Financial Vanguard

NOVEMBER 19, 2012

N2.9TRN PENSION ASSETS:

Investment guideline for review to accommodate infrastructural development ‌NECA seeks performance benchmark for PFAs

By VICTOR AHIUMA-YOUNG & ROSEMARY ONUOHA

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ational Pension Commission, PenCom has indicated intention to come up with proposals to amend the enabling Act of the new Contributory Pension Scheme (CPS) in response to growing calls for the investment of some part of the N2.9 trillion pension assets in infrastructure development. investi9gation by Financial Vanguard reveal that Commission is alreadying reviewing the investment guideline of the Pension Reform Act, 2004.

Meanwhile, employers in Nigeria, under the umbrella of the Nigeria Employers Consultative Association, NECA has called on the PenCom, to set up a performance benchmark for Pension Fund Administrators, PFAs, in managing contributors’ funds. At an interactive meeting between members and officials of the Commission over the planned review of the Pension Reform Act, PRA, 2004, in Lagos, members of NECA also demanded for the review of the provisions of the benefits due from the Group Life Insurance Policy to include a beneficiaries and indemnity clause; separation of death

in service benefits from Pension benefits.

On the transfer of unclaimed funds especially under the Nigeria Social Insurance Trust Fund, NSITF, scheme to the Central Bank of Nigeria (CBN) for management, NECA members advised that, since the money involved is a private sector fund, Trustfund Pensions Plc should create a dedicated account, which PenCom can exercise authority on, or manage in respect of unclaimed contributions from NSITF f u n d .

NECA members insisted that PFAs should handle all Pension functions in

Nigeria (be it public or private); there should be provision of sanctions for officials of the Commission found wanting in the discharge of their duries; And the Commission should define the roles and scope of assignment of its Agents and Consultants.

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ECA, on behalf of its members, sought guarantee from the Commission that the inputs of employers and other stakeholders would translate to reality and not a wasted effort. It also requested the Commission to document all inputs from

Continues on page 18 From right, Education Minister, Prof.

Ruqqayat Rufai; Governor Peter Obi of Anambra State; Chairman Visafone, Mr. Jim Ovia and the Chairman D a n g o t e Group, Alhaji Aliko Dangote discussing during the Economic Management Team Meeting chaired by President Goodluck Jonathan at the State House, Abuja. Photo by A b a y o m i Adeshida.

148.20

-0.80

2,478.00

-24.00

19.15

+0.11

108.78

+0.77

86.17

+0.72

CURRENCY BUYING CENTRAL DOLLAR STERLING EURO FRANC YEN CFA WAUA RENMINBI

RIYAL KRONA SDR

154.75 245.2942 197.492 163.9822 1.9067 0.2786 233.9555 24.825 41.2623 26.4729 236.1795

155.25 246.0868 198.1301 164.512 1.9129 0.2886 234.7114 24.9057 41.3956 26.5584 236.9426

SELLING 155.75 246.8793 198.7682 165.0419 1.919 0.2986 235.4673 24.9864 41.5289 26.644 237.7057

CBN Exchange rate as at 16/11/2012

18 — Vanguard, MONDAY, NOVEMBER 19, 2012

Cover Story Investment guideline for review to accommodate infrastructural development Stakeholders at the end of all consultations. This, they said, would be for the purpose of harmonization of opinion by a Committee that is representative of all relevant stakeholders. The Committee would be saddled with the responsibility of looking at the draft bill that would be produced by the Commission.

The plan review notwithstanding, PenCom has declared that pension fund will not be invested in wasteful ventures, stressing that every investment will be in accordance with the investment guideline indicating that pension fund will only be invested in authorised ventures with portfolio limits and performance benchmarks. The pension funds asset which has grown into a pool of long term investible funds for economic development stood at N2.94 trillion as at September 2012.

The fund is reported to be growing by at least 30 percent annually. lready, part of the fund had been invested into some sectors of the economy.

Investigation showed that about 12 per cent of the funds has been invested in shares, 61 per cent in Federal Government securities, four per cent in state government bonds, two percent in corporate debt securities while money market securities has 13 percent.

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Available data showed that Real estate has six per cent, unquoted securities has one per cent while open/close end fund as well as others have zero percent investment.

According to PenCom, the

regulation on investment of Pension fund assets was revised to expand the allowable investment outlets to include alternative asset classes such as Private Equity (PE) funds, infrastructure financing (Debt Instruments and Funds) as well as supranational bonds, amongst others.

However, the regulation is currently undergoing review for establishment of multiple funds; ethical fund even as guidelines on offshore investment is being worked out.

Analysis of sectoral contribution to the pension fund showed that public sector contribution was N811.77 billion from July 2004 to August 2012. The private sector on the other hand contributed N1.57 trillion, which represented about 55 per cent of assets of the total contributions. here are currently about 54,558 retirees from the public and private sectors under the CPS that have collected over N151.52 billion as lump sum and are collecting about N1.77 billion as monthly pension. The pension industry currently has established legal and institutional structures of 21 Pension Fund Administrators, PFAs, seven Closed Pension Fund Administrators, CPFAs, as well as four Pension Fund Custodians, PFCs. According to PenCom, Pension Transitional Arrangement Department (PTAD) consisting of the six FGN Pension offices has been established by law and is regulated and supervised by

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PenCom. About 21 state governments have adopted the CPS while 14 others are at various levels of enacting their CPS laws. According to Director General of PenCom, Mohammed Ahmad, acceptability and confidence in the CPS by the private sector and state governments is on the increase even as many employees in organisations that hitherto did not have pension schemes are now registered under the CPS. As a condition for investment in infrastructural projects, Pension Fund Operators, PenOp, are demanding for an irrevocable guarantee from the Federal Government that such projects cannot be changed.

Pension operators have said that if the Federal Government is serious about using some part of the pension fund to revamp the infrastructural deficit in the country, there is need for a tripartite partnership involving PenCom, Pension Fund Operators, PenOp, as well as the federal government. Chairman of PenOp, Mr. Dave Uduanu, who made this assertion, said that infrastructural projects must be guaranteed by government if PenOp will be involved. Uduanu said “Specifically, on infrastructural development, what we asked for is that it must be public private partnership projects and those projects must have a guarantee from the federal government.

Those are pre-conditions that must be met, before pension funds can be used for

Continued on page 19

Entrepreneurial Education Revolution: An Imperative for Sustainable Development in Nigeria: Part 1

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lbert Einstein once defined insanity as doing the same thing over and over and expecting different results, while the French classical author, Francois de la Rochefoucauld said ‘ the only thing constant in life is change’.

This paper stresses the importance of entrepreneurship education towards enhancing sustainable development in Nigeria. The problems facing the country ranging from high rate of poverty, youth and graduate unemployment; overdependence on foreign goods and technology; Low economic growth and development; among others. This paper therefore argues that entrepreneurship education will equip the students with the skills with which to be self-reliant.

The objectives and strategies for re-designing entrepreneurship education are also discussed. The paper also recommended that educational programmes at all levels of education should be made relevant to provide the youth the needed entrepreneurial skills. It is also recommended that the government should give adequate attention to entrepreneurial development in the country through the provision of good economic environment.

So it is on this premise I would like us to see the Nigerian educational system in light of current realities in the 21st century. A careful look of the current state of affairs in Nigeria reveals that we are in a 21st century economy with a 19th century education system. A system whereby much emphasis is still placed on the conventional classroom environment with much reverence for certificate for graduates who in most cases are trained to be job seekers as evidenced in present high It is also unemployment rate in the recommended land. However, we must accept the fact that times have that the changed and we must adjust government by transiting from the old should give styled era of Adam Smith inspired concept of the adequate ‘industrialized specialist’ attention to which has outlived its usefulness to a more entrepreneurial dynamic, resourceful and development I.C.T based model where in the country skills and creativity takes precedence.

Without through the deviating from the topic of my provision of speech which is good Entrepreneurial Education Revolution in Nigeria, I economic would like to briefly define environment. some of the concept in the topic.

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Continued from page 17

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Revenue Seminar: From left, Chairman, Revenue Mobilization and Fiscal Commission (RMAFC), Mr. Elias Mbam, Federal Commissioner, RMAFC, Mr. Nnamdi Ekweogwu and Representative of the Senate President, Senator Anthony Manzo, at a National Seminar on Non-Oil sector of the Nigerian Economy, yesterday, in Abuja. Photo: Gbemiga Olamikan.

WHO IS AN ENREPRENEUR?An entrepreneur is a person who is driven to establish a business to take advantage of the financial opportunities and personal fulfilment offered, by pursuing their own dreams and shaping their own destiny in local, national and global economies. I personally define an entrepreneur as anyone who can convert what he loves doing to a moneymaking venture.

Entrepreneurship on the other hand is said to be the process of planning, operating and assuming the risk of a business.

It has also been seen as a process of creating a unique value.

For the purpose of this speech, I would be limiting education to the activity of teaching about a particular subject.

Revolution on the other hand has been defined by The Macmillan English dictionary as a sudden or major change, especially in ideas or methods. A revolution signifies a drastic turn around, a new way of thinking and acting.

Vanguard, MONDAY, NOVEMBER 19, 2012 — 19

The blame games again in the oil sector B

lame games either in a family, corporate world or community is a sign of failure of leadership.

Leadership is about taking responsibility and action where necessary no matter who is involved. In situations where people are not ready to accept responsibility for their actions or inactions, they blame their failures on subordinates or opponents.

When the Minister of Petroleum Resources decided to invite Nuhu Ribadu to pry into the affairs of the oil sector, many assumed that something serious will come out of it. It presupposes that the government and the ministry had nothing to hide, hence the courage to invite Ribadu to chair the oil revenue verification committee.

Ordinarily, there is nothing the federal government and its agencies do not know about the high level of corruption in the oil sector.

The NNPC, DPR and the multinationals are all known to be neck deep in corruption and denying the government due revenue. To any serious minded Nigerian, knowing how things work here, appointing the committee in the first instance was an exercise in futility. The blame game going on now is pretence and the unwillingness of this government to act promptly and decisively on issues affecting the nation. Is the Presidency saying it is not aware that Nigeria sells its crude oil to oil merchants in the spot market as against the international practice of selling crude to refineries? Do they need a Ribadu to tell them

• NuhuRibadu this? Is government saying they are not aware that Nigeria does not know how much crude is produced, NNPC and DPR take what the multinational give to them as production data, and do we need a Ribadu to tell the nation that simple fact known to all? Are the oil thieves raving pipelines across the country ghost? Are they not known politicians in 'khaki' and 'agbada'? Why is this government pretending?

The debts that multinationals are owing the country, has the Nigeria Extractive Industry Initiative not been crying and sounding the alert? How has the government responded to it in the last three years? In the last two weeks, the government and Ribadu committee members have dragged the nation into the blame game portraying the state of hopelessness, lack of vision and direction of leaders in the country.

The Ribadu Committee was a mere riddle of the Nigerian people to say the least.

The committee as composed does not have the strength, knowledge, and insight to unravel the dept of the rot in the oil sector. It will require the expertise of a forensic accountant, a production engineer and meter reading expert to understand movement of crude from one terminal to another. That Ribadu was a police man did not equip him with the requisite knowledge to engage oil thieves at the terminals, NNPC, DPR and International oil companies and come out tops. The mere admission by Ribadu and Olasupo Sasore that some information included in the report were not verified and reconciled gives support to the position that the Committee members were not equipped to understand happenings in the oil sector. This fact is further supported by the position canvassed by some members of

the committee like Mr. Anthony George Ikoli (SAN) and Mr. Steve Oronsaye, a former Head of Service, who openly described the report as “fundamentally flawed” in findings, recommendations and procedure.

This clearly points to the fact that Ribadu may not have been deep, thorough and painstaking in this assignment. Ribadu and Sashore with their own hands destroyed what ever was good in the report when they wrote in the letter to Petroleum Minister, Diezani AllisonMadueke dated November 01, 2012 that, “The data used in this report was presented by various stakeholders who made submissions to the Task Force in the course of our assignment at various dates, which have been disclosed in relevant sections of the report.

“Due to the time frame of the assignment, some of the data used could not be independently verified and the task force recommends that the Government should conduct such necessary verifications and reconciliations.”

If some of the data in the report were those presented by operators in the industry without being independently verified by the committee, how such a report could help to solve the problem it was set out to look into beats common sense.

Besides some prominent members of the committee, Oronsaye and Anthony George-Ikoli (SAN) disowned the report citing procedural issues, unverified and unreconciled data amongst others. During the presentation of the report to President Jonathan,

Oransaye said, “I want to say to you Mr. President that the process that has been followed is flawed and the report that has just been submitted to the Honourable Minister is the immediate reaction to the President’s directive that the report be submitted. The last time this committee met was in early July when the draft report was to be considered and I raised certain pertinent issues. It was agreed and suggested and accepted at that meeting that a small group be put together to review, modify and return to the report drafting committee before presenting to the whole house”.

From the grapevine words are making the rounds that efforts were made to hush up the report and that attempts were made to falsify the content of the report which was rebuffed by Ribadu. It is clear that the Ministry of Petroleum Resources did not want the report to see the light of day and Ribadu played into the hands of those who are bent on continuing business as usual in the sector.

While Nigerians are here enjoying the blame game, others are out there looking for alternative to fossil oil. The United States, the major importer of Nigeria crude will overtake Saudi Arabia and Russia as the world’s top oil producer by 2017, the West’s energy agency said last week, predicting that Washington will come very close to achieving previously unthinkable energy selfsufficiency.

When this happens in five years time, I hope Nigerians will still be comfortable to engage in blame games.

Cover Cont.

