2016 etween now and 2016 is just about 4 years away, yet, Vestberg was also confident to posit that about three times of people that have access to internet today would be broadband users. “We expect 25 billion broadband users by 2016 which is a huge leap. Today, about1.8billion people have access to internet and 92 percent of population will have mobile coverage.

What preparations for this new networked world Ericsson is building more infrastructure and more networks around the world. Majority are based on latest technologies to accommodate the new order. Already, roughly, 40% of mobile infrastructure in the world is on Ericsson traffic and still we are building more and upgrading those others that need latest standardization. Don’t forget, we spend 8 billion dollars in Research and Development, R&D, every year to understand all the networks that will be used in the future. We designed technologies that help operators offer services on health care, the connected calls, online gaming, big time information management among others. The place of emerging markets in all these e use the same standard of technology in the whole world. We sale the same technology in Africa in US and the unique thing is that we can bring down the cost where we think is important to the world. So, Ericsson has 2G, 3G patterns in the world. That means that we are relevant. First we have to maintain standards so that we can continue to supply the world. We are the biggest mobile infrastructure providers for operators in the world. Another area we are relevant is that we also run network services. Roughly 80% of Ericsson turnover is from installation, integration, consultation, running mobile networks, fixed networks for operators. We are providing the back_ up tools for operators to carry on what they do.

affordable to more people. The place of Networked Society in the new revolution etworked society is important in every bit of the revolution because it would enable anything that will benefit from connection, to be connected. We took from 400 different studies in 2010 from universities, academia, business, to look at what the impact of broadband is, and came up with two things that

are common. For every 10% of broadband penetration, 1% goes to GDP and for every 100 connections you get 80% new jobs. Then, if you have 1000 penetration, you have higher impact and this applies to all countries. You can now see how important Networked society is in the need to transform our people’s behavioural pattern, transform enterprises in the society, using the technology infrastructure. That possibility is what we foresee. It fuels our belief that if by 2020, there is going to be about 60 billion connected devices in the world, then anything that will benefit people, needs to be connected. Of course, when the society is connected, the ICT industry lives up to its name. That is what we call a networked society.

44 — Vanguard, MONDAY, MAY 14, 2012

People in Business

Drive is very important in business

so he was able to conduct his research while doing his youth service. “I had a concept of how more value can be added to safety matches because the industry from my research, produces less than two per cent of all the safety matches used in Nigeria and the rest is being imported. It is a huge market in the sense that it is something that everyone uses everyday. So I was wondering how we can be importing about 98 per cent of something that everybody uses everyday, and yet, we claim there is high rate of unemployment. What is the problem of this country? I brought a lot of ideas on how this safety match can be sold that can actually attract people to buy it and create jobs. So I did the research and kept it in my locker and surprisingly, the CBN said they wanted people with genuine business ideas. I did not attend the programme but somebody who did, mistakenly dropped the paper on my bunk so when I woke up and saw it, I read it, immediately, my project came to mind,” he said. “One of the things that really gave me a boost in terms of my confidence in myself was winning the CBN award while I was serving. That award made me realise a lot of things, that actually if you prepare on time and plan for something, it is always easier for you to hit it head on.”

– Ohiaeri By EBELE ORAKPO

r. Frederick Ohiaeri is the Managing Director/Chief Executive Officer of 62:15 Associated Industries Ltd. and its subsidiary, 62:15 Healthcare Ltd. In this chat with Vanguard in his Lagos office, the graduate of medical physiology from the University of Port Harcourt speaks on his business, the challenges and how he has been coping. Excerpts:

