Financial vanguard october 15th edition

OCTOBER 15, 2012

Concerns over monetary policy implications of Budget 2013

BY BABAJIDE KOMOLAFE, MICHAEL EBOH, GODWIN ORITSE, ROSEMARY ONUOHA & NKIRUKA NNOROM

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xperts have expressed concern that the budget 2013 proposed by theFederal Government would lead to tight money supply next year and thus undermine credit to the economy, job creation and growth.

On Wednesday, President Goodluck Jonathan presented a budget of N4.9 trillion for the 2013 fiscal year. This represented five per cent increase when compared to N 4.697 trillion budgeted for 2012 fiscal year.

“Inflation is likely to rise unless the Central Bank of Nigeria (CBN) maintains a tight monetary stance,” says the Ecobank Research team in a comment on the budget.

According to Razi Khan, Regional Head of Research, Africa, for Standard Chartered Bank; “The increase in spending is relatively small, only five per cent. In real terms, this, of course,

means that spending does not increase. Provided this budget is actually adhered to, this should imply minimal pressure on money supply, with little need for the CBN to tighten further. However, what has not been disclosed is the broader plan on fuel subsidy - will it be maintained, diminished, or removed? Whatever happens on this front could also be meaningful for the inflation outlook, and therefore, for monetary policy.”

Since 2011, the CBN has increasingly tightened money supply in a bid to hold down inflation. Among other things, the apex bank increased the Monetary Policy Rate (MPR), six times from 6.0 per cent to 12 per cent; it also reduced banks’ ability to lend money by increasing the Cash Reserve Requirement (CRR) from 4.0 per cent to 12 per cent.

These measures, according to Mr. Goodie Ibru, President, Lagos Chamber of Commerce and Industry (LCCI), has made it difficult and

expensive for the private sector to access credit. He said unfortunately the budget presented by the President is silent on the monetary policy implications of the N4.9 trillion. He said; “The budget speech has no monetary policy content. It would have been useful for the President to highlight the thrust of monetary policy as this is critical to the realisation of inclusive growth and fiscal consolidation. This is even more so at a time when businesses are facing severe challenges with regard to access and cost of credit. The banking system currently has zero tolerance for risk and this is stifling private sector growth and the capacity of entrepreneurs to create jobs.

Collateral demands for loans are as high as 200 per cent. This is a negation of the objective of inclusive growth and a real threat to financial intermediation. Additionally, the government is progressively crowding out the private sector in the credit market. These are fundamental issues that need to be addressed to

stimulate growth and create jobs.”

On his part, Managing Director/ Chief Executive, Financial Derivative Company Limited, Mr. Bismark Rewane, said that the budget has little prospect for economic transformation. He said the spending proposed by the Federal Government is not adequate to address the problem of high unemployment confronting the nation. He said; “The budget is a tool of economic management, and you have to ask yourself what is the state of the economy?

“First and foremost, Nigeria is witnessing from 2010 till today, a slight decline in our rate of growth, from 7.1 per cent to about 6.85 per cent last quarter. The projection this year is for 6.5 per cent growth as against last year when we had seven per cent projection. Our expectations have been lowered to meet the reality

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160.05

-0.70

2,344.00

-7.00

20.03

-0.42

113.69 92.34

-0.99 +0.27

CURRENCY BUYING CENTRAL SELLING

*From left: Head, Business Advisory Unit, Human Capital Management and Development, First Bank of Nigeria Plc, Mrs. Kofoworola Adebayo (left); Head, FirstAcademy, Mr. Oshiomha Irumhekha; Head, Human Capital Management and Development, First Bank, Mrs. Ayodele Jaiyesimi; and Head, HR Support Unit, First Bank, Ms. Barbara Harper showcasing the Chartered Institute of Personnel Management of Nigeria’s awards for Overall Best Winner for Best HR Practice 2012 and winner, HR Best Practice for Banking and Insurance Sector won by First Bank recently.

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DOLLAR 154.75 STERLING 248.3428 EURO 200.0144 FRANC 165.3842 YEN 1.9741 CFA 0.2866 WAUA 237.4219 RENMINBI 24.6506 RIYAL 41.2645 KRONA 26.8514 SDR 238.1138

155.25 155.75 249.1452 249.9476 200.6606 201.3069 165.9186 166.4529 1.9805 1.9869 0.2966 0.3066 238.189 238.9561 24.7307 24.8108 41.3978 41.5311 26.9382 27.0249 238.8832 239.6525

CBN Exchange rate as at 12/10/2012 C M Y K

18 — Vanguard, MONDAY, OCTOBER 15, 2012

Cover Story

Youth restiveness and unemployment in Nigeria: The way out Part 1

Concerns oover ver monet ar plications of Budget 20 13 monetar aryy policy im implications 2013 Continued from page 17 of the world.

“In that case, when an economy is facing a slow down or a recession, what you do is to actually spend more; we call it countercyclical expenditure strategy.

If you look, Nigeria is increasing its expenditure by five per cent; Ghana is increasing its expenditure by 22 per cent; South Africa by nine per cent, so this is a bit conservative. If you are facing an unemployment rate of about 23.9 per cent nationwide, you really have to be more aggressive in spending and targeting it at areas where there is a multiplier effect and linkages. One does not see that very clearly, even though it is embedded in the budget.

“This is a budget of prudence and consolidation; but it does not address the issue of trying to use the budget as a catalyst for growth.

Maintaining equilibrium between the external and internal sectors of the economy is also one of the objectives, in doing that, using the exchange rate assumption of N160 from N155 last year, assumes that there are some risks that have to be mitigated. Those risks, if the price of oil is to decline or the production of oil is to be disrupted, there is enough head room and shock absorber and cushioning in the budget to take care of those risks.

“But if you are too risk averse, you really cannot be that aggressive in stimulating growth. The fundamental problem the Nigeria economy is facing today is growth. You need to actually stimulate growth and expend a significant amount of money on infrastructure.

“The shift in terms of increase in capital expenditure relative to C M Y K

recurrent expenditure is good but the total amount spent is not enough to actually jumpstart the economy from a slow down at a time, by this particular period in the nation’s economy.

“We do not want anybody to go away having lofty ideas that this budget is going to transform the economy. The Federal Government is only about 45 per cent or 48 per cent of the economy, there are states’ budgets, the aggregate position is different; it is good to assume that the budget bears some of the risks, it is also prudent enough not to raise the expectation beyond what the ordinary man should face.”

The inadequacy of the budget 2013 to address unemployment was also pointed out by the Chief Executive Officer, Lambeth Trust & Investment Company, Mr. David Imafidon Adonri. He noted that since most of the security equipment are imported, the huge amount of money allocated to security might not benefit the economy in terms of job creation. “That Security takes the lion share is not surprising. Government requires huge resources to contain the emerging security challenges in the country.

Unfortunately, the productive economy may not benefit directly from the huge expenditure on security since all equipment for maintenance of security is imported,” he said.

He also frowned at the silence of the President on the implementation of the 2012 budget. He said; “While presenting the 2013 national budget, the audited financial statement for 2012 ought to be simultaneously released.

That will enable the public assess actual performance against budget.

“The 2013 budget does not appear expansionary and the

deficit content appears to have narrowed. These are positive signals that could engender macroeconomic stability. The financial market will be a major beneficiary when indicators are positive.

The benchmark for crude oil has not materially deviated from that of 2012. We hope that the global oil market will remain strong to support the targeted revenue.

“As long as fuel subsidy remains, recurrent expenditure will continue to overshadow capital expenditure.

This is shameful for a nation with so much infrastructural deficit to overcome.

Director of Maxifund Investments, Mazi Okechukwu Unegbu, noted that there are a few positive developments noticeable in the 2013 budget as presented

by President Goodluck Jonathan.

The first positive development, according to Unegbu, is the fact that for the first time, the budget was presented in October. “It is a positive development that the 2013 budget was presented in October 2012 against the norm where budgets were presented long into that year which it was meant for.

Another positive side to the budget, he noted, is that the government decided to recognise the importance of education by awarding that sector a rather huge budgetary allocation.

He said; “Education got a very large chunk of the budget which has never been done before. It shows that there is hope for the education of our children if implementation of the budget is pursued to the letter.”

He also commended the frank talk between the President and members of the National Assembly, saying that the move is a good omen.

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he words ‘ youth’ and ‘ restiveness’ have become so commonly used together in the last couple of years that it seems to have taken on a life of its own. In the last decade and more there has been a proliferation of cases all over the country and indeed the world, of youth agitations which have tons of people dead and valuable infrastructure as well as personal properties lost and destroyed.

A sustained protestation embarked upon to enforce a desired outcome from a constituted authority by an organised body of youths, fits the label of youth restiveness.

It is also a combination of any action or conduct that constitutes unwholesome, socially unacceptable activities engaged in by the youths in any community.

It is a phenomenon which in practice has led to a near breakdown of law and order, low productivity due to disruption of production activities, increasing crime rate, intra-ethnic hostilities, and harassment of prospective developers and other criminal tendencies.

This scourge has been around for a long time and it looks as though it is defying solutions. Maybe the question that needs to be asked is what is truly responsible for this expression of dissatisfaction by the youth? Have their complaints over the years not been heard or attended to? Is there more to the killings and destruction than just drawing attention to the needs they want met? Are the youths trying to draw society ’s attention to themselves more than the issues they appear to be fronting? These and more are the questions we would try to tackle head on today.

In Nigeria for instance, the Niger Delta region which is unarguably the bedrock of the oil industry in Nigeria permeated the news for a lengthy period of time as the youths of that region tried various means of getting government and oil companies to pay attention to their dire conditions of living and alleviate their sufferings since according to them, the resources which is building the nation is flowing from their land so by virtue of that they

should also be partakers of its benefits. This strife led to a rise in kidnapping and vandalization of oil pipelines as well as other vices that were being perpetrated. After a period of years, the Nigerian government intervened and the Amnesty program was created to help deliver some of the promises which government had made to the youths in those areas.

The baton was soon handed over to the Eastern Nigeria.

Increase in the rate of armed robbery attacks, kidnappings as well as unbridled thuggery became the order

A sustained protestation embarked upon to enforce a desired outcome from a constituted authority by an organised body of youths, fits the label of youth restiveness

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*From left: Mr. Ron Beveridge, Senior Advisor, Tufton Oceanic, and Director of CavertonRK Nigeria Limited; Mr. Humphrey Nchom, Director, CavertonRK; Mr. Robert Knutzen, Director, CavertonRK; Mr. Olabode Makanjuola, Director, CavertonRK; and Mr. Francois De Sornay, Acting Managing Director, CavertonRK, at a strategy meeting in Lagos recently, to chart the future of CavertonRK Nigeria Limited in its bid to take advantage of growing opportunities in maritime support to the oil and gas sector.

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of the day.

Today, the northern part of Nigeria has literally erupted with unrivalled violence.

Bomb blasts, kidnaps and killings of Nigerians and others have become the prevailing trend.

Despite beefing up of security in these areas, the problems still looms. This situation begs the questions, ‘’what is the government of the day willing to do to put a permanent end to these problems.

STATISTICS The National Population Commission (NPC) has said the country’s population has risen from the 140,431,790 it was five years ago when the last national headcount was taken, to 167,912,561 as at October 2011.

This represents an annual population growth rate of 5.6 million people.

Vanguard, MONDAY, OCTOBER 15, 2012 — 19

Issues

BY FELIX AYANRUOH ESQ.

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he Petroleum Industry Bill before the Na tional Assembly if passed will address the motley of problems facing the oil and gas industry. This bill which will serve as the grundnorm of the petroleum industry – legal and regulatory framework, among other things, will enhance petroleum development and production. Also, it will establish a progressive fiscal framework that encourages further investment in the petroleum industry while optimizing accruable revenue to the government. Section 221 of the bill provides that the pricing of petroleum products in the downstream product sector is deregulated to ensure a market-related pricing; adequate supply of petroleum products; removal of economic distortions; and the creation of fair market value for petroleum product in the Nigerian economy.

Heuristic analyses of the petroleum sector show that its poor performance has been a significant barrier to private investment in the country and to overall development and economic growth. The sector’s regulatory and market structure is dominated by Nigerian National Petroleum Corporation (NNPC), the stateowned oil and Natural Gas Company. The dissatisfaction with the performance of NNPC – symptomized by corruption, decaying infrastructure, and inadequate refining

Why the Petroleum Industry Bill (PIB) will enhance bankable petroleum industry transactions capacity - has fuelled the de- market.