Investment guideline for review to accommodate infrastructural development Continued from page 18 infrastructure. If those preconditions are not in place, the fund cannot be used for infrastructure. It is also in the PenCom guideline that the projects must be guaranteed by the federal government because we know that in this country, one government can give you a concession and another government could come and revoke it. We want an irrevocable guarantee from the federal government that these projects cannot be

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

If the federal government says it wants to do the road and would give it to a project manager who is reputable, who would employ a contractor, and the

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government says it wants to issue infrastructure bond of say N100 billion to finance the project, and we know that when the project is finished, there would be toll which would enable them collect the money, of course, pension funds can be deplored to such a project. Like what they did in Chile, they used pension fund to finance the national housing deficit, but it was through mortgage bonds that were issued and guaranteed by their government. Those bonds meant that pension funds put

money in a pool and people borrowed this money to build houses, particularly those that were contributors to the scheme, but there was a guarantee that the money would not be lost. Pension fund can invest in those kinds of projects.” ccording to Uduanu, the number one objective of PFAs is to ensure that when a contributor retires, there is money to finance his pension.

PenCom has at various times, came up with guidelines on how the pension fund should

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be invested. The first guideline that was issued was very conservative. It was only money market and bonds with some equities that benefitted from it. The guideline has been revised three times and isgoing through the fourth revision. The last revision included all sorts of instruments. There was inclusion of infrastructure, private equity, mortgage backed securities, real estate investment trust.

The

Continued on page 20

20 — Vanguard, MONDAY, NOVEMBER 19, 2012

Business & Economy

NASENI wants government patronage of solar panel products

BRIEFS Investment guideline for review to accommodate infrastructural development Continued from page 19 challenge we have is that in Nigeria, people do not care to read those guidelines before they make pronouncements.

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

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

Obviously, if we set out five or 10 percent of pension funds and do demonstration projects that people can say ‘this road was financed by pension funds’ that will be good. We need to stand back and remember that pension fund is not national savings. It belongs to individuals who need it most when they cannot afford to lose the money, when they are 60 years and above. So the first job of every PFA is the security of the pension funds.”

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or Managing Director of Stanbic IBTC Pensions Managers Limited, Mr. Demola Sogunle, a common challenge in Nigeria has been matching long term developmental goals with short term capital funding.

The pension funds provide an opportunity to match longterm projects with long-term funds, he said.

Sogunle, however, said that the fiduciary responsibility of all stakeholders must be met to ensure that everyone is better off in the long term.

“The work to be done now is setting up the institutional framework that ensures people’s pensions, 10 -30 – 40 years from now don’t get swallowed in projects. It is also important that fixed income securities, floated to finance long term projects such as infrastructure, are structured in such a way as to protect the contributors against inflation, which can erode the real returns on such instruments in the long term.”

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From left Former Child Singer and Programme Director, Tosin Jegede Foundation, Tosin Jegede; Executive Director, Nigerian Network of NGO’s (NNNGO), Oyebisi Babatunde Oluseyi; Chief Executive Officer, Gemstone Group, Fela Durotoye; Head, Business Market Segment, Etisalat Nigeria, Bidemi Ladipo and Project Coordinator, Enterprise Development Centre, Nkem Dosekun at the 3rd Social Sector Dialogue during the Global Entrepreneurship Week organised

by Enterprise Development Centre (EDC) of the Pan-African University and powered by National Partner, Etisalat Nigeria.

Banks to commence bio-metric capture for customers

By BABAJIDE KOMOLAFE AND ROSEMARY ONUOHA

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igerian banks under the auspices of the Bankers Committee will soon commence a biometric data capture exercise for all customers in the banking sector.

Managing Director of the Nigerian Deposit Insurance Corporation, NDIC, Mr. Umaru Ibrahim disclosed this at the just concluded seminar for finance journalists in Dutse, Jigawa state capital.

Ibrahim said that the banks are in arrangement to have such a system that will capture the data of all bank customers in the country.

He said that the national data system has not been forthcoming as such the banks have decided not to continue to wait for the purported national data system by the National Orientation Agency, but have decided to go ahead with their own data.

He said the banks are considering going into partnership with Pension Fund Operators, PFAs, because they have a similar system in the pension sector.

The banks, according to him, were advised to partner with the PFAs so as not to waste resources and because it will help the banking system.

Ibrahim said that an initiative to promote financial inclusion in nigeria is the cashless policy designed to bring low-cost, secure and convenient financial services to urban, semi-urban and rural areas across the country especially through the mobile payment services.

Ibrahim said that the Central Bank of Nigeria and the NDIC as Nigeria’s financial sector regulators, have an uphill task, improving financial inclusion

given the relatively low level of penetration of financial services in the country.

According to the world bank, Nigeria under-performs most of its sub-saharan African peers, with the widest disparity being in the category of percentage of adults who borrowed from a formal financial institution in the past 12 months. It is also reported that only 36 per cent of the adult population make formal use of financial services, Ibrahim stated.

he National Agency for Science and Engineering Infrastructure (NASENI) has called on the federal and state governments to patronise its solar products, saying that it has the capacity to manufacture and install the product.

The Acting Director General of the Agency, Dr. Mohamed Haruna, made the call in an interview with the News Agency of Nigeria (NAN) in Abuja. Haruna said that the agency would create a lot of jobs and businesses if supported, as solar manufacturing activities could create chains of other businesses.

He said it was sad that NASENI, which the country laboured hard to install and is now producing qualitative products of international standard, was yet to be fully patronised.

He decried the situation where government and Nigerians still go aboard to invite foreigners with huge resources for installation of solar panels when the agency has solar modules lying to be installed. “We have the capacity to do this sufficiently for Nigeria and even export it, if patronised. We have a lot of products in stock, probably individuals are buying one or two for street light but that is not adequate.

Comet Group’s subsidiary boosts cargo handling at RORO terminal

BY FRANKLIN ALLI

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IRST Star Logistics, a subsidiary of Comet Group of companies, has invested in 124 metric tonnes mobile Liebbher crane at the Roll-on-Roll –off (RORO) terminal in Lagos, saying it’s to boost container handling and bulk operations at the terminal.

Speaking during the unveiling of the machine, Barrister Musa Danjuma, Group Chairman, said the habour crane has a lifting capacity of 124 tonnes and radius range of 48 meters.

He maintained that the company has made massive improvement in the terminal’s cargo capacity for cargo retention and storage, adding that the addition of this giant crane is expected to greatly enhance container handling and bulk operations at the ever busy terminal.

According to him, the company embarked on these investments and improvement in line with federal government’s desire to make the country the cargo hub for West and Central Africa. He called on the ports authority to fast track the various road constructions around the port to ensure

seamless movement of goods, plying the port access roads.

Managing Director of Comet Group, Mr. Pier Luigi Carrodano, reiterated the company’s resolve to render first class service to satisfy the requirements of its numerous customers.

He observed that since the company took over the management of the terminal, there has been a tremendous increase in output. He stated that the new crane is mainly geared towards handling of containers, and would be more than sufficient to meet clients’ present and future need.

Vanguard, MONDAY, NOVEMBER 19, 2012 — 21

Business & Economy

Develop other sources of revenue generation, OPS tells LASG

BY NKIRUKA NNOROM

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he Organised Private Sector, OPS, in Lagos State have urged the state government to develop other means of generating revenue as their over reliance on the private sector for wealth creation is impacting severely on the sector.

The chairman, Apapa

chapter of Manufacturers Association of Nigeria, Mr. John Aluya, made the appeal while making a presentation in a forum, in Lagos.

Lamenting the heavy reliance on the private sector, he said, “Lagos State has remained a focal point of discourse in recent times on infrastructural renewal and pragmatic leadership.

However, this is coming with

a great cost to the private sector, especially the manufacturers as there is so much reliance on revenue generation from this sector.

“The government needs to look at ways of capturing the informal sector into its tax collection system as the cash cow has become lean and fast losing the fight of bouncing back.”

He posited that the

L-R:Managing Director and Chief Executive Officer, Lafarge Cement WAPCO Plc, Mr. Joe Hudson; representative of Managing Director, Ebony ‘D’ Great Enterprises, Ikorodu, Miss Funmi Oshibowale and Managing Director, Alhaji Abass Opaniran Nigeria Limited, Block Maker/Distributor Ajah area of Lagos, Alhaji Abass Opaniran during a media parley at the Company’s stand at the just concluded 2012 Lagos International Trade Fair, Tawafa Balewa Square (TBS), Lagos.

Lafarge excites block makers, construction firms with new products

By PROVIDENCE OBUH AND NAOMI UZOR

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afarge WAPCO Nigeria Plc has used opportunity of the just concluded Lagos International Trade Fair to excite block makers and construction firms with its nascent products. The new products are Elephant Supaset, Readymix and Powermax solutions for construction industry.

Mr. Joe Hudson, Managing Director CEO Lafarge Nigeria, who addressed the trade fair community, said the company is transforming from manufacturing to a solution provider. “What we have done is to work with our customers to understand their needs. We have been on one product for many years with excellent quality; we decided to move on with what the customers need. What we did

was to meet with some of our major customers like block makers and they said they need cement that is fast in setting, and we developed the “Supaset” which would sell itself because of the value it creates for customers.

It is not just about the product and name but about the value it creates for the block makers. “We have the Powermax, premium technical cement that is especially suitable for large projects, which will normally require the cement to be delivered in bulk to on-site silos and the Readymix solution, with a target of construction companies doing significant projects.

“As cement producers and solution provider for our customers, we want to participate in the amazing story of the Nigeria construction industry which is growing at an unprecedented

rate. “Things have changed enormously in the last few years, because there is no more the heavy reliance on cement importation. We are now having local facilities and the growth is very fast, so we have to keep up with the growth.” He said that the company which has been producing cement product for over five decades and supporting Nigeria with its famous Elephant cement brand is changing the dynamics even as Nigeria is changing and also trying to be part of the solution to help the construction sector in the country. On the challenges of the concrete solutions, the MD noted that the Readymix is all about logistics and quality, “for logistics, we face traffic challenges in certain centres in Nigeria. So we have to work on our distribution; logistics is really difficult, but I see the opportunities far outweigh the

challenge of transforming Nigeria economically lies on the organised private sector as the engine of growth, adding that government should therefore focus on creating enabling environment for manufacturing to thrive.

He stated that developing friendly environment for manufacturers was part of the objectives that informed the country’s economic reform policy in the last few years.

“As a solution, one must underscore the need for the design of a perspective plan that brings our vision and the common agenda to the fore and that which guides the development of MDAs’s sector plans and strategies for funding and implementation at all levels of government,” he said.

He remarked that the economic policy of the country which is aimed at effecting a fundamental transformation of the economy through reduction in government expenditure, re-invigoration of the private sector and growth of domestic products was achievable going by Goldman Sachs’ forecast that if current reforms are sustained, Nigeria would emerge the strongest economy in Africa, surpassing South Africa and Egypt.

He argued that the ability to mobilise financing for investments in infrastructure has been the difference between developed countries such as USA, Britain, France and those that are still developing.

He added that this has also been the critical success factor for economies like China and Brazil.

His words: “Given the similarities we shared with China and Brazil, ie resources endowments, population and strategic positioning, much is expected of Nigeria.

“All that is expected for both domestic and foreign investments in the ‘trigger’ areas is the design, and assiduous implementation of asset of coherent policies that would create an enabling environment for the flow of investment in the desired areas.

“This creation cannot be far from us with the kind of abundant natural and human resources that abound, it is unfortunate that our economic potentials have remained largely untapped, our resources badly managed tilldate,” he affirmed.

BRIEFS Diamond Bank commends removal of ATM charges

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iamond Bank PLC has described the decision of other commercial banks in Nigeria to remove the N100 ATM withdrawal fee as a welcome development. The bank further stated that such concessions would further strengthen the Central Bank’s Cashless Policy initiative.

The Bankers’ Committee at its meeting which held on Tuesday, 13 November 2012 in Abuja agreed that it shall henceforth discontinue the deduction of the N100 fee on inter-bank ATM withdrawals hence saving billions of naira for the Nigerian banking public monthly.

Commenting on the lifting of the ATM withdrawal fee by other commercial banks Head, Corporate Communications, Diamond Bank PLC, Mrs. Ayona Aguele-Trimnell stated: “We are glad that the Bankers’ Committee has decided to embrace this initiative which Diamond Bank spearheaded five months ago because we always believe that our customers’ interests should be put first.”

It will be recalled that in July 2012, Diamond Bank PLC announced the lifting of ATM withdrawal fees on transactions made at other banks’ ATMs nationwide, thus making it the first bank to offer its customers this unique service.

Till date, the bank’s customers have continued to freely use their Diamond debit cards on any other bank’s ATMs hence saving the N100 they would have paid for each transaction.

“At Diamond, we pride ourselves with continually evolving ways of exceeding customer expectation and the decision to suspend the ATM withdrawal charge on transactions carried out on other bank’s ATMs as far back as July this year is a clear demonstration of this. With the adoption of this initiative by the rest of Nigerian banks we are convinced that it would help to usher in a season of better customer service in the industry. This adoption of this initiative also puts reiterates that we must continually innovate in a bid to raise the bar in customer service delivery and we are convinced that Diamond shall continue to take the lead in this respect,” concludes Mrs. Trimnell.

22 — Vanguard, MONDAY, NOVEMBER 19, 2012

Banking & Finance BRIEF

New set of winners emerge in Ecobank Win Big promo

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nother set of winners have emerged in the Ecobank “Win Big” promo following the second draw that held in Port Harcourt with Mrs. Josephine Njideka Nwafor from Old Market Road, Onitsha winning the star prize of a brand new Nissan salon car.