ccording to Mr. Frederick Ohiaeri, he came to Lagos a few years ago with the dream of making it big in life even if it means working himself to death to actualise all •Ohiaeri...I expect to be the best in my field his dreams. To be successful in life, Ohiaeri believes that drive is just popped into my mind. I been posted to Oyo State. I the most important ingredient. am the kind of person that never knew that Ibadan was “Drive, for me, is something takes a lot of risks. So I quit in Oyo State so I came to that makes a plane that has the job and went to do some Lagos and asked a cousin lost all its engines to still be research on the idea. How where Oyo State is and he in the air; a car without fuel everything came together is said: ‘are you not just coming still running; something that sometimes surprising and I from Ibadan? That is the makes a man whose legs and find it very difficult to capital of Oyo State.’” Call it divine arrangement hands have been broken in a understand. I took the fight to keep fighting. A lot of remaining money I had and because not only was he people will say these things travelled in search of a safety posted to Oyo State, but his are impossible but what drive match-producing company. place of primary assignment does is that it makes what Somebody told me there was was close to the match factory people consider impossible one in Calabar so I went there possible,” he said, adding: and there was none. I went to “Some businesses with very Onitsha but there was none. strong human capacity and My money had almost experienced people had finished and I came to Lagos collapsed while some that and there was none too. So started from the scratch by somebody told me to go to people who are considered Ibadan. I went to Ibadan and inexperienced and with no luckily for me, I found one. educational background, had On my way out of Ibadan, I survived because of drive. got a call that the NYSC “For a lot of people, drive is posting was out and I had usually rooted in a lot of things. Some people’s drive Decisive moment: is rooted in the fact that “After youth service, I expected that I somebody said to them that would go back to Port Harcourt, it was ‘look, you cannot make it in really a decisive moment for me. I life. You cannot amount to looked at Lagos from different angles. anything; you are useless,’ or Talk about the five richest people in someone may be lessNigeria, the five biggest churches, the privileged as a result of one five biggest politicians, they are all in circumstance or the other, and Lagos so why am I going anywhere people say to him: ‘look, that else? It has to be Lagos. But I told kind of dream is not for you, myself that ‘look, if it means struggling it is for people whose parents and dying in Lagos, let me struggle,” are wealthy,’ and he wants to he noted. defy all that.” I had an idea: Ohiaeri said that one thing that “After graduation, we were has worked for him is his supposed to go for NYSC but determination to make a difference, the letter did not come on time, to stand out wherever he found so, we spent one year at home himself and it has paid off. because the school had some “I built a market base for myself issues.” before I left the companies where I Instead of whiling away his worked. So up till today, it is the time, the author of This is market base that is sustaining me Lagos, decided to get himself but the thing is that a lot of people busy while waiting for the complain when they see challenges •Ohiaeri call-up letter. “I got a job but I was running after the which I did for a while and challenges because I knew they then there was this idea that were opportunities for me to do

A lot of people complain when they see challenges but I was running after the challenges because I knew they were opportunities for me to do something.

something. So today, I’ve built something on those opportunities that I had in the past. And I believe strongly that 62:15 Associated Industries will be a household name in this country and in West Africa.” Initial capital: “When I wanted to start off on my own, frankly speaking, if I had any money at that time, it probably was about N200,000. I took a very big risk that a lot of people wouldn’t have taken. I did not have up to five per cent of the funds I needed. If everything had gone wrong, I would have started all over again, I would not have given up. In fact, nobody gave me a chance. They all said I was going to flop. And to be very frank with you, all their analyses were realistic but I did not want to listen to them. I told myself that even if I failed, I would try again. I’ll keep trying until I succeed. A lot of friends that I begged to join me at that time said to me: ‘Do you know how much it costs to import drugs?’ Luckily for me, I had companies that had pharmaceutical products but did not have marketing strategies. Some of them came to me and gave me their drugs and asked me to build a market for them and I did. Someone first gave me drugs worth over N1.6m to sell and return the money. While I was doing that, another person recommended somebody else who did not have enough market. I bought my first car, bought the second and third cars and started employing people. And here we are today,” he enthused. Ohiaeri said he will rather be master of his destiny than a slave in paradise. “If I lose I lose, if I win, I win but I will keep fighting till I die and let it be told that I fought even if I did not succeed.” He said the unwillingness of some customers who buy drugs on credit to pay after selling; government policies which sometimes affect cost of doing business and lack of electricity supply, are some of the challenges they face. On the future of the company, Ohaeri said: “In the next five years, I expect to be the best in my field. In the pharmaceutical industry where I am, I expect to be a force to be reckoned with.”

