financial vanguard 20082012

AUGUST 20, 2012

162.45

+0.65

2,438.00

+38.00

20.36

+0.65

113.78

-1.49

95.77

+0.17

CURRENCY BUYING CENTRAL SELLING DOLLAR 154.8 POUNDS 242.9586 EURO 191.0387 FRANC 158.9975 YEN 1.9494 CFA 0.2704 WAUA 232.4657 RENMINBI 24.3441 RIYAL 41.2778 KRONER 25.6508 SDR 233.6706

From left: Mr. Mike Purves, Director, UK Trade and Investment; Mr Jim Obaszee, CEO, Financial Reporting Council of Nigeria; Arch Thomas Awagu, President, Nigerian-British Chamber of Commerce and Mr Emmanuel Ijewere,, Past president, Institute of Chartered Accountant of Nigeria, ICAN during the Nigerian British Chamber of Commerce breakfast Seminar held in Lagos on Thursday. Photo by Lamidi Bamidele

155.3 243.7434 191.6557 159.5111 1.9557 0.2804 233.2165 24.4232 41.4111 25.7336 234.4254

155.8 244.5281 192.2728 160.0247 1.962 0.2904 233.9674 24.5022 41.5445 25.8165 235.1801

CBN Exchange rate as at 17/08/2012

Shareholders' apathy, NUBAN policy escalate value of unclaimed dividends *N52bn as at December 2011 *

BY MICHAEL EBOH

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he low value of dividend currently being paid out to shareholders is further increasing the amount of unclaimed dividend in the vaults of companies listed on the Nigerian Stock Exchange. Several retail shareholders are ignoring the dividend companies have declared because the value is negligible. Some are N50, N100 and N500. These, many say they can not waste their time to claim.

As a result, the value of unclaimed dividends in Nigeria, put at about N52 billion as at December 2011 by the Securities and Exchange Commission,

SEC, is set to further escalate, unless something is done to urgently address the numerous challenges confronting the process of dividend payment and collection.

According to stakeholders who spoke to Financial Vanguard, the major factors that will account for the astronomical rise in unclaimed dividends value is the recently introduced Central Bank of Nigeria’s, CBN, Nigerian Unified Bank Account Number, NUBAN, scheme and investors’ rising apathy towards the collection of dividends with negligible or insignificant amounts.

Fitch Rating Agency, however,

believes that internal capital generation in Nigeria banks needs to be addressed in the sector as the generous dividend policies demanded by investors are not conducive to sustainable loan book growth in the medium-term. The new report considers that many Nigerian banks have thin levels of Fitch Core Capital, which are lower than is appropriate for Nigeria’s difficult operating environment.

According to Mr. Taiwo Oderinde, National Coordinator, Proactive Shareholders Association of Nigeria, PROSAN, presently, we have billions of naira as unclaimed dividends, and the CBN has started another move,

in form of the NUBAN policy that will serve to aggravate the problem instead of solving it.

“In addition to the problem posed

by NUBAN is the issue of dividends with low value. If a shareholder living in a rural area or a remote location has a dividend warrant of about N200 or N300, it will be economically unwise for that individual to spend about N500 or N1, 000 on transportation to the bank to cash or pay that amount into his account.”

“The authorities of the capital market and other stakeholders should act Continues on page 18 C M Y K

18 — Vanguard, MONDAY, AUGUST 20, 2012

Cover Story

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

Value of unclaimed dividends escalatesS Continued from page 17 immediately to address the issue of banks’ rejection of dividend warrants that are not NUBAN compliant. This is necessary to prevent the value of unclaimed dividends from skyrocketing,” said Mr. Timothy Adesiyan, President, Nigeria Shareholders Solidarity Association, NSSA. The CBN had given banks a deadline of May 31, 2012, to comply with the NUBAN scheme, from its initial proposed take-off date of June 2011.

The CBN released the Guidelines on the NUBAN scheme in August, 2010, designed to achieve a 10-digit uniform customer bank account numbering structure among all Deposit Money Banks in Nigeria.

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he scheme requires that only paper and electronic instruments that carry NUBAN codes and pass the NUBAN validation test, that is, instruments with correct check digit, would be allowed in the automated clearing system from May 31, 2012.

According to the CBN, NUBAN has great potentials to resolve the observed problems with electronic payments in Nigeria, as many of them are related to specification of wrong beneficiary account numbers.

The CBN, in a statement announcing the scheme said, “The NUBAN scheme requires that the account number field in the cheque MICR code line should feature only NUBAN numbers. Accordingly, all new cheques issued to customers should carry NUBAN codes.

“This implies that banks have to build in the required intelligence in their respective in-clearing systems to distinguish C M Y K

NUBAN codes from old account numbers while processing inward cheque items and electronic payment instruments during this transition period.”

In a response via text message, Mr. Tunde Lemo, Deputy Governor, Operations, CBN, said the apex bank has no plan to extend the deadline on NUBAN or grant any form of waiver to registrars or shareholders.

His said, “There will be no extensions on NUBAN. Registrars like other customers were given adequate notice. Unclaimed dividend is a legacy matter which has been with us for over 40 years and is not caused by NUBAN.” In the case of dividends with negligible and insignificant amounts, a number of quoted companies have been facing tough times of late, a factor which has led to their posting unimpressive performance in their various financial results.

A number of the companies have blamed this on the tough operating environment, attributable to a number of economic factors, ranging from epileptic power situation, high energy cost, and inconsistent government policies, among others.

The challenges in the operating environment negatively affected the bottom line of a number of the companies and their ability to deliver attractive returns to shareholders.

To this end, the companies now declare insignificant amount of dividends for shareholders.

Most companies declare dividends as low as three kobo per share, while only a few declare dividends above N1 per share. A cursory look at dividends declared by companies on the NSE in 2012, shows that Dangote

Flour Mills Plc declared a dividend of 10 kobo, Dangote Sugar Plc- 30 kobo, National Salt Company Plc - 70 kobo, UTC Nigeria Plc - five kobo, AIICO Insurance Plc - six kobo, Custodian and Allied Insurance Plc - eight kobo, Mansard Insurance, formerly Guaranty Trust Assurance Plc – three kobo, Niger Insurance Plc – three kobo, UnityKapital Assurance Plc – one kobo, NPF Microfinance Bank Plc – two kobo, Japaul Oil and Maritime Services Plc – two kobo, Afromedia Plc – three kobo, Vitafoam Plc – 30 kobo, Stanbic IBTC Bank Plc – 10 kobo and First City Monument Bank Plc – 35 kobo, among others. company declaring a A dividend of three kobo per share will leave a shareholder with 1,000 units of its shares with a total of N30, an investor with 10,000 units will get a total dividend of N300, while an investor with 100,000 units will get a total dividend of N3, 000. A company declaring a dividend of five kobo will leave a shareholder with 1,000 units with a total dividend of N50; N500 for a shareholder with 10,000 units and a shareholder with 100,000 units would get N5, 000. All this figures are of course, subjected to withholding tax, various other taxes and charges prior to collection. The difficulties presented by the NUBAN scheme and negligible dividends have served as a disincentive to investors, leaving a number of them with the decision to abandon the dividends.

According to Oderinde, if for instance, a shareholder living in Ibadan received a dividend warrant of about N200, and transport to and Continues on page 19

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that allows graduates to become immersed in the global economy right from graduation (Cote, 2007). It is important for these students or graduates to have skills in innovation in technology education and entrepreneurship to be ready to fit into the global market place on which today’s economy depends on. Entrepreneurial Skills Needed by Technical and Vocational Education. eadership is not a major cause of Nigeria’s L under-developed status.

Nigeria can become an economic power-house (and realize its visions) only if proper attention is given to education and technological development and promotes and rewards creativity, and

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*Greenview Development Nigeria Limited (GDNL), the Dangote Ports Operations subsidiary, at the weekend donated a patrol vehicle to the Nigeria Police at the Nigerian Ports Authority (NPA) to enhance its security operations. Captain Joshua Oyewumi, Managing Director, Dangote Ports Operations (with microphone) presenting the key of the Toyota Hilux patrol van to Alhaji M.U Kura, Deputy Commissioner of Police, Lagos State at the GDNL Terminal E Building, Apapa, Lagos.

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

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

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

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

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

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

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

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

Vanguard, MONDAY, AUGUST 20, 2012 — 19

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PHCN workers versus FG, show of shame available to the Ministry of Power? Is Professor Nnaji saying he was not aware of this development in PHCN? The management of PHCN had failed in its responsibility to fund its pension scheme which as of today, is in deficit. It did not transfer its workers to the new pension arrangement, neither did it pay its 7.5 per cent contribution nor deduct that out of its workers’ salary, yet it found money to pay retiring employees of the company.

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he government has been negotiating with PHCN workers. While they have accepted many other terms of negotiation, they have refused to open accounts with Pension Fund Administrators to enable their benefits to be transferred to the PFAs as required by the Pension Act. Besides, the Federal Government has agreed to pay the workers their entitlement based on the 2004 Pension Act even when PHCN had failed to fund its superannuation.

The issue here is that PHCN workers are well aware that if

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he current struggle between the Minister of Power and Power Holding Company of Nigeria, PHCN, is to say the least, a show of shame. The ministry had allowed some level of illegality to be perpetuated by the management of PHCN without doing any thing about it. For years after the Pension Act became law, PHCN failed to transfer its workers to Pension Fund Administrators, PFAs, as required by law. The management had continued to pay PHCN retirees from a superannuation fund that was neither funded nor was there any plan to deduct the mandatory 7.5 per cent from the workers’ pay. Now that the ministry wants to privatize the company, the workers are up in arms to resist the much needed reforms in the sector that will bring relief to the ordinary Nigerian.

The workers are in pursuit of selfish interest. While the illegality that favoured them was on-going, they kept quiet, but now that it is the other way round, they want the sympathy of Nigerians. The row between the PHCN workers and the Federal Government arose as a result of the illegality, manipulation of the Pension Act to pay retiring PHCN workers in the past. Several PHCN workers were paid under the old pension scheme while the new pension was in operation, a gross violation of the law.

The question is: Where were the Ministry of Power officials when this was going on? Does it mean that PHCN account was never audited? The Auditor-General of the Federation mean to tell Nigerians that his office grossly overlooked PHCN accounts? Was PHCN account not made

Every Nigerian will be happier if there is a miracle that the government will perform to bring about regular power supply

their pension is transferred to PFAs, they will not be able to access the money until they are sacked or when they attain the mandatory age of 50 years before they can collect the benefits. They want the money in hand and that is why they are asking for severance. If these men are paid their entire benefits in cash, they will jump at it.

But the existing law does not provide for this. They are just pretending and for their selfish interest want to hold the nation back. Every Nigerian will be happier if there is a miracle that the government will perform to bring about regular power supply.

Two of the PHCN staff who are on the war path with the Federal Government over severance allowance are billed to take home about N38.22 million

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or N28.5 million depending on their number of years of service. One who has put in 34 years will have an average take home pay of N38.2 million, while the other that has put in 25 years will go home with N28 million according to a table of terminal benefits accruing to staff of PHCN obtained from those negotiating with the workers’ union of PHCN. From the table, about two of PHCN staffers are in this category of EG1. The most senior of the two staff was employed on the 8th of January 1978 and has put in 34 years.

A break down of the benefits showed that in the EG1 category, total repatriation benefit as at June 2012 amounts to N272,602; severance pay

N6,286,287; 13th month allowance of N232,994, thereby bringing the total severance benefits to N6,791,882. From the available data of benefits schedule, accrued pensions to this particular grade of officer as at June 30th 2004 when the contributory pension came into force was N20,748,617; accrued gratuity benefits as at June 2004, was N7, 242,189.

This brings the total accrued benefits to N27, 990,806. This is not all. Adding 15 per cent of pensionable emoluments from 30th June 2004 to June 2012 of N3,440,627 brings the total accrued gratuity and pension as at June this year to N31,431,433. When the total accrued gratuity, pension and severance package are put together, the worker of PHCN with 34 years of service has benefits of N38.22 million to go home with.

The second who was employed on 2nd December 1986 with 25 years of service will take home a total of N28.5 million as total accrued benefits along the above scheme just like every other PHCN worker.

If that is the case, PHCN workers must learn to understand that they were part of the compromises that led to the current situation. The Federal Government should immediately arrest and prosecute those who compromised the system for their benefit, be it the workers or government functionaries.

Nigerians need power supply, whoever stands in the

Cover Story

Value of unclaimed dividends escalates Continued from page 18 from the bank will cost about N2, 000, such people tend to give up when they compare the cost against the benefit.

He said, “Another reason is that some shareholders who are residing in the rural areas, the only place where they have their bank accounts might be very far from where they are residing and the only account they have is a savings account. Most banks do not allow dividend warrants to be paid into savings account, all these have served as disincentive to dividend collection.”

On the NUBAN scheme, Oderinde tasked the presidency to call the Governor of the CBN to order, saying the controversies generated by the scheme, if

not properly addressed, is capable of hindering the growth and development of the capital market and further erode investors’ confidence.

He said, “This is a clarion call on President Jonathan and other capital market stakeholders to call CBN Governor, Mallam Sanusi, to order on what we call another obnoxious policy that can hinder the growth and development of our capital market, by asking banks to reject dividend warrants that are not NUBAN compliant.

