Financial Vanguard by Vanguard Media Limited

MAY 28, 2012

espite recent reduction in the initial listing and annual listing fees by the Nigerian Stock Exchange (NSE), investigations by Financial Vanguard have revealed that the NSE still remains the costliest stock exchange in the emerging markets. Apart from charging the highest fees at the point of listing from prospective companies wishing to access the market, both the annual listing fees and costs to investors on transactions done on the floor of the exchange are sky high. Financial Vanguard survey also revealed that major exchanges across Africa, namely, Cairo Stock Exchange (CSE), Johannesburg Stock Exchange (JSE), and Nairobi Stock Exchange (NSE), have all introduced compelling incentives to entice upstart companies that might want to access the market following the crippling global financial meltdown. They have either exempted or are in the process of exempting upstart companies from any form of listing fees, while transactions in some products attract nil costs for investors. For instance, the Egyptian Stock Exchange (EGX) had some months ago, while opening a new Headquarter of the exchange in Cairo announced an initial listing fee exemption for new entrants in the market to allow for fresh listings. JSE on its own has since eliminated cost on single Futures and Options to encourage liquidity providers and retail investors to continue to patronize the market. The argument in some quarters in Nigeria has always been that costs constitute impediment to companies wishing to list their shares, while already listed ones are looking for excuses to delist from the exchange. Just last year, 2011, three companiesNigeria Bottling Company (NBC), Nampak Plc and United Textile Nigeria Plc, voluntarily exited the market, while a couple of others were compulsorily delisted for various offences. Calls have repeatedly gone out for significant reduction in charges in the stock market Comparative analysis of NSE’s charges against other African markets Available data obtained by Vanguard shows that for companies wishing to

Excessive charges scare companies away from Nigerian stock market …. Operator suggests further reduction in transaction cost BY NKIRUKA NNOROM list in the Main Board, the Nigerian Stock Exchange charges initial listing fee of 0.3 per cent of the total market capitalisation of a prospective company, subject to minimum of N1,889,99.06 and maximum of N4,200,000.24; Nairobi Stock Exchange’s charges stand at 0.06 per cent of the company’s capitalisation, subject to minimum of N375,967.32 and maximum of N2,819,750.16, while

JSE charges 0.04 per cent, subject to minimum of N20,751.72 and maximum of N4,301,216.62. For listing in Alternative Investment Market segment, the Nigerian Stock Exchange takes flat fee of N300,000.00 (three hundred thousand), the company ’s capitalization notwithstanding. In Nairobi Stock Exchange, the fee still remains constant at 0.06 per cent of total market capitalisation, subject to minimum of N187, 983.66 and maximum of N1, 879,833.44, JSE charges a minimum

DAILY MOVEMENT IN NIGERIA’S FOREIGN RESERVES Date 5/22/2012 5/21/2012 5/18/2012 5/17/2012 5/16/2012 5/15/2012 5/14/2012 5/11/2012 5/10/2012 5/9/2012 5/8/2012 5/7/2012 5/4/2012 5/3/2012 5/2/2012 4/30/2012 4/27/2012 4/26/2012 4/25/2012 4/24/2012 4/23/2012 4/20/2012 4/19/2012 4/18/2012 4/17/2012 4/16/2012 4/13/2012 4/12/2012 4/11/2012 4/10/2012 4/5/2012

Gross 37,482,285,499 37,439,170,782 37,285,969,561 37,223,665,352 37,151,633,303 37,072,040,732 37,023,607,843 36,892,907,379 36,850,285,379 36,804,250,607 36,758,001,914 36,705,657,293 36,784,924,268 36,748,282,561 36,706,773,997 36,662,898,674 36,520,294,186 36,479,237,302 36,438,301,655 36,396,777,660 36,349,254,227 36,215,165,105 36,184,222,371 36,151,354,539 36,150,452,788 36,142,314,856 36,087,494,507 36,048,849,506 36,008,626,785 35,969,437,141 35,836,544,099

Liquid 36,079,146,052 36,034,598,455 35,877,638,791 35,814,050,282 35,740,840,036 35,659,929,110 35,610,330,750 35,478,408,155 35,435,615,533 35,389,060,533 35,342,317,635 35,289,611,852 35,368,246,187 35,331,002,442 35,288,932,829 35,244,387,671 35,099,101,308 35,057,100,259 35,015,170,490 34,972,574,691 34,924,243,582 34,787,716,772 34,755,571,489 34,721,459,513 34,719,314,771 34,710,274,565 34,653,013,057 34,613,620,983 34,572,548,590 34,532,456,497 34,394,416,247

Blocked 1,403,139,447 1,404,572,327 1,408,330,770 1,409,615,070 1,410,793,267 1,412,111,622 1,413,277,093 1,414,499,224 1,414,669,846 1,415,190,074 1,415,684,279 1,416,045,440 1,416,678,081 1,417,280,118 1,417,841,169 1,418,511,003 1,421,192,878 1,422,137,042 1,423,131,165 1,424,202,969 1,425,010,646 1,427,448,332 1,428,650,882 1,429,895,027 1,431,138,017 1,432,040,290 1,434,481,450 1,435,228,523 1,436,078,195 1,436,980,644 1,442,127,852

% 3.75% 3.76% 3.78% 3.79% 3.80% 3.81% 3.82% 3.84% 3.84% 3.85% 3.86% 3.86% 3.86% 3.86% 3.87% 3.87% 3.90% 3.90% 3.91% 3.92% 3.93% 3.95% 3.95% 3.96% 3.96% 3.97% 3.98% 3.99% 3.99% 4.00% 4.03%

of N2,668.62 and maximum of N501,206.02. In Nigeria, annual listing fee for companies in the Main Board attracts 0.3 per cent charges up to maximum of N4, 200,000.24. For companies listed in the same sector in Nairobi, the exchange charges 0.06 per cent (subject to minimum of N375, 9678.32 and maximum of N2, 819,750.16). For Johannesburg Stock Exchange, companies in the Main Board are expected to pay 0.04 per cent of their capitalisation (subject to minimum of N680,047.08 and maximum of N3,456,332.16) for ordinary shares, while preference Continues on page 18

166.10

-0.80

2,094.00

-11.00

19.64

+0.06

106.89 +0.34

CURRENCY BUYING CENTRAL SELLING CFA 0.2817 KRONER 26.5721 EURO 197.5055 POUNDS 244.5343 RIYAL 41.2489 SDR 236.1186 FRANC 164.3472 DOLLAR 154.7 WAUA 235.6595 YEN 1.9364 RENMINBI 24.4642

0.2917 26.658 198.1439 245.3247 41.3823 236.8818 164.8784 155.2 236.4212 1.9427 24.5437

0.3017 26.7438 198.7822 246.115 41.5156 237.6449 165.4095 155.7 237.1828 1.9489 24.6232

CBN Exchange rate as at 25/05/2012 C M Y K

18 — Vanguard, MONDAY, MAY 28, 2012

Cover Story

Youth Restiveness and unemployment in Nigeria: The way out part 1

From left: Dr. Uju Ogubunka, Registrar/CEO, Otunba (Mrs) Debola Osibogun, 1st Vice President, Alhaji (Chief) Amusat Otiti, Past President, Mr. Segun Aina, President/Chairman of Council and Mr. Uche Olowu, National Treasurer, Chartered Institute of Bankers of Nigeria (CIBN) during the courtesy visit of the President, Mr. Aina to Alhaji Otiti, founding father of the Institute at Victoria Island, Lagos

How excessive charges scare companies away from stock exchange Continues from page 17 shares attract N184.997.46; Cairo Stock Exchange charges 0.002 per cent fee (subject to minimum of N262,022.46 and maximum of N1,310,115.46). Listing in the Alternative Investment market in Nigeria attract annual listing fee of N300,000; Nairobi charges 0.06 per cent (subject to minimum of N187,983.66 and maximum of N1,879,833.44), while JSE is fixed at N551,306.24. In the fixed income market in Nigeria, State Government Bonds, Municipal Bonds and Corporate Bonds attract a minimum of N1, 888, 99.06 and maximum of N4, 200,000.24. In Nairobi, Corporate Bonds attract 0.0125 per cent charges (subject to minimum of N187,983.66 and maximum of N1,879,833.44), while Treasury Bonds also attract 0.0125 per cent charges (subject to minimum of N187,983.66 and maximum of N4,699,583.6. In JSE, it amounts to a minimum of 0.0015 per cent plus N381, 143.4 and maximum of 0.00032 per cent plus N2, 869,249.98. In Cairo, the fee amounts to 0.0000075 per cent (subject to minimum of N262, 022.46 and maximum of N1, 310,115.46. For transactions done on the trading floor, the Nigerian Stock Exchange charges 1.8555 per cent on buy side and 2.1855 per cent on sell side; in JSE, the Exchange charges 0.0055 per cent (subject to minimum of N75.84 and maximum of N140.36), while clearing and C M Y K

settlement amounts to 0.0026 per cent (subject to minimum of N48.98 and maximum of N200.66. In Cairo, transactions on the trading floor attract 0.0000012 per cent charges. Industry captains decry excessive charges Speaking on the stiff requirements, especially with regards to various fees charged quoted companies on the NSE, Managing Director/CEO, Poly Products Nigeria Plc, Mr. Nasir Gwalani, whose company is on the verge of delisting from the NSE’s official list, noted that the high cost of retaining quoted company status was the reason for the current spate of delisting from the NSE. Gwalani said, “Today, if you want to increase your capital, for a public quoted company, you deposit more money than what private limited companies pay. What is the reason for that? Why penalize a company that is ready to share its assets and profit with the general public. Why do you want to penalize the company? You go to get debentures, you pay double. You pay fees to the governor for consent, for what. If you want companies to grow, you must help them. Corporate Affairs Commission, CAC, is giving so many charges on the companies even. We pay SEC, we pay stock exchange, and we pay brokers. Why will you pay stockbrokers three and half per cent. Trading on stocks is the most expensive in Nigeria all over the world. We have recently heard DG of stock exchange saying, ‘I am going to bring it down’ we

have not seen any changes yet.” “One thing is that regulatory body should not be profitmaking body. Here we are making regulatory and monitory bodies as profit making bodies. If they become profit making body, their loyalty moves from regulating to supporting whosoever helps them to make money,” he added. Also speaking, Mrs. Funmi Ajayi-Tomori, Director, Poly Products Plc, argued that regulators have not made the market attractive enough to encourage companies to remain listed, or even to attract fresh listing. AjayiTomori believes that listing requirements in the NSE are quite rigorous; saying that if a company does not have the wherewithal, it will be difficult to meet up with certain demands. “You have quarterly returns, half-yearly returns and all of that. For a company struggling to survive, you have to meet those obligations. It is very tough. The stock exchange is not a play field for the embryos; it is for the people whose cost of administration is minimal, who have all the manpower to meet all those obligations,” she said. She added, “A lot of companies in the last thirty, fifty years have gone through very rigorous situation and a lot of companies are also growing. So, it is left on the people on the other side to make the market attractive for those growing companies to be members.” She insisted that the stock exchange is not a Fair, saying “If the Continues on page 37