Vanguard, MONDAY, MAY 14, 2012 — 45

Appointment & Promotions vicahiyoung@yahoo.com

Ike, West Africa Renaissance Group CEO, joins Guinness Nigeria Board

BRIEFS Aregbesola explains philosophy behind OYES

HIEF Executive Officer, CEO, West Africa, Renaissance Group (Investment Banking), Ms Yvonne Ike, has been appointed into the Board of Guinness Nigeria Plc, as a non-Executive Director. Ms Ike’s appointment was announced at the Board meeting of the company recently. The appointment is with immediate effect. Ike holds a Bachelor of Science Degree in Economics. She started her career as an auditor with Er nst and Young International and has been an FSA registered representative since 1994. She was a Managing Director at JP Morgan, where she spent 15 years of her career until 2009. Ms. Ike is an internationally regarded investment banker credited with pioneering a number of ground-breaking transactions in West Africa region. She has more than 18 years experience in financial services, including capital market operations and fixed-income, derivatives and equities products. Over the course of her career, she has led senior teams in New York, Geneva, Hong Kong, Nigeria and South Africa. She is presently the CEO West Africa, Renaissance Group (Investment Banking). The Board also accepted the resignation of Mrs. Ifeoma Mafeni from the Board of Directors of the Company with effect from 13 April 2012. Until her resignation, Mrs. Mafeni was an Executive Director (Human Resources Director) of the company; her resignation was to enable her pick up a role as the Diageo Human Resources Director of Africa Regional Markets. The appointment of Mrs. Mafeni to her new role is recognition of her sterling achievements while she was the Human Resources Director in Guinness Nigeria. Her impact in this role has been significant, having spearheaded major progress in the company ’s talent strategy, partnered in building a powerful leadership team and created a high performing HR function.

*Managing Director, Mohinani Group, Anil R. Mohinani and Director, Kasapreko, Gideon Osei-Amoako (middle), exchanding the Sonnex and Kasapreko agreement; GM Operations, Kasapreko, Ghana, Kojo Nunoo; President, Sonnex Packaging Nigeria Ltd, Sandesh Gossavi and Special Adviser to Lagos State Governor on Housing, Hon. Jimoh Ajao at the signing ceremony between Kasapreko and Sonnex at the Somotex office in Lagos.

Shonubi now MD/CEO of Nigeria Inter-Bank Settlement System ...Ajao, Onyejekwe appointed EDs

HE Board of Directors of Nigeria Inter-Bank Settlement System, NIBSS, Plc has appointed Mr. Folashodun Shonubi, the company’s new Managing Director and Chief Executive Officer, CEO. The electronic payments and settlement company, also announced the appointment of two executive directors, EDs; Mr. Ezekiel Ajao, Executive Director, Technology and Operations and Mrs. Christabel Onyejekwe, Executive Director, Business Development. The Board said these “appointments constitute a climax of the transformation project of NIBSS, and the company is now poised more than ever before to play its role as a financial market sharedservice infrastructure, with strong potentials for effective collaboration with other stakeholders towards actualising the cash-less Lagos and cash-less Nigeria initiatives.” Shonubi holds a master's degree in Business Administration as well as in Mechanical Engineering, from the University of Lagos. He is also a resourceful Information Technology-driven banker with over 19 years professional experience. Prior to this appointment, Mr. Shonubi was Executive Director, Information Technology and Operations at Union Bank of Nigeria Plc; a member of the Board of Union Homes and Director, Information Technology and Corporate Services in Renaissance Securities Nigeria Limited, with responsibility for