“In one of our recent meeting, we realized that many of our members were affected. We believe many others Nigerian shareholders are facing the same problem.

We would like CBN to come up with another solution by

asking the banks to honour the dividend warrants that have already been issued out, while giving registrars till December 2012 or thereabout, to phase out the old dividend warrants,” he suggested.

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n his own view, Mr. David Adonri, Chief Executive Officer, Lambeth Trust and Investment. Company Limited, said, “If all shareholders open current accounts, it will be possible to claim most of the dividends that get lost in post.

It will also enhance the full implementation of the electronic dividend (edividend) policy.

The Managing Director of a foremost registrar, who prefer not to be named said, “NUBAN is a simple thing and a nation wide position that was

canvassed by CBN that banks should change. It is for the benefits of everyone. When you have NUBAN account, it is for flexibility. From flexibility, it has affected the clearing. You will discover that the clearing days have been reduced drastically. If we are able to achieve that because of globalization, it’s nice. “NUBAN’s position that every bank account should not be more than ten numbers, will allow for integration.”

In addition, Mr. Adesiyan, President, NSSA, said, “If the issue is not addressed immediately, there will be a significant rise in the value of unclaimed dividends.

“However, we plan to meet with the Governor if the CBN and other stakeholders on the need to extend the deadline

for dividend warrant’s compliance with NUBAN. It is necessary that this is done, especially for the good of the capital market.”

Also speaking, Mr. Bayo Olugbemi, Managing Director, First Registrars Nigeria Limited, said, “We are aware of this development and we are making frantic efforts to ameliorate the challenges being faced by our shareholders. “In the interim, we are issuing cheques to replace the warrants as well as asking for Bank details of shareholders for direct or electronic credit. We are also trying to get in touch with the CBN on how to handle this.

Shareholders should be rest assured that subsequent dividend payments from August will be NUBAN compliant.”

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20 — Vanguard, MONDAY, AUGUST 20, 2012

Business & Economy Shareholders, dealers disagree over fees to verify share certificates

BRIEFS Standard Bank’s Africa costs weigh on profit

hareholders and dealers S have disagreed on the increasing cost of verifying

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tandard Bank will press ahead with expensive plans to open another 30 branches in Sub-Saharan Africa this year, aiming to cash in on booming loan and deposit growth even as the costs of such investment hit its bottom line. Africa’s biggest bank by assets, Standard is 20 percent owned by Industrial and Commercial Bank of China. It blamed a below-forecast 9 per cent increase in first-half profit on Thursday on costs of investment.

“It really has been growing rapidly and we’ve continued to invest, which is part of the reason for the cost growth that you’ve seen,” Chief Executive, Jacko Maree, told Reuters Insider, referring to its 16 operations across the continent. But if you look at the profitability in Africa, you saw the profits growing by some 80 percent, just looking at the on-the-ground banks on the continent, which is a very big jump.”

Maree pledged to do all he could to control spending after a 17 per cent rise in the six months to the end of June but said costs would continue to climb as the bank seeks to cash in on an estimated 3040 percent rise in loans and deposits across the continent.

Barrick Gold African unit in talks with China arrick Gold, the world’s B largest gold miner, is in talks to sell a majority stake in its African unit to a Chinese buyer, the first move by new boss, Jamie Sokalsky, to clear out poorly-performing businesses and revive its flagging shares. News of the talks with China National Gold Group, which bills itself as the country’s largest gold miner, saw African Barrick Gold shares closed up 8.0 percent at 425 pence, as investors bet the buyer would pay a premium to help satisfy China’s insatiable appetite for the metal.

If it goes ahead, the sale would be one of China’s largest mining deals in Africa and its most significant incursion into large-scale gold mining on the continent to date. Canadian group Barrick is grappling with falling profit, soaring costs and the fallout from what some investors see as mistakes, including the takeover of copper miner Equinox Minerals.

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*From left: Sesan Sobowale, Director, Corporate Relations, Ngozi Ife-Anene, Corporate Communications Manager, and Mike Onuoha, Head, Public Policy, all of Guinness Nigeria Plc at DRINKIQ Media workshop organiased by the company at its corporate headquarters in Lagos.

Coy invests N100m in developing Lagos beach

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he Managing Direc tor, Elegushi Private Beach, Lekki, Mr Yusuf Elegushi, said that the company has injected more than N100 milllion in developing the beach to its present status. Elegushi told the News Agency of Nigeria (NAN) in Lagos that more funds would still be invested to make the beach an attractive centre to tourists from all over the world..

He described the establishment of the beach “as a step in the right direction to reposition Lagos as a touristfriendly city.’ The sum of N20 million was recently spent to equip the environment with

necessary facilities to make the beach more attractive centre and the best of its kind in the world. We have provided maximum security guarantee as well as some swimming guards for amateur swimmers to ensure their safety,“ he said.

He said that if tourism centres, similar to Elegushi beach, could be established in strategic areas of Lagos, more foreign tourists would be attracted and that would fetch government huge revenue. Elegushi urged the state government to collaborate with the stakeholders in the drive to develop tourism in the

state. “The tourism sector is a major player in growing the economy. We will ensure that Lagos is able to take its rightful place in the tourism industry in the world,“ he said.

Elegushi said that the beach had been well equipped with facilities that would position Lagos as one of the best tourism cities in the world. More facilities would still be put in place to make the beach more attractive and suitable for sightseeing,” NAN quoted him as saying. He urged investors to show more interest in developing the nation’s tourism industry.

share certificates for the ongoing de-materialisation. The disagreement among the capital market operators in Lagos followed a circular by the Securities and Exchange Commission (SEC) stipulating that the exercise was free.

Investigations showed that contrary to the SEC’s directives, most stock broking firms still charged shareholders between N500 and N1, 000 as fees, depending on the location of the registrars. SEC had on March 13 issued a circular making Jan.1, 2013, the deadline for the de-materialisation of all share certificates.

According to the circular, all share certificates de-materialised on or before Jan.1, 2013, will be free while those that come after attract an unspecified penalty.

It also said that the allotment of shares of public offerings would be electronically transferred directly to the shareholders’ accounts in the Central Security Clearing System (CSCS). Mr Sunny Nwosu, the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), said that shareholders were being shortchanged by the dealers, in spite of their losses. Nwosu described the charges for verification as part of the market’s flaws affecting investor confidence. The ISAN boss urged SEC to ensure that it implemented the extant rules guiding the operations of the market.

NBS puts inflation rate at 12.8% in July NKIRUKA NNOROM

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he nation’s inflation rate declined by 0.1 from the 12.9 per cent in June to 12.8 in July, according to the latest figures released by the National Bureau of Statistics (NBS).

The figures are contained in a statement issued by Dr Yemi Kale, the Statistician-General of the Federation, on Friday in Abuja. It said that the monthly change in the composite Consumer Price Index (CPI) was due to persistent change in the prices of some item classes such as oils and fats, and gas.

Others are bread, cereals, meats, fish, fruits and other farm produce. It said that the change was also due to the prices of other items with

relatively smaller weights in the index, such as repairs of household appliances, catering services and other miscellaneous services. The urban inflation rate stood at 15.6 per cent in July as against 15.0 per cent recorded in June.

The statement said that the rural inflation rate was 10.7 per cent for July, while the June figure stood at 11.4 per cent.

“In July, the Composite Food Index increased year-on-year by 12.1 per cent to 138.1 points. The index was also higher than levels recorded in June of this year by 0.3 percent. The appreciation in the Food Index was as a result of an increase in the price of oils and fats, vegetables, soft drinks, as well as fruit classes.

The latter being a key dietary

component during the traditional break of the fast during the period of Ramadan.

“Also, prices of wheat, flour, and associated by-products partially contributed to the rise in the food index. This came as the import duty on wheat grains and flour increased effectively by 20 per cent and 100 per cent respectively in July,” the statement said. It said that the average annual rate of rise of the index was 11.0 per cent year-on-year for the 12-month period ending July.

The statement said that the “all items less farm produce” index, which excluded the prices of volatile agricultural products rose by 15 per cent year-on-year. On month-on-month basis, the

core index increased by 0.1 per cent in July 2012. The marginal rise in the core index is partly attributable to higher price of gas, and other services such as household repairs, catering, and household textiles. The average 12 month annual rate of rise of the index was 13.0 per cent for the 12-month period ending July 2012,” it stated.

According to the bureau, pricing and weighting were the two basic parameters used to arrive at the CPI. It added that 10,534 officers were used to collate the data for the CPI monthly, while 740 product specifications were priced across the rural and urban areas of the 36 states of the federation and the FCT.

Vanguard, MONDAY, AUGUST 20, 2012— 21

Business & Economy

NEXIM Bank seeks cooperation with Infrastructure Bank on project financing

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he Nigerian Export Import Bank (NEX IM) has called for synergy between it and the Infrastructure Bank (IB) Plc. to support the Federal Government’s transformation agenda through project financing.

M r. Roberts Orya, NEXIM Bank’s Managing Director, made the call in Abuja when he led a delegation from the bank on a courtesy visit to the Managing Director of IB Plc., Mr. Adekunle Oyinloye.

He said, “We are excited to be here, the meeting is essentially to deepen interagency cooperation and also explore areas of transactional risk sharing in co- financing projects that have export content so that we can explore areas of mutual cooperation and build synergies and capacities to support government’s transformation agenda. In NEXIM Bank, we are set up to diversify the economy from the monoproduction of oil. We need to work with institutions like you, to be able to actualise our own mandate.,” Orya stated that there was the need for the two banks to work together on a sea-link project.

According to him, the project is intended to ease Nigerian exporters’ movement of goods to other African countries and to improve trade in the ECOWAS region particularly.

He explained that NEXIM Bank had been working hard to see how best to enhance the volume of trade in the region. “ We have the sea-link project; a sea-link project is basically a maritime transport infrastructure; we are looking at how we can enhance the volumes of trade that falls within the ECOWAS subregion and even the Central African region.

“We have seen that our exporters have a lot of problems moving goods out of Nigeria to the neighbouring countries because we don’t have the maritime transportation that will make it easy for them.” Orya said the bank had since 2009, surveyed the market and observed the major constraints it had. He identified one of the constraints as the absence of new technology for the production of goods that would make them compete favourably in the market. rya pointed out that the O sea-link project would cost between 60 million dollars and 100 million dollars, explaining that 40 per cent of the fund would be borrowed, while the remaining 60 per

*From left: Managing Director, News Agency of Nigeria, Oluremi Oyo; Chair of the Lagos NAWOJ, Dupe Olaoye-Osinkolu; Permanent Secretary, Ministry of Women Affairs & Poverty Alleviation, Lagos State, Mrs. Risikat Akiyode; Editor of the Sunday Sun Newspaper, Mrs. Funke Egbemode; and Emeka Mba, the Community Affairs Manager of Coca Cola Nigeria, during the launch of a new magazine at the Nigerian Association of Women Journalists Family Week. cent would be raised through equity holding. He said the bank would be interested in collaborating with the Special Purpose Vehicles (SPVs) under its mandate and explore transactional co-financing and risk sharing relationship with others in projects execution.

He also called for support for a power sub-station and transmission line for the bank’s projects with electricity challenges. Orya said: “For instance, hotel development as tourism infrastructure in support of the national tourism master plan.

“Entertainment/shopping

complexes with multiplexes/ cinemas to support modern cinemas development in line with government’s current policy initiatives to sustain development of the creative and entertainment industries.” Responding, Oyinloye commended NEXIM Bank for the initiative and spoke of the Infrastructure Bank’s readiness to partner with it toward the development of infrastructure in the country.

“There is a whole lot of opportunity within the infrastructure space in Nigeria; if you look at the transport infrastructure sector,

of which the maritime sector is one, there is a huge potential there. The road network is inadequate; the one that is in inexistence is in deplorable condition; the airports are inadequate; the ones in existence are in deplorable condition. The water system is something else; a country like Nigeria should be a regional hub.”

Oyinloye said that the core focus of the Infrastructure Bank was to attract private capital and initiatives for the successful implementation of projects, adding that the use of SPVs would make people

Artee MD lists impediment to retail businesses

By NKIRUKA NNOROM

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takeholders in retail business have fingered lack of space and rising inflation as some of the constraints to the growth of retail sector in Nigeria.

The founder and Managing Director of Artee Group, Mr. Haresh Keswani, said in an interview that the inequality of income distribution was a potential impediment to the growth of formal retail, arguing that it limits the size of the consumer market.

He said, ”With inflation currently at 12.9 per cent and expected to rise to 13.57 per cent by the end of the year as a result of higher prices following the partial removal of the fuel subsidy at the start of 2012, it is likely to constrain purchasing power.”

“Modern outlets are

dependent on the standards of newly built, large shopping malls. However, cumbersome access to land, high costs and the short duration of bank financing is constraining developers’ appetite,” he added.

He noted that the government has a crucial role to play in developing the sector, saying that incentives for real estate developers, alleviation of land access procedures and a greater regard for retail in the country’s economic policies would galvanise growth in formal retail business.