Unlike the first draw which held in Lagos last month, all the winners emerged from the South East and South South Zones. The other winners include Dr. Ibadin Okoeguale Michael, a customer from Uselu Road in Benin and Nkamigbo Chiedozie Valentine of Factory Road Branch, Aba. Both won 2.5KVA Generators, while Ezeobiora Joseph (Obollo Afor) and Nwaobasi Mathew (Ezza Road) were winners of respective 2.5 KVA generators. Two Blackberry phones went to Ezera Raimond (Umuahia) and Nkereuwem Joseph (Okporo Road, Port Harcourt).

Speaking at the event, Ecobank Executive Director, Domestic Bank, Kingsley Aigbokhaevbo, who was represented by Funwa Akinmade, Head of Domestic Products encouraged Nigerians to open accounts with Ecobank and also enjoined existing customers to increase their deposits to the required monthly N20,000 and automatically qualify for a chance to win in the draws ahead as “This is a big opportunity to ‘Win Big’ “.

Akinmade disclosed that Ecobank has earmarked four monthly draws for the promo to appreciate customers and help them enjoy the benefits of maintaining a good savings culture, adding that, “Each draw takes us closer to the 1st prize; a Sports Utility Vehicle (SUV) to be won in the Grand Finale which comes up in December.” He reiterated that the promo is “Ecobank’s way of saying thank you to all her customers and stakeholders as well as ensure that Nigerians enjoy their rewards even before the end of the promo in December”.

Accordingly, Adekoya Bolanle Omotunde of the National Lottery Regulatory Commission, Abuja disclosed that the transparency of the draws as well as the elation in the voice of the winners as they received unexpected calls confirming them as winners is very inspiring. To her, “People should not let the opportunity offered in the Win Big promo to pass them by.”

She assured that the Commission is concerned that consumers reap the benefits of good investments.

From left: Mrs Bola Adesola, MD, Standard Chartered Bank, Nigeria; Mr Richard Meddings, Group Finance Director, Standard Chartered Bank; Chief Joseph Sanusi, Chairman and Mr Jegede Paul, Group Managing Director, Japaul Group at a Corporate dinner for the visiting Group Finance Director and clients of the bank in Lagos. Photo by Lamidi Bamidele.

FG decries poor bank lending to farmers

By CHINEDU IBEABUCHI

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he Federal Government has lamented low funding of the agricultural sector by banks in the country.

Delivering a keynote lecture at the Chartered Institute of Bankers of Nigeria 2012 Annual Lecture, Minister of A g r i c u l t u r e a n d Ru r a l Development, D r.

Akinwumi Adesina said banks need to take a proactive step to cost

effective initiatives.

He said banks ought to diversify their current agricultural portfolio to effectively meet the needs of the sector, adding that the current lending in agriculture is heavily skewed to agribusinesses, while smallholder farmers, commercial farmers and other small and medium size enterprises are unable to access affordable financing.

He lamented that for these

small holder farmers and SMEs and indeed all other actors in the sector, the critical issue is the extremely high interest rates.

He said, “The time has come for Nigeria to consider raising long term bonds to finance the agricultural sector. The rising domestic debt is certainly of concern. However, this should not be used to argue against agriculture bonds.

Many countries in the world are using the so called green

bonds to power their agriculture, including China and India.

“AMCON has over 3 trillion Naira in funds. Pension funds have billions of Naira looking for sound investments. As we modernize agriculture and raise profitability in the sector through well-coordinated agricultural value chains, AMCON and Pension funds can buy agricultural bonds to further diversify their portfolios and provide access to lower interest and long term financing for the sector.

Development Finance institutions can also finance long term bonds for agriculture.

“With changing weather patterns, we must now develop policies for protecting farmers from the impacts of climate change, especially droughts and floods. We must manage these risks. We need to scale up weather-index crop insurance schemes for farmers.

“Area-based flood insurance schemes must be put in place to ensure disaster payments to farmers and communities from floods and droughts that occur over vast areas and well beyond individual farmers.”

He noted that banks should do more than talking as they need to rethink their commitment to the real sector of the economy to increase collective wealth for the masses in the rural areas.

This will reduce unemployment and insecurity in the economy.

“We must build financial literary. The capacity to manage credit is as important as supply of credit, so risk sharing facilities should have technical assistance components for banks and borrowers.”

Nor thern go vts should ffacilit acilit at e es Northern govts acilitat ate esttablishment of MFBs — NDIC

BY BABAJIDE KOMOLAFE AND ROSEMARY ONUOHA

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he Nigerian Deposit Insurance Corporation, NDIC, has called on northern state governments to facilitate the establishment of microfinance banks (MFBs) in their region, saying that the region has the least number of MFBs in the country.

Managing Director, NDIC, Mr. Umaru Ibrahim, made this call while speaking at NDIC seminar organised for

financial correspondents and business editors in Dutse, Jigawa State, last week. He said North East and North West are lagging behind in terms of microfinance penetration, as they have only 32 MFBs, representing 3.68 per cent of the total number of MFBs nationwide.

“To enhance financial inclusion especially in Northern Nigeria, it is imperative for the governors of northern states to therefore encourage and promote the establishment of microfinance institutions in their respective

states”, he said While expressing displeasure on the uneven distribution of microfinance banks in the country, he said of the 869 MFBs in existence, 346 of them, equivalent to 40 per cent of micro banks are located in the South West geopolitical zone. He added that 162 MFBs are situated in the South East, while the North Central has 158. He said that North East and North West on their part has 63 MFBs and 32 MFBs respectively.

Of the total number of

provisional and final microfinance bank licences issued by the Central Bank of Nigeria(CBN), northern Nigeria, including Federal Capital Territory(FCT) had only 25 per cent.

Ibrahim said MFBs are globally recognised as veritable tools for financial inclusion as they play a meaningful role to ensure that rural dwellers as well as the economically active poor are engaged in economic activities through financial intermediation.

Vanguard, MONDAY, NOVEMBER 19, 2012 — 23

Banking & Finance

Nigeria moves to strengthen FDI drive, diversification of economy — Aganga Stories by PETER EGWUATU

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OLLOWING the outcomes of the ongoing reforms by the Federal Government, Nigeria would continue its quest to become the leading investment destination in Africa through strategic policies and diversification of the economy, Minister of Trade and Investment, Mr. Olusegun Aganga has said.

Aganga, who spoke at the FBN Capital Investor Conference, last weekend, said diversifying the economy would enable the nation consolidate its position as Africa’s leading investment destination with an FDI of $8.9 billion which represents 16 per cent of Africa’s total FDI of $55 billion in 2011.

Aganga who was represented by Dr. Joseph Odumodu, Director General, Standards Organisation of Nigeria (SON), said the government was committed to consolidating on the gains so far recorded by strengthening the one-stop investment centre of the Nigeria Investment Promotion Commission. “Our target is to achieve a 48-hr response for all investment linked enquiries,” he said.

Attributing the FDI growth to the growing investor confidence, Aganga noted that the creation of the Trade and Investment ministry by President Goodluck Jonathan had impacted on the country’s economic growth through its strategic trade and investment policies and programmes.

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ommending FBN Capital for organising the conference, the minister said the nation had the potential to sustain its drive towards emerging as one of the world’s leading economies given the continuous cooperation of all stakeholders.

He said the government would step up activities geared towards promoting investment opportunities in Power, Food, Education, and Transportation sectors, adding that the administration would also move to stimulate investment in other sectors of the economy through diversification and stimulation of investment in the oil and gas downstream sector.

Flagging off the two-day

conference at the Federal Palace Hotel, Lagos, Managing Director of FBN Capital, Mr. Kayode Akinkugbe said this initiative was a necessary follow-up to the maiden edition last year.

The maiden edition of the

investor conference focused on Nigeria’s aspiration journey to becoming a recongnised emerging market.

“We aim to move the conversation on to considering the enabling factors and

practical actionable initiatives that can be taken to boost Nigerian growth. “Some of these micro economic areas are: capital market, agriculture/agro-allied, real estate, power and oil & gas” he said.

From left, Olorogun Dr. Sonny Kuku, President, Bank Directors Association of Nigeria(BDAN), Mallam Sanusi Lamido Sanusi, Governor, Central Bank of Nigeria (CBN) and Chief John Odeyemi, Chairman of the occassion at the 2012 Stakeholders' Forum of the Association held in Lagos on last week. Photo by Lamidi Bamidele.

IFRS changes will impact banking industry — Ernst & Young

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INANCIAL institutions reporting under International Financial Reporting Standards (IFRSs) continue to face a steady flow of new standards and interpretations, Ernst & Young has said.

The company also said that the volume of changes to IFRS will be substantial over the next three or four years and will affect the banking industry.

Ernst and Young in its review of the financial services in Africa at a conference held in Lagos last week stated that the IFRS changes range from some minor modifications to significant amendments of fundamental principles.

According to Ernst & Young, “These changes will affect many different areas of reporting financial information including the introduction of extensive disclosure requirements, the presentation of financial statements, and how particular elements are recognised and measured, such as financial instruments

and employee benefits.

“The changes will also likely impact the information systems and processes, as well as the regulatory capital of many banks. Furthermore, the changes may impact business decisions, such as which financial products to offer, the creation of joint arrangements or the structuring of particular transactions. The challenge for preparers is to gain an understanding of what lies ahead, evaluate the implications, consider the timing of adoption, and pan for timely implementation of the changes.

Speaking, Mr. Henry Egbiki , Regional Managing Partner, West Africa at Ernst & Young, said, “ The most significant impact of IFRS 10 is likely to be felt by the insurance and asset management arms of banks, entities with significant involvement in structured entities, and banks’ loan workout departments. Key income statement, balance sheet metrics, as well as compliance with regulatory requirements, may be affected if more or fewer

entities are consolidated.”

He further said, “New processes and controls will be required to gather the information for the substantial new disclosures related to structured entities required by IFRS 12.”

He revealed that the International Accounting Standard Board (IASB) has decided to retain the mandatory effective date of years commencing on/after 1 January 2013, with retroactive application and some limited relief.”

According to him “Early application is permitted, provided that an entity adopting IFRS 10 or IFRS 11 early also applies the requirements of IFRS 12, IAS 27 ( as revised in 2011) and IAS 28 (as revised in 2011) at the same time. In Europe, pursuant to an endorsement advice issued by EFRAG2 in August 2012, the European Commission is expected to defer the mandatory effective date of IFRS 10, IFRS 11 and IFRS 12 to1 January 2014 to allow entities more time for implementation.”

BRIEFS FCMB donates N25m to flood victims

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IRST City Monument Bank Plc (FCMB) has donated the sum of N25million towards alleviating the suffering of flood victims in five states across Nigeria.

The beneficiaries of the donation, which was made through the International Federation of the Red Cross and Red Crescent Societies, include victims of the flood disaster in Kogi, Delta, Plateau, Bayelsa and Rivers states. The bank’s gesture is meant for the procurement of relief materials by the Red Cross for distribution to the flood victims, who suffered devastating losses including lives, properties and farmlands.

In addition to the donation, FCMB staff members are providing volunteer services and working with the Nigerian Red Cross Society to provide logistics support where required across the affected states.

Making the donation to the Red Cross in Lagos on Wednesday, November 14, 2012, FCMB’s Executive Director, Olufemi Bakre, stated that the contribution was meant to complement the efforts of government in providing relief to victims of the flood and resettling them as soon as possible.

Access Bank rewards Early Savers customers

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CCESS Early Savers accountholders are set to reap the benefits of their patronage and loyalty as thousands of exclusively cobranded one-of-a-kind Dorathe-Explorer Lunch Boxes will be given to customers who reach and maintain a minimum balance of N50, 000.00 on their accounts for the 30-day period of the ongoing “Early Savers Bank to School Campaign” which commenced in the first week of November.

This is further to the launch of the “Access Early Savers Back to School Campaign” introduced to reward Early Savers Accountholders and inculcate savings culture in the Nigerian children. The introduction of Access Bank Early Savers Account has significantly transformed children financial product offering in Nigeria with inclusion of fun and excitement in the total offering for children.

24 — Vanguard, MONDAY, NOVEMBER 19, 2012

Coporate Finance BRIEF Honeywell posts N1.8bn half year PBT

BY PETER EGWUATU

H

oneywell Flour Mills Plc has announced its unaudited financial results for the six months ended September 30th, 2012, recording profit before tax of N1.8 billion. The result has been submitted to the Nigerian Stock Exchange (NSE).

The result, which is reported under the International Financial Reporting Standards (IFRS), showed a 17 percent increase in revenue from N18.68 billion to N21.93 billion between comparative periods in 2011 and 2012. Profit before Tax (PBT) rose to N1.79billion from N1.32billion recorded in the first half of the last financial year owing largely to the Company’s ability to contain costs whilst achieving increase in sales.

Commenting on the results, Honeywell Flour’s Chairman, Dr. Oba Otudeko, stated , “We have a highly experienced Board and a very professional management team who are all working hard to continuously grow the business. Despite the obvious challenges in our business environment, this half-year result reinforces the positive outlook for our Company’s full year results and the sustainability of its current growth momentum well into the foreseeable future.”

Also,total assets increased 32 percent, from N38.59 billion to N50.96 billion within the period under review. Property, plant and equipment assets grew 83 percent as the Company nears the commissioning date of its new ‘Twin Mills Facility’ encompassing state-of-the-art milling equipment with additional capacity of 1,000MT/day, three additional grains storage silos and handling equipment and automated warehousing facilities with high-tech inventory management systems.

These investments in production facilities are geared to meet current and medium term demand, extend the footprint of the Company’s well-loved brands and boost availability of its products across the country.

Nestle, Guinness loses depress NSE’s value by N101bn

By CHINEDU IBEABUCHI

D

ECLINE in share prices of highly capitalised stocks listed on the Nigeria Stock Exchange, NSE, namelyNestle Nigeria Plc and Guinness Nigeria Plc- resulted to N101.13 billion depreciation in the market capitalisation last week.