the group’s IT infrastructure in Africa. Between 1999 and 2007, he worked in MBC International as Deputy General Manager and supervised their IT operational platforms. He served in First City Monument Bank Limited as VicePresident, and in Ecobank Nigeria Limited as Executive Director. Mr. Shonubi also had a stint with Citibank Nigeria Limited as its Head, Treasury Operations (1990-1993) and served on a number of subcommittees of the Bankers’ Committee. M e a n w h i l e , Mr. Ezekiel AJao, the new Executive Director, Technology & Operations, the NIBSS; attended University of Ife (now O.A.U.), and graduated with Combined Honours in Computer Science and Economics. He holds an M.Sc. in Computer Sciences from the University of Lagos, MBA certificate of O.A.U., and attended the Advanced Management Programme of the Lagos Business School in 2011. He taught Computer Science and Mathematics at Ogun State University between 1986 and 1989, and has served as Associate Lecturer at the University of Lagos and Office Support Systems Manager at AIICO Insurance Plc. He joined Gulf Bank of Nigeria Ltd as a pioneer staff in 1990 and later moved to Societe Generale Bank where he rose to become Assistant General Manager (IT), before leaving for NIBSS. Ajao joined NIBSS

Plc as Deputy General Manager in 2001 and rose to the position of General Manager, Operations – a position he occupied before this appointment. While at NIBSS, he has led the implementation of several industry projects notably - Nigeria Automated Clearing System, NIBSS Electronic Funds Transfer, Nigeria Central Switch, and the Cash-less Lagos infrastructure project. Mrs. Christabel Onyejekwe – ED, Business Development is a professional banker who has held various positions in the Nigerian banking industry. She holds an LLB Hons. from the University of Lagos and BL Hons from Nigeria Law School, and an MBA certificate in Banking and Finance. Onyejekwe started her banking career in First Bank of Nigeria PLC and peaked in UBA PLC as a GM with over 20 years of core banking experience.

•Shonubi, NIBSS new MD/ CEO

OVERNOR Rauf Aregbesola of Osun State has said the Osun Youth Empowerment Scheme, O’YES is his administration’s response to the previous insensitivity to the plight of the teeming youths in the state that had remained unemployed. Speaking during the activities marking the one year anniversary of the scheme in Ede, Aregbesola accompanied by Governor Kayode Fayemi of Ekiti State, lauded the programme as a commendable initiative to take the country out of its unemployment difficulties. He argued that any forward-looking government anywhere in the world would invest in the youths for a better society and that the youths were the essential agents for nation building. According to him, “Investment in the youth is one of the primary duties of any forward-looking government. Youths represent the reality of today and the promise of tomorrow; they are the great agents of change; the essential blocks for nationbuilding.

Ekiti moves to revamp moribund industries

KITI State Commissioner for Commerce, Industries and Cooperatives, Mr. Remi Bodunrin, has said efforts are on to revamp some moribund industries in the state. Bodunrin told the News Agency of Nigeria, NAN, in Ado-Ekiti that the initiative was in fulfillment of the electioneering promises of Governor Kayode Fayemi to industrialise the state under his eight-point agenda. The commissioner, who said the Ikun Dairy Farm had been leased to a private company, noted that the investor had already earmarked N400 million for commencement of operations. Bodurin also said government approved N500 million to revamp the Ire-Ekiti Burnt Bricks Industry while Odu’a Group of Companies would partner it in the exercise. According to the Commissioner, the first of the three phases of the project have commenced.

46 — Vanguard, MONDAY, MAY 14, 2012

Vanguard, MONDAY, MAY 14, 2012 — 47

Media & Advertising

Mr. David Okeme, Brand Building Director, Unilever Nig Plc, Mrs. Nsima Ogedi- Alakwe, Category Manager Savory, Nollywood Actress, Omoni Oboli, Mr. Thabo Mabe, Managing Director and Mr Yemi Adeboye, Corporate Relations Manager, Unilever Nig. Plc during the launch of the new Knorr Seasoning Powder.