he words ‘ youth’ and ‘ restiveness’ have become so commonly used together in the last couple of years that it seems to have taken on a life of its own. In the last decade and more there has been a proliferation of cases all over the country and indeed the world, of youth agitations which have tons of people dead and valuable infrastructure as well as personal properties lost and destroyed. A sustained protestation embarked upon to enforce a desired outcome from a constituted authority by an organised body of youths, fits the label of youth restiveness. It is also a combination of any action or conduct that constitutes unwholesome, socially unacceptable activities engaged in by the youths in any community. It is a phenomenon which in practice has led to a near breakdown of law and order, low productivity due to disruption of production activities, increasing crime rate, intra-ethnic hostilities, and harassment of prospective developers and other criminal tendencies. This scourge has been around for a long time and it looks as though it is defying solutions. Maybe the question that needs to be asked is what is truly responsible for this expression of dissatisfaction by the youth? Have their complaints over the years not been heard or attended to? Is there more to the killings and destruction than just drawing attention to the needs they want met? Are the youths trying to draw society’s attention to themselves more than the issues they appear to be fronting? These and more are the questions we would try to tackle head on today. In Nigeria for instance, the Niger Delta region which is unarguably the bedrock of the oil industry in Nigeria permeated the news for a lengthy period of time as the youths of that region tried various means of getting government and oil companies to pay attention to their dire conditions of living and alleviate their sufferings since according to them, the resources which is building the nation is flowing from their land so by virtue of that they should also be partakers of its benefits. This strife led to a rise in kidnapping and vandalization of oil pipelines as well as other vices that were being perpetrated. After a period of years, the Nigerian government intervened and the Amnesty program was created to help deliver some of the promises which government had made to the youths in those areas. The baton was soon handed over to the Eastern Nigeria. Increase in the rate of armed robbery attacks, kidnappings as well as unbridled thuggery became the order of the day. Today the Northern part of Nigeria has literally erupted with unrivalled violence. Bomb blasts, kidnaps and killings of Nigerians and others have become the prevailing trend. Despite beefing up of security in these areas, the problems still looms. This situation begs the questions, ‘’what is the government of the day willing to do to put a permanent end to these problems.

Statistics The National Population Commission (NPC) has said the country’s population has risen from the 140,431,790 it was five years ago when the last national headcount was taken, to 167,912,561 as at October 2011.This represents an annual population growth rate of 5.6 million people. The Ministry of Youth Development, said recently that there are 68 million unemployed youths in Nigeria. Every year about 300,000 graduates enrol in the NYSC scheme. This is definitely not the total number of graduates but it is a pointer. According to the Population reference Bureau, the population of youth in Nigeria is 43%.

Some Of The Root Causes Of Youth Restiveness • Marginalization: The notion appears to have gained ground that the youth resort to restiveness because of their perceived marginalisation by the ‘selfish’ elders in the scheme of things in the communities. In order to get their share of the benefits accruing to the society they resort to taking on their elders headlong, culminating in the restiveness rampant in most of our communities today.

Vanguard, MONDAY, MAY 28, 2012 — 19

ooking at development in the international oil market, Nigeria may be heading for another difficult time from external shock. This time the impact on the economy may be worse than the impact the 2008 global financial crisis had on it. Oil prices are tumbling and traditional importers of crude oil are either finding alternatives or are over supplied. Nigerian economy may face very difficult time in the next two or so years. What are the various arms of government doing about this? The sovereign wealth fund that would have acted as cushion is under litigation. Last month in this column, “Hear these bickering Governors”, we warned the nation that more oil discoveries are being made across the globe and that the US is developing its internal oil reserves to reduce its dependence on imported fuel. It is already happening. Nigeria has over the years come to depend on crude oil export for its revenue that is shared among the three ties of government. Only last week Tuesday, the Central Bank of Nigeria's Monetary policy Committee raised an alarm over the deteriorating national economic growth, stating that “the growth and development of the Nigerian economy will continue to be at risk so long as progress is not made in structural reforms”. The committee also warned that “the proposed upward review of electricity and import tariffs on wheat and rice as well as the rising global food and energy prices could further put upward pressure on prices in the nearterm”. Provisional data from the National Bureau of Statistics indicates that real GDP in the first quarter of 2012 grew by 6.17 per cent down from 7.68 per cent in the fourth quarter of 2011 and 7.13 per cent in the corresponding period last year. The real GDP growth for fiscal 2012 is projected at 6.5 per cent down from 7.45per cent in 2011. This confirms a Crude Oil disturbing and uninterrupted trend of decline going back to gerian must learn to save now, faced with sovereign debt criQ1 2010. Crude oil production was es- do not spend that extra cash sis its demand for oil has falltimated to have declined by in your hands, the rains are en and the United States has 2.32 per cent in quarter one here and it seems it is too late cut imports due to greater 2012 compared with the de- to save for the rainy day. But availability of domestic supcline of 2.41 per cent in the Nigeria policy makers are not ply. This development has led corresponding period of 2011. addressing their minds to this to a steep weakening in valNon oil real GDP growth esti- trend and development in the ues for much high quality mated at 7.93 per cent in Q1 oil market. Instead they are of 2012 was much lower than politicking with creation of 8.73 per cent recorded in Q1 more states as cost centers. of 2011.” Growth in agricul- From where will these new ture in the first quarter of 2012 states if created be financed? Equally saddening is the also declined to 4.15 per cent compared with 5.54 per cent fact that the nation’s leading in Q1 of 2011 and 5.74 in politicians instead of facing fourth quarter 2011. In gen- governance are busy schemeral, the paradox of rising pov- ing for who becomes president erty incidence in the face of in 2015. Nigerians are more impressive economic growth at home with who ever will further reinforces the call for put food on their table, ensure the implementation of appro- their children attend good priate structural reforms in the schools, and provide health key sectors notably agricul- care, security of property and ture, power and the petrole- lives. The only way to achieve um sector to stimulate produc- this is when there are resources to carry out governance. sweet and low-sulphur grades tivity What does this imply for the For too long successive gov- in a rare market development average Nigeria? In a period ernments have paid lip serv- potentially suggesting oil fuwhen oil prices are high, the ice to the transformation of the tures prices have scope to coreconomy is struggling, what nation’s economy, yet 52 years rect yet lower in a much overthen happens when oil prices after independence the na- supplied market. Oil prices have come down, fall below the budget bench tion’s economy is at risk as a mark, many states, local gov- result of the vagaries of the in- refining margins have improved but it is still a terribly ernment and even the federal ternational oil market. Oil market reports last week bleak picture for me. I’m government will find it difficult to pay salaries of workers indicated that Europe is fac- struggling to sell in Europe, not to talk of embarking on de- ing a glut of high quality crude the U.S. has cut barrels and it velopment projects. Poverty oil grades, only a year after war is only Asia which regularly which is staring the nation in in Libya created a serious saves (us) from a steeper fall, the face will worsen. Every Ni- shortage. Continental Europe a major trader in sweet grades

The proverbial rains are here, Nigeria which way to go

in Europe was quoted by Reuters as saying. Physical crude grades are priced via differentials versus benchmark dated Brent and these diffs - as they are known in the industry jargon - have sunk over the past

Nigeria may be heading for another difficult time from external shock, this time the impact on the economy may be worse than the impact the 2008 global financial crisis had on it

weeks to the lowest level in years on the Mediterranean sweet grade market. For instance, Algeria’s light sweet Saharan Blend BFO-SAH fell to a seven-year lows and Kazakhstan’s CPC Blend BFOCPC hit a two-year low by midMay. Libyan grades have been trading at large discounts to their official selling prices (OSP) and even the market favourite - super high quality Azeri Light - has fallen steep-

ly BFO-AZR. Traders cite multiple reasons for the drops. Prominent among them is the return to the market of the much missed 1.3 million barrels per day (bpd) of Libyan crude, which dramatically changed the picture from last year, when consuming nations released 60 million barrels of strategic stockpiles. Second is an overhang of West African crude as the United States, a significant buyer of Nigerian and Algerian grades, is becoming increasingly reliant on new domestic production of sweet crude from its shale reserves in North Dakota and Texas. Those are estimated to have produced 1.2 million bpd in April. U.S. imports of Algerian crude are on a steep downward trend from a high of 827,000 bpd in 2007. Imports in February this year were 256,000 bpd, down from the 2011 average of 358,000 bpd, according to U.S. Energy Information Administration data. Imports of Iraqi crude are shrinking but at a slower rate. February imports were 271,000 bpd, nearly a one-year low, far below the average for the last four years of 480,000 bpd, EIA data showed. U.S. imports from Africa and the Middle East will fall even further in the months to come owing to the reversal of the Seaway pipeline, which unlocked a crude supply glut in the U.S. mid-continent for Gulf Coast refiners. Seaway’s initial flows will be 150,000 barrels per day, expected to rise to 400,000 barrels per day. BP was already offered two 500,000 pipeline cargoes of U.S. sweet crude from Cushing, Oklahoma, just prior to the pipelines reopening. With the U.S. domestic production rising, we are seeing the arbitrage drying up, a trader in West African crude said. U.S. data shows oil imports from Nigeria fell to 352,000 bpd in February, the lowest since December 1996, compared with 948,000 bpd a year earlier. In late April, differentials for Nigeria’s Qua Iboe grade BFO-QUA hit multi-month lows as traders cited slack U.S. demand. The picture will be however different in June as a plunge in Brent futures has prompted traders to take more Basra Light into Europe to capture a price advantage. Bickering governors and oil thieves, now that the chickens have come home to roast which way for Nigeria? C M Y K