For the second week running, Nestle Nigeria Plc has led on the top losers’ chart, declining penultimate week by N37.67.

At the end of transaction last week, it lost N31.83 to close at N600.50 from N632.33 per share, while Guinness Nigeria

Oando posts N9.3bn PAT in third quarter

By PETER EGWUATU

O

ANDO Plc has an nounced unaudited results for the nine months period ended 30 September, 2012, with its turnover growing by 24 per cent to N487.8 billion compared to N392.3 billion in the corresponding period of 2011.

Gross Profit increased by three per cent to N50.7 billion compared to N49.1 billion in the corresponding period of 2011. Profit-After-Tax rose by six per cent to N9.3 billion compared to N8.8 billion in the corresponding period of 2011.

Commenting on the company’s performance, Mr. Wale Tinubu, Group Chief Executive, Oando Plc, said: “We are pleased to report our performance over the past nine months of this year 2012.

This period witnessed increased revenues and profitability due to our improved operations and recently commissioned investments.

“In the Upstream, the listing of OER on the TSX will provide a platform for raising funds to drive our aspiration for E&P growth through acquisitions and asset development. The Ebendo field drilling program has experienced an increase in gross production capacity to 4,000bopd, with the addition of 2,000bopd from the tie-in of the EB-4 well.

Plc shares dropped by N13.15 to close at N251.85 per share.

Other stocks in the top five losers include GlaxoSmithKline Plc, Julius Berger Plc and Cap Plc. Resultantly, the Market Capitalisation fell by N101.13 billion or 1.19 per cent to close at N8.413 trillion from N8.514 trillion it opened; while the AllShare Index, which opened the week at 26,718.30 closed at 26,400.94 thereby depreciating by 317.36 points or 1.19 per cent.

Analysis of the equity price movements indicated that twenty-three equities gained while forty- three equities re-

corded price declines and prices of one hundred and thirtytwo equities remained constant. When compared with the preceding week, thirty equities gained while thirty-nine equities recorded price declines and prices of one hundred and twenty nine remained constant.

Meanwhile, a turnover of 1.293 billion shares worth N9.414 billion in 19,825 deals was recorded in the week under review, in contrast to a total of 1.189 billion shares valued at N11.491 billion that exchanged hands in 22,277 deals in penultimate week.

The Financial Services sector (measured by turnover volume) accounted for 876.900

million shares valued at N5.328 billion traded in 11,454 deals. The Oil and Gas sector (measured by turnover volume) followed with 135.055 million shares valued at N186.919 million traded in 1,161 deals. The Consumer goods sector (measured by turnover volume) was third with 92.782 million shares valued at N3.119 billion traded in 3,850 deals. The top three sectors accounted for 1.105 billion shares valued at N8.634 billion traded in 16,465 deals, thus accounting for 85.42 per cent, 91.71 per cent and 83.05 per cent of the volume, value and number of deals respectively.

Vanguard, MONDAY, NOVEMBER 19, 2012 — 25

26 — Vanguard, MONDAY, NOVEMBER 19, 2012

Coporate Finance

Bonds: Sanction market makers for failing to lift market — Oluwo

By NKIRUKA NNOROM

A capital market operator has expressed concern over the inability of primary market dealers appointed in the bond market to fulfill their obligation, saying that the regulators should take step to sanction some of them for failing in their duty.

The operator, Mr. Wale Oluwo, who is also the Managing Director, Investment Banking, BGL Securities Limited, said that since the market makers were signed on to create balance in the system by maintaining firm bid and offer prices in some given securities, it behooves them to do just that.

He said that it was regrettable that up till now, none of the primary market d e a l e r s appointed over two years ago in the bond market has either been banned or suspended for reneging in their duty.

He said, “They signed a paper to say, ‘we are licensed as market makers and we will continue to make market’, that is to say, ‘we are committed to buy and sell no matter what happens’ but also the regulation has been violated and there has

been no sanction. The market maker has been taken out of the market and none of them has been banned for three or six months for not making market that they committed to make.

“The essence of market making is that anybody that wants to buy, you must sell to the person and anybody that wants to sell, you must buy. That is why it is Over-the-Counter, OTC, where they will call you on phone and ask for your quote and your quote must be a two-way quote – your offer and your bid

market makers in the equity market. How is it going to work?”

He noted, however, that those market makers might not want to continue to play their roles because they would not want to create a situation where they will give the twoway quote and investors start dumping on them.

“The market makers in the bonds market were making market before, but since this interest rate upward movement started by the CBN, it got to a point, a lot of them stopped making market. A lot of the long term bonds, like 20-year bonds, nobody is buying or selling them. “ W e l l , people want to sell, but nobody is buying. The 10-year bond, nobody is buying or selling it.

People are just concentrating at the lower end of the market; two-year bond, three-year bond, five year bond. That is the problem. So, for me, in the bonds market, we had market makers who were making market,” Oluwo stated.

According to him, when a scenario like this starts playing up, ‘the market has collapsed. ‘

A lot of the long term bonds, like 20-year bonds, nobody is buying or selling them.

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price- the price at which you will buy and the price at which you will sell.”

He expressed fear that even the latest ones appointed in the equity market might go the way of their counterparts in bonds market, saying, “Now, without success in the bonds market that we have operated for about two years, we are now trying to appoint

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From left Mrs Yetunde Akin-Taylor, Deputy Director of Education, Ministry of Women Affirs and Poverty Alleviation, Lagos State; Mrs Ndifreke Okwegbunam, Executive Director, United Way Nigeria; Mrs Joke Coker, Chairperson and Mrs Janet Butler, vice President, United Way Africa at the Community Conversation on Vocational Training in Nigeria by United Way Nigeria held in Lagos. Photo by Lamidi Bamidele.

Vanguard, MONDAY, NOVEMBER 19, 2012 — 27

28 — Vanguard, MONDAY, NOVEMBER 19, 2012

Interview

BY OMOH GABRIEL, BUSINESS EDITOR

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t the last IMF/World Bank Annual Meetings in Tokyo, debt sustainability took the center stage as financial egg heads from all over the world gathered to deliberate on the way out of the sovereign debt crisis currently crippling the Euro Zones. At the seminar on debt sustainability, Abraham Nwankwo, Director General, Nigeria’s Debt Management Office, DMO, was there and had a brief chat with some Nigeria journalist at the workshop.

Excerpts States have embarked on aggressive borrowing through the capital market.

Given that most of them have internally generated revenue (IGR) that are so low and as such depend on federal allocation and oil. Supposing something happens, how sustainable is the borrowing by the states?

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he issue of borrowing is global. Borrowing is for regions, countries both developed and undeveloped. It is for states, provinces and households. So first of all, let me make it clear that it is specifically wrong, politically and methodically to single out states and start talking about states borrowing or not borrowing. We have to say that whether as an individual, family, school, organisation, company or country, you have to borrow responsibly. So let me make it clear that there is nothing that makes borrowing by a state sinful in itself. Every economic agent should borrow responsibly.

In the case of Nigeria, of course states borrow within acceptable limits .There are rules and guidelines and states follow those rules and guidelines. First of all, no state in Nigeria can borrow from the capital market without following the process of borrowing. There are guidelines that apply to every government entity that wants to borrow from the capital market and those rules have been there and are still there and they are being enforced

by Security and Exchange Commission (SEC) through the Investment and Security Act as amended.

There are terms and conditions for any entity whether private or public that wants to borrow from the capital market. So, it is for SEC to ensure they monitor states or make sure that whoever wants to borrow comply with the various

FG, States and local govt must borrow responsibly specifications in the Investment and Security Act 2007.

Hence, the procedures, which private companies that wants to borrow from the capital market undergo is the same with that of the states in the hands of SEC. Secondly, in the case of states, because they are government entities and sub nationals, they have additional regulations and monitoring guiding them as contained in the Fiscal Responsibility law in the Debt Management Office Act, and based on the authority given to the DMO and the authority given to the Minister of Finance in the Fiscal

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that oil revenue is volatile and unstable. What this means is that, states that already have internal generated revenue now have a buffer. The rule has been made such that every state must depend not 100 per cent on oil revenue. This is to account for the volatility and vulnerability of oil revenue. So if you have internally generated revenue it is being neglected and considered as a backup. The second way to look at it is that every year DMO conducts a debt sustainability analysis and takes into account that oil revenue may drop to as low as $30 per barrel. It is on this basis that the DMO has an idea of the total debt owed by

So if you have internally generated revenue, it is being neglected and considered as a backup. The second way to look at it is that every year DMO conducts a debt sustainability analysis and takes into account that oil revenue may drop to as low as $30 per barrel

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Responsibility Act, states are also enforced to comply with additional requirements beyond what is already provided in the Investment and Security Act. So, linking states’ ability to service their debts with their Internally Generated Revenue (IGR) of course is the prudent thing to do and that is what is being done. That is why the guidelines allows no state to borrow in such a manner that its total debt service on a monthly basis is more than 40 per cent of its monthly allocation from Federal Allocation. What is taken into account is the fact that the money is essentially oil revenue. So, as a state, it is expected that your total debt service should not be more than 40 per cent of Federal allocation money.

This means that the idea of sustainability of oil revenue has already been factored in.

Everybody must realize that it has been taken into account

the country and looks at it and consider what could happen if oil revenue were to drop to as low as $30 per barrel.

This means the way we manage our debt or control it is such that the vulnerability or volatility of oil revenue is essentially taken care of. The second thing is beyond the figures - that is the value added. This is what I believe every country and states should be focusing on. What value do you generate in terms of productivity, growth and employment with the use of financial resources whether borrowed or not?

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rom the guidelines, I can say Nigeria’s method meet the best standard in the world, but in addition, over the past few years, effort is being made so that emphasis is not placed only on the statistics.

Emphasis should be on using resources effectively and efficiently so that you can use

it to generate maximum growth, employment and eradicate poverty.

When you look at the discussion going on at the IMF/World Bank meeting, you can discover that all over the world, countries are battling with issues of debt sustainability and the like, but you can say that Nigeria is relatively lucky because even before the global financial crisis started, Nigeria has been on path of reform since 2004.We continued on that path of reform up till the time that the global crisis set in and that is why despite the global crisis, the country has not been badly impacted like other parts of the world.

If Nigeria had not been on the path of reform in 2004, when the crisis set in 2008 up till about 2011, it means that with the turbulence in the oil market it is possible for us to now be experiencing the serious impact too. But go and look at the statistics, we will see that even despite the turbulence our growth still averaged about seven per cent. There are few countries in the world that did better than Nigeria in terms of growth and stability during this turbulent period. The country has been minimally volatile and vulnerable. It continues to maintain stability and growth.

What is the lesson here?

The lesson to take is that Nigeria is not isolated from the global turmoil but because it has continued to maintain a path of reform its economy is stable. What it means is that we should take advantage of the situation and continue with the ongoing structural reforms by intensifying the processes.

because Mitsubishi is producing and making sales it should not borrow. The economic fact is that for any country or business that is doing well it should be able do what can ensure its expansion and that includes borrowing. It would borrow to build more factories to give it a competitive edge and make it dominate the global market. That is the rule. In the history of the economy of the world, borrowing I must say has played a significant part. Developed countries such as US, Germany, Japan and China are not left out in the exercise as every economy is looking forward to expanding its business and that means it must seek for fund through borrowing. So we must not look at borrowing as an absolute thing but relative to something.

So is that why Nigeria is embarking on another borrowing come next year?

Nigeria is not borrowing next year. Borrowing is done on a medium term based on the developmental project to b e executed.

That i s why

Despite the period of growth and rising price of crude oil that the country is touted to be enjoying, why then is Nigeria still borrowing?

Can you tell me any country in the • Abraham Nwankwo, Director General, Nigeri world that does Management Office, DMO not borrow? It is like saying that

vtt y

ia’s Debt

Vanguard, MONDAY, NOVEMBER 19, 2012 — 29

Interview there is a budget to help decide how the available resources can be used to execute these projects. We should be praising the government for coming up with this medium term expenditure framework

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How sustainable is the cost of servicing the mounting external and internal debts?

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hen you talk of debt sustainability it has to do with solvency and liquidity.

In fact, that explains why we do debt sustainability analysis every year. It is the duty of the public including the media to get a copy of the report and see whether the solvency and liquidity ratios are okay or not. After looking at it we must ask ourselves this question; what is the relation between our total debt - both domestic and external, with our revenue generation? These two things would lead to liquidity ratio and answer these questions. Every year we do debt sustainability analysis, which includes solvency and liquidity ratios.

So, if we are not going to be able to service our debt then it means we won’t borrow.

Nigeria borrows at fixed rate and that makes it easy to service our debt. Once we go to the bond market, we borrow at fixed rate. So upfront, you know how much you are going to pay because it is fixed. You don’t borrow free of charge. Even for external loan where borrowing is done on concessional terms you still have to pay

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• Abraham Nwankwo, Director General, Nigeria’s Debt Management Office, DMO service charge and commitment fee, which is very low, but it is these combinations that make it possible to know if you can service your debt. The issue is, do we have the framework for managing our debt?

It appears the private sector is being crowded out as a result of government penchant for borrowing?

What do you mean by crowding out of the private sector? Crowding out means you have a market where private sector is borrowing and the government too is borrowing. Before now, in Nigeria, there was no bond market, it is the government that tried to develop the market. So there is no justification for accusing the government of crowding out the private sector when in actual fact the bond market was not in existence until the government started it. There was no way a three or 10 year loan could be gotten before now until the government created the bond market, which has made it possible to get a 20 year money from the market. It is wrong and mischievous to say that the government crowded out the private sector when in actual fact there was no bond market until the government developed it.

The Government is now retreating by reducing its borrowing from the market since the past three years if one looks at the statistics.

It seems that the objective for which the borrowing is done hasn’t been realised going by the fact that the projects are not visibly on ground?