“The government should encourage retail as an industry. It is labour intensive and accessible to workers with basic levels of education; it is the world’s biggest employer,” Keswani stated.

However, some retailers

have said that the country’s large population, positive macro-economic growth and a strong appetite for consumer goods are part of the positives as both foreign and local retailers are dramatically expanding their domestic retail footprint.

According to Renaissance Capital, a multinational brokerage, growth in retail space and opportunity has been accompanied by rising purchasing power.

“This has had a positive impact on people’s ability to spend, with GDP per capita levels estimated at $1656, up from $1541 in 2011 and $390 in 2001.” The firm also said that the country ’s middleclass segment earns about $6000-7000 per year, bringing the purchase of modern household goods within range.

BRIEFS Nigeria arrests ship carrying stolen oil igerian authorities have Nseized a ship carrying 300 tonnes of illegally refined diesel and arrested 11 people on it. They said on Thursday, as part of efforts to curb oil theft that officials estimate siphons off up to a fifth of the country ’s output. Oil theft from Africa’s top producer is a major cause of complaint from oil companies and the finance ministry, both of which lose revenue from thieves hacking into pipelines in operations known as “bunkering”.

The oil is sold abroad as crude or refined for the local market. “The Economic and Financial Crimes Commission (EFCC) on August 15, 2012, took possession of an illegal oil bunkering vessel suspected to be carrying 300 metric tonnes of illegally refined ... diesel,” an EFCC statement said. It said the boat had been chased by authorities last week but had escaped, although one of its crew had died when he fell over the side. Officials later tracked it and seized it. The captain of the ship escaped, it added.

Militancy in the swamps and creeks of the Niger Delta has calmed down since the last decade - when attacks on oil installations at times shut down up to half of Nigeria’s output - owing to an amnesty in 2009.

Nigeria issues N75bn 2017, 2019, 2022 bonds igeria auctioned 75 bil lion naira ($477.43 million) worth of sovereign bonds with maturities in the range of 5 to 10 years at a regular auction on Wednesday, the Debt Management Office (DMO) said. The debt office said it sold 25 billion naira of each note, which are re-openings of old debt. The DMO issued the 5-year bond at a yield of 16.32 percent, higher than the 16.19 percent at last month’s auction. It issued the 7-year note at 16.14 percent, lower than the 16.59 percent previously, while the 10-year paper was issued at a yield of 15.90 percent, compared with 16.30 percent at the last auction.

The original coupon rates of 15.10 percent, 16 percent and 16.39 percent for the April 2017, June 2019 and January 2022 respectively will be maintained, the debt office said in a statement.

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22 — Vanguard, MONDAY, AUGUST 20, 2012

Vanguard, MONDAY, AUGUST 20, 2012 — 23

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24 — Vanguard, MONDAY, AUGUST 20, 2012

Corporate Finance BRIEFS NSE freezes Starcomms shares over capital restructuring

By NKIRUKA NNOROM he Nigerian Stock T Exchange (NSE) has suspended further trading on the shares of Starcomms Plc with effect from Friday, 17th August, 20123.

The NSE in a statement that the decision to place the shares of the company on full suspension followed the receipt of application notifying the Exchange of intended Capital restructuring by the company.

By the suspension, investors would be able to either buy or sell the shares pending the conclusion of the capital restructuring exercise.

As at Thursday, the share was trading at nominal value of just 50 kobo.

The Managing Director/ CEO, Mr. Maher Qubain, had at the last general meeting with shareholders assured that the company has been positioned for sustainable growth through enhancement of its core business and investment in new and emerging growth areas.

He noted that under the positioning, the company has revitalised its offerings and made great strides in reducing its delivery costs.

“In a bid to ensure that it is properly aligned to capture growth opportunities, Starcomms has made important organisational changes by combining its corporate and enterprise businesses to take advantage of the tremendous opportunities around broadband and ICT growth.

Nigeria revenue up 8% in July on higher oil sales igeria’s gross govern ment revenues rose by 8 per cent to 825.39 billion ($5.25 billion) in July, from 763.55 billion naira in May due to higher crude oil exports, the Finance Ministry said. Nigeria distributed 564.08 billion naira to the three tiers of government for July while 213.10 billion naira was added to the excess crude account (ECA), Minister of State for Finance Yerima Ngamma told reporters.

Ngamma said government has removed $1 billion from the ECA, where Africa’s biggest oil producer saves money it earns from crude sales over a benchmark price, currently $72 a barrel.

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From left: Managing Director, Ecobank Nigeria, Mr. Jibril Aku; Mr. Arthur Moloto, Chairman, Government Employment Pension Fund (GEPF) of South Africa; Olor’ogun (Dr.) Sonny Kuku, Chairman, Ecobank Nigeria and Arnold Ekpe, Chief Executive Officer, Ecobank Transnational Incorporated (ETI), when members of the GEPF visited Ecobank Nigeria in Lagos. Public Investment Corporation (PIC) of South Africa managers of the GEPF had invested $250m pension fund in Ecobank.

41 companies didn't pay dividends in 5 years — NSE

BY MICHAEL EBOH

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total of 41 companies quoted on the Nigerian Stock Exchange, NSE, have failed to pay dividends to their shareholders for more than five years.

A breakdown of the companies, according to data obtained from the NSE, shows that three companies last paid dividends six years ago; six companies paid dividends seven years ago; one company last paid dividends eight years ago, one last paid nine years ago; three companies last paid dividends 10 years ago while six companies last paid dividends 11 years ago.

Also, three companies last paid dividends 13 years; three last paid 14 years ago; four companies last paid 15 years ago; three companies last paid 16 years ago, two companies paid 17 years ago; one paid 19 years ago; two paid 20 years ago; one company last paid dividends 26 years ago; one company last paid 29 years ago and one company last paid dividends 31 years ago.

Further analysis shows that majority of the companies identified as the worst offenders where redundant and are likely to be delisted from the NSE soon.

Stokvis Nigeria Plc is the worst culprit, as it last paid dividends to its shareholders in 1981 — 31 years ago; while Nigerian Sewing Machine

Company Plc followed on the list as it last paid dividends in 1983 — 29 years ago.

Champion Breweries last paid dividends in 1986 — 26 years ago; Afroil Plc and Anino International Plc last paid dividends in 1992 — 20 years ago; while Rak Unity Petroleum Company Plc last paid dividends in 1993 — 19 years ago.

Premier Breweries Plc and Studio Press (Nigeria) Plc, last paid dividends in 1995 — 17 years ago; West Africa Aluminium Plc, Hallmark Paper Products Plc and Lennards (Nigeria) Plc last paid dividends in 1996 — 16 years ago; Golden Guinea Breweries Plc, International

Breweries Plc, Costain (West Africa) Plc and Rokana Industries Plc last declared dividends in 1997 — 15 years ago; while Arbico Plc, Union Ventures and Petroleum Plc and Abplast Products Plc last declared dividends in 1998 — 14 years ago.

Eterna Plc, Interlinked Technologies Plc and Juli Plc last paid dividends in 1999 — 13 years ago; while six companies — Livestock Feeds Plc, G.Cappa Plc, Union Dicon salt Plc, Confidence Insurance Plc, Premier Paints and Capital Oil Plc, last paid dividends in 2001 — 11 years.

Three companies — DN Tyre and Rubber, formerly

Dunlop Nigeria Plc, Nigerian Wire and Cables Plc and Nigerian Wire Industries Plc, last paid dividends in 2002 — 10 years ago; Afrik Pharmaceuticals Plc last paid in 2003 and Wema Bank Plc last paid in 2004.

Six companies — John Holt Plc, P.S. Mandrides and Company Plc, Vono Products Plc, Linkage Assurance Plc, Pharma-Deko Plc and Alumaco Plc last paid dividends in 2005 — seven years ago; while three companies, Cadbury Nigeria Plc, Royal Exchange Plc and First Aluminium Nigeria Plc last paid dividends in 2006 — six years ago.

Afromedia assures shareholders of dividend payment …holds 46th AGM PRINCEWILL EKWUJURU fromedia Nigeria Plc, an A outdoor advertising company quoted on the floor of the Nigerian Stock Exchange has assured its shareholders of dividend payment as it holds its 46th annual general meeting on August 23, 2012.

Speaking, Dr. Onaolapo Soleye, Chairman of the company, said the company remains undaunted by the

sluggish state of recovery of the Nigerian capital market from the global financial crises, adding that the company will forge ahead to ensure that shareholders still have something to smile about.

“Despite all the challenges, we are pleased to inform you that the Board of Directors has recommended payment of dividend to registered shareholders. Not just that, shareholders will be given a bonus of 1 new share for every 20 existing ordinary shares held in the company,” he as-

sured. Dr. Soleye said this was the company’s way of appreciating shareholders for their continued commitment to the company during the year.

He, however, observed that the Nigerian business environment will gradually return to stability, whilst the company continues to position for the future, leveraging on its strong base of research and development activities as well as its international alliances in discovering and exploiting emerging opportunities both in the local and offshore African markets.

Vanguard, MONDAY, AUGUST 20, 2012 — 25

Banking & Finance

CBN expresses concerns over safety of banking transactions

BRIEFS First Bank refutes illiquidity claims

By NKIRUKA NNOROM

BY MICHAEL EBOH

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he Central Bank of Nigeria, CBN, has expressed concerns over the rising spate of cyber crimes, and has called on banks to ensure the safety of transactions, especially in the light of the cashless policy regime.

Speaking during the official presentation of ISO 27001:2005 certificate to Access Bank Plc. in Lagos, Mrs. Tokunbo Martins, Director, Banking Supervision Department, represented by Mr. Sola Ogunmoroti, emphasized the need for banks to ensure the deployment of an effective control mechanism for their information technology infrastructure to checkmate cyber crimes and ensure the safety of electronic transactions.

She said information technology is a major driver of banks’ activities, hence the need for regulatory focus on control built about around information technology infrastructures.

She said, “Transparency and accountability is posing serious challenges in many jurisdictions, and this has brought to the fore, the need for banks not to downplay the importance of Information Technology, IT. “In some cases, Control is often disjointed and without effective infrastructure. The CBN has become aware of the need to wage war against cyber crimes, hence the

emphasis on certification of banks’ information security management system” She commended Access Bank for the certification and urged other banks to emulate the bank in this regard.

“The certification of Access Bank is coming at a time the whole world has realized the importance of security of transactions,” she noted.

She, however, added that the certification is not a onoff process, stating that information security control must be strengthened to further develop the information management process.

The certificate was presented to Access Bank by

the Technology Platform Business Resource Limited on behalf of the British Standard Institute, BSI

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mplementation of information security management systems as represented by the ISO 27001:2005 certification, gives a systematic approach to minimizing the risk of unauthorized access or loss of information and ensuring the effective deployment of protective measures for securing the same.

It also provides a framework for organizations to manage their compliance with legal and other requirements, and improve

performance in managing information securely.

Commenting on the certification, Managing Director, Access Bank Plc, Mr. Aigbojie Aig-Imoukhuede, represented by Mr. Victor Etuokwu, Executive Director, Access Bank, said the certification is not an end in itself, that it is just a noted that the banks has complied with certain regulatory requirements.

He said the certification has put fresh responsibilities on the bank, adding that it will continue to develop processes that will see it deliver cutting edge, high quality and safe banking services to its customers.

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inance Houses have been advised to concentrate on the underserved segment of the financial market so as to remain relevant and competitive.

Former Managing Director/ Chief Executive, First Funds Limited, Mrs. Yemisi TayoAboaba gave this advice at the CEO Business meeting and luncheon of Finance Houses Association of Nigeria (FHAN) held in Lagos.

Finance companies, she said, exist to bridge gaps between the big commercial banks and the microfinance banks. And for them to be relevant, they have to concentrate on underserved segments of the market and

irst Bank of Nigeria Plc, FBN, has debunked claims that it is facing liquidity challenges and as such, has stopped extending credit facility to interested persons.

The bank said in a statement that at no time had it stopped lending, noting that the primary responsibility of any bank is to stimulate the economic growth of the society and ensure better standard of living of the citizenry.

The statement said, “After the last Monetary Policy Committee (MPC) meeting and the Central Bank of Nigeria, CBN’s, recent temporary policy actions, wherein required cash reserve ratio was increased by 50 per cent, market interest rates have risen to the highest levels witnessed in over two years.

CIBN partners UI on improving banking expertise

BY CHINEDU IBEABUCHI & BLESSING OBINNA

*From Right; Mr Ehizogie Binitie, Co-founder & Director of Product Management and Marketing, Rancard Solutions Company Limited, Mr Kofi Dadzie, Co-Founder/Managing Director, Rancard Solutions Company Limited, Mr Samuel Mensah, Director, Investment, SubSaharan African Intel Capital Company, Mr Akinyemi Lalude, Managing Partner, Adlevo Capital Technology Company Limited, During the Press briefing on launch of a new product by the Rancard Solutions Company Limited, held last Friday at Radisson Blue Hotel, Ozumba Mbadiwe Street, Victoria Island Lagos. Photo by Kehinde Gbadamosi

Finance Houses urged to focus on underserved segment

By BABAJIDE KOMOLAFE

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develop products to serve these segments efficiently.

“Arguably, the SME segment of the economy is a natural focus. The retail segment may also offer significant opportunities.