20 — Vanguard, MONDAY, MAY 28, 2012

C M Y K

Vanguard, MONDAY, MAY 28, 2012 — 21

News

BoI seeks EFCC’s partnership for industrial growth BY OSCARLINE ONWUEMENYI

he Bank of Industry, BOI, has sought the partnership and collaboration of the Economic and Financial Crimes Commission, EFCC, in its quest to halt the sliding fortune of local industries across the country. The Managing Director of the bank, Ms Evelyn Oputu, made this request during a courtesy call on the EFCC Chairman, Mr. Ibrahim Lamorde at the Headquarters of the Commission in Abuja. Oputu pointed out that the negative disposition of many local industrialists to loan repayment, in an economy crying for development, would need the active engagement of the EFCC and other stakeholders. She considered it imperative for the EFCC to partner with BOI to enhance the fulfilment of its mandate. “ We have come to EFCC with clean hands; we want to be able to constantly have a dialogue, working together so that you can understand us better; we want you to understand what we stand for. We want to affiliate ourselves with you, to pass the message to our teeming customers that in working with EFCC, those who do the right thing will get a reward for that and those who choose not to do the right thing will be handed over to the EFCC for prosecution,” she said. She commended the Commission for its transparency, stressing that BOI considered it a thing of pride to emulate the Commission in its openness. “We will emulate the EFCC in transparency”, she stressed. She explained that her bank has been making considerable efforts in delivering on its mandate and promised that it could do better. “ We have come to say that as Nigerians working in a Nigeria institution, we have been able to do our best, but our best will still not be enough without collaborating with the EFCC. Because of the general perception that so many people have about Nigeria, it has not been very easy to persuade the generality of the people that there can be transparency”, she noted. She appealed to the EFCC for capacity building for BoI staff in order to equip them to deliver on the bank’s core mandate. “Working with you, we would be able to get

capacity in strengthening our workforce,” Oputu said. In his response, Lamorde said that since Oputu’s assumption of office as BOI boss; a lot of positive things have taken place in the BOI. “We want to be part of your success story. We are impressed by the passion with

which you pursue your job,” he said. The EFCC Chair further said that the Commission is aware of the growing culture of loan defaulting in many financial institutions. According to him, “Some of them don’t even utilise the money for the purpose the loans were

taken. They will rather divert the loan to do other things that are not productive. So recouping the money becomes very difficult. Even the collateral for securing such loans may not even be sufficient for recouping the loans. They even hide their assets by using unknown identities, so to even confiscate their properties becomes very difficult.

From left: Com. Kayode Abe, ADMIN/HR ICAN; Com. Wole Bodunde, Chairman NASU ICAN Chapter & Com. Peters Adeyemi JP, National General Secretary NASU during the Research & Projects Trade Group Council Regular Meeting hosted by NASU ICAN Chapter in Lagos.

LADOL facilities attract investment from 20 UK companies BY GODFREY BIVBERE

bout 20 companies based in the United Kingdom have indicated interest to invest in the Lagos Deep Offshore Logistic base otherwise known as LADOL Free Zone (LFZ) because of the facilities available there. The companies have already sent their representatives to the zone on a facts-finding mission. They are also mandated to assess the available facilities at the Zone to see whether the facilities could guarantee their investment plans. The team which has John Crawford, a Deputy Director at the United Kingdom Trade and investment (UK T&I) as leader, was accompanied by representatives of the companies, were conducted round the base by the Managing Director of LADOL Dr. Amy Jadesimi, who assured the team of her organization’s readiness for partnership. She noted that although LADOL commenced

full operations just a few years ago, it’s over $150 million dollars investment had already soared with groundbreaking jobs such as the famous Agbami Floating Production Storage and Offloading (FPSO) platform which installation was completed at the base, as well as a giant Noble Drilling Rigs maintenance recently undertaken at the base, amongst others. Jadesimi pointed out that LADOL’s market target goes beyond Nigeria to include the entire West Africa, Europe and beyond, considering the internationalized scope of its operations backed with the appropriate location at the Lagos West of the Niger which guarantees ease of acess to the base. She said the company ’s willingness to partner with relevant international organizations was informed by its scope of expansion which is being encouraged by the Local Content regime recently embarked upon by government. She noted that LADOL has

commenced the development of its phase two investment with a partnership deal with Samsung of Korea in building a state of the art FPSO that would be second to none in the sub-region. Responding on behalf of the visiting team, Deputy Director of UKTI (Russia/Central Asia/Africa/ Middle East), Mr. John Crawford, expressed delight at the facilities in the LFZ, saying “ what we have seen here is impressive and encouraging”. According to him, “what we have seen here shows that you have really done some home work and ready for business, and we shall not hesitate to take the message home to UK that your organization has what it takes to move Nigeria forward as a major oil and gas based country”. Crawford however counseled the LADOL management to maintain business continuity in other to sustain the required interest of foreign investors who are wary of the dangers inherent in going into business deals with short life span.

BRIEFS Alleged N4.2b theft: Absence of co-accused stalls Atuche’s trial

he trial of former Managing Director of Bank PHB, Francis Atuche, was on Thursday stalled due to the absence in court of his co-accused, Lekan Kasali, on the grounds of ill health. Both accused persons were arraigned before an Ikeja High Court in Lagos on May 17, 2011, charged with stealing N7.2 billion belonging to the bank. They are facing a threecount charge bordering on conspiracy and stealing before Justice Adeniyi Onigbanjo. They had pleaded not guilty. During Thursday ’s proceedings, Kasali’s counsel, Mr Chris Ameh, informed the court that his client was absent due to an undisclosed ailment. Ameh said Kasali was hospitalised and apologised for his absence. He said:” I express regrets for the absence of the second accused who is ill and presently on admission in a hospital.

Indulge marks 10 years wellness campaign on healthy lifestyle

n commemoration of its advocacy on the importance of healthy lifestyle and total well being of Africans, Indulge Nigeria is celebrating its ten years campaign on healthy lifestyle, and its impact on preventive care. In a statement made available to Vanguard from the organization, MD/CEO Indulge, Dr Bisi Abiola said, “I will always be grateful to sponsors of Indulge Wellness events. it is not possible to provide people with so many free screenings, tests, products and services if not for the generous help of our sponsors such as Unilever Nigeria Plc, MTN Nigeria, Grand Cereals Limited, UAC Foods, Promasidor, Popular Foods, Kraftfoods, Globacom, PZ Cussons, Neimeth, Nestle, Tropical Naturals, Vitafoam, GSK, Nutricima Limited, and our principal partner on health wellness, Lagos State Ministry of Health’. C M Y K

22 — Vanguard, MONDAY, MAY 28, 2012

Money Guide BRIEF Fidelity Bank establishes business school

idelity Bank Plc has set up a Business School to redress the perceived inefficiencies in the market and build capacity in the industry. The move will also ensure that every member of the Fidelity team is adequately armed with the required knowledge to effectively compete and win in the market place. Commissioning the school, Managing Director and Chief Executive Officer, Fidelity bank Plc, Reginald Ihejiahi said that the bank has taken steps to enhance its learning philosophy and training models. He noted that emphasis would be placed on practical learning and self-development. “Strong weights would now be attached to self facilitated learning both at the individual level as well as that of team (unit/Group/ Division) with more emphasis on practical curriculum that actually deepens staff business school model to boost the knowledge and skills of team members in every market we play”, he said. Ihejiahi also announced the appointment of Idris Yakubu, GM, North Bank, Taiwo Joda, Head Large Corporates and Multinationals, Osahon Ogeiva, Head of Telecoms and Edet Eni, Head Office SBU as Deans and heads of faculties of Public Sector School, Value Chain School, Telecoms School and the Consumer Finance School respectively and charged them to live up to their responsibilities. ”As Deans and head of faculty, you will work with Learning & Development to ensure that a comprehensive curriculum of “how to” programs is prepared to provide bank wide practical training and reference materials on how to win new businesses and deepen the bank’s market share in our target business segments; educate on products and services to be offered to each business segment, and guide on how to drive up business volumes and revenues and demonstrate how to measure service and inform on what customers consider in deciding where to take their business”. He also admonished the students to make good use of the opportunity to develop themselves and become better team members. C M Y K

CBN should maintain 12% MPR for 2012 — Khan By BABAJIDE KOMOLAFE

he Central Bank of Nigeria (CBN) is expected to maintain its benchmark interest rate, the monetary policy rate at 12 per cent throughout this year, says Razia Khan of Standard Chartered Bank. “For now we expect the monetary policy rate to be maintained at 12%, most likely until the end of the year,” she said in response to the decision of the Monetary Policy Committee (MPC) of the apex bank to maintain the MPR at 12 per cent. In an email response Razia Khan, who is the Regional Head of Research, Africa, Standard Chartered Bank said, “No surprises in the CBN’s decision to keep the Monetary Policy Rate on hold at 12%.” Citing concerns over the declining growth rate of the Nigerian economy and the potential risk of the euro zone crisis on the Nigerian economy, the MPC decided to suspend further tightening of the money supply and hence left the MPR unchanged. Khan said, “Although the CBN sounded a decidedly more dovish note, we believe that there will be limited room to ease interest rates unless we see a significant external shock with global consequences. Although m/m inflation in Nigeria has been well-behaved, the CBN nonetheless expects inflation to rise further, with a peak at around 14.5%. In our view, evidence of weaker domestic agricultural output, combined with the anticipated imposition of tariffs on some imported food items are a significant risk factor for inflation which should continue to rise in the near term. However, the extent to which this feeds into generalised price pressures should be significantly offset by benign money supply trends and evidence of a cyclical slowdown of sorts in the Nigerian economy. “ For the moment, it is the external risks that loom large. Even emerging from a period of relative strength in oil prices, Nigeria’s FX reserves have risen only very modestly to $37bn. In view of global risks, and Nigeria’s new susceptibility to potential outflows, much still needs to

be done to rebuild the economy’s external buffers. “For now we expect the monetary policy rate to be maintained at 12%, most likely until the end of the year. Although the MPC will watch the 12 month measure of inflation closely, Governor Sanusi’s statement that there

is ‘no need for further rate tightening’ will set the context for market behaviour. This is the clearest statement yet from the CBN on the outlook for interest rates since the partial lifting of the fuel subsidy – a sign that they are comfortable with current inflation risks, but also evidence of their concern about the global outlook and its implications for Nigeria. Given the balance of risks

however, we believe the CBN is still right to maintain a steady interest rate policy, given the questionable effect that any monetary stimulus might have on domestic growth in Nigeria. The best possible stimulus at this point would be to allow for macroeconomic stability – in particular, a stable exchange rate - and conditions that permit deeper, structural reforms to take place.