We don’t have to make conclusions if we have not done our investigations on this. If your revenue is less than your expenditure then you have to borrow.

That is why there is a budget, but before the budget gets approved, stakeholders including the media and civil society organisations are called together to look at it. After then it goes to the National Assembly which considers the Appropriation bill before making it an Act. They would have looked into the

Before now, in Nigeria there was no bond market, it is the government that tried to develop the market. So there is no justification for accusing the government of crowding out the private sector when in actual fact the bond market was not in existence until the government started it

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budget to see the expenditure and the revenue before taking action on whether to approve or not. At the end of the day, why would anybody say there are no feasible projects if the budget contains the expenditure both capital and recurrent? And the same budget tells you the difference between the two to decide how much to be borrowed. You can’t come back and say you don’t know where the bond money goes to.

There is always a contention between the National Assembly and the Executive on the execution of projects for which capital votes were made. So, why do we have 50 per cent implementation of capital budget every year?

I know you are aware that in certain years, the money meant for capital expenditures were returned.

Every year, we know that every penny allocated for capital expenditures, which was not spent is returned to the treasury. If you are not able to spend, you should be able to account for what you did not spend. Secondly, on the issue of capital budget implementation, Nigeria needs to improve on it and that is why measures are

being put in place to make this possible. Last year for instance, I am aware that all Ministries, Departments and Agencies (MDAs) were tasked to start execution of projects in advance so as to make a significant per cent implementation of the budget feasible.

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hey were told not to wait until the funds were available. This is to encourage them to make preparations so that when the fund is made available, they can commence the implementation straight off.

There are corrective measures that have been put in place to ensure that there is higher implementation of the budget.

Secondly, we must realise that the budgetary process is not completed until some months into the year sometimes up till April. So when you are talking of budget implementation in Nigeria, it is done for nine months and not 12 months as expected.

That is why this year government is committed to working with the National Assembly to ensure the process is completed on time so that the implementation can start January of the New Year.

30 —Vanguard, MONDAY, NOVEMBER 19, 2012

Homes, Housing Finance BRIEFS Ogun allocates 12% of 2013 budget to housing

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he Ogun State Ministry of Housing’s 12 per cent share of the N215bn in the proposed budget for 2013 will be channelled into the provision of affordable housing schemes that will be of immediate benefit to the people.

Governor Ibikunle Amosun was quoted in a statement on Friday to have given the assurance at a two-day budget breakdown session held at the Oba’s complex, Oke-Mosan, Abeokuta.

According to him, the housing schemes will cut across the high, medium and low income cadres.

He said that 70 per cent of the proposed Government City along Oke-Mosan and Oba axis would be devoted to housing projects, with the provision of necessary infrastructure to make it attractive; while existing estates would get facelift with improved infrastructure.

LASPOTECH empowers building artisans

BY MIKE EFFIONG

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he Lagos State Polytechnic and a Non Governmental Organisation (NGO), Shelter Watch Initiative have empowered artisans with skills in building and property development.

The artisans are the first set of graduates from LASPOTECH’s skill acquisition programme for stakeholders in the building sector.

Stressing the importance of training the artisans, Director-General, Standards Organisation of Nigeria (SON), Dr. Joseph Odumodu who was represented by Mrs. Cynthia Ifegwu, said the combination of substandard building materials and artisans without necessary skills was an invitation to disaster.

According to him, while SON is doing its best to ensure that both locallyproduced and imported building materials meet the required standards through constant monitoring, it behoves on all professional bodies to collaborate to ensure

L-R : Nnamdi Okonkwo, Executive Director, South South Directorate, Fidelity Bank Plc; Ngozi Obidike, Head, Lagos Office, Consumer Protection Commission; Reginald Ihejiahi, MD/CEO, Fidelity Bank Plc; Prince E.O. Jeminiwa, Ag. Director, Regulation & Monitoring, National Lottery Regulatory Commission; Obioha Obiagwu, GM, Lagos Bank, Fidelity Bank Plc, and Obi Iregbu, Asst. Director/Coordinator, Lagos Zonal Office, National Lottery Regulatory Commission at the Fidelity 25th Anniversary Cars and Cash Savings Promo mega draw.

FG defends high cost of housing in Nigeria

By MIKE EFFIONG

T

he Federal Government has defended property developers over the high cost of housing in Nigeria.

Ms Ama Pepple, Minister of Land, Housing and Urban Development, stated that housing could not come cheap as a result of high cost of land acquisition.

She said the high cost of housing in the country was due to huge funds that were involved in land purchase.

She spoke at the official commissioning of 106 housing units built by Crown Realities Plc. The cost of the unit housing at the estate, christened Crown Court, ranges from N52.5 milion to N85 million, depending on the type.

Pepple said “I know they paid N300 million for land in the estate so we would not be surprised if the prices of the unit of house are high.”

She defended the right of every individual in the country to own any house provided such individual could afford it.

“Though we are pressing for the low income earners, we will not stop people building houses for the higher income group. We will continue to press for low income earners. Those who also buy expensive houses are Nigerians, if they can afford the money, I cannot stop them from buying houses.”

The minister re-emphasised the administration's focus on housing sector as contained

in the Vision 20:2020 programme and the transformation agenda.

Mr. Dan Ozu, who is the executive officer of Crown Realities Plc, blamed government for unwholesome practices in land allocation, a situation he linked with the high cost of housing. He said

that the set of building in the estate was not built for low income earners. Noting that there was no way housing could be cheap in the country in view of the high cost of land.

He said, “There are three layers in housing delivery sector, the low, the middle

and the high income earners, all over the world. The highest population is the low income people and if you want to make houses for them, as it is being done across the world, you need some kind of subsidy.

“This may not be in form of money; it could be in form of giving lands. The subsidy can also come in from building of access roads and provision of portable water if you have those things you could now work out how to manage other cost to bring the cost of building you are producing down.”

He however, regretted that the county had not gotten it right in the area of coming up with desirable housing policy, stressing that the only opportunity offered through National Housing Policy (NHP) scheme was burgled and tainted by structural defect.

“We have not got it right in the housing sector in the country. The opportunity we missed especially is the National Housing Fund.

What I had advocated at that time was that the NHF should not have banking relationship between government and individual it should have been bankers with individual, Primary Mortgage Institutions(PMI) would have been able to chose and relate with their customers in a mutually beneficial manner,” he said.

Property firm allocates papers to Cedar Gardens’ subscribers

By YINKA KOLAWOLE

P

entagon Real Estate Investment Limited has issued allocation papers to the first batch of subscribers to its Cedar Gardens estate project.

Addressing subscribers at the allocation ceremony at its head office in Lagos, last week, Managing Director of Pentagon, Pastor Emeka Okoye, noted that Cedar Garden is conceived as a model gated community, along the Seme border-town axis, sitting at Igbesa town, along Atan Road, near Agbara, Ogun State.

According to him, it is strategically located around the Agbara Industrial Layout, with so many multi-national companies like Nestle Nig Plc, Unilever Nig Plc, Pharmadeco Nig Ltd, and is surrounded by two private universities, Opic Estate and the Lagos Free-Trade Zone.

“This area is blessed with great potentials because of its sophistication, lucrative business environment and, of

course, the impact of the ongoing mega road and rail transport construction project.

When completed the road will vastly open up the area in grand style, linking it with other parts of the metropolis as well as the Central Business Area through railway and road transportation,” he said.

Okoye apologised for issuing the allocation documents a month behind the promised date of October.

He said that as a result of the delay, subscribers are now expected to take physical possession of their properties as from december ending or early January next year, instead of the earlier schedule date of November. He said the allocation date when they are expected to be on site to take physical possession will be communicated to them.

The Pentagon boss said only those who have completed their subscription payments were being issued their allocation documents, advising them to scrutinise the documents for

any possible errors that need to be corrected before the final allocation. He added that subscribers who have not completed their payments could still do so before the allocation on site takes place.

Okoye assured all the subscribers that the company will deliver on its promises on provision of basic amenities.

“Pentagon will keep the basic promises to the subscribers.

Everything we promised in the estate will be delivered, and that is even the reason we advised that subscribers form an association as a form of pressure group to follow up on the delivery of promised infrastructure.”

He noted that basic amenities promised include provision of paved roads, borehole and bringing electricity into the estate. “We want to maintain our brand. Our goal is to get documents ready for all the subscribers. This partly explains the reason for waiting till December ending or early January before we begin physical allocation,” he stated.

Vanguard, MONDAY, NOVEMBER 19, 2012 — 31

Commodity Index

32— Vanguard, MONDAY, NOVEMBER 19, 2012

Insurance BRIEF Trustfund Pensions unfolds growth strategies, assures investors

BY VICTOR AHIUMAYOUNG

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RUSTFUND Pensions Plc has promised to focus on investments that will guarantee safety of contributors’ funds towards yielding high returns to its shareholders in the years ahead.

Chairman Board of Directors of the company, Dr. Ngozi Olejeme, who disclosed this at the 4 th Annual General Meeting, AGM, in Abuja, said that it was imperative for management and staff of the company to work assiduously in view of the current challenges facing the economy.

According to her, the challenges of insecurity and trust in political office holders as demonstrated during the fuel subsidy scandals and the pension scams would continue to affect the confidence and performance of the Nigerian Capital Market and the entire economy.

She predicted that the country would witness a more difficult operating environment unless there was an ease in the European debt crisis, return to stable international oil market, return of peace in Nigeria especially checking the rate of insurgencies and guaranteed improvement in the investment opportunities.

She, however, noted that Trustfund is prepared to increase its client base through an unflinching quality customer service, aggressive marketing and prepare proactively for the expected transfer window as directed by the National Pension Commission, PenCom. According to her, “It is my belief that we can demonstrate the capabilities in accepting challenges as they arise as we have done in the past years.

Our management team must without fail be akin to investment opportunities that will continuously guarantee safety of contributions towards yielding high returns to its shareholders.

NECA advises employees on will writting habit

By ROSEMARY ONUOHA

E

mployers under the auspices of the Nigerian Employers Consultative Association, NECA, have advised employees to imbibe the habit of will writing.

According to the employers, employees should discard the idea that preparing a will means that a person will soon die.

The employers made the call at the interactive session organised by the National Pension Commission, PenCom, in collaboration with NECA to discuss the proposed amendments of the Pension Reform Act, 2004, with a view to obtaining final input of employers before it will be presented to the Law makers.

The employers said that there are lots of unclaimed pension contribution from deceased contributors, adding that so many people have come up to claim to be beneficiaries due to lack of written will stating the actual beneficiaries of the pension contribution.

At the interactive meeting, employers also discussed variously on retirement pension, while many questions were asked on who is on the right position to access the pension of the

deceased employee, as well as who is qualified to withdraw or collect his pension. In response to this question, it was clarified that the next of kin so indicated by the deceased employer while filling his/her pension form is indeed the beneficiary and as such can access the pension

when the employee is no more.

Another question bordered on the situation whereby an employee is declared missing; wether his pension is payable and to who. In response to that, it was concluded that a missing employee will be counted a dead person and his pension paid to his next of

From left: General Secretary, Association of Corporate Trustees, Mr. Yinka Adegbola; President, Mrs. Toyin Sanni and Vice President, Mrs. Funmi Ekundayo at the 10th Annual General Meeting of the Association in Lagos.

Lasaco Assurance receives ISO 9001:2008 certification

By NKIRUKA NNOROM

L

asaco Assurance Plc has been awarded ISO 9001:2008 certification by the Standard Organisation of Nigeria in recognition of the company’s effort at maintaining high level of quality in its products and services.

The chairman, Chief Edward Leigh, who received the award on behalf of the underwriting firm in Lagos, said the company took a bold step to apply for the International ISO 9001:2008 quality management system certification in 2010.

He noted that with the conferment, Lasaco Assurance has become the first ever insurance company in Nigeria to apply for and receive the ISO certification.

“In the last eighteen months, our people at all levels, branch network, business processes, procedures and practices,

kin. In his concluding remark, the chairman of the NECA advised employees to always fill their next of kin when opening retirement account especially when the job is a pensionable type as that will guide and guarantee their access to the pension in the event of retirement or death.

reports and reporting standards, quality policy and management have been subjected to world class rigorous checks, analyses and various audits, both internally and by audit teams from standard Organisation of Nigeria.

“As at the time of this report and after the final top-tobottom-to-top detailed audit by SON, it was confirmed that Lasaco Assurance’s quality management system is fully ISO 9001:2008 certified in the insurance and financial services sector category,” Leigh said.

He said that the certification was a culmination of the various steps the company has taken since 2005 in reinventing and transforming its people, vision, work habits, business processes, procedures, practices and quality management as a whole.

He added, “All of us- the board, management and

shareholders- have every reason to be very proud of this singularly important international rating which will positively impact on our growth and profitability, both

in the short and long term.”

Among other benefits, he said the ISO certification has also conferred on the company a very unique competitive advantage and position of strength as it pursues its growth and profitability goals, including the merger and acquisition strategy of business combination with identified insurance companies.

Linkage calls off merger talks with Cornerstone

By ROSEMARY ONUOHA

L

inkage Assurance Plc has called off all merger talks with Cornerstone Insurance Plc due to strong opposition by shareholders of Linkage.

Managing Director of Linkage Assurance, Mr. Gus Wiggle, who disclosed this, said that they were unable to conclude the exercise due to lack of consensus by the shareholders of Linkage Assurance on the matter.

He said that Linkage Assurance and Cornerstone Assurance opened discussions on business combination because they recognised the need for an enlarged entity to combat the issue of operating in an extremely fragmented industry.

Wiggle said that they, however, believe that both companies will in their individual capacity work towards harnessing the opportunities open to the industry in the economy.