Knorr steps up growth through brand extension ...unveils knorr in Powder form Stories by PRINCEWILL EKWUJURU

rands that reflect, live and adapt, earn the right to survive over time. Brands that project themselves change the rules and the fitness landscape. Managing brands direction requires connection that is purposeful to that idea. Purposeful in the sense that evolution allows a brand to adapt to changing wants and

needs without losing its core relevance in movement forward. That was why the company said it decided to come with the variants because consumers want a better life. That is what they are doing as a company and as a brand. We are now improving our brand for a better tomorrow. Why we are doing this, is to bring health to the Nigerian consumer.” Since Unilever Nigeria Plc

took over the manufacture and sale of Knorr seasoning from Cadbury in 2005, there’s been overturn in the seasoning market. Battle in the seasoning market had been fought and some seasonings losing a sizeable proportion of their market share, and some had continued to extend their brand portfolio and others only enjoyed generational value in the market. According to Gamble in

1987, “Brands extension is on the increase. “When brands wish to enter markets from which they have been absent, (which is not the case with Unilever’s Knorr) companies use the name of one of their brands.” The introduction of Knorr powder seasoning; Stew and Soup variants are a good example of brand extension, using the existing Knorr cube brand to drive sale for the new products or using it to hold a segment of the market. According to Thabo Mabe, Managing Director of Unilever Nigeria Plc, at the unveiling of the brand in the front of a capacity Knorr consumers speaks the acceptability of the brand as he said that the company is unveiling the brand in a different way based on the strategic agenda of creating better life everyday and year However, before the launching of the products, the company had a walk referred to as the ‘Green Walk’, which the Managing Director corroborates with the launching, which he said was about driving health and “most importantly making consumers life easier.” Mabe said that cooking has been made easier with the new Knorr powder variants. Whilst stating that consumers can now enjoy cooking. “ We are now making life easier for everybody. We are bringing health credential as a corner stone of our brand. Continuing, he said, “Whatever we do in our development, innovation, in our research is based on our consumers request. We do things to satisfy our consumers , we don’t do things to copy what other people are doing. We look at our consumers and we can proudly say we understand our consumers.”

Promo: We are taking empowerment from another angle—NB

n a system where the economic power of Nigerians are dwindling every day, the only remedy is to look for an alternative way to ameliorate their suffering. This, Nigerian Breweries Plc is doing through the Legend Real Deal Promo. The desire of Mrs. Oyinade Olushola this year was to own a bigger generator. But, already had a small capacity generator, referred to as “I better pass my neighbour”, it was not adequate for her business as a food vendor who also caters for outdoor events, a bigger generator is surely a necessity. She finally got what she desired when she spotted a Legend crown cork in the on-going Legend real deal promo. Reacting to her win, she said: “They sell beer near my shop. I had heard about this promo, but I did not believe it was real. “I was just walking along the street and I found

the crown cork on the floor. Something told me to pick it up and I did. The next thing, I looked under the crown cork and I found out that I had won a generator, I was so happy,” she said. Olushola added that the generator will boost her business. “I will use it at home and for my business. I sell food, and I also cater for events. Now I can carry the generator everywhere,” she said. When Mr. Umeokeke Bonaventure decided to take a bottle of Legend Extra Stout, he felt reluctant to open the crown cork. But recalled previous occasions when he had tried, nothing happened. This time, something did happen! Bonaventure opened the crown cork and found that he had won a generator, he screamed. “You don’t need to ask me how I feel, when this reporter queried him, he said, of

course I feel great and cannot describe how I feel in words,” he replied, when asked to express his feelings. He said: “It was the first bottle of Legend Extra Stout that I took and I didn’t want to open the crown cork. You know when most companies introduce these promotions nothing often happens. I have tried several times, but this time I am lucky.” Bonaventure further commended this reporter via the phone, which, according to him t was timely; as his old generator was being fixed during the time of the call. Speaking on the promo, Mr. Funso Ayeni, Senior Brand Manager, Legend NB Plc stated: “Part of the reasons for embarking on this promo is to say thank you to our customers. Legend Extra Stout is today Nigeria’s fastest growing stout brand and we achieved this enviable status