Real GDP Growth Rate (Q1 2011-Q1 2012)

FirstBank extends savings culture to children with HiFi Account future that is secure and

everaging on the May th 27 Children’s Day celebration, First Bank has extended its promotion of savings culture to children with its HiFi Young Savers Account. Introduced some three years ago, the FirstBank HiFi Young Savers Account is a special account designed for children from age 0 – 17 years to sensitize and cultivate savings culture within this age bracket and to help parents plan towards the future of their children and wards. HiFi Young Savers Account can be converted to a regular current or savings account when the child attains the age of 18, providing a platform for enabling the child remain true to the ideals of effective money management as adulthood beckons FirstBank’s spokesperson, Mrs. Folake Ani-Mumuney, says the Bank in line with its desire to drive a planned financial future for children believes that imbibing a saving culture makes children better managers of money and resources when they become adults. Ani-Mumuney says

raising a generation of children grounded in effective financial management will influence the adoption of policies that would facilitate economic growth and development in the future. “FirstBank remains committed to leading efforts geared towards preparing children for a brighter future through the HiFi Young Savers Account as well as supporting other platforms that enhance financial education of parents, guardians and children,” she explains. FirstBank will be celebrating the 2012 Children’s Day at the special carnival being organized by Inspiration 92.3 FM on May 28, 2012 in Lagos. In addition to giving away special gift packs to HiFi Young Savers Account holders at the event, the Bank will offer parents an opportunity to learn about the product and sign their children up for a financially secure future. “Children’s Day is special for us at FirstBank and we wish all children in the nation a happy children’s day and a

glorious. We invite all parents and guardians to sign up their children and wards for the HiFi Young Savers Account package to ensure a future of prudent and financially independent leaders for our nation,” she adds. Some of the features of the HiFi Young Savers Account include: minimum opening and operating balance of 5,000, lodgment of cheques and dividend warrants in the account, cash collaterised loan up to 80% of account balance, and conversion to a checking account when the young saver attains 18 years of age. Benefits include: a gift on the child’s birthday, customized “welcome pack” when the account balance reaches N50,000.00, and eligibility for a N1million raffle draw on account balances from N750,000.00 and above. Valid identification of the parent, Birth certificate of the child, 2 passport photographs each of the child and parent, Utility bill, and minimum opening balance of N5,000.00 are the account opening requirements for the FirstBank HiFi Young Savers Account.

Vanguard, MONDAY, MAY 28, 2012 — 23

Money Guide BRIEFS

By BABAJIDE KOMOLAFE

he Chartered Institute of Bankers of Nigeria (CIBN) recorded 45 per cent decline in its operating surplus for the year ended December 31st 2011 due to provisioning for diminution in investment Results of the Institute show that operating surplus fell to N21 million from N74.5 million in 2010. This, according to the National Treasurer of the Institute, Mr Uche Olowu, was due to provision for diminution in investment losses of N58.14 million. He said, “The internally generated revenue of N291.44 million combined with Banks’ subscription of N136.99 million less operating expenses of N324.04 million and depreciation of N24.63 million resulted in operating surplus of N79.75 million before provision of N58.14 million for diminution in value of investment leading to a net operating surplus of N21.61 million. Presenting the financial performance of the Institute in 2011, he said, “The year 2011 was very eventful as the Nigerian Financial System continued to experience challenges occasioned by the global financial crisis that started in 2009. However, the Institute did not relent in its pursuit for membership growth in addition to other

Keystone Bank promote savings culture with Future Account

T From Left; Mr Kehinde Durosinmi-Etti, Group Managing Director / Chief Executive Officer, Skye Bank Plc, Mr Olatunde Ayeni, Chairman, Mrs Abimbola Izu,Company Secretary/ Legal Adviser, Skye Bank Plc and Mr Michael Tarfa, Non Executive Director, Skye Bank Plc, during the Annual General Meeting of Skye Bank Plc, held in Lagos .PHOTO; Kehinde Gbadamosi

Provisioning deflates CIBN operating surplus by 45% income generating activities. The Institute also embarked on a restructuring exercise, which led to the modification and re-alignment of the existing Organogram. It is envisage that this will bring about improved business process and managerial efficiency with the attendant improvement in revenue generation, going forward. “The challenges of the operating environment notwithstanding, I am

pleased to inform you that the Internally Generated Avenue during the year under consideration was higher than the subscriptions received from corporate members. This performance, which was consistent with the institute s medium to longterm plan, was encouraging as the inter-relational ratio of Internally Generated Revenue and Corporate Members ‘ subscription to total income as at 31 st

December, 2011 stood at 68%, an increase of 3% when compared with 65% recorded in2010 fiscal. This is a clear indication that the institute is reducing its dependence on corporate members’ subscription for its activities. “The balance sheet of the institute showed a bigger and healthier position as the net assets grew by N70.11mollion representing 8% from N857.81million in 2010 to N928.67million in 2011.

Investors missing from global financial reform process —Report

nvestors should be placed at the heart of global financial and accounting standards, say ACCA (the Association of Chartered Certified Accountants) and Grant Thornton in a new report. However, the pair warns that investors’ views on shaping future standards are not being heard. They also say that the piecemeal, fragmented way in which solutions to global economic uncertainty are proposed and the lack of focus on investors in the reform process prolong global economic fragility. The report, ‘Putting investors at the heart of the financial system’, is based on a series of roundtables for investors and investor representatives held in markets around the world. The report proposes seven steps to improve matters. ‘Investors should be the primary focus for global financial and accounting standards, yet their voices are not being clearly heard,’ says Sue Almond, director of technical at ACCA. ‘Investor

opinion is not seen as a reference point against which to prioritise issues, nor does it drive an agenda for a continuous improvement in transparency and measures to meet the needs of shareholders. ‘Investors don’t always speak with one voice and the investor community opinion isn’t necessarily homogenous, but this doesn’t mean all voices should be ignored.’ The report recommended some measures to improve the position among which are: Setting an integrated reform agenda with investors’ needs at its heart. Investors would like to see new and improved accounting, auditing, and corporate governance standards developed in a more integrated manner. Reform proposals need to be based on a solid understanding of investors’ needs and priorities; Continuing to develop globally consistent standards. Global consistency is essential for investors with global

portfolios. Investors seek comparable information on financial statements and the application of audit and accounting standards; And broadening the reports issued by companies. Integrated reporting is seen as representing an opportunity to fill some information gaps. Its closer alignment of risk management and performance could enhance investor confidence in management’s ability to perform in future; Spreading high standards of corporate governance. The adoption and enforcement of corporate governance frameworks and codes is patchy globally. Wider adoption is seen as valuable by investors. In some regions, improved corporate governance was seen as the highest priority for improving investor confidence; ‘The investor round-table discussions organised by ACCA and Grant Thornton provide a springboard for further debate,’ says Steve

Maslin, a partner at Grant Thornton. ‘Investors are willing to explore new approaches to developing financial reporting reforms. They support the concept of a more integrated process that emphasises the interrelated nature of accounting, reporting, auditing and corporate governance standards and regulations. They fully endorse the prioritising of investor needs, ensuring that any proposals for reform begin first with a sound analysis and understanding of the challenges investors face and their most urgent priorities for improvement. ‘ACCA and Grant Thornton will explore means of facilitating further debate, and continue their efforts to bring the views and interests of investors to the forefront of that debate. Policymakers, standard setters and professional bodies alike must put investors’ needs at the heart of the agenda to enhance the accountancy profession.’

he importance of educating and developing a savings culture among children has been brought to the fore by Keystone Bank as the bank has dedicated the entire month of May as Children Banking month. As part of the activities lined up to celebrate the month, a total of 112 schools have been invited on an excursion of the Bank’s Head Office and some of its over 200 branches across the country where the children will be introduced to the significance of imbibing a good savings culture. During the excursion the children will also get handson training on banking operations while learning the concept of savings. The bank has also perfected plans for selected volunteer staff to visit a total of 28 schools to teach children on why they need to starting saving early in life and how they can achieve it through the bank’s Future Account. According the Managing Director, Mr. Oti Ikomi, “Keystone Bank appreciates the need to create awareness and education on savings culture amongst children, which is why we are using our flagship product, the Future Account as a platform for parents to start saving money for their children’s future needs.” Keystone Bank Future Account is a savings account that can be opened for all children from birth to 18 years old. The account is opened with a minimum of N1,000 and the Parent or Guardian can deposit money into the account regularly. The account is managed by the Parent/Guardian until the child turns 18 years old. The Children are also in for a fun time as Keystone Bank in conjunction with Inspiration FM is organizing one of the biggest Children Carnival on Children’s Day (May 27, 2012). It is expected that 500 free tickets would be given to Keystone Bank Future Account customers in Lagos. A draw will be held in Lagos for parents/guardians that either open a Keystone Bank Future Account with N10,000 or increase the balance of their existing Future Account by N10,000. The fun train will also stop in Port-Harcourt, Lagos, Kaduna, Abuja, Benin, Enugu and Ibadan where the bank will host 350 children to a Children’s Day party.

24 — Vanguard, MONDAY, MAY 28, 2012

Capital Market BRIEF IFC, Standard Chartered partner to boost local capital market

Bharti eyes 49% in Qualcomm India broadband venture

harti Airtel (BRTI.NS), India’s biggest mobile phone carrier, said it has agreed to buy a 49 per cent stake in Qualcomm Inc’s (QCOM.O) fourthgeneration (4G) broadband venture in the country for $165 million. Bharti will buy a 26 percent stake held by two Indian partners in the Qualcomm broadband venture and the remaining by subscribing to fresh equity, the company said in statement, sending its shares as much 6.9 percent higher. Qualcomm, which spent nearly $1 billion to buy 4G airwaves in a 2010 auction, had sold a total 26 percent stake to Global Holding Corp and Tulip Telecom (TULP.NS) for about $58 million to comply with the sector’s foreign holding rules. As part of the agreement, Bharti will buy the remaining 51 percent stake in the broadband venture by 2014, and Qualcomm will exit the venture but will continue to provide technology services, said a source with knowledge of the situation.

From left: MD/CEO, Learn Africa Plc, Fred Ijewere, Chairman, Learn Africa Plc, Emeka Iwerebon and MD, Finance Director, Learn Africa Plc, Peter Nosike at the Learn Africa Pre AGM Media Briefing, held in Lagos.