While thanking the company’s customers, brokers, and agents for their patronage during the period of the merger talks, Wiggle assured that with fresh injection of funds into the company, they will continue to serve numerous clients in accordance with global standards whilst observing industry best practices.

Vanguard, MONDAY, NOVEMBER 19, 2012 — 33

Micro Finance BRIEF

Stories By PROVIDENCE OBUH

NPA attributes lull in cargo and vessel throughput to subsidy scam

I

nternational Finance Corporation (IFC) has invested N800 million in Lift Above Microfinance Bank (LAPO) for onlending to low income earners.

Country Manager, Solomon Adegbie-Quaynor disclosed this saying that the Corporation is committed to supporting Nigerian Microfinance Banks.

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries.

Adegbie-Quaynor said, “IFC is a leading investor in microfinance in Sub-Saharan Africa, with a fast-growing, well-performing portfolio of equity, debt and advisory projects. IFC’s portfolio includes 24 microfinance clients across 12 countries in sub-Saharan Africa, which have reached over 1.5 million microenterprises and lowincome households". AdegbieQuaynor added, “ He said the investment in LAPO is IFC’s first financing

By GODWIN ORITSE & PROVIDENCE OBUH

T Cocoa stuck in bags by Export Trading Group (ETG)

IFC lends LAPO N800m to expand capacity of a national microfinance a result, IFC agreed to provide N800 million ($5 million) loan. “LAPO provides a platform to distribute other tailored services at the baseof-the-pyramid, including

micro-health insurance and environmentally-friendly energy products, such as solar lanterns and cooking gas,” he said. Godwin Ehigiamusoe, Managing Director, LAPO, said,“Through this partnership

IFC is helping LAPO expand our capacity to reach a wider group of clients. Our relationship will help build greater financial inclusion among a rural low-income client base in Nigeria”.

$210m ETG investment to strengthen smallholder farmers’ business tie T

he $210 million investment made to the Global Agricultural Supply Chain Manager, Export Trading Group (ETG) will further strengthen the business tie between the smallholder farmers' and consumers around the globe,

especially Africa.

This is even as the Pembani Remgro Infrastructure Fund, the Carlyle Group and Standard Chartered Private Equity Invested about N33 billion ($210m) into ETG

Financial Vanguard gathered that the Strategic partnership will accelerate expansion of ETG’s business across Sub-Saharan Africa, India, China and South-East Asia by leveraging Carlyle’s global platform and the

Actis brainstorm on business risk management

A

ctis, the pan-emerging markets private equity investor has emphasized the need for better understanding of the modules of dealing with risks associated with business and managing them,while reiterating its commitment to building the Nigerian b u s i n e s s e s a n d harnessingthe human potential that would generate business opportunities.

The company brought together stakeholders in the business community to enlighten them on the theme, ‘Understanding and Managing Business Risk.´

Speaking during a breakfast meeting organized by the company in collaboration with the Young Presidents’ Organisation (YPO), Director, Real Estate, Actis, Mrs Funke Okubadejo, said that the challenges associated with businesses are: identifying the risks and implementing effective strategies to curb or mitigate them.

In her welcome address, Okubadejo said, “Actis is committed to bringing people in the business community together to talk about highly topical issues.”

Actis is a company that invests exclusively in the

emerging markets with a growing portfolio of investments in Asia, Africa and Latin America and US$5 billion of funds under management. YPO is an organisation connecting 20,000 chief executives employing more than 15 million people in 120 countries around the world.

On her part, the West Africa Chief Executive, Ms Ngozi Edozien explained that a risk well managed eliminates the problem profit losses and regulatory breaches, adding “A business is also able to counter economic or political disruptions and anticipate the required strategic shifts.”

P e m b a n i R e m g r o Infrastructure Funds’s regional expertise Also the investment will enhance ETG’s ability to connect African smallholder farmers to consumers around the world.

ETG owns and manages a vertically-integrated agriculture supply chain acrossthe African subcontinent with operations spanning procurement, processing, warehousing, transport, distribution and merchandising. According to Ketan Patel, Managing Director, ETG,“We are excited to partner with The Carlyle Group and PembaniRemgro have extended our relationship with Standard Chartered Private Equity. The new capital will allow us to expand operations across Sub-Saharan Africa, India, China and South-East Asia and create new markets for African smallholder farmers.”

Carlyle is part of a small group of investors that injected $210 million into Export Trading Group, a Tanzaniabased agricultural company that sources commodities from Africa’s small farmers.

HE Nigerian Ports Authority (NPA) has decried the lull in the level of cargo and vessel throughput saying that “the subsidy saga and the global economic downturn has affected the decrease in the level of vessel and cargo throughput” Speaking to newsmen in Lagos, NPA’s Managing Director Mallam Habib Abdulahi said that, it is falling not because NPA is not up and doing, it is because of the subsidy saga that has reduced the money in circulation.

Abdullahi noted that even at this time of the year, the level of expected import is still very low considering the fact the Christmas is around the corner.

He explained that despite the current development, the authority will go ahead with its development plans so as to ensure that when volumes begin to pick up , there would be enough room to accommodate them.

He noted that there were challenges that are facing both the NPA and the terminal operators adding that with good projection and proper planning these challenges will be surmounted.

His words “ there is a general trend in the world’s economy and as a result of this there is a contraction,however, Christmas is coming and I am sure that volumes will pick up again .

The NPA boss who was on tour of the ports also said that everything will be done to ensure that both terminals' operators and NPA get the benefits of the concession programme. He who said that management was impressed by the level of investment and cleanness in most of the terminal visited. Meanwhile, the management of the Nigerian Ports Authority has commended the level of investment by terminal operators which has hit over N30billion. Port Mnanger, Lagos Port Complex (LPC) Mr. Joshua Asanga revealed this to the Managing Director, Nigeria Port Authority, NPA. during a tour at the Lagos Port Complex.

34 — Vanguard, MONDAY, NOVEMBER 19, 2012

Appointments & Promotions vicahiyoung@yahoo.com 08033348923

NBC names Langat Managing Director

Trustfund Pensions re-appoints Olejeme, two others board members

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T

IGERIA Bottling Com pany, NBC, Limited, has announced the appointment of Mr. Ben Langat as its new Managing Director.

He succeeds Mr. Segun Ogunsanya who will be taking up a new role outside of the company.

In a statement signed by Adeyanju Olomola, Head Public Affairs and Communications, Langat who previously held the role of the Director of Finance for the company had assumed the office on November 1, 2012.

Langat joined NBC as Director of Finance in June 2009 from Unilever and overtime established himself as a very strong leader for his values, integrity, business acumen and leadership.

He built a strong team and established a high performing business partnership culture further enabling his team to offer optimum support to key functions on their strategic priorities as well as work collaboratively with franchise partners, Coca-Cola Nigeria Limited. In his three year tenure as Director of Finance, he also played fundamental roles in the successful execution of critical business initiatives and increased focus on driving cost leadership.

Langat, a Kenyan citizen, holds a Bachelor of Commerce Degree from the University of Nairobi, and is a Certified Public Accountant of Kenya CPA (K).

He is a member of the Insti-

•Ben Langat tute of Certified Public Accountants of Kenya and spent over 16 years with Unilever in various roles in Kenya and Malawi up to his last role as Finance Director for Unilever Ghana; a role he occupied before joining NBC.

RUSTFUND Pensions Plc, has re-appointed Dr. Ngozi Olejeme, Chairman of its Board of Directors.

At its Annual General Meeting, in Abuja, AGM, Comrade Abdulwaheed Omar, President of Nigeria Labour Congress, NLC and Chief Richard Uche, President of Nigeria Employers Consultative Association, NECA, were also re-appointed into the board of the Trustfund Pensions, a leading Pension Fund Administrator, PFA, in the country.

Speaking at the AGM, Dr. Olejeme, said significant changes were made in the management of the company in the past one year.

According to her, “The former Managing Director, Mr. Bernard Ekwe seized to be a staff of the company. While thanking him for his contributions to the company during his stewardship, we wish him well in his future endeavours. As a proactive organization with ef-

Ngozi-Olejeme fective succession plan, the Executive Director, Finance and Administration, Mrs. Helen Da-Souza was appointed immediately as the Acting Managing Director until a substantive one is confirmed. We assure all stakeholders that such changes are expected in the corporate world and that it

does not in any way affect our operations and goodwill. Rather it demonstrates our company’s readiness to meet challenges promptly and move ahead. I am also pleased to inform you that during the period under review, an Independent Director was appointed by the company in the person of Mrs. Osaretin Demuren whose experience expands over 30years in the financial industry. We welcome her on board as we believe she will bring to bear her wealth of experience to the uplifting of our company.”

“Also during the year under review, four (4) vacancies were created on the Board by the resignation and withdrawal of the following Directors: there are Alhaji Buba Gamawa (representing Nigeria Social Insurance Trust Fund, NSITF), Comrade John Odah (NLC), Mr. Nebolisah Arah (Mainstreet Bank Ltd), Olawale A. Edun (Chapel Hill Denham).

Mohammed takes over at Works Ministry

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EWLY posted Permanent Secretary, Federal Ministry of Works, Dr. Abukakar Koro Muhammad, has assumed office at the Ministry.

The hand-over ceremony took place last week in the Ministry’s Conference Room at Mabushi in Abuja.

Speaking at the ceremony, Mohammed said the ministry was one of the important ministries of the Federal Govern-

ment road infrastructure is a major encouragement to investment into the country, improve the economy and raise the standard of living.

The Permanent Secretary sought for the cooperation of the staff, stressing that he believed in dialogue and appreciated his predecessor Mallam Bukar, describing as a humble, hardworking, disciplined and loyal person who had passion

for the civil service.

On his part, Mallam Aji, in his valedictory speech, said the occasion was another historic day in the transformation agenda of the Federal Ministry of Works on road infrastructure.

He said noted that the ministry was uniquely structured and that road development and maintenance was critical to na-

tional development.

Aji who explained that transforming the road sector required huge funding, assured the new Permanent Secretary that the ministry was blessed with very competent engineers who were highly dedicated and competent to compete with other engineers from any part of the world.

Emeribe gets global appointment

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EGISTRAR, Medical Lab oratory Science Council of Nigeria, MLSCN, Professor Anthony Emeribe, has been appointed into the 20-man Governance Board of the global movement called “Strengthening Laboratory Management Towards Ac-

•Emeribe

creditation programme, SLMTA”.

By the appointment, Emeribe, a renowned Consultant Haematologist, is expected to join other eminent scientists drawn from various countries across the world to expand SLMTA’s impact and ensure its sustainability.

The Board also oversees and supports implementation of the programmes global and regional strategy and also provides a vision and global/ regional strategy for SLMTA programme in terms of spread, depth, scalability, and sustainability.

Emeribe while on the Board is expected to draw on his wealth of experience in mentoring, empowering and standardising medical laboratory facilities and personnel in the African region. He is to join other Board members in making recommendations on long-term and short-term pri-

orities and policy issues; establish strategic alliances with key partners to increase the programme success, visibility and long-term impact as well as lead campaigns and media outreach to showcase the program success and advocate for medical laboratory needs.

Reacting to the appointment, Emeribe said “We are now living in a global village.

Picture shows from right: Dr Abubakar Mohammed, new Perm Sec of the Ministry of Works and the former Perm Sec, Mallam Burkar Goni-Aji during the handing over ceremony in Abuja recently.

NDE recruits 11,725 trainees for skill acquisition

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ATIONAL Directorate of Employment, NDE, has engaged 11,725 unskilled and unemployed youths for training in vocational skills under its Vocational Skills Developth ment Programme for the 4 quarter of 2012.

Out of this number, 925 persons will receive skills training in the Advanced National Open Apprenticeship Scheme

A-NOAS) while 10, 800 others will train under the Basic National Open Apprenticeship Scheme, B-NOAS. A statement from the NDE,

by Mr Edmund Onwuliri, its Assistant Director, Information and Public Relations, said the National Open Apprenticeship Scheme of the NDE would commence with training in the Basic National Open Apprentice-

ship Scheme, B-NOAS. Under this scheme, the statement said unskilled and unemployed youths would be recruited and posted to either accredited NDE Master craftsmen/women in the informal sector or to NDE Skills Training Centres for the purpose of skills acquisition in trades such as Computer Operations and Maintenance.

Vanguard, MONDAY, NOVEMBER 19, 2012 — 35

36 — Vanguard, MONDAY, NOVEMBER 19, 2012

Tax Platform

Non-Interest Banking in Nigeria-Tax Issues (I)

BY FRANK OBARO

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he storm surrounding the introduction of NonInterest Banking (NIB) commonly called Islamic banking is gradually settling down and it is important to begin to exhume the challenges that might crop up in its operations with particular reference to the taxation of the sub-sector by the relevant tax authorities, especially the setting of standards for the type of taxes that apply and that are to be collected from the transactions.

As the name implies, NonInterest Banking (NIB) is a system of financial services that provide unique services in accordance with Islamic religious jurisprudence and Sharia principle and fully regulated by the relevant regulatory authorities as provided for in sections 9, 23 and 52 of the Banks and other Financial Institution Act (BOFIA) 1991 as amended.

The CBN is empowered by law, to issue licenses to appropriate entities for the establishment of Non-Interest Banks provided they meet the regulatory requirements.

The establishment of an enabling ûscal and regulatory framework in the UK for Islamic Finance becomes more imperative today than ever.

Though the Federal Inland Revenue Service (FIRS) technical Working Group on NIB is working assiduously to enunciate policies that will guide the tax regulation governance of this sub-sector it is also crucial for sector stakeholders to step in and make valuable contribution to engender a mutually acceptable tax system on the operations of Islamic Banking in the Country.

I

slamic financial instruments continue to attract consumer attention, with the central element of being interest-free products in compliance with Islamic Sharia law. According to financial sources, the value of funds involved in Islamic banking worldwide grew by an average of 15% annually over the past three years.