Financing for the developbate on the theoretical and holistic overhaul of the oil and ment or exploitation of a right, natural resources, or similar gas sector. assets is a complex and costith the exception of a intensive undertaking in which few developing countries, insufficient domestic capital to fund projects in the petroleum industry has become a real challenge. Faced with the problem of domestic financing in the petroleum industry, the Nigerian government, in drafting the PIB, conceded that private investments are needed to tackle the current shortages of refine product - can only be sourced in the international capital

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lenders or other debt-holders look principally to the revenues generated by the project alone as the source of funds from which project debt will be repaid. In sum, the collat-

Heuristic analyses of the petroleum sector show that its poor performance has been a significant barrier to private investment in the country and to overall development and economic growth

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eral for the debt is confined to the assets of the projects itself and, in particular, the project’s revenue stream.

Project finance is, therefore, non-recourse or limited recourse financing predicated on the economic and technical merits of the project itself and not by any form of share capital. Because of the cost, complexity, and risks involved in financing energy projects, traditional sponsors are unwilling to go it alone. Project finance has, therefore, become a crucial financial tool used in attracting capital to these types of projects.

Notwithstanding its position as Africa’s largest oil producer with four domestic refineries, secure and consistent supply of refined petroleum products to meet demand requirement remains a problem.

It is axiomatic that under the present dispensation, NNPC – the gate keeper for securing stable supply – actually colludes with independent marketers to create scarcity, which in turn has resulted in the development of a thriving black market for petroleum products.

Under the current regime, investors are reluctant to commit to refinery projects because they are simply not cost-effective. The PIB by deregulating the downstream sector provides for a climate of investor confidence and more measurable (and reasonable) rates of return on investment.

To be continued.

Felix Ayanruoh is a US energy attorney licensed in the State of New York and the District of Columbia

Cover Story Concerns over monetary policy implications of Budget 2013 Continued from page 18 He noted the effort by the government to empower women, saying this is also commendable because women are better money managers than men. “When women borrow money, they ensure that they pay back because they don’t like being in debt.

It is the women that ensure that their children are sent to school. The men don’t really bother about those things.”

Unegbu, however, said that implementation is a major factor that could affect the budget. According to him, Nigeria has never recorded 75 per cent budget implementation. He said; “We have some positive developments in this budget but what we have to ensure is that implementation is carried out to the letter.”

According to Unegbu, there should be a rejuvenated intention on the part of the

Federal Government to fully implement the budget if the people are to take them seriously. He said government should create the enabling environment for businesses to thrive so that employment opportunities can be created.

“For the economy to thrive, the high unemployment rate in the country must be reduced by more than 50 per cent. There should be a conscious and concise effort by government to create the enabling environment for businesses to thrive.”

Managing Director, H. J. Trust and Investment, Mr Harison Owoh, observed that the prices of crude oil fixed at $75 per barrel as against $80 per barrel proposed by the National Assembly would generate a lot of rancor between the lawmakers and Presidency.

He said that the projected growth rate of the gross

domestic product, GDP, by 6.5 per cent as against 6.85 per cent projected in the previous year might not be feasible considering the increase in the level of unemployment rate, decaying infrastructure, ethical challenges and other climatic changes.

Owoh stated that the flood problem witnessed in the country this year would still have negative impact on the nation‘s economy next year.

He said that N74.26 billion allocated to power sector would be enough for the country to build more power stations, noting, however, that the major challenge was that the government would only utilise money for the maintenance of the power sector.

Owoh said that the failure of the Federal Government to use funds allocated to the power sector in the past resulted in epileptic electricity supply being experienced in the country.

Mr. Eddie Osarenkhoe, TFS Finance Limited & former President, Finance Houses Association of Nigeria (FHAN), also commended the decline in the share of recurrent expenditure, focus and efforts to encourage women entrepreneurs. He said; “I observed that there is decline in the share of the recurrent expenditure. This is good for the economy as there would be more money for capital projects.

I also observed the attempt to focus more on women, by creating a grant to encourage women in business, just like it’s been done in some developing economies. This is also good for development.

However, we will have to see full details of the budget before we do profound analysis.”

Shittu Olayiwola, President, Association of Nigerian Licensed Customs Agents (ANCLA) commended the

incentives given to the aviation industry but said similar incentives should be extended to the maritime industry so as to open up the waterways and enhance the Cabotage regime.

Similarly, Dr. Zeb Ikokide, President of the Freight Forwarders Institute of Nigeria, commended the incentives on the Completely Knocked Down (CKD) for the agric sector. He, however, advised that this should be well monitored so as to ensure that jobs that are internally generated are upheld.

Managing Director of Merciful International, Mr. Vincent Ikekeregu, also emphasized the need for monitoring of implementation of the incentives saying, “Whatever incentives the government is giving to improve the economy will amount to nothing if measures are not put in place to monitor and evaluate the entire project.”

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20 — Vanguard, MONDAY, OCTOBER 15, 2012

Business & Economy BRIEF Cloud-based banking enters Kenya market

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loud-based banking has arrived in Kenya as Fountain Credit Services has become the first institution in the East African country to run cloud operations, the company said in a press release.

Fountain Credit Services has reportedly become the first institution in Kenya to run cloud operations.

The company, a microfinance institution in Kenya, has officially launched the Temenos T24 for microfinancing that is being hosted in cloud.

Fountain believes that using cloud will help reduce initial capital output for start-up costs as well as reducing operating costs through its “pay-per-use” model.

It comes as the company hopes to continue its rapid expansion, with new users and branches being added to the T24 system, run by Microsoft’s Azure platform.

The cloud model gives Fountain the demonstrated “viability of performing credit and lending in the cloud without an on-premise system,” the company said, adding that it is the “trend likely to become commonplace among banks and other financial services providers in the region.”

Commenting on the launch of the microfinance software, Arch. John Kithaka, CEO, FEP Group (Fountain Enterprises Program) said: “We chose the cloud solution from Temenos as they offer a complete managed service and incremental upgrades that meet our demands. Our vision for launching Fountain Credit Services Ltd was to deliver the best possible services and products to our customers – Temenos T24 Microfinance and Community Banking (MCB) enables us to do exactly that.

T24 MCB is a secure and robust system that will enable us to tackle fraud effectively.

Procuring T24 from the cloud brings with it huge economic benefits and provides Fountain with the scalability and flexibility to grow with our customers’ demands.”

David Arnott, CEO, Temenos said: “Fountain is a true pioneer, being the first Kenyan financial institution to launch with such a configuration.

Relieving the institution of

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FRC to bar MDs, CFOs, executive directors from audit committees

BY MICHAEL EBOH

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he Financial Reporting Council of Nigeria, FRC, said it is considering a review of some of its rules and will bar managing directors, chief financial officers and executive directors from audit committees of public companies.

Speaking at the KPMG Chief Financial Officers’ Forum in Lagos, Mr. Jim Obazee, Executive Secretary/Chief Executive Officer, FRC, said it is seeking to ensure that audit committees of companies are composed only of nonexecutive directors and comprising individuals with broad knowledge of accounting and ability to effectively interpret financial statements.

This, he said, is in furtherance of FRC’s drive towards enshrining good corporate governance among public companies and ensuring integrity in the financials of the firms.

According to him, we are going to put forward a law that will ensure that audit committees are composed only of non-executive directors.

He said; “For the sake of good corporate governance, increased integrity and confidence in the financials of companies, managing directors, chief financial officers and other executive directors of the Board of a

DINNER: From left: Former President, Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN), Mr. Hakeem Ogunniran, and Mr. Nasar Ahmad from India, during ICSAN’s 36th Award Night/Dinner held in Abuja recently.

company, have no need to be in the audit committee.

“One would ask, what is the role of the CFO in the audit committee? It is the CFO that prepared the account, why is it necessary that he or she be in the audit committee?

“One of the duties of the audit committee is to ensure checks and balances and also ensure the integrity of the financial report.

The committee can only invite the CFO to explain certain things and then, he or she can leave.”

He said, with the proposed

law, sanctions will be imposed on companies that default in the presentation of their financial statement.

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ccording to him, when the law becomes operational, certain members of audit committees of defaulting companies, especially the chairmen, will be removed from the committee, and barred from becoming members of audit committee of any company for some period of time.

Continuing, Obazee said,

Mainstreet Bank donates relief materials to flood victims T

he management of Mainstreet Bank Limited led by its GMD/CEO, Faith Tuedor-Matthews, donated relief materials to victims of the flood disaster in Delta State.

The relief materials donated by the bank include blankets, mattresses, food items (cartons of milk, sugar, beverages; bags of rice, garri, beans), detergents, toiletries (soap, antiseptic, toothpaste), treated mosquito nets, etc.

Making the donation to the Delta State Government officials, Tuedor-Matthews

noted that, “Given the enormity of the disaster and destruction of lives and property left in its wake, the bank wish to identify with the government of the state to assist in ameliorating the plight of victims of the flood disaster”.

“We have come to sympathize with the state government. No amount of relief can make up for what has been lost to the flood,which has led to the loss of lives, property and suffering. But the gesture will bring a certain degree of comfort and succour

to the families affected. We are touched by the pains and grief the victims are passing through. ” On the purpose of the donation, the bank’s chief executive stated that,“the contribution was meant to complement the efforts of the government in providing relief materials to victims of the flood disaster and resettling them as soon as possible. Mainstreet Bank will continue to support initiatives to improve the standard of living of Nigerians especially in critical times such as this."

“Foreign investors are reacting positively to economic transformation in Nigeria including the country’s movement towards International Financial Reporting Standards adoption, as they expect application of IFRS to have positive cash flow effects.

“These effects could include reduced contracting costs or reduced scope for managerial rent extraction associated with greater financial reporting transparency and provide convergence benefits.

“Foreign investors may react negatively to movement towards IFRS if, for example, they believed that IFRS would decrease financial reporting quality.

This could occur in economies or accommodate countries' differing political and economic features that hitherto led to existing difference in domestic accounting standards.”

Speaking earlier, Mr. Tola Adeyemi, Partner & Head, Audit Services, KPMG, said the forum is aimed at promoting interaction between CFOs of companies and regulators.

He further stated that the forum will help CFOs network among themselves and sharing of best practices, with the aim of promoting best standards among companies.

Vanguard, MONDAY, OCTOBER 15, 2012 — 21

Banking & Finance

*From left: The Principal, Ojodu Junior Grammar School, Mrs. Adebola Kolawole, Regional Director, Ikeja Directorate, Skye Bank Plc, Mr Owolabi Kamson, Head, Strategic Brand Management, Skye Bank, Tokunbo Adegboye, and CEO, Gem Publications, Bola Olawale at the donation of books to the school by Skye Bank and Gem, in celebration of World Literacy Day.

Banks with weak corporate governance will lose customers —CBN STORIES BY BABAJIDE KOMOLAFE

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anks that have weak corporate governance will lose patronage and customers, says Mallam Lamido Sanusi, Governor Central Bank of Nigeria (CBN).

He spoke at 2012 edition of the CBN-FITC Continuous Education Programme for directors of banks and financial institutions in Lagos.

“Many investors and consumers of financial services in Nigeria are becoming increasingly discerning and sophisticated in the choice of banks they have a relationship with.

They desire strong institutions that offer premium quality and cuttingedge services. Banks that are perceived to be weak or not properly run will lose patronage and customers, for it is a natural and rational human instinct to avoid or jump off a sinking or rudderless ship.

“The stark message here is that to remain competitive in Nigeria s changing banking landscape, banks and financial institutions must innovate and adapt their corporate governance practices so that they can meet the demands of their stakeholders and grasp new opportunities. In other words, corporate governance is not

a matter for mere regulatory compliance but one of survival and enlightened selfinterest”, he said.

Speaking on Advancing Corporate Governance from Compliance to Competitive Advantage, Sanusi, who was represented by the Deputy Governor, Financial Sector

Survellance (FSS), Dr. Kingsley Moghalu, said further, “The existence of policies and regulations on corporate governance at financial institutions is not enough without an effective mechanism to ensure their compliance. Yet, while mandatory compliance with

and enforcement of rules are absolutely important, they do not contain in themselves the final emotional power of commitment. Views of corporate governance are shifting from mere obligation and compliance with laws and codes of best practice, to a strategic business imperative.

“There is need therefore to interrogate the effectiveness and impact of the current approach that emphasize compliance and complement these with other effective and sustainable strategies that appeal to the moral conscience and competitive spirit of corporate organizations and motivate them to self-regulate, do good and avoid evil. For, in the final analysis, we cannot regulate bad behavior.

“From a fundamental level, the key issues of corporate governance revolve around integrity, transparency, accountability, ethics and building trust. With effective corporate governance anchored on core values of ethics, integrity, professionalism and trust, institutions will have competitive advantage in attracting business and generating positive reactions in the marketplace.