Operators appraise equity rebound, seek sustenance of regulatory framework By PETER EGWUATU

PERATORS in the Nigerian capital market have stated that for the equity market upsurge currently being experienced under the new leadership of both the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE), there is need to sustain the reforms being put in place by the apex capital market regulator. The operators observed that the All-Share price index gained 18.9 per cent, closing at 24,770.52 in 2010, a significant improvement over the closing figure of 20,088 in 2009. Equity market capitalization has since increased by 37 per cent rising from N4.99 trillion in 2009 to N6.8 trillion in 2011, driven mainly by the listing of Dangote Cement. The market closed with a market capitalization of N6.6trillion as at 30th March 2012. As at the close of trading last week Thursday, the market closed with a market capitalization of N7.085 trillion and index of 22,218.44 points. While assessing the improvements in the equity market, Managing Director/ Chief Executive Officer of Investment Centre Limited, Mr. Ifeanyi Odunwa said, SEC under Arunma Oteh has brought discipline to the market, reduction of market infractions and a bit of stability in equity prices. For a person coming from a multilateral financial institution, (African Development Bank), she brought professionalism,

transparency, charisma and finesse to market. Though, she needs the collaboration of all staff in the commission, operators as well as other regulators in the market to execute the reforms being put in place to attain a world class market. According to him, “SEC has drastically reduced unethical behaviours by market operators through the commission’s strategy of name and shame of anyone that infringes the market and this has gradually brought back investors’ confidence. The regulatory framework

nternational Finance Corporation, IFC, a member of the World Bank Group, and Standard Chartered has launched a bond-issuance program that will increase the availability of local-currency financing for private sector development in Africa. The IFC Pan-African Debt Medium-Term Note Programme will initially focus on Botswana, Ghana, Kenya, South Africa, Uganda, and Zambia. Over the next several months, IFC will work with the respective authorities in these countries to obtain their consent to be part of the program. Standard Chartered is appointed as the sole arranger for the program. Standard Chartered will also be the lead manager for many of the inaugural bond transactions under the program. Other financial institutions may co-lead individual bond issues. Bonds issued through the program will raise funds that IFC will use to provide longterm, local-currency finance for African businesses, protecting them from foreignexchange risks.

most important developments in the market is the step taken to reposition the NSE into a more focused institution. In this case, I think SEC played its key role as a regulator in facilitating the change of leadership at the Exchange. While this process is still work-in-progress, I believe the Exchange will emerge a more improved institution,” Odukoya said. In his view, the former President of Chartered Institute of Bankers of Nigeria (CIBN) and Chief Executive Officer, Maxifund Investments & Securities

According to them, the market has began to enjoy favourable sentiments from investors given the improved regulatory framework , which is a culmination of various efforts put in place by the Securities and Exchange Commission (SEC) in the past two years.

being put in place by the SEC in the past years should be sustained. Commenting on the performance of the market, Mr. Tola Odukoya of Dunn Lorren Merrified, an investment banker, said that the intervention at the NSE by SEC, which is one of the steps taken to reposition the market for the positive current results, would make the Exchange a better institution on the long run. He said, NSE has ensured strict enforcement of compliance with post-listing obligations. “In my opinion, one of the

Limited, Okechukwu Unegbu said, “Good results pushed the stock market indices as both capitalization and index appreciated greatly. This shows that the fundamentals of these companies quoted on the market are strong. I had earlier predicted that the market will record an upsurge in the second and third quarters and this is exactly what we are seeing now. To some extent, we should commend SEC for its effort in strengthening corporate governance and instilling market discipline. Although, there are more need for more rules and policies in terms of

restoring confidence to the market.” Furthermore, he explained, “One major thing that really affected the market during the crash was infractions and unethical practices by some operators which the SEC is prosecuting offenders. Besides that our market is still strong and this is the best time for investors to take advantage of the low equity prices to recoup the losses they had earlier incurred.” Meanwhile, it seems there is consensus among operators and stakeholders that the prospects for the nation’s capital market have since the crisis in 2008, have never been brighter than this year. The market has recorded a Year-To-Date (YTD) of over eight per cent compared with a decline of over 16 per cent last year. According to them, the market has began to enjoy favourable sentiments from investors given the improved regulatory framework , which is a culmination of various efforts put in place by the Securities and Exchange Commission (SEC) in the past two years. One of the factors attributed to the renewed patronage of the market by investors is the corporate actions coming from listed companies. Unlike before when investors used to wait for companies to release their results, months after the end of their financial years, investors have been savouring their dividends for the year ended December 31, 2011. Even companies that could not declare dividends prepared their minds of the investors ahead through profit warnings to the market, a development that did not exist before. Also assessing the improvements of capital market under Oteh, some operators have opined that the commission has brought a bit of professionalism and transparency. According to Odunwa “Oteh has drastically reduced unethical behaviours by market operators through her strategy of name and shame of anyone that infringes the market and this has gradually brought back investors’ confidence. Her various actions since assumption of office has confirmed SEC as the ‘Headmaster’ of the capital market. All she needs to do is to resolve the division among her executive members. She should find a way of letting them know the kind of changes she wants for the commission so that they can key to her vision and work in harmony for the progress of the Nigerian capital market.” In terms of strengthening the SEC, stakeholders observed that in the past two years, the Information and Communications Technology (ICT) of the commission had been revamped with modern productivity tools which have significantly enhanced the SEC capacity to discharge its market development and regulation mandate.

Vanguard, MONDAY, MAY 28, 2012 — 25

26 —Vanguard, MONDAY, MAY 28, 2012

Capital Market BRIEFS LBSAA holds presidential dinner

n a bid to encourage academic excellence and celebrate outstanding performance of members, Lagos Business School Alumni Association (LBSAA) is set to host this year ’s President’s dinner on Saturday 2 June, 2012 at Eko Hotel & Suites, Victoria Island. This event of the alumni association is the most looked – forward – to social event of the prestigious school. According to the President of LBSAA, Mr. Udeme Ufot, “This year ’s dinner is expected to be the biggest in the history of the association as we expect about 1,300 guests to grace the occasion. Already, some distinguished Nigerians including two State Governors have been invited while over 20 corporate organizations are supporting the dinner by means of sponsorship and corporate tables. Top on the list of our sponsors are Stanbic IBTC, Honeywell Flour Mill and Chams Plc while more are on line to give their commitments”.

Lehman to buy rest of Archstone for $1.58 billion

ehman Brothers Holdings Inc said it would acquire the remaining 26.5 percent of apartment company Archstone that it didn’t already own from Barclays Capital (BARC.L) and Bank of America Corp (BAC.N) for $1.58 billion.Sources told Reuters on Thursday that Lehman had reached a deal to buy the last portion of the company. The last slice of Archstone was critical to Lehman in order to block real estate investment trust Equity Residential (EQR.N) from controlling Archstone’s fate. In January, Lehman bought half the banks’ stake, or 26.5 percent of Archstone, for $1.325 billion. That came after Barclays and Bank of America struck a deal to sell the 26.5 percent stake to Equity Residential, which was also given the right to bid for the banks’ remaining stake. But Archstone’s ownership structure gave Lehman the right to match the offer for the first slice. Lehman bought the stake and later filed a lawsuit against the two banks in the U.S. Bankruptcy Court in

Investors lose N47bn in one week BY MICHAEL EBOH Investors lost N47.439 billion in the secondary segment of the Nigerian capital market last week, as the value of their investment in the Nigerian Stock Exchange, NSE, dipped by 0.66 per cent. In particular, investment value, represented by the market capitalization, dipped by 0.66 per cent from N7.138 trillion at which it opened the week, to close at N7.090 trillion. Another major market indicator, the All-share index, also dipped by 0.66 per cent or 148.75 basis points to close the week at 22,381.11 points, from 22,232.36 points at which it opened the week. Guinness Nigeria Plc led 34 other stocks on the price losers’ category in the week under review, dropping by 4.69 per cent to close N223.99 per share, Total Nigeria Plc followed with a loss of N6.94 or 4.99 per cent to close at N132.01 per share and Unilever Nigeria Plc dipped by N2.21 to close at N28.30 per share. On the contrary, Julius Berger Nigeria Plc recorded

the most share price gain, rising by 9.47 per cent to close at N34.00 per share followed by First Bank of Nigeria Plc with a gain of 8.56 per cent to close at N11.41 per share and Ecobank Transnational Incorporated rose by 2.71 per cent to close the week at N11.38 per share.

Equity trading dipped by 5.84 per cent, as a turnover of 1.74 billion shares valued at N15.108 billion was recorded in 19,754 deals, in contrast to penultimate week’s turnover of 1.848 billion shares valued at N13.863 billion in 20,435 deals. At the close of trading activities for the week, the

Financial Services sector of the equities market was the most active (measured by turnover volume) with 1.300 billion shares valued at N8.881 billion traded in 11,347 deals. This was followed by Conglomerates Sector with 197.476 million shares valued at N505.041 million traded in 767 deals.

From left: Mr. Ityoyila Ukpi, Director, Dangote Cement PLC; Alhaji Aliko Dangote, Chairman and Mr. Victor Edwin, GMD/CEO at the 3rd Annual General Meeting of Dangote Cement PLC held in Lagos on Thursday. Photo by Lamidi Bamidele.

Dangote Cement targets 60m tonnes by 2015 … Pays N1.20 dividend BY PETER EGWUATU

angote Cement Plc, said plans are on to increase total production of cement in order to meet its domestic and international markets, even as it paid a cash dividend of N1.20 per share for the financial year ended December 31, 2011.

Speaking at the company’s rd 3 Annual General Meeting (AGM), held last week in Lagos, Chairman of Dangote Group, Alhaji Aliko Dangote said, We are looking beyond our local market and plans are in place to increase our total production to 60 million tones of cement by 2015. At present we have 19.25 million tones and this comprise: Obajana

Cement Plant 10.25 million tonnes per annum, Benue Cement Plc three million tonnes per annum, and Ibese plant six million tones.” He further assured shareholders that they will reap higher returns from their investment as production increases in both Nigeria and other countries such as: Sierra Leone, Ivory Coast, Liberia, Ghana, Tanzania and Cameroon.

CAP eyes increased profitability, plans capacity upgrade BY MICHAEL EBOH

hemical and Allied Products, CAP, Plc said it plans to upgrade its manufacturing capacity as parts of strategy to enhance its production capability and ensure improved profitability. Speaking at its Annual General Meeting in Lagos, Mr. Larry Ettah, Chairman of the company, said the upgrade will bring about increased efficiency and significantly enhance its product volume. He said, “We plan to introduce more innovative products and services. Working with AkzoNobel, our

technical partners, we will continue to invest more in our flagship brand with the view to further consolidating our leadership in the decorative paint market. “We shall also embark on projects that aim to increase consumer base, brand equity and loyalty. We will continue to expand our market footprint and improve penetration by opening additional inspirational colour centres. Volume ramp up and efficiency are expected from our planned upgrade of our manufacturing capacity. ” Ettah further explained that the company has put in place strategies that effectively positioned its business to take

advantage of the opportunities that would arise from the projected growth in the Nigerian economy in the current financial year. “We will further ensure that our corporate values are upheld and that more of our colour champions and strategic employees are given the requisite exposure to further improve their skills and competence,” he noted. He further stated that despite the challenging operating environment in 2011, the company’s financial performance was impressive and benefited from sustained focus on strategic priorities across the business.