because of their support.” Ayeni revealed that winners of the generating sets and 32 inch TV screens have the option of having their prizes delivered to their homes if they so desired. On the initiative, he stated: “We want to make our consumers as comfortable as possible, hence the option of having the 32 inch TV sets and generators delivered to their homes, at the expense of NB Plc.” Ayeni stated that the brand resolved to explore the cashless route to enable consumers claim their money with ease. He said: “We put the safety of the consumers as well as proprietors of our designated redemption centres into consideration, hence, the decision to use the cards. He added that the lucky cash winners can only withdraw the money thrice using the ATM terminals.

BRIEF D-Banner Africa, C23 boost digital advertisement

igeria’s advertising landscape received a boost recently when C23, a media and IT firm, in collaboration with D Banner Africa, a mobile media station, launched a digital banner, designed to boost the consumer base of low and large scale businesses in the country. Speaking, Damola Akindolire, Managing Director of C23 at the unveiling in Lagos, said that the new product is introduced as a way of making indoor advertising signage an affordable opportunity for businesses to thrive. ‘The future of advertising is in the digital signage, the market is currently a bit static and because of that we decided to take indoor advertising signage into the next level by making d-banner an affordable opportunity for small businesses and services to the right consumers,’ these were the words of Akindolire when he explained that the innovation is a product of deep research, a digital platform that allows for interaction and bluetooth enabled. He stated that the companies would be unveiling 100 dbanner platforms across the country witiin the next 12 months, while 40 would be launched in Lagos in the next two quarters in Lagos, since Lagos represents the hub of advertising. ‘D-banner is affordable, cheap and the most effective way to reach consumers in a hard market like this, where everybody is fighting for a market space. It is a platform that both small and big businesses in Nigeria can reach out to their consumers, irrespective of the locations and that is why we have practically selected the locations that are displaying these banners. Among them are the airports and major shopping malls in Lagos. The Managing Director of D Banner Africa, Ese Okotie, described the product, invented in the United Kingdom, as an incorporation of the roll-up banner with the digital screen. ‘It can be set up in three minutes. Advertising has really gone so far, so what we are doing is not catching up, but getting others to catch up with us,’ he added. He explained that the product is already being used by the likes of Disney and BBC,Chrysler and other super brands around the globe, adding that the company’s decision to partner with C23 was informed by the need to help the nation’s advertising make the benchmark for brand owners.

48 — Vanguard, MONDAY, MAY 14, 2012

0817 002 3569

whittle down the perceived excessive powers of the apex bank in the CBN’s 2007 Act, we concluded last week in this column that the issue of good governance will not depend on whether the Chairman and Directors of the apex bank were external directors. On the other hand, we suggested that an appropriate evaluation of the performance of the CBN could only be made against the background of its prime objective/mandate, which invariably is maintenance of price stability! We noted that on the grounds of available evidence, i.e. for example, inflation projected to approach 15% by the end of the second quarter, the inordinately high cost of borrowing and minimal access to funds to the real sector, and a weak naira in the face of increasing dollar revenue deepening poverty in Nigeria, we may rightly concede that CBN has failed in delivering the expectations of its prime mandate. We concluded that there was no basis for Nigerians to expect improved social welfare or any form of reduction in the rate of unemployment under the CBN’s current operational and monetary framework. Incidentally, the current hearing by the House of Committee on the capital market, curiously, does not beam any investigative light on why the CBN also enjoys unfettered administrative independence and fiscal autonomy, which precludes budgetary approvals or indeed, any form of supervision or oversight by the National Assembly, as is currently the practice with other ministries and parastatals. Indeed, stories of huge leakages and extra fiscal cash movements from the CBN abound in our economic history in the last 30 years. For example, we recall the disappearance of $12.8bn oil windfall from the federal treasury some years back; we also recall the substantiated allegations of Abacha’s direct access to hundreds of millions of dollars from the Central Bank treasury; former President Obasanjo also made ‘illegal’ incursions into the treasury to pay the London/Paris Clubs debt as well as for huge contracts in the power sector, without prior approval from the National Assembly. The way things stand, so long as the power for appointment of the Central Bank Governor resides solely with the Presidency, it will be difficult to prevent such executive forays into our treasury. On its refusal to submit its budget and administration for scrutiny and approval by the National Assembly, CBN, on its own side, has taken protection under Section 6(3)(a) of the 2007 CBN Act, which states that its Board of Governors shall be solely responsible for the consideration and approval of the annual budget of the bank. The House Committee, however, may rightly feel that CBN’s position is a deliberate misinterpretation of Section 6(3)(a) of the CBN Act. Indeed, if the budgets and performance