Institutions that have a reputation for ethical behavior in today s marketplace engender not only customer loyalty but employee loyalty.

A great deal depends upon fairness, honesty, integrity and the manner in which institutions conduct their affairs.

Cashless Society: Glo calls for more telecoms involvement in regulation

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elecoms service provider, Globacom, has called on the Nigerian Government to allow telecommunications companies to participate in the regulation of the mobile money subsector which is the instrument of the new cashless policy of the country.

Speaking at a seminar in Lagos on “Nigeria Transiting to A Cashless Society: Possibilities and Challenges”, Tunde Kuponiyi, Globacom’s Director, Telebanking Unit said that the current regime of mobile money regulation, which is being bank-driven, is not friendly to telecoms companies who provide the mobile payment platform.

Delivering a paper at the seminar on Monday, Kuponiyi said that though there was a lot that telecoms companies could contribute in a cashless economy, their current mandate was limiting.

Kuponiyi explained that since the mobile payments

business is ninety percent dependent on the mobile industry, it was unfair that the mobile networks are prevented from advertising their various mobile payment products which are the foundation on which the bank products operate.

“From the customer’s mobile phone, to the mobile payments system and feedback to the mobile phone, the mobile payment transaction utilizes mostly mobile resources, makes use of mobile time and is supported largely by mobile engineers, but unfortunately the CBN has restricted telecom companies from advertising in the mobile payments space”, Kuponiyi said. He advocated that telecom companies must be allowed to speak about the capabilities of their networks, the quality of user experience and the choice of mobile payment services available on their networks.

He lamented that the passive role to which the telecoms companies have been confined has led to the slow growth of the mobile payment sub sector. “It is now roughly a year since the first mobile money went live and approaching a year since cashless economy came into operation. Meanwhile, none of the individual players can boast of having more than 10,000 active subscribers”, he stated. Kuponiyi concluded that while the regulation supports leadership by banks, he believed that the rules need to be adjusted to create more room for telecoms companies’ involvement so they can do more in support of mobile payments.

“Telecoms companies have large and wide retail networks spanning the farthest reaches of the country that they can make available to scheme operators for mobile money services.

BRIEFS Governors storm ICAN conference

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onsidering the importance of the theme of the 42 nd Annual Accountants conference of the Institute of Chartered Accountants of Nigeria (ICAN), a good number of Executive Governors of the States of the Federation are set to grace the confab as resource persons and as guests of the Institute’s 48th President, Mr. Adedoyin Idowu Owolabi, BSc, MILR, FCA. The conference which is scheduled to take place from today to Friday in Abuja has as its theme, “Building Enduring Institutions for National Development” It will be declared open by President Goodluck Jonathan tomorrow.

Governor Babatunde Raji Fashola (SAN), the Executive Governor of Lagos State and Alh. Mu’azu Babangida Aliyu, the Executive Governor of Niger State, will be making presentations on the topic, “Governance And Sustainable Development: Addressing The Leadership Challenges” during the plenary session of the conference. Also at one of the workshop sessions, Alhaji Ibrahim Hassan Dankwambo, the Executive Governor of Gombe State will be discussing “Financial Reporting And Value Creation In The Public Sector: Issues, Challenges And Prospects”.

Not only that, the Governor of Central Bank of Nigeria will discuss another paper by Mr. Vernon Soare of The Institute of Chartered Accountants in England and Wales (ICAEW), entitled, Building Trust In Financial Report: Meeting Stakeholders’ Expectations; while his Deputy Governor (FSS), Dr. Kingsley Moghalu, will discuss a workshop topic entitled Whistle Blowing: Setting A Framework For Corporate And Public Accountability Apart from that other Governors and members of the National Assembly will be coming as special guests to make sundry useful contributions to building enduring institutions for the nation’s development as well as identify with the Institute and the President and to grace the gala night rounding off the conference. Prominent among them is Governor Kayode Fayemi of Ekiti State, who recently emerged Leadership Governor of the year.

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22 — Vanguard, MONDAY, OCTOBER 15, 2012

Micro Finance

IFC disburses $13 million microfinance loans in 2012 Stories by PROVIDENCE OBUH

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he International F i n a n c e Corporation (IFC) through its inclusive business clients has disbursed over $13 million microfinance loans to farmers, students, microentrepreneurs, among others.

The corporation made this known during the launch of a new inclusive business report entitled ´Being the Change: inspiring the next generation of inclusive business entrepreneurs impacting the base of the Pyramid.´ IFC’s Inclusive Business Models Group was launched in 2010, to expand access to goods, services, and livelihood opportunities for those at the base of the global economic pyramid (BoP) in commercially viable, scalable ways and also mobilizes people, ideas, information and resources to help companies start and scale inclusive business models more effectively.

IFC Vice President, Business Advisory Services, Ms Nena Stoiljkovic revealed, “In 2012 alone, IFC’s inclusive business clients reached over 173 million farmers, students, patients, and utility customers directly and provided over 13 million microfinance loans, also inclusive business clients offered 284,000 jobs.”

Stoiljkovic said that the corporation clients are currently using inclusive business models to provide direct benefits to the underserved population at the base of the pyramid, creating high development impact in financially sustainable ways.

“Those living at the base of the pyramid represent $5 trillion worth of purchasing power.

IFC’s mission is to create opportunity for people to escape poverty and improve their lives, and we pursue it by investing in the private sector.

“At a fundamental level, it is the private sector that drives economic growth, a basic ingredient in poverty alleviation. The private sector can expand access to goods, services, and livelihood opportunities for the C M Y K

poor, helping to ensure that growth is inclusive,” she said.

For companies, inclusive business models are opportunities for market growth and competitive advantage.

For development agencies, inclusive business represents a powerful approach to achieving their goal of inclusive growth and development.

IFC investments are supporting this emerging business at the base of the pyramid, she explained.

However, IFC launched Inclusive Business Models Group to create the tools, resources, and networks that will help investment and advisory staff develop new ways to support IFC clients scale up their inclusive business models to reach more people at the base of the pyramid, while the group is actively documenting and sharing knowledge to help others develop inclusive business models more quickly and more easily.

CBN to launch FIS, MSMEDF

T

he Central Bank of Nigeria (CBN) has announced plans to launch the Financial Inclusion Strategy (FIS) and the Micro, Small and Medium Enterprises Development Fund (MSMESDF).

CBN broke the silence on the long awaited launch in a circular posted on its website, signed by the Director Development Finance Department Mr. Paul Eluhaiwe, stating that President Goodluck Jonathan is expected to inaugurate the MSMEDF prepared by the apex bank, scheduled to hold on Tuesday, 23rd October, 2012 in Abuja According to Eluhaiwe, the President would be supported by Princess Maxima of the Netherlands who will be visiting Nigeria on the invitation of the Central Bank of Nigeria from 22nd to 24th October.

Maxima is the United Nations (UN) SecretaryGeneral’s Special advocate for Inclusive Finance for Development.

“Concurrently, the regional meeting of the Child and Youth Finance Initiative for Africa and the Peer Learning Programme of the Alliance for Financial Inclusion, involving 17 participating countries would also hold from 23rd to 24th October,” Eluhaiwe added.

Meanwhile, MSMEDF is a fund established to provide grants for capacity building of staff in microfinance institutions, on women based lending, promoting the development of regulatory provisions that are favourable to women lending, supporting

initiatives that can improve financial literacy and entrepreneurship development for women clients. Other key objectives include supporting programmes that are geared towards the mobilisation of women, research and development, and promotion of women-friendly financial innovations and products.

At the Development Finance Officers’ Conference held recently in Akwa Ibom State where officials of the CBN and other stakeholders converged, CBN Governor, Mallam Lamido Sanusi emphasised the importance of recognising that women are crucial players in the attempt to grow the country’s small and medium-scale enterprises (SMEs) and ultimately lead to the country ’s economic d e v e l o p m e n t .

Sanusi lamented that 76.8 per cent of adult females are unbanked, poor and vulnerable despite constituting over 50 per cent of Nigeria’s population, estimated at about 167 million people, saying, if Nigeria must tap into the economic capacities of women, then the gap must be bridged.

Represented by Director, Development Finance Department of CBN, Mr. Paul Eluhaiwe, the governor said, “The most recent efforts of the CBN in improving access to finance by women are the Revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria, National Financial Inclusion Strategy (NFIS) and the N220bn Micro, Small and Medium Enterprises Development Fund ( M S M E D F ) . "

Vanguard, MONDAY, OCTOBER 15, 2012 — 23

C M Y K

24 — Vanguard, MONDAY, OCTOBER 15, 2012

Corporate Finance BRIEFS Fidelity Bank doles out N250m, 25 cars to customers

By NKIRUKA NNOROM

A

s part of efforts to en courage savings culture among Nigerians, Fidelity Bank Plc has concluded arrangement to reward its teeming customers across the nation in commemoration of its 25thanniversary.

First on the list is a gift splash to reward members of the public who open savings accounts with the bank or add money to their existing accounts within the next six months – October through April, 2013.

Among the items to be won are a total of 25 Hyundai Accent cars, N25 million cash, 250 generator sets, 250 Blackberry smart phones. Instant prizes for people who open accounts or top up their existing accounts including DSTV Driftas, Genesis Cinema tickets, notebooks and biro pens.

To qualify for the monthly draw, members of the public are expected to open savings account with Fidelity Bank with a minimum deposit of N20, 000 or top up their existing accounts with incremental N10, 000.

The savings account could be any in the savings bouquet which includes the Fidelity Savings Accounts (FSA), Fidelity Personal Savings (FPS), SWEETA (for children), Easisave or Flex (for the youth).

According to the bank, customers who deposit N20, 000 and above would be given instant gifts while multiples of N20,000 increases a customer’s chances of winning the prizes.

Addressing the media while unveiling the promo, Mr. Obioha Obiagwu, General Manager in charge of Lagos branches, said the Cars and Cash Savings Splash was one of the bank’s ways of appreciating her numerous customers who have remained faithful and loyal to the bank.

Tracing the history of the bank from when it was just a one branch Merchant Bank in 1988 to when the bank converted to commercial bank in 1999 and then became a Universal Bank two years later, and subsequent consolidation with two other banks under the Fidelity brand name in December 2005, Obiagwu observed that the bank had made giant strides, with nearly 200 branches spread across all states and commercial cities of the country.

He pointed out that the savings campaign was also to encourage savings culture amongst Nigerians of all age brackets.

C M Y K

BY PETER EGWUATU

T

he ongoing privatisation of the power sector is expected to yield fruitful result in the stock market and the economy in general if the companies are made to list on the Nigerian Stock Exchange (NSE).

Operators in the capital market in their various comments on the privatization of the power sector had advised the government to ensure that companies privatized are given condition to list on the NSE to enable Nigerians benefit from the profit to be generated when the companies begin full operation.

According to experts, “Allowing the companies to list on the NSE will make them accountable and responsible to the public and would also help the stock market to increase in depth and market capitalisation.”

Meanwhile, unlike the Global System for Mobile Communication(GSM) regime, however, energy experts say electricity is a crucial social need, not a luxury, hence the need for President Goodluck Jonathan’s administration to take precautionary steps aimed at ensuring that Nigerians at all strata, especially in rural communities derive maximum benefit from the laudable policy .

When ten years after the privatisation of the telecom sector, some towns and villages are yet to enjoy GSM services by the telecoms companies, analysts are of the opinion that that kind of neglect will be unacceptable to the Nigerian people under the new power distribution model; and could pose a threat to national security.

Contrasting GSM that relies on microwave coverage, electricity has to be physically distributed through pylons, cables, transformers, etc to every single home. To distribute electricity to every home physically, the companies will have to overcome objections from communities, acquire rightof-way from state and local governments and negotiate with the irate youth and communities.

The key success factor that must be taken into account is which firms and consortium have the financial muscle, relevant experience, sustainable business model and where necessary, moderate state participation to do the job best? The other fundamental factor must include local on ground experience of the teams.

Power sector privatisation to increase stock market depth, capitalisation

… Experts caution FG on rural electricity

Arunmah Oteh

’

The issue of local knowledge and the support of local authority is critical for the success of the business

If ever there was a time to emphasize competence driven by knowledge more than a political call or sentiment for re-invigorating the nation’s battered electricity sector, this is it. The National Council on Privatisation (NCP) recently approved the technical bid evaluation of 31 firms for the various distribution companies. The financial bid opening was scheduled for October 10, upon the submission of their individual post-qualification bonds.