Some analysts estimate Islamic banking to be worth some $500 billion, with the Middle East controlling a quarter of those assets. Kuwait is reportedly the biggest contributor, accounting for almost 29% of the sector ’s value in the Gulf region. It is followed by Saudi Arabia with

about 27%, and the UAE with 15.2%. Nigeria with its 160 million people should definitely not be left out of emerging business frontier.

The unbanked population can be a key target.

There are a num ber of challenges that have to be addressed for the successful I n t r o d u c t i o n and operation of Islamic banking in Nigeria. Indeed the challenges are numerous, the absence of skilled workforce and the technical capacity to even regulate Islamic financial institutions are lacking and must be resolved before we can witness a boom in this banking sub-sector.

M

uch has been said of the Lack of Shariacompliant liquidity management instruments.

Islamic banks cannot invest their excess liquidity in interest based instruments, which are the liquidity management instruments in the money market.

This puts them at a disadvantage side by side with conventional banks. The current interbank market and the instruments used by the Central Bank for monetary policy operations are all interest-based with no equivalent government securities or other money market instruments that are Shariah compliant , all of which are essential to avoid a liquidity bottleneck for

,

can be used with the recent benchmark of the International Financial Reporting Standards (IFRS).

Should NIB products be taxed as conventional banking products? One of the best ways to understand Islamic banking is to gain an understanding of the products that are considered acceptable. The important thing to remember is, as it is with the Christian Bible, there are several differing interpretations of what the Holy Quran and the Hadith actually intend. As a result, not all of these products are universally acceptable (particularly those where the return is determinable in advance), but they are a useful guide. Several of these are covered below: Wadiah (Safekeeping)-In Wadiah, a bank is deemed as a keeper and trustee of funds.

A person deposits funds in the bank and the bank guarantees refund of the entire amount of the deposit, or any part of the outstanding amount, when the depositor demands it.

Mudarabah (Profit Loss Sharing) Mudarabah is an arrangement or agreement between a capital provider and an entrepreneur, whereby the entrepreneur can mobilise funds for its business activity.

Musharakah (Joint Venture), this concept is normally applied for business partnerships or joint ventures.

The profits made are shared on an agreed ratio, while

Islamic financial instruments continue to attract consumer attention, with the central element of being interest-free products in compliance with Islamic Sharia law.

Islamic banks when they come into operation.

Another key deficiency that has been hotly discussed is the lack of knowledge of accounting and auditing standards pertinent to Islamic financial institutions. The balance sheet structure of Islamic banks is unique, and even though the work of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) on accounting and auditing standards for Islamic banking products is available, there is the need to train conventional accountants and auditors in the application of the standards and how it

,

losses incurred will be divided based on the equity participation ratio. This concept is distinct from fixedincome investing (i.e. issuance of loans).Murabahah (Cost Plus), this concept refers to the sale of goods at a price, which includes a profit margin agreed to by both parties. The purchase and selling price, other costs and the profit margin must be clearly stated at the time of the sale agreement. The bank is compensated for the time value of its money in the form of the profit margin. Bai’ Bithaman Ajil (Deferred Payment Sale), this concept refers to the sale of goods on a deferred payment basis at a

,

Does the purchase and then onward sale of assets by the Islamic financier result in any capital gains or other profit-based tax?

price, which includes a profit margin agreed to by both parties. This is similar to Murabahah, except that the debtor makes only a single instalment, on the maturity date of the loan. By the application of a discount rate, an Islamic bank can collect the market rate of interest. Qardul Hassan (Benevolent Loan),t his is a loan extended on a goodwill basis, and the debtor is only required to repay the amount borrowed.

H

owever, the debtor may, at his or her discretion, pay an extra amount beyond the principal amount of the loan (without promising it) as a token of appreciation to the creditor. Ijarah Thumma Al Bai’ (Hire Purchase), these are variations on a theme of purchase and lease back transactions. There are two contracts involved in this concept. The first contract, Ijarah contract (leasing/ renting) and the second contract, Bai’ contract (purchase) are undertaken one after the other.

Bai’ al-Inah (Sell and Buy Back Agreement)-The financier sells an asset to the customer on a deferred payment basis and then the asset is immediately repurchased by the financier for cash at a discount. The buying back agreement allows the bank to assume ownership over the asset in order to protect against default without explicitly charging interest in the event of late payments or insolvency. Sukuk (Islamic Bonds), in keeping with the prohibition of riba, a conventional bond is not permitted. A Sukuk bond, however, is asset-backed and the returns on it are not fixed, but are linked to the return on the assets purchased with the proceeds of the issue.

Interestingly there is no tax law specifically to regulate the NIB in Nigeria. The current tax legislation therefore has to be strengthened urgently to accommodate the operations of the NIB institutions. Aside the Jaiz Bank Plc and Lotus Capital currently operating non-interesting banking institutions in Nigeria non

,

other exists. Clear tax legislation is the required to back the guidelines created by the Central Bank to spur up growth in this sector.

The key issues are; how would Company Income Tax be charged on Musharaka, Mudarabah and Sukuk (is it be charged like conventional bonds)? Or VAT on Ijara? The collection of taxes such as Company Income Tax, Value Added Tax, Capital Gains Tax, Withholding Tax and Stamp Duty need to be properly highlighted and guided by appropriate legislation to avoid multiple taxation of the sub-sector.

Does the purchase and then onward sale of assets by the Islamic financier result in any capital gains or other profitbased tax? What will be an equitable VAT framework on Islamic banking products?

Issues remain unclear. Is VAT, which tends to be a key tax type with greater focus on delivery procedure in commodity murabaha/tawaruq transactions, be an issue?

Islamic Finance requires proper documentary evidence of the transfer of title from the original supplier to the financier.

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rom a UK perspective, in light of the changes made by the government overtime, changes have been progressively incorporated into UK tax legislation since 2003 with particular changes relating to Sukuk in the 2007 Finance Act with more changes done in the 2009 tax legislation. These changes will bring Sukuk legislation in line with conventional corporate bonds and securitisations and address capital gains and capital allowances issues.

With the take-off of Islamic Banking there is a need to work with tax jurisdictions with established NIB tax legislation as a learning curve to guide the FIRS on the high-level tax implications of Shariah compliance, as well as on the day-to-day practical issues of complying with the intricacies of the existing Nigeria direct tax legislation.

Vanguard, MONDAY, NOVEMBER 19, 2012 — 37

38 — Vanguard, MONDAY, NOVEMBER 19, 2012

“

History is, indeed, little more than the register of the crimes, follies and misfortunes of mankind”, Edward Gibbon, 1734-1794.

(VANGUARD BOOK OF QUOTATIONS p. 92).

The Nigerian most dreaded might not even be the leader of Boko Haram. He and his colleagues might soon disappear like the Maitasene – the dreaded Islamic group of the I980s. Religious uprisings never last in Nigeria and have invariably been regional in scope. The worst threat to our present and future might well be Dr Ngozi Okonjo-Iweala – the Federal Minister of Finance who has embarked on raising the nation’s debt ceiling.

Two weeks ago, the Federal government announced plans to borrow $9.3billion for various unspecified projects. The nation’s debt had risen by about $II billion since the Finance Minister ’s return to her old office last year. All are longterm obligations meaning twenty years or more. Even if Jonathan contests for the second term and is re-elected, the borrowing spree would still amount to mortgaging the future of Nigeria in exchange for providing trillions of naira more for current holders of transient power to embezzle.

Her claims that the funds are needed for development, and that Nigeria can easily repay, represent the triumph of faith and greed over historical experience; as brief recollection of Nigeria’s history will soon demonstrate.

The year 1978 marked a watershed in Nigeria’s economic history. In that year, Nigeria migrated from a debtfree country to a debtor nation.

Not even during the civil war did this country borrow to prosecute the war. But, in peace

government officials, won the debate. At any rate, no government can resist the additional pool of funds, which loans represent, into which they can dip their hands for filthy lucre. Soon $2.8 billion was sourced and Nigeria joined the global club of debtor nations in 1978 courtesy of the Obasanjo administration. But, history does not often run in straight lines; sometimes it hits like a boomerang. By the time Obasanjo providentially returned as civilian President on May 1999, the $2.8 billion, “easily repayable debt”, had risen to nearly $36 billion and choking development – with very little to show for it.

Incidentally, it was the same technocrats who were then warning the government that the debt trap was not in the national interest. How did Nigeria migrated from debtorfree to become one of the most indebted nations on earth? The answer to that uestion will shed light on the perils associated with the current opaue plans by the Federal government to borrow $9.3 billion; in addition to the over $4 billion already owed. A good place to start is to ask the Finance Minister what specifically had been done with the foreign and domestic debts already incurred. She was responsible for creating the Excess Crude Account from which $13-16 billion was taken for the Independent Power Projects, IPP, during Obasanjo’s second term. Till

today, Nigerians have not derived any benefits from the illegal transactions. Now that she, like Obasanjo, had returned to her old office, she owes Nigerian an obligation to tell us what happened to the $13-16 billion first, before she can ask us to endorse another scheme she has cooked up.

The truth is, the sum total of her intervention in Nigeria’s economy had been more negative than positive. Even the debt “ relief ” she was acclaimed to have secured was a normal financial settlement; it was worse than what other third world countries got from the creditor nations and some people earned huge commissions from the transactions. Who were they?

Our transition, to use the current lingo, from debt-free to bad debtor, was linked to the change from lean to fat government structures.

Military governments, at the time, were very lean. Apart from Ministers, the President had few advisers. Governors also appointed few Commissioners and even fewer advisers. There was no legislature at any level. The return to civil rule and the fatal change from parliamentary to presidential system of government constituted the first step in our slide into debt.

And, it also accounts for our inability to raise domestic capital for development; resulting in what could become our perpetual resort to debt.

Nobody counted the costs of operating a presidential system of government with two legislative houses at the centre as well as one in every state.

The costs started showing from the conduct of the 1979 elections. Other unplanned financial consequences soon followed.

that the draw was structured in such way that that one million naira and one car must be won in each of the zones throughout the period of the draw.

He stated that the number of depositors coming in recent times showed that customers appreciate what the bank is doing, while assuring that they will continue to develop customer-centric products and services tailored to address specific needs of the banking public.

Also speaking, Mrs Ngozika Obidike, Head, Consumer Protection Commission, Lagos office, who was there to supervise the draw, said that so far, the process has been transparent. She urged the bank to ensure that the handing out of items to the

prize winners is also done in transparent manner.

“Looking at the promo today, the draw was very transparent. That is why we advise companies to register their promo with CPC three months ahead of the draw so that the commission will have the opportunity of advising them accordingly.

She confirmed that Fidelity Bank has so far complied with all statutory requirements guiding promos of this nature.

To qualify for the monthly draw, an individual is required to open a savings account with the bank with a minimum deposit of N20, 000 or top up the existing accounts with incremental N10, 000.

The new debt trap courtesy Okonjo-Iweala –1 time we went cap in hand.

Later in this series, the reader will discover what happened to the first set of loans the nation took on the advice of people like Okonjo-Iweala – the technocrats. In 1978, as now, technocrats, led by Chief Ernest Shonekan, the acclaimed leader of the Organised Private Sector, OPS, had persuaded General Obasanjo, then Head Of State, that Nigeria was “underborrowed”. That meant the nation was almost totally debtfree – except for some shortterm obligations. Apparently, that was a crime and unacceptable. Government

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oil, which since 1973 had risen from $3 per barrel to $28 per barrel and projections were made that it would top $100 in a year or two. Nigeria’s ability to repay was thus guaranteed.

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nlike the technocrats, critics, including this writer opposed the loan on the following grounds. First, corruption in government, at the time, had risen to unprecedented levels and borrowing would only provide more funds for public servants to steal. Second, many of the projects, for which the funds were raised, were white elephant projects from which

By the time Obasanjo providentially returned as civilian President on May 1999, the $2.8 billion, “easily repayable debt”, had risen to nearly $36 billion and choking development – with very little to show for it.

was urged, then as now, to take advantage of the low interest loans that were on offer by the International Monetary Fund, IMF, fronting for Western financial institutions in search of foolish third world countries to enslave economically. Of course, the loan was meant to finance infrastructural development –roads, bridges, water, power supply etc. To sweeten the argument they pointed to the price of crude

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Nigerians would derive no benefit. Third, with a change of government scheduled for 1979, the loan would tie the hands of the incoming civilian administration, which we believed deserved a free hand in order to make a clean break with the military administrations of the past.

Well, the technocrats, who were poised to be the only group of Nigerian beneficiaries, apart from

Business & Economy

25 winners emerge in Fidelity Bank’s Cars & Cash promo

By NKIRUKA NNOROM

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total of 25 lucky winners have emerged in the ongoing Fidelity Bank’s Cars and Cash 25th Anniversary promotion.

The winners, who were drawn from the five major geo-political zones of the country, emerged through a random selection done at the bank’s Head Office in Lagos at the weekend.

The draw saw 10 depositors

of the banks winning N100,000 each; eight won N250,000 each; two winners emerged in the N500,000 slot; one person clinched the N1 million prize, thus bringing the total prize money to N5 million, while the star prize of five brand new Hyundai Accent cars were also won by five customers drawn from the various geo-political zones.