Finance companies as a group, may be able to collaborate with government in providing funding and capacity-building that is critical for growing the SME segment,” she added.

She, however, identified inability to access long-term and cheap funds, as a major barrier to the effective operations of finance houses in the country, adding that until this challenge is tackled, finance houses will not be able to contribute effectively to the growth and

development of the economy.

In a presentation titled, Finance Houses and funding challenges – Any silver Bullet? she said that “high cost of funds which leads to r i s k i e r investments makes finance companies less attractive to other institutional financiers.

Furthermore, unlike banks, finance houses are not allowed to accept deposits from the public. As a result, in terms of funding, they are limited to funding from shareholders' private equity companies, development finance institutions and other institutional investors.”

On his part, Mr. Patrick Mgbenwelu, Director and Head, Project and Structured

Finance, FBN Capital Limited, advised finance houses on opportunities and challenges of participating in financing of infrastructure projects through PublicPrivate Partnership (PPP). He said that due to the inadequacy of the pool of funds in the banking system, there is opportunity for finance houses to participate in such projects. “Pool of existing and projected local bank debt funding is insufficient to meet Nigerian infrastructure investment requirements of planned projects across all sectors as the size of domestic banking system is insufficient to finance existing pipeline of deals,” he said

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he Chartered Institute of Bankers of Nigeria, CIBN has entered into partnership with University of Ibadan, UI to improve the level of banking professionalism in the country.

President and Chairman of CIBN, Mr. Segun Aina disclosed this in a visit to the management of the university recently to discuss issues of mutual importance to both institutions.

Mr. Segun noted that the visit was part of efforts to engage key stakeholders on various initiatives of the Institute including benchmarking programmes of other banking institutes in various countries; creating a new administrative structure for the Institute; enhanced certification programmes; reviewed ACIB Syllabus which entails a 4 routes to ACIB; development of a competency framework for the banking industry; improved Continuous Compulsory Development Programme (CCPD) and establishment of a Banking School to deepen knowledge and skills in the industry among others.

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26 —Vanguard, MONDAY, AUGUST 20, 2012

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Vanguard, MONDAY, AUGUST 20, 2012 — 27

Homes & Housing Finance BRIEFS Dangote moves to crash cement price

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Land reforms will facilitate more of this housing development

FG allays stakeholders' fears over land reforms Stories by YINKA KOLAWOLE

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ederal Government has allayed the fears of land owners and other stakeholders over planned reform of management and administration of land in the country, noting that the reform is aimed at revoking existing land documents such as Certificate of Occupancy (C of O).

Chairman, Presidential Technical Committee on Land Reform, Prof. Peter Adeniyi, said the reform is neither meant to repeal the Land Use Act nor usurp the powers of state governors and local government chairmen over land administration or deny individuals, communities or corporate bodies of the right to their lands, but to strengthen capacity for efficient administration of land.

He lamented that only 3 percent of the nation’s land is currently registered. “It is important at this point to state categorically that the land reform programme of the Federal Government is not intended to abrogate the Land Use Act or usurp the powers of the state governors and local government chairmen on land administration or deny individuals or communities the right to their land. But what we want to do is to see how it can be made workable. “As it is now, there is not much that can be achieved from it; but by the time we are through with

the assignment, we would have interacted with people and communities across the country to actually know how to make our land economically viable, not only for land owners but also to government’s as well,” he stated.

Adeniyi said the committee was mandated to look into land matters in both rural and urban areas of the country with the objective of developing

and testing a systematic approach to registration that would develop nationally acceptable procedures for land titling and registration. He said is currently implementing a pilot scheme in Ondo and Kano states in a bid to provide systematic identification and registration of title rights. According to him, “5,000 parcels of land would be registered from two locations in each of the states.

We will take one in an urban area and the other from a rural area. We are going to adopt the systematic approach of land registration rather than the existing sporadic approach. Facts have shown that investments flow naturally and more to countries with land registration system while those without comprehensive land registration would have nothing to attract foreign investors with,” he asserted.

angote Cement Plc has commenced moves to reduce the price of cement in the country by initiating a systematic liberalisation of the product’s distribution.

Managing Director of Dangote Cement, Devakumar Edwin, said the company plans to ensure price stability and reduction by reviewing its distribution networks.

According to him, the company was opening up more mega depots in addition to recruiting new distributors in order to ensure that consumers benefit from its increased capacity to produce cement.

He also disclosed that the company had taken delivery of 500 new trucks in order to solve the problem of logistics.

“What we are doing now is to liberalize the distribution network by increasing our depots and registering more credible distributors.

“All we require is the Certificate of company registration, two passport photographs and letter of intent.

There is also opportunity for individuals to buy direct. Henceforth, we are guaranteeing 48 hours registration with a minimum purchase of one trailer load that is 600 bags monthly. In fact no deposit is required. And customers can collect from any of our plants,” he declared.

Edwin disclosed that the purcase of bulk cement by any interested party was as simple as walking into any of the company ’s distribution outlets. “In the long run, we hope that this effort will not only make cement available in every nook and cranny of Nigeria but will reduce the price and make the price stable.

Mainland Estate subscribers get title documents he management of Pentagon Real Estate T Investment Ltd has handed over title documents to plots of land at the Mainland Park City located in Mowe along the Lagos – Ibadan Expressway axis to another batch of subscribers to the estate.

Speaking recently at the allocation ceremony, Pastor Emeka Okoye, Managing Director, Pentagon REI Ltd, noted that the company had to brace several teething challenges common to real estate business in Nigeria to make the estate project a reality. These, according to him, include the challenge in obtaining Certificate of Occupancy (C of O), approved layout plans, building approvals, obtaining beacon numbers and registered surveys with RED COPIES lodged at the Land Registry.

Others are infrastructure like road, water, drainage systems, electricity, security, the perennial ‘Omo Onile’ debacle, among others.

“Despite the challenges, today, we have come to rejoice with another set of hundreds of subscribers who have become part and parcel of this

Pastor Emeka Okoye (l), MD, Pentagon, presenting title documents to one of the subscribers to Mainland Park Estate, Mowe, Mrs. Bose Anipupo, during the allocation ceremony

establishment. Access to land ownership is a very key factor towards housing Nigerians.

So far, we have issued allocations to thousands of subscribers though we are not done yet.

We are as determined as ever to meet our obligations and to surpass the target we set for ourselves as a corporate entity.

“Today, we are happy to report that over 200 subscribers are being given their title documents in Mainland Park City. Before the end of this year, we hope to fully allot everybody who has fully met his/her obligations to the company, not only in Mainland Park City, but also in other sister estates like Rehoboth City Ofada, Cedar Gardens Agbara, Crystal Gardens in Lekki etc.

28 — Vanguard, MONDAY, AUGUST 20, 2012

Interview

Aviation industry suffering from lack of continuity and proper planning — Akerele

BY NKIRUKA NNOROM

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continuity as we move along the continuum. And what do I mean by this? I could be wrong but I believe in the last 12 years, since 1999/2000, we have had in Aviation/ Ministry of Transport, when we have Ministry of Transport running aviation, some 10 ministers, equating to almost one minister every 1.3 years.

Richard Akerele is the CEO/Managing Director of Aviation Services and Logistics Plc, a major player in in-flight catering services in aviation sector in Nigeria with about 20 years operating experience in the aviation business. In this ou see without a road interview with Vanguard, he map followed, each posited that the aviation minister has his idea of what industry is suffering from it is he/she wants to do which administrative lapses, lack of means that progress is slowed continuity and proper and can be confusing. Over coordination among other there in the Federal Aviation things. Excerpts Authority, I believe we have What is your assessment of had something like six the Nigerian aviation managing directors in 12 industry in recent time years, which is one DG every I think most Nigerians are two years. Again, it does not disappointed with present lend itself to continuity and position or disposition of the therefore becomes a problem aviation industry in our country.

This is being accentuated by the recent unfortunate accident of the Dana Airline some weeks ago in which over 150 people perished. I think it highlights some of the problems we have in our industry today. I am not speaking as a technical aviation expert but as a concerned Richard Akerele individual working in the aviation industry for over 20 years. I have been working in aviation since 1990, so I believe I have some knowledge of aviation in Nigeria. I think the Nigerian aviation industry is suffering from a lack of continuity and a proper plan: well thought out plan, taking account of where we are and we where will we like to be in the next thirty years. I think this road map is important to give us direction.

I also believe that those running the aviation sector should follow the road map and therefore having

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and can be confusing.

So, for you continuity is basically the problem in aviation industry. What of infrastructural development Yes. The continuity is not there.

What I have experienced in the last few years- in the last 15-20 years exactlyevery new administration brings in new idea and always has a winning formula. We are yet to stick to a continuous programme. For anybody, it doesn’t matter whether you are in the Ministry of Aviation, it doesn’t matter whether you are in government, if it is in school or in your own personal life, you need continuity, otherwise you will tend to miss the goal you want to achieve. That is why I think the fundamental problem is lack of continuity.

on. We need to really develop our airport and infrastructure at Murtala Mohammed Airport which is our main airport. We are doing this, but in a fashion I consider not a planned way. I think because of this, there is a major problem in aviation in Nigeria which falls into other areas. In respect to security, we have made some improvement, but we have a lot more to do. We need to become more vigilant and more professional in our

approach to aviation in general. I will like at this point to say that unless everybody within the aviation sector and indeed within the government and within Nigeria and all over Africa come together to work together with one another, it could be difficult to succeed in any meaningful level.

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hat do I mean by this?

You may realise that in European countries and other countries around the world, they work together to achieve their objectives. It is like a football team, everybody has one goal to meet. I have found out that in Nigeria, there is lack of cooperation between the officials of government and private practitioners. We should be working together to achieve the same objectives and our objectives should be one and the same.

How do you think the airlines can be adequately

There is lack of infrastructural development, there is lack of plan as well, but lack of plan is the main issue. You may realise that seven years ago, we relaid the runway at the local airport.

Still, today, several years after, there is still no light in that runway which raises the questionwhat happened?

There are numerous projects around the airport.

The car park has been lying fallow for the past four to five years at least and the story goes

Over there in the Federal Aviation Authority, I believe we have had something like six managing directors in 12 years, which is one DG every two years; again, it does not lend itself to continuity and therefore becomes a problem and can be confusing.

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*Richard Akerele...! do not buy into the general thinking that we sho flights which international airlines can make into Nigeria

Vanguard, MONDAY, AUGUST 20, 2012 — 29

Interview

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I think government subsidy should be in place, and it should be in form of direct subsidy; in other words, there should be reduction in landing and parking fee for the airlines or complete abolition of parking fee for local airlines.

funded because as it is, there seems to be paucity of funds for their operations

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hat is no doubt. I believe that if you take the airlines, particularly in Nigeria, the local domestic airlines are inadequately funded and this leads to problem. Two or three aircrafts do not constitute an airline. I think this is a problem in itself. I think there is not enough capital

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uld restrict the numbers of

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invested into these companies to make them viable and this has to be looked into. It needs to be looked into: to know if mergers are required, but we definitely need to have stronger, financially backed airlines in order to ensure that they are able to run their businesses. Aviation is a highly technical business, it is not a trading business and therefore it must be taken very seriously. For the airlines to succeed, they need to cooperate among themselves and I also think that any subvention or subsidy the government wants to do must be specific. I do not believe in handing out cash to rescue our airlines. I think this is a failed approach. I think it is borne out of the recent N300 billion government bailout that was provided which has somehow has disappeared. I think government subsidy should be in place, and it should be inform of direct subsidy. In other words, there should be reduction in landing and parking fee for the airlines or complete abolition of parking fee for local airlines, which is a direct subsidy by the government, which does not involve cash transfer, but nevertheless will reduce, significantly, the operating cost of these airlines.

ith better funding, the airlines will be better able to service themselves and their customers. I believe that kind of subsidy is better than cash. I also think this kind of subsidy can make our airlines to fly internationally, and be more competitive. We must have a good, strong local domestic airline. It is a prerequisite for a hub in any part of the world. Today, we do not have any strong domestic airline or national flight carrier, and therefore the idea of having a hub is yet to be realised and we will continue to be so until such time we have a strong domestic/international airline. Now, having direct subsidy like free landing and parking fees for domestic airlines that fly internationally will give us competitive advantage, and will also

Richard Akerele

reduce the cost of ticket which will encourage Nigerians to fly on the local airlines and therefore strengthen those airlines. So, I believe direct subsidy like this will be very helpful. It will make our local airlines more competitive and if they become competitive, they will also grow and therefore we should have a hub.

What is your view on putting restriction on the number to times international airlines can fly into this country

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do not buy into the general thinking that we should restrict the numbers of flights which international airlines can make into Nigeria. I say this from my own narrow perspective because I believe it is hindering development in the industry and protectionism of the wrong type is not really beneficial. Why do I say this?

I think over the last few months this year, there have been on-going arguments over the prices of tickets to fly to Europe and rest of world from Nigeria. There have been arguments that compared to other parts of the world or our neighbouring country like Ghana, the prices of our flight tickets are higher using Virgin Atlantic and some other European airlines.

I find it difficult to compare Nigeria with Ghana: Ghana is a relatively poor country compare to Nigeria, and therefore cannot afford the same things that we have.