Experience of past failures of power privatisation elsewhere in the world

,

should be instructive for our nation. Experts maintained that there is a vital need to appropriately choose distribution companies with the capacity to make far reaching changes (which is the traditional focus of the electricity sector reform) in the way electricity is delivered to consumers, companies with on-the-ground experience that can focus on integrating the various aspects of utility operation in an efficient manner…things such as network rebalancing, accurate metering, revenue management and asset optimization.

The issue of local knowledge and the support of local authority is critical for the success of the business.

This brings up the case of distribution companies located in the difficult and troubled areas like the NigerDelta region, Lagos, Kaduna and Kano, particularly Port Harcourt and Benin Discoms.

Meanwhile, it would be recalled that following the recent approval of the technical bid evaluation of a total of 21 firms for the various distribution companies by the NCP, all is now set for the financial bid opening ceremony for the 21 firms that are bidding for the 10 electricity distribution companies across the length and breadth of Nigeria. The electricity distribution firms proposed for sale are located in Ibadan, Ikeja, Abuja, Enugu, Jos, Eko, Port Harcourt, Yola, Kano, Benin and Kaduna.

According to NCP, Ikeja Distribution Company received the highest number of qualified bids with eight firms. They are: Oando Consortium, Amperion Power Distribution Company Ltd, Honeywell Energy Resources Limited and Integrated Energy Distribution and Marketing Company.

Others are Vigeo Holdings, Gumco, African Corporation AFC and CESC, Kepco/ NEDC Consortium, West Power and Gas and Rockson Engineering.

The Eko Distribution Company received the second highest number of bids, with six firms showing interest.

The bidders are Oando Consortium, Integrated Energy Distribution and Marketing Company, SepcoPacific Energy Consortium, Kepco/NEDC Consortium, Honeywell Energy Resources Limited, West Power and Gas as well as Rockson Engineering. For the Benin Distribution company, four firms emerged. They are: Southern Electric Distribution Company, Rensmart Power Ltd., Vigeo Power Consortium and Rockson Engineering.

Vanguard, MONDAY, OCTOBER 15, 2012 — 25

C M Y K

26 — Vanguard, MONDAY, OCTOBER 15, 2012

Corporate Finance

Equities’ value appreciates by N276bn

BY MICHAEL EBOH

A

n upward trend was recorded in transactions on the Nigerian Stock Exchange, NSE, last week, as the value of listed equities, represented by the market capitalization, appreciated by N275.586 billion.

Driven by gains recorded in the share prices of major blue chip companies, the capitalization rose by 3.27 per cent to close the week at N8.695 trillion, up from N8.42 trillion at which it opened the week.

The All-share index also appreciated by 3.2 per cent, as it garnered 845.18 basis points from 26,442.67 points at which it opened the week to close at 27,287.85 points.

Nestle Nigeria Plc led 49 other stocks on the price gainers’ table, rising by N10 to close at N625 per share, from N615 per share at which it opened; Guinness Nigeria Plc followed with a gain of N4.40 to close at N281 per share and Ashaka Cement Plc garnered N2.75 to close at N19.50 per share.

Other share price gainers include: Cadbury Nigeria Plc N2.44, Nigerian

Breweries Plc N2.15, Julius Berger Nigeria Plc N2, First Bank of Nigeria Plc N1.48, Cement Company of Northern Nigeria Plc N1.35, Zenith Bank Plc N1.25, Lafarge Wapco Plc N1.24 among others.

On the contrary, Chemical and Allied Products Plc led 24 other companies on the price losers’ table, dropping by N1.45 to close at N27.55 per share, down from N29 per share at which it opened; Northern Nigeria Flour Mills Plc followed with a loss of N1.07 to close at N20.41 per share and International Breweries Plc shed N0.81 to close the week at N13.19 per share.

Other share price losers in the week under review include: PZ Cussons Nigeria Plc N0.75, Roads Nigeria Plc N0.53, Arbico Plc N0.44, Union Bank Nigeria Plc N0.40, Presco Plc N0.30, Oando Plc N0.24 and Mansard Insurance Plc N0.19 among others.

Equity trading, however, depreciated by 54.11 per cent in the week under review, as investors exchanged 2.184 billion shares valued at N17.495 billion in 27,786 deals compared to the previous week’s of 4.759 billion shares valued at N40.472 billion in 20,364 deals.

SEC seeks quick resolution of cases involving brokers, investors

By PETER EGWUATU

T

he Securities and Exchange Commission (SEC) has called for the quick resolution of cases involving investors and stockbrokers in order to sustain the confidence returning to the stock market. Speaking at the16th Annual Chartered Institute of Stockbrokers (CIS) conference in Lagos, Director General, SEC, Ms. Arunma Oteh, said, “There is need to quickly resolve issues involving investors and stockbrokers so as to sustain the confidence returning to the market.”According to her, “Confidence and integrity is necessary ingredient in the stock market. They are the foundation that is needed in building a virile capital market. I commend the CIS in ensuring that their members abide by its code of conduct.” Continuing, she said,“The capital market would be repositioned to tap from the Federal Government transformation agenda of the agricultural sector.

Oteh said that market participants must be prepared to tap from the development in the market, noting that, the market was experiencing increased participation of institutional and retail investors. She noted that the Commission would in 2013 roll out strong regulatory framework that would guide collective investment schemes (CIS),saying that, retail investors should embrace the investment window. She said that the Commission would continue to educate retail investors on the need to embrace Collective Investment C M Y K

Scheme (CIS) to avoid loss of investment.

Meanwhile, President, CIS, Mr. Ariyo Olushekun in his opening remark said, “The Chartered Institute of Stockbrokers (CIS) is a key stakeholder in the Nigerian economy.

The activities of our members and the fortune of our clients depend significantly on the economic health of the country. We have therefore always sought to help craft policy solutions for s o m e o f t h e m o s t pressing economic challenges in the country. We are happy to note that our policy prescriptions at past c o n f e r e n ces, contributed to the enactment of the Pension Reform Act of 2004 and the establishment of the Asset Management Corporation (AMCON) Act of 2010, amongst others.”

He further stated that following the challenges confronting the country today, “We decided to make the opening part of the theme of this year’s conference “Appraisal of the Nigerian Economy”. We believe this provides an opportunity for us to focus the intellectual resources of our stock broking community, financial experts in various economic sub-sectors and other seasoned capital market operators on the central economic issues of today.”

“We hope to be able to proffer solutions to topical economic questions such that the recommendations made at this year’s conference will help shape government policies in the near to medium term future” the CIS President added.

1.58

1.38 5.52 1.15 5.81 40.06

29.00 10.22

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

10.03 36.19 3.40 2.88

25.77 41.81

8.51 0.64 0.57 3.60 11.00 1.87 0.50 14.85 3.15 20.15 1.07 0.70 1.15 3.26 0.88 7.30 1.59 4.70 8.41 0.50 0.50 17.10

0.68 0.76 0.50 0.50 0.50 1.38 0.50 0.50 0.50 1.55 0.50 0.61 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.52 0.50 0.50 0.50 0.50 0.50 0.50

0.50 0.50

0.50 2.02 0.63

Household Durables Beta Glass Co Plc Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

FINANCIAL SERVICES Banking Access Bank Plc Afribank Nigeria Plc Bank PHB Plc Diamond Bank Nigeria Plc Ecobank TRANSNATIONAL INCORPORATION Fidelity Bank Plc FinBank Plc First Bank of Nig. Plc First City Monument Bank Plc Guaranty Trust Bank Plc NPF Micro-Finance Bank Plc Intercontinental Bank Plc Oceanic Bank International Plc Skye Bank Plc Spring Bank Plc Stanbic IBTC Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc

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

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

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

0.50 2.02 0.57

0.50 0.50

0.80 0.88 0.50 0.50 0.50 1.47 0.50 0.50 0.50 1.60 0.50 0.61 0.50 0.50 0.50 0.50 0.50 0.50 0.57 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

9.01 0.64 0.55 4.79 11.95 2.34 0.50 17.00 3.62 20.50 1.07 0.70 1.15 4.05 0.88 7.30 2.00 5.50 8.01 0.54 0.52 18.35

25.02 43.00

10.03 34.39 3.52 2.88

30.00 625.00

0.50

27.56 615.00

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

8.20 6.12 65.00 2.68 6.02 0.76

0.50

8.25 5.25 64.99 2.30 5.91 0.70

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

39.00

5.19

39.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

3.80 281.60 13.19 142.00 0.89

0.50

100.00

11.00

31.00 10.60

1.50 5.42 1.14 5.81 40.50

1.56

0.50 35.70 14.98

0.50

Closing Price (N)

5.46

3.62 277.20 14.00 139.85 0.89

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers Union Diagnostics & Clinicals Services

0.50

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

100.00

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

10.92

0.50 35.70 15.28

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

300,000

50,000

1,100,000 60,000 1,010,000

100 950,000

6,877,863 1,362,057 1,000 7,100 100,000 417,850 11,000 600,000 2,000,000 1,698,475 20,000 1,172,778 2,749 1,670,890 6,503,000 20,590 68,267,009 110,000 15,615,763 100,300 40,000 114,500 6,066,500 40,000 50,000 100 1,000 100,000

23,616,633 646,608 13,287,533 18,618,028 2,217,806 39,697,378 1,000 42,499,228 24,529,721 16,938,963 56,000 73,200 91,000 39,099,614 1,006,032 1,125,520 10,124,039 24,619,277 1,291,098 14,352,194 127,163 39,038,936

218,393 3,380,207

225 10,620 1,095,502 11,923

2,893,658 34,833

5,000,859 8,812,635 1,028,731 16,949,139 2,302,306 1,064,272

17,112

50,000 288,229 1,096,554 1,816,527 1,000

20,000

2,000,000

43,501

98,008 15,500

132,800 264 8,879,437 100 1,696,244

5,551,147

909 115,288 800,695

20,000

Quantity Traded

0.50

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

255.00 7.10 100.00 1.01

4.63

0.50

100.00

20.15

62.26 8.28

2.54 8.28 1.82 7.60 42.50

0.66

0.64 24.58 8.30

Year High

0.50

9.52

0.50 2.02 0.50

0.50 0.50

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

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

27.00 22.56

12.71 36.19 4.78 2.66

10.17 367.83

4.31 4.02 57.00 2.31 3.80 0.50

,39.00

186.00 5.23 72.50 0.93

2.23

0.50

97.00

11.59

32.96 3.01

1.45 5.52 0.50 6.43 28.70

0.48

0.50 14.53 6.40

Year Low

0.00

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 0.36 0.36 0.01 0.01 0.14 0.03 0.07 0.00 0.00 0.00 0.00

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

1.29 1.32

3.90 1.61 0.70 0.00

0.28 15.94

0.54 0.71 4.50 0.26 0.73 0.06

3.70

12.12 0.35 4.50 0.00

0.00

0.00

11.75

1.66

3.26 3.66

0.28 0.35 0.22 0.31 7.03

0.04

0.01 7.94 1.80

E.P.S.