While commenting on the company’s performance for the year 2011, Dangote, said a turnover of N235.704 billion was recorded for the year under review as against N202.565 billion in 2011. “Our operating profit grew from N102.969 billion in 2010 to N117.332 billion. Profit Before Taxation (PBT) grew from N101.051 billion to N117. 843 billion, while Profit After Tax (PAT) grew from N105.322 billion in 2010 to N125.478 billion in 2011” he added. He further stated the company decided to appreciate the shareholders for the support and understanding by declaring a bonus of 1 for 10 shares. According to him, “With additional production volume, increase in turnover and profitability our esteemed shareholders are soon to be smiling with robust dividends to their banks.” Speaking at the AGM, Brigadier Emmanuel Ikwue, Chairman, Coordinating Committee, Zonal Shareholders’ Association, said, “We the shareholders commend the Board for the impressive performance and we pray that the company continues to grow form strength to strength.

Capital Market Company

Opening Price (N)

Stock Market Report Closing Price (N)

Quantity Traded

Year High

Year Low

E.P.S.

P.E. Ratio

Oil and Gas and Products Petroleum Products Capital Oil Plc

0.50

205,000

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

0.50 32.49 15.01

0.50 32.49 14.14

165,000 78,092 149,047

0.64 24.58 8.30

0.50 14.53 6.40

0.01 7.94 1.80

50.00 2.77 4.37

1.10

1.02

464,000

0.66

0.48

0.04

15.00

Livestock/Animal Specialities Livestock Feeds Plc

1.07 5.52 0.73 6.43 36.00

1.02 5.52 0.90 6.43 35.00

13,311 100 47,532,423 250 7,733,280

2.54 8.28 1.82 7.60 42.50

1.45 5.52 0.50 6.43 28.70

0.28 0.35 0.22 0.31 7.03

5.18 15.77 3.64 20.74 4.14

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

31.06 8.69

34.00 8.69

679,608 309

62.26 8.28

32.96 3.01

3.26 3.66

10.11 2.26

11.50

4,918

20.15

11.59

1.66

7.33

100.00

1,500

100.00

97.00

11.75

8.51

Real Estate Investment Trusts Skye Shelter Funds CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc Beverages-Non-Alcoholic 7-UP Bottling Company Plc

ICT Computer Based Systems108 Courteville Investment Plc

IT Services NCR (Nig) Plc Tripple Gee and Company Plc ICT Telecommunications Starcomms Plc

0.50

26,348

0.50

0.00

3.29 235.00 5.35 109.00 0.89

3.29 22300 5.35 108.00 0.89

104,948 85,862 294,561 623,013 200

4.63

2.23

0.00

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

255.00 7.10 100.00 1.01

186.00 5.23 72.50 0.93

12.12 0.35 4.50 0.00

19.98 16.29 22.22 0.00

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

41.70

25,640

51.49

39.00

3.70

13.92

Tools and Machinery Nigerian Ropes Plc

6.93 3.80 60.11 2.14 6.30 0.50

6.09 3.90 60.11 2.00 4.83 0.50

3,036,540 15,912,065 347,738 399,053 2,190,333 60,000

19.90 16.20 95.00 6.60 6.70 0.88

4.31 4.02 57.00 2.31 3.80 0.50

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

16.00 425.00

439,400 312,970

29.20 470.00

10.17 367.83

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

11.68 36.19 3.30 2.88

11.10 36.19 3.30 2.88

358,924 247 361,000 800

15.58 42.66 6.75 3.67

12.71 36.19 4.78 2.66

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

23.00 30.51

23.00 28.30

404,392 346,419

43.50 31.25

27.00 22.56

1.29 1.32

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

6.85 0.64 0.57 2.75 11.08 1.32 0.50 10.51 4.52 15.90 1.07 0.70 1.15 3.20 0.88 6.28 1.28 4.00 4.09 0.54 0.50 14.85

6.66 0.64 0.55 2.68 11.38 1.33 0.50 11.41 4.25 15.70 1.07 0.70 1.15 3.08 0.88 5.98 1.19 4.00 3.55 0.52 0.50 14.80

97,777,303 646,608 146,538,502 7,377,315 1,527,181 3,239,390 1,000 18,037,497 7,131,993 32,298,853 500 73,200 91,000 65,121,075 1,006,032 610,695 963,881 13,153,179 1,242,415 2,007,054 199,500 29,051,004

11.10 3.39 2.30 9.27 4.30 3.20 9.50 16.12 8.30 20.50 1.78 1.78 13.50 10.17 2.18 11.38 2.91 11.70 5.38 1.92 1.75 16.70

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

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

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

0.50 0.73 0.50 0.50 0.50 1.76 0.50 0.55 0.50 1.59 0.50 0.54 0.50 0.50 0.50 0.52 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

0.50 0.75 0.50 0.50 0.50 1.74 0.50 0.61 0.50 1.56 0.50 0.52 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

319,600 44,510 5,000 3,000 30,200 1,033,606 1,000,000 83,750 500 199,270 30,146 1,040,063 96,166 1,670,890 9,663 287,200 142,673 4,700 1,412,500 100,000 2,400 15,994 13,750,000 81,750 10,000 130 5,167 20,000

1.06 1.20 0.50 0.50 0.50 3.51 0.50 0.69 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.90 0.50 2.50 0.50 0.50 0.50 0.50 0.50 0.50

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

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

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

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

0.50 0.50

500 365,000

0.50 0.50

0.00 0.00

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

0.50 2.02 0.50

27,500 25 3,827

0.61 2.02 0.66

0.50 2.02 0.50

0.00 0.00 0.03

0.00 0.00 16.67

7.77

250

10.54

9.52

0.54 0.71 4.50 0.26 0.73 0.06 0.28 15.94 3.90 1.61 0.70 0.00

0.00

16.91 14.38 16.89 16.92 5.75 8.83 37.57 27.96 3.26 22.48 7.34 0.00 20.93 20.46

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

0.00

NATURAL RESOURCES Chemicals BOC Gases Plc Metals Aluminium Extrusion Ind Plc Non-Metalic Mineral Mining Multiverse Plc

Year Low

E.P.S

0.50

Closing Price N 0.50

Quantity Traded 12,000

Year High 0.50

0.50

0.00

P.E Ratio 0.00

5.05 0.50 0.85 20.00 1.44 0.65 8.59 3.50

5.05 0.50 0.80 20.00 1.23 0.62 8.59 3.50

168 22,090 412,700 54,899 312,500 50,576 10 100

5.31 1.45 3.20 29.65 5.61 1.96 12.91 200

5.31 0.70 0.83 23.11 3.61 0.95 0.95 4.28

0.06 0.00 0.27 2.58 0.21 0.08 0.00 0.00

88.50 0.00 3.07 8.88 9.05 14.13 0.00 0.00

0.50

117,664

0.52

0.50

0.05

10.00

0.50

1,000

0.50

0.04

12.50

13.80 2.66

3,912 750

9.31 3.59

3.25 3.25

6.49 0.00

1.43 0.00

0.50

7,008,301

1.47

0.50

0.00

10.46 9.45 25.35 5.10 112.11 0.50 0.74 45.50 3.25 1.15 10.93

10.50 9.10 25.35 5.29 112.25 0.50 0.74 42.34 3.25 1.15 10.93

364,321 120,200 5,250 658,400 4,200 17 4,769 192,685 163,214 214,000 875

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

1.59 1.71 1.76 1.80 8.01 0.00 0.00 1.05 0.36 0.18 0.00

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

3.79 2.00

272,000 1,080,693

6.91 3.60

8.26

100

8.69

6.00

1,000

9.20

6.80

10.60

100

12.39

10.70

3.98 2.03 8.26

5.94 1.47

0.15 0.19

8.26

0.00

0.93 0.13

39.60 9.16 0.00

7.37 85.77

0.50

650,000

0.50

0.00

1.38

150

1.38

0.00

Processing Sysetms Chams Nigeria Plc

0.50

250,000

0.50

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

1.45 0.50

6,000 4,000

2.50 2.58

1.62 2.58

1.44 0.50

2,000 1,000

1.51 0.99

1.33 0.50

0.05 0.00

28.80 0.00

3.98 12.71 13.28 4.30 1.05 2.92 0.63

3.98 12.71 13.28 4.30 1.05 2.78 0.6

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

3.98 15.58 15.03 4.30 1.86 2.92 0.63

3.98 12.71 13.97 3.60 1.05 2.92 0.63

0.00 3.90 0.00 1.22 0.17 0.07 0.00

0.00 3.26 0.00 3.52 6.18 41.71 0.00

OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service

0.60

3,822,079

0.97

0.16

6.06

Intergrated Oil and Gas Services Oando Plc

16.71

15.96

4,790,791

78.97

27.99

6.95

4.17

20.50 0.50 25.46 3.24 11.34 132.90 36.50 138.95

20.50 0.50 25.46 3.22 10.98 132.90 36.50 132.01

82,191 1,000,000 28,559 545,160 80,694 13,873 49,470 4,176

37.10 0.70 32.60 5.59

0.50 0.50 5.71 3.89

4.93 0.00 6.02 0.67

7.40 0.00

163.50 2,100 240.00

141.00 63.86 195.50

13.32 3.32 11.91

11.11 19.23 17.07

Paper/Forest Products Thomas Wyatt Nig. Plc

Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc

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

1.87

0.00

0.13 0.00

0.87

00.50

0.50

2,000

600

0.50

50,039

0.72

1.97 1.25

240 452,610

4.33 3.65

1.97 1.30

0.00 0.16

2.65

0.54

0.00

13.15 0.00

6.99

SERVICES

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

1.97 1.36

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

2.83

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

6.78 1.10

0.50

2.93

615,100

3.67

0.50

2,000

1.64

6.78 1.10

100 287,760

400 2.07

0.51

0.90 3.00 1.33

0.04

0.08 0.22 0.69

12.75 0.00 8.19 4.91 11.25 34.09 2.12

Media/Entertainment Daar Communications Plc

0.50

1,000

0.50

0.48

0.00

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

1.90 2.80 4.20 3.75

1.90 2.80 4.20 3.93

1,000 1,200 4,322 55,590

3.68

3.17

0.26

12.19

8.00 6.82

4.60 3.60

0.00 0.13

0.00 27.69

0.50

0.00

Road Transportation Associated Bus Company Plc

0.50

1,000

0.80

Speciality Interlinked Technologies Plc

4.90

5.15

4.90

0.50

0.00

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

1.80 5.90

1.80 6.00

21,000 123,444

2.78 11.75

1.57 6.50

0.51 0.80

4.22 8.75

Vanguard, MONDAY, MAY 28, 2012 â&#x20AC;&#x201D; 27

Food Products Dangote Flour Mills Plc Dangote Sugar Refinery Plc Flour Mills Nigeria Plc Honeywell Flour Mill Plc National Salt Co. Nig Plc UTC Nigeria Plc

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers

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

Computers and Peripherals Omatek Ventures Plc

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

Real Estate Development UACN Property Development

Opening Price N Union Diagnostics & Clinicals Services

as at Friday, May 25, 2012

C M Y K

28 —Vanguard, MONDAY, MAY 28, 2012

C M Y K

Vanguard, MONDAY, MAY 28, 2012 — 29

C M Y K

30 — Vanguard, MONDAY, MAY 28, 2012

Talking Insurance

Insurance

WITH

YnikaBoa lrniwa Reforms and the insurance industry (3)

Y now, readers of this column will have no ticed that I keep coming back to the issue of MDRI in the last few editions of the column. If we are not done with it, then we are not done; pardon me. I will now share with you, my readers, excerpts from the Afrinvest 2011 Insurance Sector Report titled Trotting at the Pace of Reforms. That report dealth with many issues; but as it concerns our immediate environment — Nigeria — it focuses reform-driven expansion in the industry; the re-growing of premium, dominance of the revenue base by non-life insurance products. It is capped with a SWOT analysis of the sector, which I will bring to you later.