Their country is smaller as am sure you are aware. Lagos alone probably has more population than the whole of Ghana, and therefore our demand is higher. The basic economics of demand and

supply will tell you that where you have higher demand, you are likely to have higher prices. So, from that perspective, I think the immediate question should be how to alleviate this problem.

One way to alleviate it will be to allow international airlines like Virgin Atlantic, Virgin Air and such like to fly twice, or three times or as many times

the airlines flying more will mean more businesses for our hotels, it will mean more landing fees for the airport authorities and of course, those of us operating in-flight catering services will be providing more food. So generally, the economy will gear up. I don’t believe we should restrict them. We should encourage more flights because I think an average Nigerian will benefit from it rather than saying we should restrict the flights to protect the few airlines we have at the expense of majority of people in this country. I think it is going to rev up the aviation sector two, three, four folds if you are to open it up more. We are a large nation in Africa as you know; more populous and we are also the second richest nation. We are also geographically blessed. We probably have the best position than any other African country because of our geographical location vis-a viz Europe, North and South America and possibly in the middle east. We have shorter distance to all of these destinations and in most cases, half the distance and therefore a lot cheaper. So,

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I also believe that in the interest of all, if we truly want to develop the airports, they should be given over to the state governments as their own property and they should be run and managed by the states because it is then that you will probably see a better quality and a better service delivery.

as they could comfortably afford. An example will be the British Airways that has eight flights a day to New York from Heathrow alone.

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here are eight flights a day in British airway to New York and we have one.

Now, they have eight flights in a day for just British Airways alone to New York and we have one. In other words, if the Airway feels their flight from London to New York is more, they will reduce the price of their ticket to make sure they fill their slot. I think with great supply, you might find that the price of the ticket will drop. What will that mean? The price of ticket dropping to the general public in Nigeria means that people can afford to fly more for holidays and business purpose and vice versa. So, I think it will grow your economy as well because all

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we have all the advantages, but we are not taking it. So, we should really be the number one destination in Africa but to do that, we need to develop our airports as well. That should be in our 30 years plan; having long range plan that we have studied and have talked to international airlines; we have talked to everybody in the industry and not just doing it in isolation. We have asked the airlines what their requirements are and what they feel their demands will be over the next five, ten to thirty years period. Another area I think we really need to consider is our airports generally.

Several years ago, the government employed the IFC to do a study on how to commercialize our airports.

They came up with a plan; a blue print which involves the commercialization and privatization of our airports.

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30 — Vanguard, MONDAY, AUGUST 20, 2012

Homes & Housing Finance BRIEFS Minister commends Bauchi on housing development inister of Lands, Housing and Urban M Development, Ms. Ama Pepple, has commended the Bauchi State government on its efforts aimed at providing affordable housing for residents of the state.

Pepple made the remark at the inauguration of 288 housing units tagged Bauchi Unity Estate, in Bauchi State.

She also commended the state government for the establishment of housing estates that provide cheaper and adequate living environments for indigenes.

She reiterated the commitment of the Federal Government to construct one million houses annually to meet the 17 million needed to house Nigerian citizens.

The minister said the aim is to provide affordable houses in all the states of the federation, as part of the Federal Government’s

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Boom time for Nigeria’s cement industry

BY JAMES MAPOSA

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igeria’s cement producers are spearheading expansion and growth of West Africa’s regional cement industry. Spurred by sizeable expenditure on increasing existing production capacity, the Nigerian cement industry’s local output rose from 10.5 million tonnes in 2010 to 28.6 million tonnes in 2011. This robust increase in production also caused Nigeria’s cement industry to account for 63.6 percent of the West African region’s cement output in 2011.

Despite this substantial rise in production output, Nigeria’s leading cement manufacturers are continuing to pour more investment into further increasing their production capacities during the years 2012 to 2018. Strong economic growth forecasts is a key contributor to the local cement industry spending

Mass housing developments such as this require cheaper cement more on expanding their production capacities. In particular, massive capital expenditure on building new and upgrading old public infrastructure within Nigeria are being experienced, Investments in plugging the housing deficit in cities, such as Lagos, is another f a c t o r expected to boost local c e m e n t demand.

Nigeria’s c e m e n t producers are therefore positioning themselves to take full advantage of this anticipated rise in local c e m e n t demand.

Dangote C e m e n t Group Plc (DCP) has led the Nigerian c e m e n t i n d u s t r y ’s capacity expansion growth.

Between 2005 and 2011, DCP has spent an industry unprecedented $6.50 billion on ramping up its production c a p a c i t y.

Through t h e s e massive c a p i t a l

expenditures, DCP has substantially grown its market share, becoming the market share leader of the Nigerian cement industry in recent years. In addition to Nigeria, DCP is also implementing aggressive expansion strategies by establishing production and distribution presences in 14 other African nations. Going forward, DCP is expected to continue being an industry-leader in terms of growing its existing installed base and regional presence.

Frost & Sullivan expects DCP to be produce 50.0 million tonnes of cement per annum by 2020.

Aggressive growth initiatives such as these are expected to have a significant impact on the existing status quo of Africa’s cement industry. In early 2012, the Nigerian government announced the banning of cement imports into the country, effective September 2012. As a key trade partner to several West African nations, Nigeria’s cement industry is well positioned to export its locally produced excess to these neighbouring states in 2014 and beyond.

Such a development is expected to further impact non-regional cement imports into the region. Supported by anticipated successes in exporting cement within West Africa, Nigerian cement producers are also looking to break into central, east and southern Africa.

Key geographic expansion strategies, that Nigerian cement manufacturers will implement, include: Building of import terminals and supply of bulk and bagged cement to countries without limited limestone reserves; Acquisition of a small-sized cement manufacturer with strong growth potential in countries with sizeable

limestone deposits, and; Construction of a Greenfield cement manufacturing facility in countries with sizeable, but undeveloped, limestone and coal reserves.

Although aggressive regional growth plans are underway for DCP, several constraints hinder the cement producer ’s progress. The predominant use of low pour fuel oil (LPFO) to power cement kilns within Nigeria’s cement industry, significantly raises the industry ’s production costs, when compared to other African cement producers who use coal as their main energy source. Entering into regions like Southern Africa, where most of the cement producers use coal as a fuel source, is a factor that is expected to have a significant impact on pricing and profitability for DCP, notes Frost & Sullivan. The company will also have to contest with lower priced Asian cement imports within the East African region.

Transportation of cement to central and eastern Africa is another factor that is expected to further raise production costs, further impacting profits for DCP. Despite these setbacks, innovation is a key strategy that cement producers expecting to gain a sizeable market share within Africa will continue to adopt. Ashaka Cement, a Nigerian cement producer, is developing its colliery and plans to supply extracted coal to other cement producers within the country. *Mr. Maposa, Team Leader for Environmental and Building Technologies, Frost & Sullivan, a global consulting and research firm, e-mailed this from his base in South Africa.

Vanguard, MONDAY, AUGUST 20, 2012 — 31

Insurance

Pension contributors to undergo biometric data enrollment …Must do bond registration to get entitlements — PenOp

BRIEFS Call to build investor confidence in life companies

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Stories by ROSEMARY ONUOHA

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iometric data enrollment for contributors to the new pension scheme will soon commence in the pension sector as Pension Fund Operators, PenOp, is putting modalities in place to kickstart the initiative.

Chairman of PenOp, Mr. Dave Uduanu, who disclosed this in Lagos said that the move is to capture the biometric data of all the contributors to the new pension scheme.

Uduanu said “Where we are now is that we are going to work on a collaborative basis to capture the biometric data of everybody who has a pension account. Now if your biometric data is not captured before because it was done manually, we are going to do an electric capture of those biometric data. I expect that to commence as soon as possible and concluded very quickly.”

Uduanu said that once the biometric enrollment is complete, the transfer window will be opened subsequently by the National Pension Commission, PenCom. A transfer window is a process that allows a contributor to the new pension scheme to change from one

Pension Fund Administrator, PFA, to another.

Uduanu said “The embezzlement in the previous pension scheme is because there was no biometric data capture. So they don’t know who they are paying and there are ghost pensioners. As such, we don’t want to have ghost pensioners in this new system and that is why PenCom is

insisting on all of this.”

The PenOp Chairman also said that so many pensioners that transferred from the old scheme into the new scheme are yet to do bond registration as required by the Pension Reform Act 2004.

He said “If you don’t do bond registration, you are not going to receive your entitlements. When the new

*From right; Mrs Omobola Johnson, Minister of Communications and Technology, presenting Web Jurist Award to Ejike Osisioma, Head, IT, Royal Exchange Plc.

Crystalife Assurance plans diversification of product offerings

BY RITA OBODOECHINA

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he board of Crystalife Assurance Plc said it will seek to improve its industry presence by diversifying its product offerings and optimally deploying delivery channels.

The chairman of the company, Mr. Kehinde Durosinmi-Etti disclosed this to shareholders during the company’s 14th annual general meeting held in Lagos.

Durosinmi-Etti said that in terms of brand image and operational efficiency, the company will always seek improvement in all its spheres of operation, required investments in people, technology and process will be given optimum attention.

He noted that the company

would implement a risk based operational approach with the objective for an efficient management of all processes.

Speaking on the financial performance of the company, he said the company recorded a relatively good performance in the year ended December 2011.

According to him, gross premium income stood at N2.6 billion, which was a 24 per cent growth from N2.1billion reported in 2010.

He said its life fund grew by 28 per cent from N1.13 billion in the previous year to N1.44 billion, resulting in actuarial valuation surplus of N788 million.

Accrued shareholders portion of this surplus of 44 percent increased the share holder’s fund from N3.00 billion in 2010 to N3.2 billion in 2011, while investment

portfolio grew from N3.7 billion to N4.1billion, recording a profit before tax of N225 million.

The company further declared a final dividend of 2kobo per ordinary which will be paid within a month’s time.

According to the Chairman, “In 2012, an estimated industry Gross premium of about N250 billion appears realistic, as the success of the MDRI should significantly drive volume in that year and in subsequent years. This development will engender the creation of additional jobs across the industry through the agency network system, expectedly this should increase market penetration and create a wider outreach for the desired consciousness about insurance in Nigeria”

scheme started, there was a cut off period. Technically speaking, they were doing the defined benefits scheme, so there was an actuarial evaluation of how much government owned them at that point. But government have said, ‘when you are about to retire come and do a bond registration’ and it means retirement bond, which is that government is owning you this money.”

According to Uduanu, to do a bond registration, contributors should go through their PFAs and process their documents, then they are to make sure that all their contributions are clear.

After that Pencom will approve the money that the government is owing them which is the accrued retirement right.

“The accrued retirement right will now be paid into your account and that is what we call consolidation. When it is paid into your account, we now know that all the money government owns you both for current and past job is now complete and we can pay. Without that we cannot pay.”

While complaining that some contributors don’t go for bond registration Uduanu said, “If you don’t go for bond registration, there is no way that PFAs will pay you. If you don’t do bond registration, you are to be blamed, you can’t blame PenCom.” The bond registration, according to Uduanu, is necessary because there must be an order to the new pension system, stating “If there is no order, the monies will be lost like the old system. But some Nigerians don’t want to respect that order. If you tell somebody to go and do bond registration, he won’t do bond registration, you tell somebody, go to your employer and get a confirmation letter that all your benefits have been paid , they will say ‘no just pay me’.”

“It is a retirement savings account; it is not a bank account. You can go to your bank and collect money any time you want but this money is for retirement. So contributors must go to their PFAs and make sure that all the documentation has been collected. Some people say

nvestors’ value life insurance assets lower and the industry needs to boost confidence in the sector, TAL MD Jim Minto says.

“Markets value our assets lower and it is very common for life companies to trade at discounts,” he told the Financial Services Council conference on the Gold Coast earlier this month.

“If we are to continue to pay claims, we need to restore investor confidence in our life companies.”

OnePath Acting MD Gavin Pearce says providers of capital will go where they can get the best returns.

“Investors look at capital returns but in life insurance the cost of distribution draws on the capital,” he said.

“Unless we change investors’ attitudes to life companies, we will fall down paying the claims.”

Swiss Re reports 3% rise in treaty renewals

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wiss Re has reported rate increases of 3 per cent from the July reinsurance treaty renewals, mostly from Australia, New Zealand and the Americas.

CEO Michel Liès described the month’s renewals as successful and says the rate increases follow last year’s “already strong levels”.

But a solid performance from the reinsurer’s property and casualty arm was masked by an almost $US1 billion ($946.6 million) loss from its US life assurance business Admin Re, which saw Swiss Re’s second-quarter profit fall to $US83 million ($78.5 million) from $US960 million ($907 million) in the previous second quarter.

The group’s combined ratio for the quarter was 85.7 per cent, compared with 81.4 per cent in the corresponding period in 2011.

The property and casualty business increased profit by 86 per cent to $US717 million ($677.7 million), with Mr Liès putting the strong result down to fewer catastrophes, reserve releases and investment gains. Premiums rose 18 per cent to $US2.8 billion ($2.65 billion).

Mr Liès says the July renewals comprise 20 per cent of the group’s reinsurance annual treaty premiums and he expects the trend of strong rate increases to continue.