In the North West/North East zone, Muhammed Shensu, a spare parts dealer, who banks with the Kaduna branch won the car prize;

Benita Onwuneme, a 23 year old student of Madonna University won the star prize in South South zone; Blessed Makas Ventures, that banks with Trinity branch emerged the star prize winner in Lagos/ South West zone, Saidu Sanusi of Zaria branch won the star prize in Abuja/North Central, while Odo Ngozika Blessing of Nsukka branch emerged the star prize winner in the South East zone. Speaking at the event, Mr Nnamdi Okonkwo, Executive Director, South South Directorate, explained

Vanguard, MONDAY, NOVEMBER 19, 2012 — 39

Advertising, Media & Marketing

Africa Magic offers $100,000 lifeline on ‘Money Drop’ Stories by PRINCEWILL EKWUJURU It is not like the, 'Who Wants To Be A Millionaire' (WWTBM) game show. It is an eight (8) questions game, christened, ‘The Money Drop,’ with $100,000 price,courtesy, Africa Magic, a channel on Digital Satellite Television (DSTV) platform of Multichoice Nigeria.

The game, an all Nigeria version of the hit International game show; ‘The Money Drop,’ is, if you can answer the questions correctly, $100,000 will drop in your bank account.

With the Port -Harcourt, Lagos, Abuja and Kaduna auditions already ended, participants who scaled the huddle will move to the next round to travel to South Africa to join other qualifiers from other part of Africa.

The format of the series is simple but captivating. In each episode, a pair of contestants start off with a $ 100,000 in hard cash – Just 8 questions stand between them and their money. One wrong answer the contestants could see all their cash disappear through a trapdoor. So the question is, can you beat The Money Drop?

For contestants at the PortHarcourt audition, it was a new experience, but mind burgling to be questioned on things you see everyday and be swept off your feet by the questions.

For two friends, Christy Piaatjies and Anthea Williams, all female, were also at the Port Harcourt audition and they shared their experiences.

Responding to reporters questions, Piaatjies said, “It was fun and prays that they make it to the next round because it is going to be exciting for her to be part of the show.

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he friends who are South Africans living in Nigeria would be participating in the Million Rands Money Drop Show, said that though they have stayed in Nigeria for some years, they picked to be South Africa Show not for any bias reasons.

“When we were asked what we would do with the money, we said we want to open a small guest house in Nigeria.”

Whether the show could affect their relationship, considering one person may be responsible for the team losing out, she said, “Never, we love each other and we have gone

through more than this, money should not be a cause to end true friendship.” The other friend, Anthea Williams also said that it was exciting participating. “I just heard about it today (that is the day she took part in the audition) and I decided to take part. I am taking part just for the fun and not because of the money and I enjoyed it very well.”

Though none of the team was willing to comment officially on

why the show is coming to Nigeria, but a member of the team who said she was expressing her personal opinion said “Nigeria is the most populous nation in Africa and format shows come to Nigeria or South Africa first before it goes into any other African countries, so it only makes sense that a show that is this big will come to Nigeria first.” Before now, M-Net Africa Managing Director, Mrs

Biola Alabi had said AfricaMagic Entertainment will be screening an all-Nigerian version of the hit international game show, The Money Drop, which is the highest selling format since 2010.

The producers, Endemol has made the series popular in other climes as it has already been sold in key markets across Europe, America, the Middle East and Asia and now it is coming to Africa and the first

From Left: Vanessa Umeh the front end controller, Shoprite Enugu, Rev Sister Maria Goutti,Chief Matron & Officer in-charge of the Daughters of Divine Love catholic institute, Nnenna Anyadiegwu, Sales manager Shoprite Enugu and Donatus Nnamani, Shelf packer when the management team of Shoprite Enugu donated N320,000 worth of shopping vouchers to the DDL Prolife Center Enugu; via Shoprites’ Help-Change-A-Life Charity project.

Fidelity evolves new TVC to drive business

E

VERY discerning brand has marketing activities it undertakes to connect with its customer(s).

Like in sponsorship, brands lean on tools that connect to their target audience, that’s why Glo, MTN, Coca cola, Airtel etc sponsor various marketing activities like football, talent hunt shows, cultural festivals and quiz competitions, because sports and music appeal to the youth segment, and culture to both youths and the elderly, thus companies capitalize on this to draw attention to their brand.

In this case Fidelity Bank Plc is not sponsoring any physical marketing activity but by way using its new TVC tagged; Always, Always created by DDB casers Lagos to drive business in the banking sector.

The TVC, a 45 seconds snap shot brought the scenario of a teenager at the beach side with a toy rocket on his hand with the grand father who was glossing through a magazine with the picture of the boy’s

biological father on the cover, suddenly he turned and saw the picture and shouted to grand father wow! that’s daddy, and the grand father replied, yes!and the boy said one day I will be great just like that, rhetorically the boy asked the grand father How do I become great.?

And the grand father replied, with the help of Fidelity Bank, while showing the boy who he has asked to join him on the beach bench where he was sitting, continuing, he said to the boy they help you become great by giving support to agriculture, transmission and manufacturing, and the asked again, always, Always, the grand father answered Always, Always, and the boy replied, now they help me launch my rocket raising the toy with him.

Explaining the TVC further, Head, marketing Communication of the bank, Mr. Emma Ezinna, said that aside the TVC the bank will be extending its brand portfolio in the nearest future, that the bank

wouldn’t want its existing and prospective customers to begin to search for the bank around town anymore.

Unless you get your brand to a certain point that it connects to them such that customers never to like 5miles to look a branch of the bank, if they can actually walk into one that is in their neighbourhood, unless you get your brand to a certain point that it connects the brand that it becomes a destination not just a stop by place, even though we recognise that we are not there yet.

In terms of the message we found out that we want to reach the immediate platforms on some kind of message and we found out that among the messages that will always appear, apply or appeal to the youth will be entertainment, that is why, when it comes to entertainment, there are two genres; sports and music. So, that is why in the last two commercials we had one was on sport and the other ‘My band’ which has to do with music.

BRIEFS Peppe Terra gains recognition

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EPPE Terra, a ready to use blend of fresh tomatoes, onions and pepper in an easy to open pack has continued to delight consumers and has become, within less than two years of its launch, the toast of every kitchen.

Peppe Terra, with promise of “No Stress - No Mess - Peppe Terra - All Plus”, was launched in Nigeria in December, 2010 and the response from the consumer has been extraordinary the company said..

Tropical General Investment (TGI) Nigeria Limited (from the respectable House of Chi), the makers of Peppe Terra has described the brand as an innovation that provides differentiated value addition to the Nigerian Woman, like none else in the Nigerian packaged food market.

Roy Deepanjan, Managing Director, says “We have been able to put up a brand whose quality & proposition is international. This has now been vindicated by Euromonitor International’s special mention on Peppe Terra, wherein the brand collected kudos for being ‘innovative’ and ‘uniquely adapted for to suit local tastes’.

Ice, others share success story at MTN Link Forum

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ANSHAK Zamani better known by his stage name as Ice Prince, has stated that hunger and passion are his driving force to success. He revealed this recently at the MTN Link Forum held in Abuja.

Sharing his success story with young budding Entrepreneurs and Professionals gathered at the Forum from within and outside the environ of Abuja Metropolis, the Oleku crooner and one of the Guest Speakers at the event said his hunger and passion for the industry has constantly propelled him to do more “I was at the BET awards recently and I can tell you that a lot still needs to be done in terms of global recognition of our music and the artiste.

Americans for one are not very receptive of our music, we need to further prove to them that we can match them one on one when talking music and that is one of the factors that drive me, the hunger to make world recognized songs and the passion I have for good music,” he stated.

40 — Vanguard, MONDAY, NOVEMBER 19, 2012

Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com

Tel:0817 002 3569

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IUS Adesanmi, a budding literary icon was the guest speaker at the “Second State of the Nation” lecture organized recently by the Pastor Tunde Bakare-led Save Nigeria Group. Adesanmi, an Assistant Professor at Carlton University, Canada, chose the title “Reparations: What Nigerians Owe the Tortoise” as his theme. I invite you to share in an experience that turned out to be an insightful and sobering verbal interactive satire. Adesanmi humorously skillfully adopted the personified traits of the Tortoise (Ijapa) in Yoruba folklore as primary motifs to embellish his canvass on the Nigerian predicament.

The defining character traits of the tortoise in these stories are of greed, selfishness and such other odious, antisocial behavior. Adesanmi narrated three such ‘tales by moonlight’ Ijapa (tortoise) stories to tickle the memories of his matured audience.

Adesanmi defines Ijapa’s ingrained ingratitude, greed and selfishness, in three stories. However, constraint of space will allow for only a brief narration of the story in which tortoise set out to cheat the bird family, who had been invited for a feast in heaven.

In a show of comradeship, all the birds donated some of their feathers so Mr. Tortoise could fly with them to the party in heaven; however, Ijapa insisted on taking the new name of “All of you” before the trip to heaven. Consequently, the tortoise mischievously cornered to himself all

Tortoise folklore as metaphor of national leadership the refreshments provided for the guests since every presentation was usually prefixed with ‘this is for all of you’.

Of course, the hungry birds were very displeased with this fraudulent arrangement, and, therefore, took back the feathers they had happily lent to Mr. Tortoise. Consequently, Ijapa tumbled from heaven in a near fatal fall to earth with broken bones and a badly fractured shell as his ultimate reward!

The common denominator in all the stories is the tor-

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Adesanmi argues that the simplistic nature of the tortoise’s stories was not only for entertainment of our children before bedtime, but also served as easily comprehensible symbolic markers for moral rectitude and the reinforcement of positive communal values.

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ur current experience as a people is mirrored with great fidelity by such tortoise folklore, as our leaders have completely hijacked the intellectual property of Mr.

The rain of oil falls on Dubai and falls on Nigeria; the rulers of Dubai use their own share to create a path of sweetness, while their Nigerian counterparts condemn their own people to the path of bitterness, lack and hunger.

toise’s immutable ethos to cheat and corner the common weal or muddy the waters for others in the community after having his fill. The inevitable opprobrium of shame or even severe personal injury was never a deterrent.

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Tortoise, and have become impervious to shame as they wallow in antisocial behaviour with such impunity that would make the tortoise ethos seem as mere rascality!

Consequently, Adesanmi argues that we owe a debt to

tional and social welfare strides of Awo’s ‘life more abundant’ philosophy were no accidents and the socioeconomic benefits derived therefore still remain meaningful today.

I

n consternation, Prof.

Adesanmi reminds us of the Patriarch’s song, which loosely translated, means “the same rain falls on sugarcane and bitter-leaf; the sugarcane takes its own rain and travels the path of sweetness, while bitter-leaf takes its own share of the same rain and travels the path of bitterness”.

For example, the rain of oil falls on Dubai and falls on Nigeria; the rulers of Dubai use their own share to create a path of sweetness, while their Nigerian counterparts condemn their own people to the path of bitterness, lack and hunger. Every week, “the Federal Executive Council chambers in Aso Rock becomes the meeting point of tortoise ‘wannabes’, as hundreds of billions are shared out of the national cake to friends and cronies, while 99% of Nigerians still go to bed hungry”.

Ultimately, Prof. Adesanmi pleads that we once again become our brothers’ keepers, and urgently enthrone the ethos of the greater good for the community as our abiding mantra!

make reparation payments to Ijapa in the same manner that plagiarized intellectual property attracts sanctions, which may include compensations!!

On the other hand, our erudite storyteller admonishes that the converse of tortoise’s antisocial ethos is the adoption of socially supportive and inclusive behaviour, where leadership is primarily dedicated to the service and satisfaction of the common good. Such ‘pro-people first’ ethos is discernible, according to Adesanmi, in the example of the tall themes of Chief Awolowo’s 1955 budget speech, part of which reads as follows: “Of our total expenditure of £12.45 million, not less than 82.6% (capital budget) is devoted to service and projects, which directly caters for health (10.7%), education (27.8%), prosperity and general welfare of our people (5.4% agriculture).”

Nigerians may contrast such a people friendly budget with the current arrangement, where consumption accounts for about 70% of the federal budget, while education, health and agriculture, together account for less than 15% of total expenditure.

Obviously, the giant educa-

SAVE THE NAIRA, SAVE NIGERIANS!!

Business Economy

SON appoints four to accredit imported goods

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HE Standards Organisa tion of Nigeria (SON), has appointed four Firms for accreditation of imported goods in line with the global best practices. Dr Joseph Odumodu, the Director General of the organisation announced this during the signing of agreement between SON and the firms in Lagos.

Odumodu said that SON appointed the new IAFs “to tackle the influx of substandard goods into the country.”

He underscored the importance of the new appointment as it conformed to the SON Conformity Assessment Programme (SONCAP). He described SONCAP as a flagship programme of the organisation.

According to him, the SONCAP is in charge of regulatory activities of the organisation, critical to its campaign

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of zero tolerance on substandard products. “We have successfully created necessary background for the stoppage of substandard products in the country and expectations of Nigerians have been heightened. Nigerians are eager to see the adherence to the zero tolerance slogans against substandard products and we cannot afford to disappoint them. It is the same way that the expectation is high from the government to ensure that the country is rid of substandard products to ensure employment generation and wealth creation,” he said. Odumodu urged the IAFs to strive toward desirable achievements of SONCAP by ensuring thorough inspection of imported goods. He said that SON would begin to issue the SONCAP certificate to goods coming into the country. The Director- Gener-

al listed two of the accredited firms to include the Intertek International Ltd., and Cotecna Trade Services.“They have the technical competence to deliver the best service to Nigerians,” Odumodu said.

Mr Mattheiu Delorme, the Chief Operating Officer of the Cotecna Trade Services, assured Nigerians of excellent performance in monitoring imported goods. He said that in the old system, goods already checked were often substituted but that now such goods would be sealed and confined on arrival in Nigeria.

“It is a big challenge to us but we will work with SON to block all loopholes as soon as we discover them. We intend to protect Nigerians with our new ideas just like we have been protecting other countries,” Delorme said. In another interviews, the Manag-

toes to make sure that the new prerequisites are strictly adhered to, to ensure success,” Faleye said.

ing Director of the Intertek International Ltd. Mr Victor Faleye assured of full testing of products imported to the country. “We will be on our

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