Why MDRI Recall that in 2008, NAICOM introduced the Market Development and Rest ructuring Init iat ive (MDRI), a medium term reform plan (covering 2009 to 2012), targeted at enhancing industry capacity, market eff iciency and consumer protection in the Nigerian insurance market space. NAICOM expects the initiat ive to deepen and grow the insurance market, moving industry gross premiums from N164bn (US$1.1bn) in 2008 to N1.0t r (US$6.4bn) in 2012. MDR focuses on four key issues: the enforcement of compulsory insurance products in Nigeria, sanitizat ion and modernizat ion of insurance agency System, wiping out fake insurance inst itutions and the int roduction of Risk-Based Supervision. The core focus of the MDRI is to enforce compulsory insurance covering six areas, which include Group Life Insurance, Employers Liabilit y Insurance, Buildings under const ruction, Occupiers Liability Insurance, Motor Third Party Insurance, Healthcare professional and indemnity insurance. Although, compulsory insurance has become a major tool for growing the penet rat ion rate in the indust ry, failure in enforcing previous policies have cast a doubt on the ability of regulators to push through current reforms in this direct ion. That said, we think recent commitments by NAICOM and increased levels of awareness could buoy premium expansion in the medium term. With the off icial March 2009 kick-off date, we look to see the full impact of this policy on insurers’ books from 2012.

Consolidat ion in the industry brought about the emergence of larger insurance firms with technical capabilit ies to take advantage of economies of scale

Reform-driven expansion The Nigerian Insurance market has undergone substantial st ructural and regulatory changes following market intervent ion and the evolution of Nigeria’s financial sector in the last decade. From a largely f ragmented operating environment characterized by a weak and almost non-existent regulatory f ramework, the industry consists of 49 players (down f rom 104 in 2006, prior to the consolidation in the indust ry). The cont ract ion in the number of industry players has led to improved capacity not only for higher underwriting, but also the abilit y to set tle larger claims. The consolidat ion in the industry brought about the emergence of larger insurance firms with technical capabilit ies to take advantage of economies of scale. Industry market capitalization rose to N278.4bn from a pre-consolidation level of N73.7bn. Further, complementary reforms, especially in the banking sector, has also aided the growth of the indust ry as the int roduction of universal banking led banks to diversify into the insurance business terrain; a trend that helped boost premium growth in the sector. C M Y K

From Left: Non Executive Director, Chemical and Allied Products (CAP) Plc. Mr. Opeyemi Agbaje, Chairman, Mr. Larry Ettah and Non Executive Director, Mr. Solomon Aigbavboa, During the 47th Annual General Meeting of Chemical and Allied Products [CAP] Plc, held in Lagos, PHOTO; Kehinde Gbadamosi

Insurance sector, weakest link in AMLCFT chain —NAICOM Stories by ROSEMARY ONUOHA

he insurance sector has consistently been considered as the weakest link in the Anti Money Laundering/Combating Financial Terrorism, AML/CFT chain, the National Insurance Commission has said. Assistant Director (Inspectorate), Head AML/CFT Unit of NAICOM, Mr. Sam Onyeka who said this in

Lagos noted that the sector is considered the weakest link in the chain because it has consistently failed to report suspicious transactions to regulatory bodies. Suspicious transaction, according to NAICOM, is premium payment above N1 million for individuals and N5 million for corporate organisations. Onyeka said “Some insurance companies still receive premiums in cash as

Leadway commemorates founder’s memorial anniversary …Donates to charity

eadway Assurance Company Limited has made donations by way of drugs, foodstuff and equipment worth thousands of Naira to Ile Aanu Olu Pre-School Unit for physically challenged children, Modupe Cole Memorial Home School as well as to the Wesley Schools for the Hearing Impaired. In a statement made available to Financial Vanguard, the company said that the donations are in commemoration of the 13th memorial anniversary of the Founder of Leadway, Sir Hassan Odukale. The company said that the action has been the style of the memorial of the company’s founder since he passed on 13 years ago, stating “Donations by way of drugs, foodstuff and equipment worth thousands of Naira are presented to homes in commemoration of the anniversary. Sir Hassan Odukale was well known for his generous and philanthropic way of life and is quoted as saying in 1996 “……as we go about our daily business activities we do not think in terms of what we are going to gain but in terms of the services we can render” not just to clients and stakeholders that we serve but within the community that we operate.” The company said that these ideals of philanthropy have guided the efforts of the company in its Corporate Social Responsibility initiatives which also include health, community support and

education. During the presentation, the company’s management enjoined public-spirited individuals, corporate organisations and wellmeaning Nigerians to continue to aid special and charitable homes. “Such donations would go a long way in easing the lives and ensuring a brighter future for the children,” the company said. A nine year old boy, Kayode is one of 18 children currently being taught at the Ile Aanu Olu Pre-School Unit for physically challenged children, one of the homes that were beneficiaries of donations from Leadway Assurance. According to the company “Kayode is a precocious 9 year old who loves music, dancing and all things colourful. He has a shy, happy smile and curiously kneels when he greets you. When you ask his name he answers with some hesitation “…Kay!” his vocabulary being all of 10 words. His teachers say this is a feat considering that he was totally without speech when he first came to the school.”

much as N50 million. It is an offence not to report some transactions to the Nigerian Financial Intelligence Unit, NFIU, or to NAICOM for which an offender can go to prison.” According to Onyeka, if an insurance company fails to detect and report suspicious transactions to the appropriate bodies, if NAICOM comes for inspection and such transaction is detected, such company will be penalised. He said that insurance operators should ensure that suspicious transactions are reported to the Commission in line with the AML/CFT directive and always look at the possibility of fraud and take precaution because the world environment has become so bad that underwriters must do something to protect themselves. Onyeka who said that insurers must do it for their business to survive noted that the Commission has information that people transfer funds from abroad through brokers, agents who use such funds to buy security. He said “If a broker said you can’t have access to their clients and some documents then send suspicious transaction report to the Commission.” Onyeka said that brokers don’t file suspicious report to NAICOM only insurers do, so the insurers must make sure that brokers collaborate with them stating, “The way to protect yourself is to send alert because there could be problem someday.” Onyeka said that any insurer that is not ready to abide by the directive should close shop stating “For so long in Nigeria we have left what we are supposed to do. We cannot continue to wait. We have to leap frog so that we can do other things.”

Vanguard, MONDAY, MAY 28, 2012 — 31

Economy IMF, originally 40, has increased to 188. There is hardly any space left to hang the many flags of all members on the IMF wall! Bringing people together around the internet is significantly easier than doing so in the board room or plenary session of any international institution. Reconciling interconnections and governance with a view to “making it better”, will be a real challenge in the coming years. It will be your challenge.

BY CHRISTINE LAGARDE, Managing Director, IMF

The importance of being good global citizens

his new world of oppor tunities is also a world of grave challenges and uncertainties. Your generation is facing the worst economic insecurity in decades, possibly ever since the Great Depression. Just look at some of the signs. The inability of 75 million young people across the globe to find meaningful work, rising inequality that strains the compact holding our society together, a fear that the global economic engine will no longer deliver as it has in the past. I really wish our generation could forge instantly a better legacy for you. But now it will

Christine Lagarde

The “new” world of interconnections: a world in progress

cross the long tide of human civilization, there have been many ebbs and flows, many advances and retreats, many great strides forward and many shattered opportunities. But there has never been a time quite like the present, because history does not repeat itself, and because we produce progress. We stand at the entrance of a new world, a whole new way of living, of communicating, of crossing borders. It is the great paradox of our age: the world gets bigger, with so many more people and places sharing the fruits of knowledge and prosperity; and the world gets smaller, with so many more people and places crossing paths and sharing destinies. For today, the world is more closely-knit than ever before. An infinity of little interconnections dances across the fabric of global society, transforming millions of fragmented images into one dazzling mosaic. As George Bernard Shaw put it, “We are all dependent on one another, every soul of us on earth”. People are meeting each other in the global marketplace of goods and ideas more than at any point in history. ince 1980, the volume of world trade has quintupled. People are flowing more freely across borders. About 900 million tourists traveled between countries in 2010, up from a mere 25 million in 1950. The world has over 200 million migrant workers, up from 78 million in 1965. Highly-skilled professionals—like yourselves—are even more mobile. Foreigners make up between a fifth and a quarter of the professional workforce in countries like Australia, Canada, and Switzerland. Look at modern business. There is no greater symbol of American industrial pride than the roaring automobile industry in Detroit. And in 2010, for the first time in its history, General Motors sold more cars in China than at home. Global companies like Nokia, Nestle and Phillips earn only 1-2 percent of total sales from their home countries. Indian information technology companies regularly generate up to 95 percent of their sales in Europe and the United States. One world, open for business. Nothing embodies our interconnected world more than the reach and fluidity of global communications. The communications revolution is opening a gateway to freedom, a passage to knowledge, an avenue to understanding. When the first transatlantic cable was laid in 1858, it took more than two minutes to transmit a single character. As recently as twenty years ago, the long-distance phone call was still prohibitively expensive. Today, communication is