0.00

0.00

0.00 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 1.39 1.39 50.00 50.00 6.43 16.67 7.14 0.00 0.00 0.00 0.00

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

20.93 20.46

3.26 22.48 7.34 0.00

37.57 27.96

16.91 14.38 16.89 16.92 5.75 8.83

13.92

19.98 16.29 22.22 0.00

0.00

0.00

8.51

7.33

10.11 2.26

5.18 15.77 3.64 20.74 4.14

15.00

50.00 2.77 4.37

P.E. Ratio

13.77 2.41

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

0.50

Processing Sysetms Chams Nigeria Plc

0.50

4.90 2.17 5.92

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

0.50

1.94 2.11 4.20 4.11 Road Transportation Associated Bus Company Plc

0.50 Printing & Publishing.

Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press

6.50 1.17

0.50

3.00

1.97 1.71

Media/Entertainment Daar Communications Plc

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

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

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

Afromedia Plc

SERVICES

0.50

20.50 0.50 20.68 2.21 10.20 115.00 30.68 130.00

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

0.61 12.74

Intergrated Oil and Gas Services Oando Plc

3.98 9.53 13.28 4.30 1.05 2.92 0.66

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

Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans

2.23 0.50

1.38

Paper/Forest Products Thomas Wyatt Nig. Plc

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

0.50

10.55

Non-Metalic Mineral Mining Multiverse Plc

5.98

Metals Aluminium Extrusion Ind Plc

8.26

2.09 1.91

16.75 8.01 29.00 5.20 118.50 0.50 1.27 56.26 3.15 1.90 10.93

NATURAL RESOURCES Chemicals BOC Gases Plc

Tools and Machinery Nigerian Ropes Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

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

0.50

0.50

ICT Telecommunications Starcomms Plc

0.50

Computers and Peripherals Omatek Ventures Plc

5.05 1.19 1.14 38.00 1.61 1.38 8.59 3.02

ICT Computer Based Systems108 Courteville Investment Plc

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

Opening Price N

2.16 5.00

4.90

0.50

3.10 2.01 4.20 4.10

0.50

6.60 1.14

0.50

3.30

1.97 1.77

0.50

0.50

20.50 0.50 20.79 2.28 10.20 115.00 30.68 130.00

12.50

0.62

3.98 9.53 13.28 4.30 1.05 2.78 0.66

1.44 0.50

2.20 0.58

0.50

1.38

0.50

10.55

5.69

7.85

1.99 1.81

19.50 8.01 27.55 6.55 118.50 0.50 2.01 57.50 3.29 1.95 10.93

0.50

13.77 2.41

0.50

0.50

5.05 1.36 1.30 39.00 1.71 1.43 8.85 3.02

Closing Price N

12,000 498,039

20

81,232

102,800 9,308,892 4,322 3,979,687

10,000

800 723,800

101,000

447,794

240 354,794

33,000

50

82,191 200 41,466 328,863 123,457 16,145 1,894 130,869

2,606,176

6,114,406

6,888 5,040 100 29,198 200 84,311 2,749,340

2,000 1,000

458,900 15,000

13,870

1,000

5,000

5,000

70,000

10,000

55,484 2,357,539

938,217 3,128 53,010 1,048,527 47,333 10,374 378,918 1,228,551 1,000 50,000 1,000

2,307,692

21,800 5,011

691,550

1,200,000

1,000 154,524 3,808,465 260,309 720,000 2,500 1,927 100

Quantity Traded

Stock Market Report

0.51

2.78 11.75

5.15

1.57 6.50

4.90

0.50

4.60 3.60 0.80

3.17

3.68

0.48

3.00 1.33

0.90

2.65

1.97 1.30

8.00 6.82

0.50

400 2.07

1.64

3.67

4.33 3.65

0.72

539,000

141.00 63.86 195.50

163.50 2,100 240.00

27.99 0.50 0.50 5.71 3.89

1.87

3.98 12.71 13.97 3.60 1.05 2.92 0.63

1.33 0.50

1.62 2.58

0.50

1.38

0.50

10.70

6.80

8.26

5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

0.50

3.25 3.25

0.50

0.50

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

Year Low

37.10 0.70 32.60 5.59

78.97

0.97

3.98 15.58 15.03 4.30 1.86 2.92 0.63

1.51 0.99

2.50 2.58

0.50

1.38

0.50

12.39

9.20

8.69

6.91 3.60

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

1.47

9.31 3.59

0.50

0.52

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

Year High

0.87

0.51 0.80

0.00

0.00

0.00 0.13

0.26

0.00

0.22 0.69

0.08

0.54

0.00 0.16

0.04

13.32 3.32 11.91

4.93 0.00 6.02 0.67

6.95

0.16

0.00 3.90 0.00 1.22 0.17 0.07 0.00

0.05 0.00

0.13 0.00

0.00

0.00

0.00

0.13

0.93

0.00

0.15 0.19

1.59 1.71 1.76 1.80 8.01 0.00 0.00 1.05 0.36 0.18 0.00

0.00

6.49 0.00

0.04

0.05

0.06 0.00 0.27 8.88 0.21 0.08 0.00 0.00

E.P.S

4.22 8.75

0.00

0.00

0.00 27.69

12.19

0.00

34.09 2.12

11.25

4.91

0.00 8.19

12.75

11.11 19.23 17.07

6.99

7.40 0.00

4.17

6.06

0.00 3.26 0.00 3.52 6.18 41.71 0.00

28.80 0.00

13.15 0.00

0.00

0.00

0.00

85.77

7.37

0.00

39.60 9.16

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

0.00

1.43 0.00

12.50

10.00

9.05 14.13 0.00 0.00

88.50 0.00 3.07

P.E Ratio

as at Friday, October 12, 2012

Vanguard, MONDAY, OCTOBER 15, 2012 — 27

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28 — Vanguard, MONDAY, OCTOBER 15, 2012

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Vanguard, MONDAY, OCTOBER 15, 2012 — 29

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30 —Vanguard, MONDAY, OCTOBER 15, 2012

Insurance BRIEFS Royal Exchange supports youth development conference

By ROSEMARY ONUOHA

R

oyal Exchange Plc has thrown its weight behind the 5th annual edition of the Leadership Conference for Secondary School Prefects in Lagos State.

The event, which is scheduled to hold at the New Auditorium, Igbobi College, Yaba, Lagos, on Wednesday, 24th October, 2012 will attract over 1,000 students drawn from about 50 post-primary educational institutions in the state.

In a statement, Executive Director of Royal Exchange Group, Alhaji Auwalu Muktari said that this year’s conference will be exciting, educative and instructive as it will include a lecture on insurance as well as inspirational discussions on leadership, attitudinal change and patriotism.

He said that Royal Exchange is committed to the development of youth in the country, adding “Unless we catch them young and nurture them at this stage, the country ’s future is most certainly fraught with uncertainty and ineptitude.”

Alhaji Auwalu Muktari urged parents and teachers to continue to pay attention to the academic and moral developments of their children and wards as this demographic segment constitutes the real foundation of nationhood.

This year ’s conference, which is in collaboration with Foundation for Youth Education, has as its theme, The Youth as Catalyst in the National Transformation Agenda.

Royal Exchange plc, which had previously sponsored the 4th edition of the conference last year and Nigerian Idol, started operations in 1921 and continues to be driven by innovation and a determination to offer services that are of exceptional value to its customers.

Following the recapitalisation exercise in 2007, the company was reorganised into a Group structure comprising Royal Exchange Plc as the holding company and five strategic subsidiaries namely: Royal Exchange General Insurance Company Limited (Non-Life Insurance Services); Royal Exchange Prudential Life Plc (Life Assurance Services); Royal Exchange Finance and Investments Limited (Financial Advisory Services); Royal Exchange Healthcare Limited (HMO and Health Insurance) as well as Royal Exchange Microfinance Bank Limited (Banking Services).

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FLOOD: Time for operators to propagate importance of insurance Stories by ROSEMARY ONUOHA

A

s flood continues to wreck havoc across the country, insurance operators have been urged to use the opportunity to educate the public on the importance of insurance.

President of the Chartered Insurance Institute of Nigeria, CIIN, Dr. Wole Adetimehin who stated this noted that insurers should drum the need for insurance because of the huge effect of the flood that has destroyed lives and property of the public in many states.

Adetimehin said insurance penetration in Nigeria is a concomitance of several factors ranging from the less than optimal level of public awareness to its degree of visibility in the average citizen’s scale of preference.

He said: “In many ways, insurance remains an essential index for measurement of national development although lacking in its expected degree of presence in both individual and national consciousness, especially in developing countries like Nigeria.

“Recent flooding of parts of Nigeria and cases of related environmental hazards make insurance the way to go for Nigerians. The insurance sub-sector must seize this as the needed opportunity to drive home its age-long message.”

On the 2012 Education Seminar of the institute, with the theme: Making Insurance

Count, scheduled for November 7th to 9th in Port Harcourt the Rivers State Capital, Adetumehin noted that the seminar will address the imperatives for improved service delivery and ensuring that the policy holder is protected at all times.

He said the seminar, brings into focus the imperatives for growing insurance bigger in public perception while examining the ways and

means by which branch office operations could be strengthened to guarantee prompt resolution of customer related issues which have remained sore spots in the industry’s profile.

Adetimehin said the resolution of all customer related issues should be a win-win situation with the customer and the service provider occupying positions of mutual respect, adding that the choice of the seminar theme is borne out of the compelling need to make insurance count for the policy holder through deliberate shifts in strategy and guaranteed improvement in service delivery which must ensure that the customer ’s genuine interest is protected over and above business interest.

*From left: Head, Corporate Affairs/ Admin, Chartered Insurance Institute of Nigeria, Mr. Joseph Obah; Managing Director, Regency Alliance Insurance Plc, Mr. Biyi Otegbeye, and Miss Insurance 2012, Miss Onyeka Adigwe, during the courtesy call of Miss Insurance to their corporate office in Lagos last week.

NEM is official insurer of Trade Fair —LCCI

By RITA OBODOECHINA

T

he Lagos chamber of commerce and industry, LCCI, has named NEM Insurance Plc as the official insurer of the 2012 Lagos International trade Fair.

In a statement issued by LCCI, the President of the Chamber, Mr Goodie Ibru, said NEM Insurance is the official insurer of the fair, while, First Bank of Nigeria plc is the official Bank of the fair.

The fair which is scheduled to hold at the Main Bowl of the Tafawa Balewa Square (TBS) in Lagos, from Friday 2nd November to Sunday 11th November, 2012, is tagged ‘the biggest and the best’, and organised by the Lagos Chamber of Commerce and Industry.

According to the statement, Silver bird television was also appointed as the official television partner of the fair, Rhythm 93.7FM, the official

Radio partner of the fair Business day newspaper, the official newspaper of the fair, LAGBUS, the officer transporters and, Rapid Vigil Security Company Limited, the Official CCTV Company of the Fair.

Earlier on, the Chairman, trade promotion board, Mr, Babatunde Paul Ruwase appealed to all exhibitors , local and foreign , to ensure that only products of high quality, duly certified by Nigerian regulatory authorities are sold during the Trade Fair.

He said, arrangements has been concluded to provide a “ Feed Back Desk” and “Dedicate Phone Lines”, where visitors to the Fair can report any untoward act, especially as it concerns the conduct of exhibitors and quality of products sold by the exibitors.

He noted that the LCCI will work with the Lagos State Ministry of Environment for

the provision of services of its various Agencies like the KAI brigade, LAWMA, for proper environmental sanitation and provision of a good ambiance at the Fair.

However he said, LCCI have engaged a good security firm, which shall work in close collaboration with the Nigeria Police, and the Federal Fire Services.

He explained that the theme of this year’s fair which is “Promoting Trade for Sustainable Economic Transformation” is a manifestation of the LCCI’S commitment to the development of both local and international trade, towards the realization of a speedy transformation of the Nigerian economy.

Ruwase added that with this theme, the fair will focus attention on the promotion and development of Indigenous and international trade with a view to increase volume of trade and boost economic activities

of industrialization, which is critical to the achievement of a sustainable economic transformation.

He stressed that this also placed emphasis on how far LCCI have gone to fulfill all promises made to intensify and sustain its critical role as catalyst for business promotion and keep to its promise of improved and better Fair that will deliver value to all stakeholders, adding that with the continued recognition of the role of the private sector in the economic development of Nigeria, and the move by the government to transform the nation’s economy , the Fair seeks to use the medium of trade to support government concerted efforts and provide an avenue for both Nigerians and foreigners to have windows of opportunities , not only to interact , but also to strike highly mutually beneficial and lucrative business relationship.

Vanguard, MONDAY, OCTOBER 15, 2012 — 31

“The banks and government only help those who don’t need it. The ones who need it get no loans, no advice, not even a simple guide on how to start”. Ibrahim Okai, 1980s.

(VANGURAD BOOK OF QUOTATIONS, p 20).

W

hat Ibrahim Okai said in the 1980s was true before then and still true today – especially in Nigeria. Banks according to economic principle, are the only entities established to create wealth. But, they seldom do it for the poor in most countries. In Nigeria, never. In fact, here, they prefer to lose money on rich deadbeats than to make money on small struggling business people.

If you have not applied for a loan lately, kindly be informed that the lending rate starts at 30 per cent for the most highly favoured customers. Unless you are Dangote, Otedola, Mike Adenuga, Atiku, then forget it. And if your company is not MTN, GLO, Zenon Oil, Airtel etc., don’t go near any bank. The interest rates have been pegged so high, as one banker confided in me, “in order to discourage borrowing.” The implications of that policy, which apparently has been embraced by all the banks, are grave – in the immediate, short, medium and long-terms –however defined.

If you think the Federal Government knows nothing about the high interest rates inhibiting borrowing and lending, then you must be living in another country not this one.

Government and the banks have colluded to ensure that the micro, small and medium scale enterprises obtain no loans, no advice and “not even a simple guide on how to start.”

THE ROLE OF GOVERNMENT f you ask three top government officials, most directly involved in the promo-

I

AMCON, Bank lending and jobs — 1

The Central Bank of Nigeria headquarters in Abuja tion of those enterprises, Minister of Finance, Minister of Investment and the Governor of Central Bank what is government’s policy on the promotion of those businesses, the answer will be the same.