The putrid mess also in CBN! (2) of all government agencies, including the Presidency, are constitutionally subject to National Assembly approval, it becomes inexplicable that the operations of any arm of the executive could be excluded from such scrutiny and approval. It becomes more worrisome if the exempted agency is not only the custodian of our treasury and national wealth, but also the agency responsible for ensuring, the creation of an enabling environment that would galvanise employment, industrial regeneration, with improved social welfare and increasing employment opportunities in line with its mandate. It is equally dangerous that this same government agency is also capable of committing Nigerians to an expensive debt trap without recourse to alternate evaluation and approval from any superior

n the light of the ongoing constitutional amendment I by the National Assembly to

lead to improvement in infrastructure and social welfare. Regrettably, also, the CBN may not do any better in its secondary role of banking regulation and supervision. Nigerians have witnessed at least two major banking sector meltdowns in the last seven years, and on each occasion, the CBN had stepped in to refloat the sector with huge cash injections. It is not generally recognised that such funds were basically deliberate expansions in money supply largely supported by printing more naira, without minding the creeping inflationary impacts of such action on the economy, and the reduction in the purchasing power of all income earners, particularly that of the poor. Ultimately, for the joy of inflicting such pain on the people, the few bank proprietors and management (who do not enjoy the patronage of the incumbent government) will get a mere slap on the wrist as punishment and before you say Jack Robinson, it will once again become business as usual. Curiously, the apex bank, whose gross failure to entrench global best practice in the supervision and regulation of the system, invariably, always walks away without any sanction for what some critics would describe as their criminal negligence. On the individual level, there is no evidence in the public domain of any form of disciplinary action against any CBN staff for their role in the rape of the banking system in the last decade, but its board members and directors have been quick to point fingers as in Kingsley Moghalu’s presentation at the ongoing capital market hearing, which decried manipulation by stakeholders as the cause of failure in the banking sector. The expectation created after the last banking meltdown by the same Moghalu, who is currently CBN’s Deputy Governor Financial Systems Stability, that CBN would return to clean out its own stable after it has sanitized the banking sector, was certainly intended to be a joke! How can anyone rely on the same set of management, who brazenly presided over the well-acknowledged putrid rot in

More recently, the incumbent Governor has similarly made direct donations of millions of naira to victims of the Boko Haram bomb blasts in Kano and Madala in Niger State, and over N1bn has also been made available by the apex bank for revamping facilities in some Nigerian universities. The value of such CBN donations in the public domain exceed N1bn, and one wonders what the total budget of the CBN for its corporate social responsibility (CSR) actually is. Critics have noted that even if such acts of CSR were appropriate, the CBN would have been better advised to make the donations through government agencies properly empowered with responsibilities for such activities. The writer has on the platform of the Freedom of Information Act sought information from the CBN on critical issues,, particularly with regard to its monopoly in the foreign