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32 —Vanguard, MONDAY, AUGUST 20, 2012

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Vanguard, MONDAY, AUGUST 20, 2012 — 33

“The outstanding faults of the economic society in which we live are its failure to provide full employment and its arbitrary and ineuitable distribution of wealth and incomes”. John Maynard Keynes, 883-946, in The General Theory of Employment, Interest and Money. Published in 936.

[This week I continue where the series ended last week with my WELCOME DR OKONJO-IWEALA, published last year August when she returned as Finance Minister].

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hile you are getting busy finding an swers to the questions above, let me draw your attention to the statement above made by Keynes at the end of his magnum opus. Although written 75 years ago, the observation is as relevant today as when it was written in 1936. In fact, it has become more relevant in the modern global economy – Nigeria included. At the moment, over 200 million people are looking for jobs all across the world – perhaps about 42 million of the job seekers are in Nigeria alone.

Part of the reason, as you must have known, as World Bank Managing Director, is the fact that growth, estimated at 7% per annum in Nigeria, is not creating jobs and the benefits of growth are not being shared broadly. Now as in the period before the Second World War, when Keynes pointed to the destabilizing impact of “arbitrary and inequitable distribution of wealth and incomes”, Nigerian politicians in all the political parties governing at the federal and state levels have institutionalized income inequality and narrowed access to employment.

Take a look at the high profile selections made before the just concluded elections and you will notice the increasing strangle hold on political positions by a few families or cabal in virtually every state.

Kwara might as well be called

Time to go Dr Okonjo-Iweala —2 Saraki State. But, what was once limited to one state is now becoming national. In Plateau, the governor appointed his son as Special Adviser; “arbitrary and inequitable distribution of wealth and incomes” is not better illustrated than that. To some extent, the same is true of states under “progressive” governors. Dr Okonjo-Iweala is surely familiar with the broad outlines of Keynes theory which guided economic policy from the late 1930s until the conservative elements staged a come-back which has resulted in the current global recession. Certainly, she must ask herself where to start redressing the inequitable distribution of wealth in a country where legislators earn over 100 times the take home pay of a professor.

Previously, a country growing at 7% would have been churning out jobs at a rate that will almost guarantee full employment; if not labour shortage – given population growth rate of 2.85%. Instead of scramble for workers, such as we experienced during the Gowon administration in the 1970s, people are still being laid off and factories are closing.

In addition to all these, the Finance Minister came the first time when the international price of crude oil was heading for the roof. Given imminent global recession on account of economic crisis in the US and Europe, she might have arrived just in time for the price of crude to head for the basement.

She needs all the luck in the world to avoid becoming the scapegoat for what might follow. hat was last August; we T are in another August and the economic debacle

Dr Okonjo-Iweala facing us reminds me of historian Trevor Roper ’s Last Days of the Third Reich, and the Chapter on Two Winters.

The first winter was triumphant for the German Army in Russia; the second was disastrous. Over 800,000 German soldiers perished in the snows of Stalingrad. Last year, you enthusiastically claimed that your mandate is to manage the economy in order to create jobs. At least that was what the President told you.

Well, Madam, the same President, a few weeks ago, announced that “During the campaign, our emphasis was more on job creation, power, but now what worries us most is security. This is because you must be alive before you will eat food.” Obviously, your boss does not realize that if you don’t eat you will be dead soon enough. What concerns us here is the fact that your role in government had been demoted. Job creation, power and food security will now take the back seat. Henceforth, the Minister of Defence, the DG-NIA, the National Security Adviser, the DG-SSS and the Inspector-General of Police, IGP, will take preference

over the Economic Management Team which you co-ordinate. Since you were probably aware of what happened to the US during the wars in the Middle East, you need not be told that, when a nation tacitly selects guns (metaphor for security) over gari (metaphor for jobs, power and food), the allocation of funds head towards destructive pursuits not constructive objectives. That has been the verdict of history which will not change because the country now embarking on that venture is our own Nigeria.

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gain you are aware that even nations which have expressed the burning desire to create jobs – US, European nations, South Africa, Brazil etc – are failing woefully to achieve the goal of job creation mostly on account of lopsided income distribution. A nation, whose President had declared employment a secondary concern, has no chance whatsoever. So, Madam, forget jobs. The core mandate for which you were recruited has become part of A.O.B (Any Other Business) at the weekly Federal Execu-

tive Council meeting. That is not your fault. Let me quickly add, you just went to work for the wrong boss.

However, let me point out your personal faults for which you should seriously consider throwing in the towel. Basically, it comes to one word CREDIBILITY. Last August, you were a highly credible Managing Director of the World Bank. Even, some who disagreed with your debt repayment option accepted the fact that it was a step in the right direction. Your second coming was fraught with dangers – of which you were probably not aware. But you were warned. Let me again take you back to last August.

In the second part of WELCOME BACK, DR OKONJO IWEALA – 2, the following observations were made. “ WELCOME DR OKONJO-IWEALA; YOUR COURAGE IS ADMIRABLE “The man who enters a room by breaking down the door can be justifiably accused of violence. Yet something must be said about the state of the door”.

Professor John Kenneth Galbraith, Nobel Prize Winner in Economics.

Nobody who studied economics in the United States in the 1960s to 1980s could have avoided the great Harvard Professor of Economics and iconoclast. You must have read some of his books during your years in the university. If you are wondering why this is important, it is in reference to your press conference on Wednesday, August 25, 2011 during which you were reported to have said that, “There has been a lot of debate on fuel subsidies and we have all resolved that removing it is a good direction to go on. You have to leave it to us to decide when it is prudent to do so”.

BUSINESS & ECONOMY CBN to commence 24-hour PoS transaction settlement

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he Central Bank of Nigeria (CBN) said in Lagos that it would commence a 24-hour transaction settlement on Point of Sales (PoS) for merchants. Mr Tunde Lemo, the Deputy Governor, Operations of the bank, stated this at a seminar to commemorate the 30th anniversary of the Institute of Chartered Accountants of Nigeria (ICAN), Ikeja District.

The theme of the seminar was “Complementing the Efforts of CBN-Imperatives and Realities of Cash-less Policy”.

He said that the 24-hour

transaction settlement would be achieved through a method described as “Straight Through Process (STP)” Lemo, represented

by Mr Dipo Fatokun, the Director, Banking and Payments System Department of the bank, said the process would allow immediate credit of merchants’ accounts, instead of the present two days settlement. He said that the development would also increase people’s confidence on the cash-less policy and encourage frequent usage

of PoS terminals.

Lemo said that the CBN Governor, Malam Sanusi Lamido Sanusi, had already signed a directive on the development, adding that the new process would start on Sept. 30, this year. Lemo, however, disclosed that the CBN was planning to rollout PoS terminals that would be Wi-Fi enabled to improve on the connectivity problem. The deputy governor said that one of the challenges facing the cash-less policy, particularly in the area of mobile payment was a lack of awareness that

the policy was in progress.

He said that the CBN had registered additional three telecommunications companies to complement the initial two in providing connectivity for the mobile money payment. Lemo said that 14 mobile money agents had been registered in addition to the existing 16 for effective service delivery. The President of ICAN, Mr Adedoyin Owolabi, said that as accountants, the new policy presented fresh challenges for audit control reconciliation and accounting.

Owolabi said that the policy presented a window of opportunity to clients, employers and stakeholders who would look up to accountants to provide solutions that impacted positively on businesses. He said that the policy would promote safety and control systemic and operational risks inherent in manual transactions. Mr Patrick Sanni, the Chairman of ICAN, Ikeja District, said that the body would continue to partner stakeholders to ensure that members keyed into and benefit from the policy.

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34 — Vanguard, MONDAY, AUGUST 20, 2012

Aviation BRIEFS Boeing celebrates delivery of Ethiopian Airlines’ first 787-8

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oeing and Ethiopian Airlines is celebrating the delivery of the airline’s first 787 Dreamliner.. The delivery was made last week, th 14 August and Ethiopian Airline is the first African based operator to receive the plane.

In a statement, Tewolde GebreMariam, CEO of Ethiopian Airlines said .

“Today begins the first day in a new era of flying for our passengers and brings us even closer to our vision for the future, Vision 2025. We are pleased to be the first airline in the world outside Japan to receive this technologically advanced aircraft. We have been waiting for this airplane and now that we officially have it and will show it to the world, I can say with pride, it was worth the wait. This airplane is going to move Ethiopian Airlines to the forefront of aviation leadership around the globe.”

IATA rates Landover Aviation Business School top 10 Authorised Training Centre

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nternational Air Transport Association ,IATA, has rated Landover Aviation Business School ,LABS, Lagos , as Africa Top 10 Authorised Training Centres (ATCs) for 2012.

This is coming as LABS is been honoured by IATA for the second successive year having being named amongst the Top 10 ATCs in Africa in 2011. Business Manager of Landover Aviation Business School Mrs. Toyin Sanni who spoke on the award received by the school noted that the award was given in recognition of the number of students trained by the school as well as the quality of training delivered as determined by the rate of success the students had in their examination.

According to Mrs. Sanni, IATA appreciated the outstanding contributions of the Landover Aviation Business School for developing human capital in the air transport industry.

Imo State to construct new airport terminal on PPP agreement Stories by LAWANI MIKAIRU & DANIEL ETEGHE

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he Imo State Government has indicated its interest to build an ultra-modern airport terminal through a PublicPrivate-Partnership (PPP) agreement.

Disclosing this development during a press briefing at the Imo State Liaison office in Lagos, Special Assistant to the Imo State Governor, Lagos Liaison office, Hon. Lisa Chinwe said the administration of Governor Rochas Okorocha was poised towards developing Imo State through the construction of several projects including building a brand new airport terminal in the state.

According to her,”most of these projects that the government is intending to embark upon including the building of a brand new airport terminal in the state will be on the PPP agreement, so that is how they will be done.”

Hon. Chinwe further noted that when completed, the airport terminal would bring greater advancement in airport infrastructure and foster development in the state.

The intention of the Imo State Government is coming on the heels of renewed call by the Chairman of Bi-Courtney Group Limited, Dr. Olawale Babalakin for more Nigerian private investors to consider entering into the PPP

agreement with the government in order to foster development in the aviation industry. Dr. Babalakin said; ”There will be greater advancement in airport infrastructure if more Nigerians toe the line of PPP arrangements such as that of Bi-Courtney.”

Enumerating the various laudable projects embarked upon by the Okorocha administration, Hon. Chinwe said; “Governor Okorocha is

doing everything possible to make Imo State good in just one year in office. We are going to have what is called, Imo City in Lagos to showcase the rich cultural heritage of Imo State and by next month, we are going to start a free Igbo education centre here in the liaison office, whereby we can teach people Igbo language freely. We are also going to have a Lagos Villa, it is an estate project that will afford Imo State citizens in

Lagos the opportunity to have access to housing, also an insurance scheme will be put in place to assist those doing business in Lagos in the event of fire outbreak and other unpredicted disaster. We are poised towards assisting our businessmen in Lagos,” she stated.

According to her, the government was doing everything possible to make sure that all Imo citizens in Lagos were carried along.

*From left; Coordinator, National Lottery Regulatory Commission, Bayelsa, Rivers & Akwa Ibom, Peterson Evi-Parker handing over the car key to one of the winners of Hyundi ix35 SUV Mrs. David-West Annette. With them is popular Nollywood actor, Bruno Iwuoha at the 4th Prize presentation of the ongoing MTN Goodwill Automania in Port Harcourt.

“Road Show”: Create enabling environment first — ATSSSA

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inister of Aviation, Princess Stella Oduah has been urged to create the enabling environment that would make the aviation industry more viable and attractive to foreign investors.

The call was made by the National President, Air Transport Services Senior Staff Association Nigeria (ATSSSAN), Comrade Benjamin Okewu, recently Lagos.

It will be recalled that the Minister had embarked on a 10-day Aviation Road Show with top officials of the ministry and agencies in the aviation sector in a bid to woo foreign investors to the aviation industry.

Speaking in an interview with newsmen, Comrade Okewu said the infrastructural changes being witnessed in the sector presently should have been concluded by the minister of aviation before embarking on the “ road show ” to woo investors to the industry.

Okewu noted that the intention of the minister to woo investors to the sector was a good thing, he however added that the timing of the trip was wrong saying that there are investors in Nigeria capable of investing in the sector.

“If you ask me if the road show is what is needed for the industry now, my answer

will be no. There is nothing wrong in doing a road show, but before you bring in investors you should first create the enabling environment. There is a process, I thought we were remodelling. Have they concluded the remodelling? I thought we said we wanted to change the face of infrastructure in the aviation industry, have we concluded that? Is that what you want to bring investors to come and do? Don’t we have investors in Nigeria that can do that?

Yes, there is need for us to go out and look for investors but I think critically that the timing is wrong.”

Comrade Okewu believes

that because of several projects that are ongoing, the Minister should allow these projects to be completed before going out to woo investors. According to him ‘’ you have your roadmap, you have aerotropolis that you want to turn the industry into, and these things have not been subjected to inputs from various stakeholders, for it to have a concrete model that you can sell to investors. If those investors come now and start punctuating all those models what would you say?