Government, you will be told, believes in the small and medium enterprises because they employ 70 per cent of workers and create most of the job opportunities. Ask further what government is doing for those categories of businesses and the reply, well-rehearsed, will be forthcoming without hesitation. Government is doing everything it can to help them. Press further and ask how and you will probably draw an angry glance. The reason is not hard to find. Governments have

’

Government and the banks have colluded to ensure that the micro, small and medium scale enterprises obtain no loans, no advice and “not even a simple guide on how to start

been paying lip-service to promoting small enterprises.

My last attendance at a seminar or workshop (more like talk shop) organised by the Federal Government was in

,

2005. The contract was given to the young daughter of a well-connected party official.

Among the speakers was Dr Magnus Kpakol, the DirectorGeneral of the Poverty Allevi-

ation Programme, who was there to inform the participants about how his agency will reduce poverty and create hundreds of thousands of small entrepreneurs. It was perhaps the 20th such workshop to which I was invited since 1975. So, I was accustomed to “the salad bowl of illusions” (George Santayana, 18631952) which served as communique after the exercise. Raising my hand, I asked the organiser why we should expect any result from that particular workshop given the track record? Her reply was prompt.

“Don’t attend any other workshop we organise if we fail this time”. Well, they failed and that was the end of seminars or workshops on small and medium scale enterprises for me. Even the PAP, which from the outset was a bed of corruption, has failed to create small scale entrepreneurs fast enough to fulfill its mandate of reducing the poverty level; which stays stubbornly glued at 70 per cent.

Certainly, several more have been held with the same results – small and medium scale enterprises have not benefitted from government in the last 40 years. And they are not likely to do so – as long as government makes promises with one side of the mouth and takes measures guaranteed to negate those promises with the other side.

Everybody knows that credit is the life-blood of enterprises.

Banks have never been enthusiastic about lending to small businesses –even under the best of conditions. Small business people have also not been too keen on taking loans at shylock rates. Elsewhere in the world (USA, Japan, China, Korea, Malaysia, etc, where interest rates never exceed 35 per cent, the governments have intervened to make it possible.

Continues next week

Business & Economy

NAMA to diversify to non-aeronautical revenue sources

By LAWANI MIKAIRU & DANIEL ETEGHE

M

anaging Director of the Nigerian Airspace Management Agency, NAMA, has revealed that the agency will soon exploit non-aeronautical revenue sources in its bid to be self-reliant on Internally Generated Revenue,IGR. This is coming as the agency is set to reposition itself as one of the leading Air Navigation Service Providers (ANSP) in Africa in this 21st Century.

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Engineer Udoh revealed this in a press conference to mark the agency’s 10th anniversary and the Managing Director’s one year in office.

He told newsmen at the agency’s headquarters in Lagos, that NAMA was poised towards providing a safe, efficient, effective and economic air navigation services to all airspace users through a wellimproved technology and dedicated workforce.

According to him,” Our target is to reposition NAMA as a 21st Century Air Navigation Services Provider (ANSP) but before that, we need to evalu-

ate the following: where are we, where do we want to be and how do we get there?”

Engr. Udoh, however, stressed that answering those questions would help the agency to be on track in achieving all that it has set out to achieve in the nearest future, adding that was the roadmap for the agency.

Enumerating the agency’s achievements, Udoh said; ‘’We have achieved a great success on the TRACON project as all our airspace are well covered, we also have the Total VHF Radio Coverage of Nigeria, WGS-84, Solar Power, Naviga-

tional Aids for designated airports.”

The NAMA Managing Director further pointed out that in three years time, NAMA will be one of the Air Navigation Service Providers that will be leading in providing valuable national services in Africa adding that it also hopes to have a low-incident ANSP. He further revealed that the agency has been able to achieve N20 billion capital base and he hopes to achieve N30 billion capital base within the next 12 months..Engr.

Udoh added that in achieving the agency’s roadmap, it was

planning to be self-reliant on IGR. He said that as from next year, the agency will stop getting subvention from the Federal Government.

He also revealed that the agency was planning to diversify to a non-aeronautical revenue source.

He said that at the moment, NAMA has modern equipment to provide air navigation services with a good technology to ensure that the agency gives efficient services to the various airlines flying in the Nigerian airspace.

32— Vanguard, MONDAY, OCTOBER 15, 2012

Housing Finance BRIEF Planners seek revival of LMCDA

N

igerian Institute of Town Planners (NITP) has called for the reactivation and re-examining of the moribund Lagos Mega City Development Authority (LMCDA) and the need for collaboration between the federal, Lagos and Ogun state governments in order to achieve the objectives.

Speaking at the 2012 Annual General Meeting of the Lagos Chapter of the Institute, the outgoing NITP Chairman, Mr. Makinde Ogunleye, noted that the urbanisation process in Nigeria, and particularly in Lagos, has progressively moved from hope to hopelessness through the continuous transformation of the urban landscape into slums because of the failure to keep to the United Nations target, as set out in goal seven of the Millennium Development Goal to ensure environmental sustainability by 2015.

“In fact, our seemingly intractable urban planning problem in the country is the unwillingness or inability of the political class and technocrats to rise to their responsibility by creating proactive strategies to midwife a new template that devolves planning to the citizenry through local planning authorities; planning all over the world is a local affair,” he said.

Ogunleye called for the immediate review of the Lagos Regional Plan in line with current physical planning reality in Lagos State, and to allow unhindered public access to the Lagos digital map for planning purposes. He canvassed for the inauguration of the Lagos State Model City Development Authority (LSMCDA) and committees to assist towards achieving the implementation of the various model city plans.

He further called on government to devolve the preparation and implementation of local plans to the Local Planning Authority in line with the provision of the existing laws and regulations as well as arrest the spate of illegal development in the State, government issuance of development permit by LASPA, the District and the Local Planning offices.

“The governor has no business in the development permit process except on special cases when such proposal was not contemplated in the prevailing approved physical development plan,” he argued, noting that if the advice is taken, it will reduce the existing bureaucratic bottleneck in the building C M Y K

Aerial view of Banana Island

Mortgage banker advocates 1% of crude oil revenue for social housing STORIES BY YINKA KOLAWOLE

T

he federal government has called been called upon to set aside one percent of annual sales from crude oil as intervention fund for the development of social housing across the state capitals and local councils in Nigeria.

Mr. Abimbola Olayinka, Managing Director of Resort Savings and Loans Plc, made the call at the just concluded 2ndNational Conference on Shelter and Urban Renewal which held in Abuja. He also urged the government to set up an agency that will oversee the development and delivery of social housing in the country. According to him, the agency will act as a dedicated and credible intermediary that will harness national efforts in the social housing sector as different from the existing structures set up with commercial responsibilities and intents.

“The three tiers of government should not shy away from their responsibility of providing primary infrastructure if we must achieve our goal of providing affordable housing. The infrastructure projects could be financed by issuing bonds and will also provide a future income stream for government through municipal fees that will be paid by home owners,” he stressed.

Olayinka also called for the various housing reform legislations pending before the National Assembly to be passed without further delay.

“Investors can work in diffi-

cult environments in the short term if there is convincing evidence that reforms that will improve the investment climate will be implemented as quickly as possible.

“High cost of building materials is also a key factor that has led to the high construction cost in Nigeria. The restriction on the importation of cement which by account constitutes about 40 per cent of building materials has also hindered provision of social housing. Government therefore needs to seek alternatives to usage of cement in the building of houses,” he add-

ed.

In the same vein, Mrs. Fatima Wali-Abdurrahman, Chief Executive Officer, The Filmo Group, a real estate development firm, also called for intervention funds targeted at the development of social housing programmes and implementation of the social housing policy; adequate infrastructure and facilities that will improve accessibility for social housing programmes; incentives to enhance institutionalised rental housing opportunities for vulnerable and disadvantaged groups; upfront grants to meet part of the

land and construction costs to providers of social housing to increase stock; comfort to avert/outlaw illegal eviction of beneficiaries; tax incentives for social housing institution; capital grants, interest-rate subsidies to create a type of “equity” which cushions the private sector loan debt; incorporate default risk insurance schemes for beneficiaries; protection for stakeholders willing to engage in this limited-profit part of the real estate sector, e.g. publicly owned companies, not-forprofit organisations, foundations etc.

FCT pre-qualifies 13 firms for land swap project T

he Federal Capital Territory (FCT) administration has pre-qualified 13 companies under its land swap initiative aimed at facilitating rapid infrastructure development and delivery of affordable housing in the territory.

The land swap policy is a development initiative recently introduced by the FCT administration whereby land is given to investors in exchange for their commitment to develop infrastructure within the area where they are allocated land.

Prominent among the 13 companies are Dangote Group, China Railway Construction Company Limited (CRCC), Gilmor Engineering

Nigeria Ltd., and Adkan Services Limited. Others include First Aries Crude Oil Limited, System Properties Development Consortium Limited, Edimo Group, Ridley Group, Afri-International Projects & Consulting Limited, Hongye Group, Rosehill Group, Nimec Investment Company Limited and Balmus International Limited.

A document dated September 28, 2012 and signed by Coordinator, Abuja Infrastructure Investment Centre (AIIC), Mr. Faruk Sani, directed the pre-qualified companies to “give specific and express instructions to the bank to monitor, inspect and take records of the account at any time without any recourse

to the Project Account holders.”

According to Sani, a Technical Committee has been constituted to closely work with representatives of the firms to produce the following: survey plan, topography & contour maps; detailed site land use and layout; engineering design; demographic reports for resettlement & compensation and any other technical task critical to commencement of work.

The firms were directed to forward to the AIIC the list of their representatives for the technical discussion after opening a project account with N350 million.

Vanguard, MONDAY, OCTOBER 15, 2012 — 33

Housing Finance

Nigeria’s housing deficit: Imperatives of social housing

BY ADEKUNLE OYINLOYE

N

igeria has a chronic housing deficit estimated to be about 17 million housing units. The country currently has a population of close to 170 million people, with over 40 percent living in the cities.

Urbanisation has also been growing at over 5 percent per annum on a constant basis over the last 15 years, which has increased the housing needs in urban centers and cities by about 400,000 houses on an annual basis. The aggregation of these simple statistics explains the current demand, whilst failure to implement practical and sustainable solutions explains the ensuing housing deficit.

Housing is recognised as the most important basic human need after food.

Hence, it forms part of government’s responsibility to provide the enabling environment to ensure sustainable housing provision. The Nigerian

housing sector is bedeviled by a complex web of problems: high proportion of existing stock of poor quality houses; under supply; low capacity to sustain effective housing delivery; and poor policy implementation strategies.

The housing situation is compounded by inadequate infrastructure (electricity, water roads and drainage etc.); low industrial capacity; and the aforementioned high rate of urbanisation. The macro-economic environment characterised by high unemployment, high interest rate, weak private sector participation in the economy, and low purchasing power have all created challenges for sustainable investment in the housing sector. Other factors affecting the sector are a cumbersome land tenure system, absence of a robust mortgage system, and high import content. This situation has manifested in congestions and poor living conditions amongst other negative

’

There is a clear consensus that the extent of financing required to bridge the country’s housing deficit surpasses the supply of capital available from government

externalities in most settlements.

So, what are the solutions?

Any viable solution to the housing deficit challenge must: Be supported by appropriate and enabling government legislation and policies; Give rise to construction of quality living environments; Be responsive and specific to the local demand and needs; Be a vehicle for stimulating employment in the productive industries; Promote best practices and standards in relation to design, delivery and management; Promote housing for a range of income groups.

The thinking in some quarters that “Social Housing” is for poor and the poor alone is a fallacy. In the UK, vital

,

professionals or “key workers” such as teachers, police officers and nurses are mass beneficiaries of Social Housing Programs that enable them to afford quality accommodation near their places of work in cities, as opposed to being forced to live in suburban areas requiring long hours of commuting.

N

eedless to say, such arrangement speaks to household income levels directly!

The role of government in establishing workable solutions cannot be overstated. The initiatives of government since the 1970’s to increase the stock of houses all over the country have achieved little to no success.

Current government policies have favoured private sector initiatives as the driving force in housing provision.

However, this has recorded limited success due mainly to low technical and financial capacities, poor business ethics, and a fragmented market made up of too many minor players. The conclusion of the Report of the Presidential Committee on Urban Development and Housing is that “as at the beginning of 1999, housing development had been so neglected by successive governments who for many years did not regard housing as a priority and who typically made no annual budgetary provision for housing that to all intents and purposes, a ’No-to-housing’ situation existed in Nigeria, the result being that about 60 percent of Nigerians can be said to be houseless persons”.