Ultimately, for the joy of inflicting such pain on the people, the few bank proprietors and management (who do not enjoy the patronage of the incumbent government) will get a mere slap on the wrist as punishment and before you say Jack Robinson, it will once again become business as usual.

constitutional authority. For example, it is not clear if President Jonathan recognizes that it is reckless for his government to pay up to 15% for its risk-free sovereign debts, when even distressed European economies such as Spain still borrow at less than 4%! Mr. President would be hard pressed to rationalize why we should pay such a high cost for borrowing trillions of naira that even the CBN openly admits would only be kept idle in vaults and accounts records. The CBN and its associate agency , the Debt Management (read as Debt Creating) Office have unilaterally rapidly increased our national debt portfolio by about 500% in the last five years, with a collateral debt service charge of over N500bn; i.e. over 10% of the 2012 expenditure budget. So, it will be difficult to fault the House of Reps for seeking more transparent information and some measure of supervision of the Central Bank. The way things are, it is not clear if the staff salary structure and other emoluments enjoyed by Central Bank staff are in consonance with federal civil service structure. The CBN on its part has further expressed its financial and administrative independence in ways, which have raised questions on probity and accountability; for example, the N50m donation by former CBN Governor to some members of National Assembly to support their oversight functions on the banking sub sector a while back.

exchange market and the industrially destabilizing impact of its easy dollar policy to bureau de change. The CBN has characteristically shunned our request for any such information. However, I must say that successful amendment of the 2007 CBN Act may not necessarily guarantee efficient delivery of CBN’s core mandate of price stability. In other words, the amendment of the Act, may not deliver the expectation of minimal inflation below 3%, or lower cost of borrowing below 5% or indeed, reduce the rate of unemployment, neither will it

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the system to expose their own failure to act responsibly in policing the banks to create clean and lean banking institutions? In the following three articles published in this column between 2007 and 2008 namely; “Banks and Fraud Incorporated” and “Banks and Money Laundering 1&2”,we endeavoured to show that the abuses of uncollateralised loans, insider trading, bogus financial reporting, share price manipulations and the resultant huge values of non-performing loans had not only become manifest for over four years, but that the regulators of the banking and financial system and the special financial fraud squad, EFCC had publicly acknowledged the prevalence of serious banking infractions and evidence of collaboration in the laundering of public funds by the banks all this while. The big surprise is the inexplicable lack of will on the part of these guardians and protectors of public trust in these institutions to act decisively. Indeed, in addition to the articles referenced above, the malfeasance in the banking sector had been graphically captured in other pieces such as “Banking of Public Funds, Corruption and Double Speak” (published 7/4/09), “Whose Money is Soludo Playing With, Anyway?” (18/04/05), “The Bonanza in Margin Trading” (8/ 09/08), “Bogus Liberalisation = Capital Flight” (3/04/06) and “CBN Stop this Nonsense” (17/ 04/06) all of which can be accessed at www.lesleba.com. The degree of malfeasance in possibly all the banks was so mind-boggling that it is difficult to claim that they escaped CBN vision . When this piece was first published in 2009, we called for a thorough investigation to determine why CBN officers and their colleagues in the Securities and Exchange Commission and the Nigerian Deposit Insurance Corporation seemed to have turned blind eyes to the shenanigans in the banking sector until the advent of Sanusi. We had also advised that if Sanusi were truly desirous of starting off on a clean slate, he would need to examine the circumstances surrounding a CBN advert which gave a clean bill of health to Intercontinental bank less than two months before Lamido’s audit investigation revealed otherwise. The questions are, on what indices/information did the former CBN Governor make his declarations; who recommended this course of deliberate misinformation and who paid for the full page advert carried in several papers. All these questions have remained unanswered. It is instructive that soon after his exit from the apex bank, the former Governor was soon able to finance an obviously deep pocket campaign for the top seat in the government House in Anambra State from his personal savings! SAVE THE NAIRA, SAVE NIGERIANS!