Incidentally, it is a good intention, it is a good project but sincerely the timing is wrong.

Vanguard, MONDAY, AUGUST 20, 2012 — 35

People in Business

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r. Brown Ekanem is the Chairman, Board of Directors, You-Nik Nigeria Limited, an Information and Communication Technology firm established in 2006. The outfit is into computer training, website design/development, software and multimedia virtual tutorial development. In this chat with Vanguard, Ekanem speaks on his journey into business and the challenges.

Excerpts: According to Brown Ekanem, a Physics 0graduate from the University of Calabar, he had always wanted to be an entrepreneur. “During my university days, I was always engaged in one form of business or the other until I found my passion in Information and Communication Technology. ” Child of necessity: Necessity, they say, is the mother of invention and so it was for Ekanem. “The idea of Multimedia Virtual Tutorial (MVT), usually developed with pictorial and video animated illustrations, came to me on a particular day when I was taking some of my computer students on internet lessons in 2004.

That particular class was very exhausting so I started wondering if there was a way I could deliver my lessons to my students and other people simultaneously without stressing myself much, and behold, the idea of MVT came,” he said.

Continuing, he said with the MVT which is designed to take education beyond the four walls of the classroom, a student can take a full class or course work from the comfort of his/her home or office. “It complements school activities and ensures 95% comprehension and retention of every topic studied as people remember more of what they see than what they hear.

It gives the student the opportunity to watch and listen to a particular lesson over and over again until maximum understanding is achieved.”

The Lafia, Nasarawa-based outfit which has staff strength of over 40; has two subsidiaries - You-Nik Celebration Nig. Ltd and You-Nik Academy Nursery and Primary School.

Speaking on the reason for setting up You-Nik Academy, Ekanem said, “two years ago when my daughter was born, I was worried about a suitable school for her and since my wife has passion for children and education, we decided to provide good early childhood educational services for allround development of children through best teaching methodology. Our motto is Moulding future leaders."

On the challenges in doing business in Nigeria, Ekanem said he had faced several challenges. “Financial constraint and lack of skill in some areas I delved into. I have fallen down severally in the course of my business and I have gotten up.

Now I am not scared that I will fall or fail in my business or feel bad about what people will say because I know that no matter

Always rise up no matter how many times you fall – Brown Ekanem

*Mr. Brown Ekanem

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Stories By EBELE ORAKPO

To be successful, one does not need to work hard only but intelligently hard, be honest and time-conscious

how many times I fall, I will rise again,” he stated.

Ekanem believes that although hard work is good, it does not on its own guarantee success. He said, “To be successful, one does not need to work hard only but intelligent-

,

ly hard, be honest and timeconscious and never be afraid to fail, always rise up no matter how many times you fall, learn to give back to the society, above all, be prayerful.”

On Nigeria’s educational system, Ekanem regretted that

the average Nigerian youth goes to school mainly for the certificate instead of knowledge. “Some parents are not helping. These days you see them paying mercenaries and teachers to help their children pass examinations. I find that very disturbing.

“We recognise that every parent wants to see their child succeed sometimes even by all means. What we do in our school is build a good sense of value in the kids, a value that tells them they can succeed,

Normalcy returns to Port Harcourt refinery …Marketer predicts price change in products

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ull production of DPK (ker osene), PMS (petrol) and AGO (diesel) by the Port Harcourt Refining Company (PHRC) and marketing of petroleum products by PPMC both subsidiaries of NNPC, has commenced in Port Harcourt. PHRC supplies refined petroleum products to PPMC depots in Port Harcourt, Aba, Calabar and others.

Last month, National President of NUPENG, Igwe Achese and Rivers State Chairman of IPMAN, Sunny Nkpe had raised alarm over the illegal diversion of crude oil from PHRC. They had stated that for over three months, the management

of PHRC complained of insufficient supply of crude oil to produce DPK and AGO. During this period, the demand for the products exceeded supply leading to increase in pump prices of PMS, DPK and AGO from N97, N110 and N145 to N105, N135 and N170 respectively in the South-South and South-East regions.

Speaking with newsmen, the Managing Director, Riquest Oil and Gas Ltd, Mr. Chinedu Okonkwo thanked the Ministry of Petroleum and the new management of NNPC led by Mr. Andrew Yakubu for coming to the rescue of both marketers and consumers in the region.

On the price change in petroleum products, Okonkwo said, “If you are a good business analyst, you will observe that in the past two-three years, the price of kerosene goes up between October and December. Price of petrol will drop a little because within the next few weeks, we expect PPMC to increase loading and marketing of petrol. Secondly, in Port Harcourt, Governor Ameachi is repairing the Whimpey-Iwofe Road, a major commercial route for the transportation of petroleum products.

"When the road is fully repaired and loading commences fully at Masters Energy and Petrostar, price of petroleum products will

that they are excellent children therefore they should study hard to showcase their innate abilities.

"We focus on quality in our content, combining both British and Nigerian curricula in grooming the kids; qualified and well motivated teachers and child-friendly equipment to create a good educational environment. "When these fundamentals are present in any school, the pupils get exposed and gain confidence to a point that during external exams, they will not need the help of their parents."

He advised the Ministry of Education to ensure a more strict monitoring of schools by committed and passionate staff to be able to evaluate and correct what happens in the classroom.

“Most teachers in Nigeria don’t have confidence in the profession.

Many of them are just teaching because it is the last resort. I know this because I have interviewed many in the course of our existence. A banker who earns N50,000 wears well-fitted clothes and works with a smile and contagious confidence, unlike a teacher who earns about the same amount. We need to encourage and promote this profession because the future of our nation depends largely on it.

“At You-Nik, we developed a scheme to make teachers proud of their profession. We have a free medical scheme for all our teachers which covers two of their family members. We reward the best based on set parameters. Anually, we give gifts like car, plasma TV, deep freezer, motorcycle etc.

We increase their salary every year and send them for different professional trainings to help them adopt excellent methodology in teaching. Most importantly, the relationship between the management and teachers is that which increases their confidence and love for the profession. We remind them of their importance.

The school which started with eight pupils, now boasts of a population of 170 pupils in just two years, with a teaching staff of 18. be forced to drop.”

On diesel, he said since the country has hit 4,477 megawatts in power generation and the Petroleum Minister said that supply of gas to PHCN has increased, and also in rainy season, the high water level causes increase in power generation, "it is safe to predict an improvement in electricity power supply which will negatively affect the consumption of diesel." He noted that the decline in global market price of crude oil will adversely affect the price of refined products. "These two major factors will cause the price of diesel to decline. For instance, an average hotel uses 8,000 to 10,000 litres of diesel monthly, since the electricity power has improved, I am predicting a fall to 5,000 to 6,000 litres per month,” he said.

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36 — Vanguard, MONDAY, AUGUST 20, 2012

Agric

On the state’s policy on agriculture I am sure that you are conversant with the agenda of Governor Olusegun Mimiko. He has A caring heart agenda which represents the things the governor wanted to do and they are what he has been doing.

It might interest you to know that the 'A' standing alone represents Agriculture and Food security. That is by no means a coincidence, it is a deliberate design and that underscore the huge importance attached by the governor and his administration to agriculture.

As you are aware that is where we are coming from as a country and a state, but the advent of oil put paid to all of that, but we are coming back to the basics , because it has dawned on us that what is sustainable and inexhaustible is agriculture and that is one economic area that can give millions of jobs within months and that is why this government has taken agriculture as number one to run with other areas of the economy.

On the objectives of the ministry under the caring heart agenda

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ssentially, it is for agriculture, food security and we are looking at that. The objectives include self sufficiency in basic food commodities in which the state has comparative advantage in their production.

It also has the objectives of transforming agriculture from the level of subsistence to that of commercial agriculture through mechanization, as well as the increase of livestock and fisheries so as to increase animal protein in the diet of the populace.

We also have the objective of using agriculture to generate employment for the youth and for them to make a genuine career in agriculture.

Just as we have the objective of modernizing agricultural C M Y K

Our achievements in agriculture speak volumes — Olorunfemi production, processes, storage and distribution through the infusion of improved technology and management techniques so as to make it more responsive to the demand of other sectors of the economy.

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n other words, we are looking through the agricultural value chain from the concept, to production and all the way to processing and packaging as well as marketing.

We want to enhance the capacity for value addition, leading to employment and are able to facilitate the acquisition of farm lands and title holdings towards improvement of agriculture through public–private partnership initiatives.

This is where you will have the large scale agriculture, talking about 5000, and 10000 hectares.

On what the government has done to move agriculture from subsistence level to commercial level Thank you, why we don’t want to flung figures, let me start by saying that as at this time last year, this government had spent about N6 billion on agriculture

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ndo State Commissioner for Agriculture, Engr. Ademola Olorunfemi, is a delight to listen to as he reels out what he thinks the state under the leadership of Governor Olusegun Mimiko has achieved in the area of agriculture.

In this interview with JIMOH BABATUNDE in his office last week as the state prepared to dole out N45 million to the 9 th set of beneficiaries of Fadama III project, he said the state has done more to uplift agriculture.

Here is an excerpt

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•Engr. Ademola Olorunfemi these items - herbcides , fertilizers, seeds and even sprayers. Of course, like I said, these inputs are directly from the manufacturer, that means they are genuine, cost competitive and of course, we

We also introduced the buy back scheme where we buy the produce from the farmers at competitive market rates, we go to their farms to buy and it saves them cost of transportation, spoilage etc

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excluding this year.

The government has been able to increase our agric input supply agency which is in charge of providing genuine agricultural inputs, seeds, fertilizers, herbicides, insecticides and other inputs to farmers at highly subsidized rate, usually in the range of 50 – 70 per cent.

The government immediately on assumption of office, pumped in about N200m to the existing N46m for the agency to procure all

tractors from less than 30 that we met on ground and we are buying another 50 very soon.

We have brought in the private sector to come to this area and assist. e have increased our tractor hiring unit from the former four in many years back to 18 so as to cover the 18 local governments and there is no magic, we are just using the same 18 farm centers.

So we have done a lot of training in every area using the engineering services in terms of tractor, ADP extension, Fadama, IFAD and others, to increase the capacity of our farmers.

On tractor for instance, we are going to commence training of 100 youths on tractor operation and mechanics soon.

On financing and loans We have given out loans to over 2000 farmers. We have given out N700 million, under IFAD, ADP, FADAMA; we have given out grants of over half a billion since inception of this government.

subsidy them by 50-70 per cent. he government has 18 farm centres spread across the state, so these inputs are distributed there, we network through farmers’ groups, media and our extension agents in Agricultural Development Project (ADP) to reach out to farmers.

As if that is not enough, the government through the ministry created mobile farm centers. Through the mobile

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farms, we take the farm inputs from the 18 farm centers to markets in villages and hamlets on market days , with prior information to farmers that we are coming and we sell at the same rate famers would have bought going to the same farm centers , having travelled one hour or more.

We also introduced the buy back scheme where we buy the produce from the farmers at competitive market rates, we go to their farms to buy and it saves them cost of transportation, spoilage and all of that and then sustain their interest in producing the following season .

At off-seasons when these produce become very expensive, we sell to farmers at subsidised rate of 50 per cent of market price. In fact, the governor has given approval for the sale of 500 metric tonnes of maize to the general public, mostly poultry farmers.

We have huge silos in all 18 farm centers as well as stores where you could keep the grains. Silos are for a very long time, but in this instance, we are not keeping for a long time as we buy and sell during offseasons.

On mechanization In terms of mechanization, this government has bought 76

he IFAD, ADP and Fadama programmes are special projects that are community-based, and this government has been paying its counter part funding to the World Bank, Africa Development Bank and the Federal Government.

I am glad to say that in all of these, we have always been top in Fadama; this is the third year running. The World Bank has rated the state the best performing state in the Fadama project. These are judged largely in terms of the prompt payment of counterpart fund; the appropriate management of the scheme and achievement of the deliverables. These are items that are clearly stated.

Soon, we will be giving out N45million to the 9th set of beneficiaries of Fadama.

Before now, we have disbursed N290 million.

These are monies that go to cooperatives, the people form cooperatives, determine what they want and we provide the technical evaluation and pay this money to their account and monitor them. This has developed over 4000 rural families.

On agric services This government created what we call new generation of farmers. As you are aware, the farming population is aging, you and I don’t want to go into farming for obvious reasons and that is why we are introducing mechanization, tractorization and all of that.

We have 15 centers spread across the state with 40 hectares.

Vanguard, MONDAY, AUGUST 20, 2012 — 37

38 — Vanguard, MONDAY, AUGUST 20, 2012

Vanguard, MONDAY, AUGUST 20, 2012— 39

Advertising, Media & Marketing

Near Monopoly: Multichoice’s GOTV ambushes Startimes Stories by

…deploys aggressive marketing campaign

BRIEF APRA to counter negative report on Africa

PRINCEWILL EKWUJURU

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ompetition is good for businesses and it helps to grow the economy, and bring out the best in companies, as well as help create employment, but sometimes it has the tendency to breed monopoly.

The entry of Multichoice and other pay-TV channels into the Nigeria pay television market was a welcome development.