34 — Vanguard, MONDAY, OCTOBER 15, 2012

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Vanguard, MONDAY, OCTOBER 15, 2012 — 35

People in Business

BY EBELE ORAKPO

M

r. Pelumi Salas Aribisala is the Group Managing Director of Ogunmod Farms located in Ile-Ogbo, Osun State and 100-plot farm in Ibadan, Oyo State. The BSc. Microbiology graduate from the Obafemi Awolowo University, Ile-Ife, in this chat with Financial Vanguard, said although he is a microbiologist by profession, but farming is his passion so he is a farmer by calling.

Aribisala who prefers to be called a farmer rather than an agriculturist because of the desire to identify with the people, noted that Nigeria can generate over 50 per cent of her budget from agriculture within a space of five - ten years, if the government and people are serious. Excerpts:

Motivation: According to Mr. Pelumi Aribisala who manages a 300acre farmland, what really made him go into farming was the dream of making Africa self-sufficient in food production to put the lie to the impression created by western media that the African continent and its people are a hungry and deprived lot.

“What really motivated me into agriculture was the fact that I hate it when I watch CNN or BBC and they show us as hungry people. They make us look like we do not have anything whereas in Africa, we have both natural and human resources in abundance. In fact, the western world depends on Africa. As a result of that, I took it upon myself that I want to see a day that I will be able to say that from my farm, I am feeding Africa, at least once every week. That is my dream, my vision and my goal and I am really working towards that,” he said.

How it all started: Narrated Aribisala; “One thing I believe is that you always need a shoulder to stand on so that you can see far. At the same time, the shoulder may not be financial. I have a brother who owned about 10 acres of land on which he had planned to build a hospital and I asked him to let me use the land. Although he refused initially, he eventually released it to me.

I started with oil palm and today, I have about 30 acres covered with oil palm and the whole farm is about 300 acres.

It is still very small because my target is to have one million hectares of farmland. We have cassava, especially the yellow vitamin A bio-fortified variety from HarvestPlus, plantain, maize, vegetables etc. My idea of a farm is a

My target is 1m hectares of farmland - PELUMI ARIBISALA their cassava, watermelon, dug their fish pond. There is a medical doctor among them.

He was the first to dig his pond and started with about 2,000 fingerlings and now, we have about six of them that are into fish production. They will not do it the usual way, we are looking at bringing technology into everything we do.

"I have programmes/proposals and a lot of things that I have designed that if we have a serious government or serious organisation/group that will buy into it, within a space of about five – ten years, we can be generating more than half of the country’s budget from the programmes and they are firmly rooted in agriculture."

*Mr. Pelumi Aribisala....My investment strategy is this: Do not eat your profit, always plough it back.

’

I know what I can do to help a state generate more than they are getting from federal allocation; I know what I can do to help Nigeria be at the forefront of every facet of agriculture

complete farm, people call it integrated farming but I call it farmaculture whereby everything you do on the farm is useful on the farm. From your crop, you feed your animals and from the animals, you generate waste and you go into waste management.

"We produce biogas and we grow medicinal mushrooms on water hyacinth, rice straw, and sugarcane baggasse. We use every waste we can generate from the farm. We do crop production and animal husbandry. I started with snails, we also have grasscutters, a few cows and soon, we will go into fishery and piggery. We have quite a number of things; anything you can find on a farm, when you get to us, you will find it.”

Training: "I train people on everything I do. We trained some corps members during the orientation programme in Oyo and

,

My dream: "We are looking at acquiring another 300-500 hectares in Iseyin area. We want to ensure that food is out of the list of Nigeria's problems. Recently, at a three-day conference in Lagos, organised by the Commonwealth Youth Alliance for Leadership and Development in Africa, youths from all over Africa came together to discuss leadership and developmental issues in Africa. While there, I formed a group, 37 of us; and we will be working in synergy so that what I am doing in Nigeria, they also will be doing in their different countries. We exchange ideas and before you know it, we are feeding Africa. We don't have money but we have ideas and we know that there are organisations that have this money and want to use it for agriculture. It is not just ideas on paper; ideas that have been working on the

Ekiti states. Those in Ekiti have started their mushroom cultivation. I also trained them on waste management and they are doing fine. Those in Oyo State were trained on agriculture, waste management and other agro-allied related areas. We have about 30 corps members from the NYSC farm in Iseyin that have decided to go into agriculture. " They are financing it themselves but we are facilitating some things for them like getting tractor from Oyo State Ministry of Agriculture free of charge. They only fuel it.

We want to use them as a model. They *Vitamin A biofortified cassava have planted

field. I call it agricultural revolution and environmental stewardship. I tell people I am an agricultural revolutionist and an environmental steward,” he said.

Initial capital: Apart from the 10 acres he got from his brother, Aribisala said he was able to build on that because he believes in ploughing back his profit into the business. “My investment strategy is this: Do not eat your profit, always plough it back. It is a geometric way of growing capital. I also got some money from family and friends, those that really believed in what I was doing and they believe I could do better. I was able to put all these together so any land I see, I buy and because of my relationship with the farmers and the villagers, I did not really have to have the cash for the land. All I needed to do was show them what I wanted to do on the land.

Once I show interest on a piece of land, I give them a business idea. ‘I’m going to work on this land for X number of years; this is the little money I have which I generated from my farm.’ Then I pay them a little, we sign the papers which they keep with their lawyer. Then in about one year or so, I am able to pay them fully.”

Regretting the average Nigerian's impatience, he said farming needs patience. ”Youths nowadays are generally lazy and that is why I go from place to place, using my own story as an example to inspire them. I have never received any grant or loan from government. If they bring it, I have what I will use it for.

Even if I am given billions of naira today, I already have programmes for the money. I know what I can do to help a state generate more than they are getting from the federal allocation. I know what I can do to help Nigeria be at the forefront of every facet of agriculture. So money is not the issue in agriculture because you may have money and still not succeed.

Government can address unemployment and food insecurity through agriculture and waste management."

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36 — Vanguard, MONDAY, OCTOBER 15, 2012

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Vanguard, MONDAY, OCTOBER 15, 2012 — 37

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38 — Vanguard, MONDAY, OCTOBER 15, 2012

Appointments & Promotions vicahiyoung@yahoo.com 08033348923 BRIEF Christ’s school alumni honours Kolade, Oyebode, others

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HE alumni association of one of the oldest schools in Nigeria, Christ’s School Ado-Ekiti, has used the 2012 Home coming to honour some of the old students who have done the global alumni body proud in their distinguished career within and outside Nigeria.

In the statement by the Chairman of the Homecoming Planning Committee, Mr Sanya Haastrup, this year Homecoming was hosted by UK Chapter of Christ’s School Alumni Association under the leadership of Mrs Adenike Adetiloye Babatola.

Homecoming is an initiative of the Platinum Club of Christ’s School old students.

The annual event provides an avenue for all ranks of alums the opportunity of reunion at their alma mater premises.

The President of UK Alumni Chapter, Mrs A. A. Babatola at a meeting with the Lagos Chapter representatives led

by Mr Yemi Akeju, stated that Dr Christopher Kolade, onetime CEO of Cadbury Plc and former Ambassador to the United Kingdom was honored at the Reunion Banquet held in Ado-Ekiti on Saturday October 12th 2012.

Other old students of Christ’s School who made this year recognition list of the global alumni body are Chief Fola Alade, the renowned architect; Prof Olufemi Oyebode of the University of Birmingham and the Chief Examiner, Royal College of Psychiatrists from 2002 to 2005; and Mr. Bisi Olawole onetime President of Christ’s School Alumni Association of North America, an Atlanta USA based ICT professional.

This year Home coming was rounded-off with a thanksgiving service at the School’s Chapel on Sunday October 13th 2012 at 9 am.

"It was pleasant seeing fellow old students at the 'Homecoming of Consolidation'', which afforded us an opportunity to deliberate on ways to sustain the lasting values of the School which had kept the heritage of the school alive till date," the statement by the group stated

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Adereti now Yellow Brick’s creative director

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ELLOWBrick Road, formerly ZK Advertising, has appointed Mr Temitayo Adereti as its creative director.

The agency made the announcement as part of its reorganisation strategy, since it re-branded at the beginning of the year.

Following this appointment, Nnenna Onyewuchi, who held the position would now focus on heading the strategy unit.

Speaking, Kaliko Olowole, Managing Director of Yellow Brick Road, said “It has been a long and meticulous search to find someone befitting of the role. Not only were we looking for someone with the right credentials who could drive home what we stand for as a creative agency, it was also important that we found somebody who personifies the culture of the Agency. We are

happy to announce that after much deliberation, we are convinced that Adereti is the man who deserves the keys to our trophy cabinet.”

Adereti began his creative career at SO&U Saatchi and was until joining Yellow Brick Road, Deputy Creative Director at TBWA. His career in advertising saw him worked on some of the nation’s biggest brands such as MTN, GTBank. Indomie and Stanbic IBTC. Commenting on his new appointment, the new creative director said, “Creativity is the simplest, cheapest and most effective way for companies to remain relevant in these trying times

of information clutter and unstable economies. The future belongs to any company brave enough to embrace the principles of doing things differently by choosing solutions that are ideas-driven with high impact. At Yellow Brick Road, we are dedicated to helping such a company not only grow financially, but also grow in the hearts of its consumers.”

Yellow Brick Road is a communications solutions agency.

The company started operations in Nigeria as ZK Advertising in 2006, and rebranded to Yellow Brick Road at the beginning of the year.

•Adereti

Etisalat MD chairs 2012 LAIF Awards

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HE Board of the Association of Advertising Agencies of Nigeria, AAAN, has chosen the Chief Executive Officer, CEO, of Etisalat, Mr. Steve Evans, to chair year 2012 Lagos Idea Festival, LAIF, award.

The theme of the award which comes up on November 3, in Lagos, is The best of LAIF. LAIF Awards was instituted in year 2006 by the AAAN with the aim of recognizing, rewarding and fostering creative excellence in marketing communications.

LAIF Awards has c o n t i n u o u s l y promoted Nigeria’s creative potentials in the international circle as well as recognized outstanding creativity and created an avenue for the celebration of world class ideas.

One of the newly introduced categories is the Young LAIFERS Award.

The award is aimed at promoting excellence in brand strategy development as well as encouraging craftsmanship in young practitioners.

Participants of this category are young practitioners of less than 30 years of age, in a recognized advertising organization.

The President of the Association and the outgoing Chairman of LAIF Management Board, Mrs. Bunmi Oke, noted that the LAIF Awards was the most credible creative rating in the Nigerian creative industry.

*From left: Mr Babatunde Savage, Chairman, Guinness Nigeria PLC; Mr Seni Adetu, MD/ CEO and Mr Bismack Rewane, Non-Executive Director during the Guinness Nigeria PLC Shareholders' forum held in Lagos. Photo by Lamidi Bamidele

PENGASSAN PPMC branch gets new officers

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IPELINE and Products Marketing Company Limited, PPMC, branch of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has elected new leaders to lead the affairs of the branch for the next three years.

All the elected officers were returned unopposed by the delegates at the conference.

The election, which took place during the private session of the branch’s 3rd Triennial Delegates Conference at Abeokuta, Ogun State, saw Comrade Saheed Olufemi Odesanya elected as the Branch Chairman, while Comrade Essien Markson became the Vice Chairman.

Comrade Odesanya succeeded Comrade Sunday Sadiku as Chairman of the

Branch Executive Council (BEC).

Comrade Andrew Atikpo emerged Secretary and Comrade Sanni Mohammed was elected Assistant Secretary, while Comrades Oscar Elias, Saleh Abimaje, Ifeanyi Nwigwe Simon Onovae, and Henry Atsiangbe became Treasurer, Industrial Relations Officer (IRO), Financial Secretary, Publicity Secretary and Auditor respectively.

Comrade Helen Eke was also elected Chairperson of Women-in-PENGASSAN to represent the interests of female senior staff in the branch.

In his acceptance speech after the election Comrade Odesanya, who thanked the delegates for the confidence they had in him, promised to

make team spirit his watchword by carrying all members along in the affairs of the branch.

He said that the new executive council will continue to build on the achievements of the past executive council.

Speaking, PENGASSAN President, Comrade Babatunde Ogun, charged the elected officers to show minimum quality of commitment to serve their members fairly and without prejudice and for greater members’ interest.

He urged them to seek the most realistic strategies in dealing with issues, while calling on collaboration between labour and management to engender growth in the company.

Vanguard, MONDAY, OCTOBER 15, 2012 — 39

Advertising, Media & Marketing

*From Left; Platinum Award Winner Member, Enugu State House of Assembly, Hon. Sir, Ugwueze Matthew;Managing Director/CEO, Intercontinental Distillers Ltd,. Chief Patrick Anegbe and company’s AGM, Marketing and Sales, Mr. Bayo Oke, at the Distributors’ Award Night ceremony of (IDL), held in Lagos

IDL making distributors’ reward a policy Stories by PRINCEWILL EKWUJURU

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t has become a policy enshrined in the books of Intercontinental Distillers Limited to reward its distributors every year. The gathering at this year ’s forum looked like a town hall meeting. Every one was expectant, the atmosphere was electrifying, one would have thought it was a political gathering, but no, it was the annual IDL distributors' forum, where distributors are categorized in terms of their sales volume and growth in the reviewed year and rewarded accordingly.

This year ’s distributors forum tagged; 2011 Distributors Award ceremony saw the distributors cart home different prizes which ranged from gift items to cash prizes for different categories of distributors who were rewarded with 22 LCD television sets, 22 single door refrigerators, two 6.1kv generators sets and two trucks for the highest in sales turnover.

The interesting thing about the reward system gift of cash prizes from N200,000 and above is to shore up the the distributors' purchasing power in the next dispensation, which the company promised would be moved around states.

Just like the Managing Director of IDL, Mr. Patrick Anegbe had promised that the company will continue to reward hard work and loyalty of its distributors. “The C M Y K

company will continue to do everything possible to assist them in growing their business, whilst the company will remain innovative in producing first choice drinks," he enthused.

The Managing Director who said the management of the company is aware of the growing demand for its products in spite of challenges in the industry and the need to meet ever growing expectations of its customers

in terms of quality and quantity. “The company had to embark on capacity building by hugely investing on factory expansion.” He said.

The Managing Director who said the company is spending about N100million in the 2011 financial year distributors forum, also warned its distributors on sale of fake products.

Anegbe who said further that the company is aware of the challenges posed by fakers of some of its products pointed out that the company is doing everything possible to stem

the trend, while assuring the distributors that measures are being put in place to checkmate the menace.

His words, “I want to assure you that these measures have started yielding positive result. What we need from you as our distributors is your unflinching support and loyalty to our company by ensuring that you are not involved in selling of fake products.” He however warned “it’s a criminal offense for anyone to sell fake products of any kind. We will continue to monitor the activities of our distributors and will not hesitate to withdraw the distributorship and prosecute any distributor found in possession of fake products.”

The highpoint of reward ceremony was the star prize of a mini truck won by Hon. Ugwueze Elochukwu Martin, who is presently in the Enugu State House Assembly.

He said as a public officer, he has handed over the business to his wife.

On the truck won, Igwueze said the truck will aid him in effective distribution of his goods.

Also speaking, Juliet Eze, representing Emma Obata & Sons winner of the second truck, expressed happiness and said its not easy to achieve a feat like winning a star prize in a company that is filled with competition, “I am happy that God has brought the company this far.

This will help us reach our customers faster.”

APCON constitutes new committees to steer regulations in 2013

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tiffer regulation of advertising practice in Nigeria is eminent as the Advertising Practitioners Council of Nigeria, (APCON), constituted new committees that would champion the council’s plans to repositioning the industry come 2013. Recently at a reconstitution meeting of the committee by the council at APCON House, the chairman of APCON, Mr. ‘Lolu Akinwunmi inaugurated 44 members into six committees to drive the council to the level of best global standards.

According to Akinwunmi, following the dissolving of the committees on September 26, except the Advertising Standards Panel committee headed by Mr. Ade Akinde, the council has painstakingly selected the best brains representing various sectoral groups in APCON council.

“We looked at where we are, where we are going, what we have done so far and looking

at the future, we felt if we are to sustain the momentum, we need to look at ways of refreshing and re-strengthen

membership. I am happy to have very talented people to drive the regulation of advertising through these committees in this challenging period of advertising business.

NIMN charge professionals on sustainable business, value creation

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he National Institute of Marketing of Nigeria (NIMN) has called on its professionals to make use of their knowledge to achieve real business growth by imbibing strong marketing culture that would help create value and translate into economic growth.

The President of the institute, Lugard Aimiuwu, said this at the just ended NIMN 2012 international summit, in Lagos, where he affirmed that when real business growth is achieved, it would create business opportunities and attract international community’s into the country.

Aimiuwu noted that this in

turn will enhance productivity, create jobs and significantly improve citizen’s quality of life.

He however, submitted that for Nigeria to achieve real business growth in turbulent times and maintain its competitiveness in the global economy, there is need for national transformation.

According to him, what the country needed currently is for programmes and events that would catalyse the advancement of the country to be put in place.

He added that, “marketing profession is therefore, the logical partner in driving Nigeria’s strategic transformation.”

BRIEF New ad campaign for President Brut debuts

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n a bid to reposition President Brut, a premium Italian sparkling white wine from the stable of Brian Munro in the Nigerian market, a new advertising campaign dubbed ‘Only One President” has been unveiled.

According to the brand promoters, the campaign theme, “Only One President” expresses the brand’s top ‘Presidential’ positioning in the wine market category.

Speaking on the new advertising campaign, Mr. Paul Wilson, Managing Director of Brian Munro Limited said, this campaign is set to promote President Brut as a premium Italian Sparkling Wine of distinction, which pops and is good for every occasion.

President Brut is made from a selection of the finest grapes and has a rich and wellbalanced taste being a less expensive alternative to champagne. The Managing Director further revealed that the campaign is based on the brand’s excellent taste and its outstanding value for money.

President Brut comes in a 75cl bottle.

Enyi Odigbo bags Brand Personality crown

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ome October 23, 2012, Chairman of DDB Casers, Mr. Enyi Odigbo will be conferred with Brand personality Award for the year 2011, by Marketing Edge Publications. The award ceremony which is billed for Lagos is recognition of his achievements in the brand building business and for his contributions to the growth of creativity in advertising business in Nigeria.

Former Managing Director of Samsung Nigeria, Mr. Enang Idonrenyen will deliver a dinner talk on contemporary marketing issues at the event which already received the endorsement of major players in Nigeria’s corporate world.

Explaining the rationale for the choice of Odigbo for the award, Publisher and Chief Executive Officer, Marketing Edge Publications, Mr. John Ajayi, said the doggedness and incomparable but admirable entrepreneurial spirit demonstrated by Mr. Odigbo in championing the cause of advertising.

40 — Vanguard, MONDAY, OCTOBER 15, 2012 Adereti

0817 002 3569

Understatement of projected revenue in 2013 budget?

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n the light of the usual extended recess during the forthcoming Id el-Kabir and the Christmas/New Year celebrations, the Legislature may have, possibly less than two months within which to consider and approve the 2013 budget, which President Jonathan laid before the National Assembly last week.

Instructively, in successful economies elsewhere, budgets would traditionally be laid before parliament at least four months before the New Year, to ensure that minute details and implications of budget proposals would have been thoroughly assessed without the burden of time pressure. However, the National Assembly’s current insistence on full implementation of the 2012 budget before its approval of the 2013 projections may suggest that, as in the past, legislative endorsement may not come until sometime in the first quarter of 2013.

Incidentally, the proposal submitted by President Jonathan makes no apparent provision for the payment of controversial fuel subsidy; indeed, there is no indication that contrasting subsidy figures from critical government agencies on subsidy values have been resolved. In other words, in view of subsidy payments of over N2tn in 2012, we may assume that Mr. President

may have adroitly subsumed subsidy payments as a first line charge on the total revenue projection of N10.84tn in 2013.

Indeed, it is not clear how the Executive arrived at the

,

Service (FIRS), which reports suggest may actually surpass the N5tn threshold this year. Incidentally, FIRS confirmed actual revenue collection of about N4tn by third quarter of 2012; so, a

In any event, even if we accept President Jonathan’s total projected 2013 federal revenue of N10.84tn as fairly accurate, the component of N3.89tn total revenue available for the federal government budget would also seem to be a gross understatement.

projected total revenue figure of N10.84tn, as indications of revenue inflows from government income streams suggest that the 2013 revenue projections may be grossly understated. In the first place, oil revenue traditionally contributes over 80% of totally collected federal revenue each year; that is about N8.64 trillion of 2013 total projected revenue. In other words, other sources of internally generated revenue may account for the balance of about N2.2tn.

This relatively paltry figure would appear to be a contradiction of the vastly improved performance of the Federal Inland Revenue

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2013 projection of N5tn total revenue should be quite feasible. In addition, from available reports, the Customs Service revenue collection has also exceeded N400bn as at August 2012. This may suggest that all things being equal, we may also confidently expect up to N500bn revenue contribution from Customs Service in 2013.

In summary, therefore, total revenue projection for 2013 should be over N14tn, made up of N8.6tn (about $50bn) from crude oil sales, N5tn internally generated revenue and N500bn customs duties and levies.

Indeed, NNPC’s reports of

crude output often in excess of 2.5 million barrels with crude prices hovering at an average of $100 per barrel in spite of world economic downturn in 2012 may suggest that the above revenue projection of N8.6tn may not be an overstatement.

In any event, even if we accept President Jonathan’s total projected 2013 federal revenue of N10.84tn as fairly accurate, the component of N3.89tn total revenue available for the federal government budget would also seem to be a gross understatement. The constitutional revenue sharing formula of 52% for federal, 26% state and 22% local governments would suggest that federal allocations should be a minimum of about N5.5tn, instead of N3.89tn indicated in the 2013 budget statement.

Thus, in the event that total federal expenditure projection is only N4.92tn for 2013, we may, in fact, actually have a budget surplus of over N500bn instead of the apparent deficit of almost a trillion naira in Mr. President’s budget 2013 statement. In the light of the average cost of about 15% for such government borrowings, this would reduce the debt burden, and also reduce debt service charges by over N150bn!

Incidentally, the allocation of N591.76bn for debt service

accounts for over 12% of the 2013 expenditure budget, and remains the highest sectoral allocation well above the N426bn allocated for education, N279bn for health, and the paltry N81bn for rural development and agriculture (which presumably also includes provision for water resources).

P a r a d o x i c a l l y , government’s heavy borrowings have not brought a n y commendable improvement to the welfare of Nigerians; that notwithstanding, the commercial banks, who appear to be government’s favourite children, now post enviable profit figures, which, according to Aig Imokhuede, Managing Director of Access Bank, may exceed 10% of the compounded profit figures of all European banks this year.

In the light, however, of the apparent reluctance of the banks to provide low-cost funds to the real sector, Nigerians may wonder about the source of these huge bank profits. The answer to this, of course, is not farfetched; why, for example, would anyone expect banks to abandon the juicy yields of between 12 and 17% for government’s risk-free borrowings for the sake of the huge challenges of the real sector?

SAVE TH E NAIRA, SAVE NIGERIANS!!

Business Economy

Analysts forecast reduction in Nigeria’s inflation to 11.03%

BY NKIRUKA NNOROM

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espite the threatening effect of flooding that enveloped the country, analysts at FSDH Securities have projected a decline in inflation rate to 11.03 per cent from 11.70 per cent and 12.8 per cent in August and July respectively.

The analysts said that they arrived at the forecast based on the report that the Food and Agriculture Organization (FAO) Food Price Index (FFPI) for September 2012 released on October 04, 2012 showed that the Index averaged 216 points in September, up 1.4 per cent from August figure on account of a spike in the global prices of dairy products, meat products and cereals, but decline in the international prices of sugar C M Y K

and oils tempered the level of the rise in the Index for the month of September.

FSDH research said further analysis showed that the value of the Naira appreciated marginally against the US Dollar in the month of August by 0.01 per cent, in addition to the appreciation of 0.03 per cent in the month of July.

“Consequently, the appreciation in the value of the Naira in September 2012 lowered the pass-through effects of the prices of imported consumer goods in Nigeria between the two months under review,” it said.

FSDH Research also observed that an analysis of the consumer prices it monitored across the country in September showed the prices of beans increased by

about 100 percent while prices of rice increased marginally by about 0.25 per cent. It said: “The drastic rise in the prices of beans was due to the security challenges in Maiduguri, Borno State, where beans is majorly grown in the country. Prices of tubers dropped marginally while the prices of vegetables remained fairly stable. Also, prices of educational materials increased on account of the beginning of the new academic session.

“Going forward, the recent flood disaster in Kogi, Benue, Anambra, Edo, Delta, Ebonyi, Bayelsa, and Imo states which destroyed a lot of farmlands may lead to food shortage and cause prices of food to go up drastically to end the year, except the Federal Government releases food from its strategic reserves. The

affected items are: rice, maize, yam, cassava, fish, cattle and vegetables.

“FSDH Research is of the opinion that inflation rate

year-on-year in the month of September 2012 should moderate downward due to the effect of positive factors mentioned above.

Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Yemi Adeoye Oscarline Onwuemenyi Franklin Alli Michael Eboh Amaka Abayomi Ebele Orakpo Ifeyinwa Obi

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