Months back, when GOTV was launched in Lagos to compete in the PayTV market, the new brand was to ride on the back of the latest Digital Broadcast; (DVB -T2) technology.

Before now, the brand had launched in Ibadan, Enugu, Port Harcourt and other African countries. The brand’s entry strategy, which is affordable pricing was laudable. Other strategies employed were patriotism, channel variety and superior technological platform. All these were deliberate to rival StarTimes.

Interestingly, StarTimes, also equipped with all the characteristics of GOTV even though consumers have given GOTV the chance to succeed where brands like DaarSat, Infiniti TV, Trend TV, FlySat TV, HITV and FSTV had failed.

GOTV like every new product, has embarked on aggressive media campaign not only to fight for market share but also for the share of the voice. While the brand’s payoff clearly says ‘entertaining Africa’, its core message in the Lagos market is Lagos for show apparently coined from the popular Eko for show mantra.

The campaign is hinged on the fact that it has 30+ channels, superior technology driven by patriotism and affordability.

However, the brand promoters and perhaps the advertising agency that created this campaign, has not been able to sell one thing that distinguishes GOTV from StarTimes except the fact that GOTV is championed by MultiChoice, operators of DStv against an NTA-driven StarTimes.

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nother worrisome communications strategy is that the brand may tend to continue to attach a particular city to itself as it expands. For C M Y K

instance, the Lagos for Show mantra; what happens where brand is extended to other states? The branding of houses remains another strategy deployed by GOTV.

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ut as Mr. Pang Xin Xing, Chairman, Startimes Group said during the second anniversary of the company, in the last two years, the vision of enabling every Nigerian household to afford digital TV, to watch digital TV and enjoy digital TV, NTA-STAR has already set up the DTT network in

nine cities, including Abuja, Lagos, Kano, Ibadan, Port Harcourt, Benin, Kaduna, Onitsha and Asaba, offering clear and rich digital TV programmes to Nigerians at affordable price and providing digital TV transmission service for national TV and private TV stations.

GOTV is not also very clear with its brand promise.

Unlike HiTV whose introduction was hinged on English Premier League and Champions League and StarTimes on affordability,

GOTV is talking about several things that seem to put consumers at crossroads.

DaarSat suffered a disastrous end due to nonfocused communication strategy. The same can be said of HiTV, which due to stiff competition from DStv brands like FSTV, Trend TV, Infiniti TV and many others, has not been able to see the light of day.

It has also been said that GOtv was introduced by MultiChoice to wrestle the low end segment of the market currently being controlled by StarTimes.

*From left;The International Relations lecturer, Mr. Kunle Ogedengbe, Secretary-General, African Public Relations Association(APRA), Mr. Yomi Badejo-Okusanya and President, Brand Journalists Association of Nigeria (BJAN) Mrs. Neta Nwosu during APRA interactive session with the media in Lagos.

Ultimate Wonder promo: MTN woos subscribers with airplane

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oon, a subscriber of MTN in Nigeria would become the proud owner of a brand new aeroplane courtesy of its Ultimate Wonder promo.

The promo which was flagged off in Lagos is a new customer-based ‘recharge and win’ promo in which customers will win weekly cash prizes, and an ultimate winner will cart home a Cessna 182 T aeroplane, in a grand prize presentation in October.

Larry Annetts, Chief Marketing and Strategy Officer, MTN Nigeria, noted that as a market leader, MTN continually seeks for avenues not only to enrich the lives of its customers, but also to appreciate and reward its loyal subscribers for keeping fate with the brand over a long period of time. “MTN is keen to transform the lives of many Nigerians; we recognise reward schemes as one of the best ways to touch and enrich

the lives of our subscribers and so we are connecting Nigerians to life-changing initiatives that are not easily replicated by any brand in Africa,” he said.

According to Annetts, “Last year, in commemoration of our 10th year anniversary in Nigeria, we excited and enriched many Nigerians with the much-talked about ‘1 Billion Naira’ reward; where 90 lucky winners went home with cash prizes of N10 million each among other mouth-watering prizes. This year again, through the MTN Automania game, a subscription-based initiative,

the company is giving out 100 xi35 SUVs in a 100-day nationwide promo. But with the launch of the MTN Ultimate Wonder promo, you will agree with me that MTN has taken the customerreward concept to an unprecedented level where no brand has attempted in Africa,” he added.

Apart from the ultimate prize of an airplane, subscribers will also have opportunities of winning weekly cash prizes of N150,000 for 100 customers and a weekly star prize of N2,000,000 in the threemonth, nationwide promo.

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he African Public Relations Association (APRA) has expressed its desire to counter what it described as the negative public relations activity of western media on the African continent. The association disclosed this at its inaugural media roundtable where the Secretary-General of APRA, Mr. Yomi Badejo-Okusanya, said that APRA is concerned that Africa is often reported in the negative light by western media as a continent of corruption, underdevelopment and a home of failures, "but we have resolved to change that story by repackaging the continent as the frontier and destination of global economy and foreign direct investment. We are not unaware of the numerous challenges Africa has to overcome as it rises," which he said had continued to plague her as a continent, placing her in a very unfavourable position globally and so APRA is determined to take up the challenge of bridging the gap, by becoming the mouth, voice and mouthpiece of the African continent.”

The discourse titled, Rising Africa and the Role of the Media, was aimed at bringing together stakeholders in the communication sector to make relevant inputs in the projection of a positive image for Africa, in line with the vision of APRA. According to Okusanya, Africa’s ability to identify these challenges and surmount them will form a major part of her history and go a long way to establish a unique identity by which Africans can begin to consciously build the future that they seek.

He disclosed that the association had taken the initiative to critically assess the situation of the continent and identify immediate need in building the image of Africa and economic development by supporting Buy Africa initiative; infrastructure development and technology advancement; advancing democracy; health and social welfare and combat the image battery by western media and tell a different side to African stories through the establishment of African cable network.

Close-Up gives to charity, rewards winners

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s part of activities marking its 38th anniversary, on “Close Up Loves Naija campaign” platform, the toothpaste brand from Unilever Nigeria Plc has

given back to four charity organisations.

The choice of the charity homes was premised on the decision of its consumers who via an interactive social

media platform, chose the homes within Lagos State.

It doesn’t end with naming the charity, as they have to get the charity voted for by friends to get it on the shortlist.

40— Vanguard, MONDAY, AUGUST 20, 2012

0817 002 3569

ECONOMY: ACQUIESCENCE TO CONSTITUTIONAL VIOLATIONS former President Obasanjo privately concluded arrangements with our London and Paris Club creditors to pay $18bn, so that about $12bn could be written off our debts before seeking the approval of the legislature. The same Obasanjo similarly paid out over $12bn for the enhancement of our power infrastructure and later also paid billions of dollars more to a Chinese conglomerate for the improvement of our rail transport system. These

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n democratic countries where utmost respect for the rule of law prevails, constitutional violations not only receive condemnations, but are also visited with serious sanctions. Indeed, even when social evolution overtime makes earlier constitutional and legal provisions redundant, the judiciary will still mete out existing sanctions provided in the constitution for such infractions. We note, for example, the inability of the terminally ill Mr. Tony Nicklinson to willfully put an end to his suffering, without the jeopardy of a life sentence for anyone who facilitates his suicide, according to English law.

However, in recognition of the outdated law on suicide, a British High Court, advised politicians to quickly amend the law in line with current social consciousness, but nonetheless, refused to grant Nicklinson’s request for euthanasia!

The above contrasts very sharply with the Nigerian predicament, where constitutional violations by no other than government itself are openly condoned and sustained without any voice of dissent, talk less of sanction.

Regrettably, the federal executive remains the prime villain in this matter; we recall that about six years ago,

Ultimately, even though there were modest provisions in appropriation bills during the Yar’Adua years, the NNPC obviously got a presidential nod to absorb humongous subsidy values, in excess of budget provisions

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payments were all made without prior legislative approval; consequently, these payments were executive violations of

constitutional provisions, which carry impeachable sanctions; but OBJ got away unscathed!

In similar vein, the late President Yar ‘Adua’s initial attempt to abolish fuel subsidy met with such serious civil resistance that made Yar’Adua to back down.

Ultimately, even though there were modest provisions in appropriation bills during the Yar’Adua years, the NNPC obviously got a presidential nod to absorb humongous subsidy values, in excess of budget provisions; even though this was a constitutional violation, Late President Yar’Adua also got away with it without so much as a legislative whimper of protest.

Incidentally, President Jonathan inherited the silent understanding for NNPC’s underwriting of extra budgetary subsidy values until the bubble burst in January this year, when it became clear that the subsidy process had become a huge scam, in which, possibly over N2 trillion had been paid out in place of less than N300bn provided in the 2011 budget!!

Of course, all the above infractions are serious enough to attract impeachment, but inexplicably, our legislative assembly has remained unperturbed, some would say settled, while the citizenry’s pursuit of daily survival left

no time to assess the intricacies of governance.

Similarly, the concept of an Excess Crude Account (ECA) was also the brainchild of former President Obasanjo, and Okonjo-Iweala as Finance Minister.

Every rational Nigerian would endorse the wisdom in putting away surplus funds for future application.

Indeed, it will be difficult to argue against thrift as a virtue. However, one must wonder about the wisdom in putting away money while one lives in ghetto shacks with leaking roofs compounded with his family’s severe health and educational deprivations. Worse still, the excess crude savings attract minimal interest while our government goes cap-inhand, to borrow at rates above 15%, sometimes for funds that will just be kept idle.

Incidentally, there is no provision for an ‘excess crude account’ in our constitution, Section 162 of which states very clearly that all monies must be domiciled in a consolidated revenue fund, and disbursed in accordance with extant constitutional provisions; impeachment is the collateral sanction for any violation.

Even if our social circumstances were different such that our incomes grossly exceeded critical expenditure for social infrastructural

enhancement, an excess crude account would still remain unconstitutional until the relevant provisions have been amended to formally accommodate the maintenance of such an account, just as in the case of suicide facilitation for the terminally ill Tony Nicklinson.

The concept of the Sovereign Wealth Fund (SWF) is similar in many respects with the maintenance of ECA! The only difference, of course, is that the SWF is targeted for disbursement in the medium term to distant future. In any event, there is also no provision for a sovereign wealth fund in the constitution.

Furthermore, Dr. OkonjoIweala’s announcement of a sinking fund into which N25bn will be paid monthly for the purpose of debt service and redemption is also similarly patently unconstitutional; so far, the federal executive appears to have failed to carry along the other two tiers of government in the sustenance of any of the above unilateral executive deductions from the consolidated revenue fund without legislative approval.

Inexplicably, no one is complaining!

SAVE THE NAIRA, SAVE NIGERIANS!!

BUSINESS & ECONOMY

Fuel subsidy: FG names 21 companies under investigation under the fuel subsidy regime. This is contained in a statement issued by the Special Assistant to

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he Federal Ministry of Finance on Friday published the names of 21 firms being investigated

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

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Group Business Editor Acting Finance Editor Energy Editor Head, Capital Market Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Energy Correspondent Energy Correspondent Industry Reporter Capital Market Reporter Money market Reporter Energy Reporter Maritime Reporter

CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT

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Media/Marketing Industry Capital Market Graphics Department

the Finance Minister on Media, Mr Paul Nwabuikwu.

The statement said the firms were being investigated based on the report of the Presidential Committee on Fuel Subsidy Payments headed by Mr Aigboje Aig-Imoukhuede.

The companies are: Alminnur Resources Ltd, Brilla Energy Ltd, Caades Oil and Gas Ltd, Capital Oil and Gas Industry Ltd, Connoil Plc, Downstream Energy Source Ltd., and Eterna Plc. Others are: Euraafric Oil and Gas Ltd, Lumen Skies Ltd, Majope Investment Ltd, Matrix Energy Ltd, Menon Oil and Gas Ltd, Mob International Services and M.R.S. Oil and Gas Ltd. The rest include: Nasaman Oil Services Ltd, Natacel Petroleum Ltd, Ocean Energy Trading and Services, Pinnacle Contractors Ltd, Sifax Oil and Gas

Company, Tonique Oil Services Ltd and Top Oil and Gas Development Co. Ltd. The statement noted that the Aig-Imoukhuede committee’s report recommended that these firms should refund various sums to the Federal Government’s treasury.

Also, the statement listed a second group of companies with infractions considered by the government and AigImoukhuede-led committee as “ relatively minor.”

According to the statement, these categories of companies are in discussion with government for a quick resolution of their issues. It gave conditions in which government was prepared to settle their claims.

“For oil marketers under investigation for possible refunds to the government, their 2012 outstanding claims will be netted out against their expected refunds to

government. For those with a positive net balance, that is outstanding claims greater than expected refunds will be processed and paid.” Also, the statement said for marketers that owed government more in refunds than government owes them, the Aig-Imoukhuede committee would accelerate review of their documents after the Eid-el- Fitr public holidays.

It assured Nigerians that claims for marketers in this category would be processed and settled, if cleared, without further delay after the public holiday.

“For others that may not be in the above categories but who have other issues or claims, their claims will also be addressed with the same dispatch. ” The statement also reiterated that the ministry was not responsible for the looming fuel supply shortage in Abuja and environs caused by the oil marketers strike over delayed payment of subsidy claims.