Since 1980, the volume of world trade has quintupled. People are flowing more freely across borders. About 900 million tourists traveled between countries in 2010

cheap, instantaneous, multifaceted, and global. You are the generation that is constantly “plugged in”—to your family, your friends, your colleagues, and indeed to the issues of the day and the concerns of the world. You are the internet generation. The internet brings the global family to the kitchen table. It is truly the screen of a billion dreams, the portal of a billion possibilities. You are the generation of social media, which

turns a simple two-way conversation into a multi-layered and textured process of mutual interaction. Change is coming with great speed. Last year, the world clocked up 438 billion minutes of international long-distance telephone calls. That is a large number, but a newcomer called Skype clocked up 145 billion minutes. And since I am in Harvard, I cannot fail to mention Facebook—a global phenomenon connecting 845 million people across the world, sharing their lives and their loves on a single global platform. By the way, I am on Facebook, and Twitter too! orders, barriers, walls have come down to allow this degree of interconnection. Yet, more walls are being erected around the globe— physical walls, political walls, mental walls. There is a serious disconnect between the interconnections and the severe fragmentation of global governance. It only takes a couple of comparisons: the original membership of the United Nations in 1945 was 50 member states. Today there are 193 member states. Similarly, the membership of the

be your turn to apply your talent, your determination, and your idealism to help overcome these challenges and seize the opportunities created by this new world. You will need to connect the dots, to reconcile the high-intensity connections with more cooperative governance. This requires new ways of thinking, new ways of behaving. To quote John F. Kennedy, it requires “profiles in courage”. Your generation must become another “greatest generation”. What do I mean by this? With the world becoming a single village, a global family, we now have a core responsibility to be good global citizens, to watch out for each other, to be sensitive to how our actions affect one another—no matter where we live. We need to shed the habits of the past that trapped us in our own mental backyard, or shackled us to the posts of provincialism. In practice, this means many different things. It means seeking better living standards for all and an economic system where the fruits of growth are shared fairly amongst peoples and coun-

tries. It means working to put extreme poverty behind us, so that our fellow global citizens in the world’s poorest countries can take their rightful seat at the table of prosperity. It means urgent action to preserve the planet from self-induced destruction, before the stark realities of a rapidly warming climate condemn future generations—especially in poorer countries—to a life of hardship and desperation. It means striving for greater equity, and greater equality of opportunity, between men and women, rich and poor, young and old. Ultimately, it means working for peace—in our world, in our countries, in our lives. None of this will be easy. But it will be impossible unless we all stand together, thinking and acting like true global citizens. And here, I believe education is the first stepping stone to a better world. Through education, we pass on knowledge, learn from each other, and better understand each other. It is a bridge between peoples and generations. It is the best investment in our children, no matter where we live, as it provides them with a passport to this new world. Drew Faust, the president of Harvard, put this really well when she said that “universities nurture the hopes of the world: in solving challenges that cross borders; in unlocking and harnessing new knowledge; in building cultural and political understanding; and in modeling environments that promote dialogue and debate.” he Kennedy School epit omizes this imperative: forty-three percent of graduates here today are non-U.S. nationals, hailing from 81 countries. You know, more than others, the importance of education in breaking down barriers of suspicion and misunderstanding. You know the old dictum that the pen is mightier than the sword. I would go further and say the book is mightier than the bomb. You might have heard of the recent “book protest” in Tunisia—a truly remarkable story. A group of citizens occupied a public space, armed only with a book in their hands and an unquenchable fire in their minds. They are an inspiration to us all. Although you are graduating today, I believe true education is a lifelong endeavor— a life without learning is a life without meaning. Now you are about to step outside the academy into a world of multiple options. Each of you will be serving the common good of humanity. You will carry the values you learned at this university into the wider world of work. For those of you entering the public sector, or joining a multinational institution or a non-profit entity, this is clear. You have chosen to serve your fellow human beings. I salute you. Many of you will also enter the private sector, which is also a noble choice.

C M Y K

32 — Vanguard, MONDAY, MAY 28, 2012

Interview

oly Products Nigeria Plc, a manufacturer of polythene and other plastic products, recently disclosed plans to delist from the Nigerian Stock Exchange. In this interview with Vanguard, Mrs. Funmi AjayiTomori, a Director in the company, gave an insight into the delisting plan, arguing that quoted companies are still burdened by excessive charges from the regulatory authorities among other things. EXCERPTS I want to begin by asking, in the AGM that was held recently, the proposition was that you want to delist from the NSE and my understanding is that this decision was because of the cost implication of remaining a public quoted company. Are there some other reasons for this or are those basically the reason why you want to delist. I think that is one of the main reasons because many companies, especially for SME companies, the rigidity in regulation can be very stifling and they are not big enough to withstand all this rigidity. Invariably, most SME companies are family owned businesses and when they go public, in the area of publicity, it becomes difficult. In any case, this company went public not on its own accord but by Federal governmen’s declaration of the indigenization programme in 1978. So many people don’t know that historical fact. When the federal government decreed that 50 to 60 per cent of Nigeria plastic industry must be sold to the public, that was when Poly Products Nigeria went public in the first instance; nothing more than that. You see, some companies have grown very rapidly, some have not grown. It depends on your own nature to be able to know if you fit in the public limited liability arena or are safe in the private liability company. As you have heard, the company has had reasonable relationship with shareholders and here they are at this point. For me as an economist, looking at this, they have gone through various stages in life. There was a time when the company was just simple plastic industry and they were producing Nylon bags and Plastic bags which is the lowest of all plastic products for the market. And that sector is not very particularly viable sector; it is very low value adding and the returns are not high. Often times, not many understand the dynamics of such an industry. Overtime, they have shifted the product make. My own issue as an economist and I have been involved in private sector development is that you should be in the high value added sector, not in the low value added volume sector. The plastic industry is very C M Y K

Quoted companies are e versatile and very progressive provided you know where you should be. So, slowly they have being trying to move in that direction. Coming to the issue of stock exchange, it is very rigorous and unless you have the way withal, it will be difficult to meet up with certain demands. You have quarterly returns, half-yearly returns and all of that. For a company struggling to survive, you have to meet those obligations. It is very tough; it is very tough. The stock exchange is not a playing field for the embryos; it is for people whose cost of administration is minimal, who have all the manpower to meet all those obligations. We also support the development of the stock exchange, but it is not every Tom, Dick and Harry that should or can be there. A lot of companies in the last thirty, fifty years have gone through very rigorous situation and a lot of companies are also growing. So, it is left on the people on the other side to make it attractive for those growing companies to be members. But for the time being, some need to withdraw, refurbish, re-make themselves and then may be, some other time go back to the stock exchange. Does it then mean that you have plan of going back to the stock exchange in future?

said some; I haven’t said so, but if you are grow ing, if your company is growing, if you have been able to conquer the harsh business environment and your growth is rapid, then it may be justified because you may need more money to expand; then you can go back. The stock exchange is not something that you have to be there if you are not supposed to be there or you can afford to be out of it. No! It is a very dynamic market; the buying and selling of shares is quite dynamic, and if you think you are solid enough, strong enough, then you go to the stock market. You see what is happening to Facebook; some go, some come in. You know, you can always go and come back depending…, but on its own, the stock exchange must make itself attractive; it must be able to attract investors to come to that exchange. Talking about being attractive and attracting companies to the stock exchange, what can the Nigerian Stock Exchange precisely do so as to attract more companies. Am sorry,I am not competent to say anything on that because I am not in the stock exchange.

Mrs. Funmi Ajayi-Tomori ...If you ask me, I don’t think anybody should be particular about the SMEs coming to the stock exchange Recently, the Nigerian Stock Exchange reviewed its listing rules and the listing and postlisting charges were brought down. They also brought down the annual listing fees for SMEs to about three hundred thousand. Is this still rigorous for SMEs to meet since there are still other benefits companies derive from stock market listing. If you ask me, I don’t think anybody should be particular about the SMEs coming to the stock exchange. The fact is that when you look at the entire private sector, if the sector is growing and the private sector is crucial in any economy; if it is growing, those growing companies will automatically come to the exchange. So, it is not that SMEs must come or must not come. No, don’t restrict yourself to the SMEs, when the stock exchange is very dynamic, when the economy is growing, when it is booming, more and more companies will come on their own. Infact, the concern of the Federal Government should be to attract investment, both local and foreign. There are issues that are affecting those companies. The stock exchange is not a Fair. If the infrastructural cost is reduced, if the cost of doing business in Nigeria is very competitive, oh! The companies will be begging you to come from anywhere in world because Nigeria has a big market; it has the potential. But for how long have we been talking of potential, we have been talking about Nigeria’s potential for over thirty years. Until we are able to explore

those potentials, our economy and the stock exchange will continue to crawl. Stock exchange is a place that automatically people will want to come there because they want to list; they want to mobilize fund for further growth, but if you are putting the horse before the cart, it will not work. You know, the growth of the stock exchange is related to the growth of the economy in general; just not growth, but where the economic growth of a country generates employments, and it is all these private investors that generate employments. When you are spending 30 per cent of your profit in infrastructure, and then you have the problem of security; all these factors have enormous setback on the development of any economy. Now that you are planning to delist from the exchange, what will be the fate of your shareholders, are you going to carry them along or are you disengaging them com-

By NKIRUKA NNOROM

pletely Obviously, if you disengage, you have to carry them along. I mean after disengaging, because there are still some limited liability companies that still have minority shareholders in their companies. Are you planning to carry your shareholders along? Of course yes. You know the meaning of private limited liability company? Maximum Membership of about fifty (50) is what is required. That is the measure of a limited liability company. What if you decide to have more than that?

o! You cannot if you are a lim ited liability company. Some body covered that delisting plan very well. I don’t know who wrote that article that says that out of eleven thousand shareholders in our company, over ten thousand have less than five per cent equity. So, does that make sense? I have always asked them who drew up that shareholding structure for you. If you are a good investment vehicle, you don’t do that. For inef-

When the stock exchange is very dynamic, when the economy is growing, when it is booming, more and more companies will come on their own. On its own, the stock exchange must make itself attractive; it must be able to attract investors to come to that exchange

Vanguard, MONDAY, MAY 28, 2012 — 33

Interview

excessively charged on NSE fective minority shareholders of about ten thousand to have one hundred shares each, it is very cumbersome for anybody. If you see the whole list yourself, you can’t even go through it. I was even coming to that point you just raised now. I was worried when I looked at that shareholding structure. How come less than ten per cent of total shareholding is accruing to over 11,000 shareholders? Are there not rules from SEC on shareholding?

Now, going forward, what should the shareholders who have being with you all this while expect now that you are delisting You know, the point is that when you talk about investment, some will win and some will lose. I have put money in RT Briscoe, I lost; I put money in Studio Press and I lost. Quite a number of companies like that; I look through them and the share certificates are worthless. A company can go through that way of gradual bankruptcy, but in this particular case, the major shareholders are have all voted for the delist-

Mrs. Funmi Ajayi-Tomori ...It is very difficult for small companies to abide by what they are saying

s at that time the company went public, the Advisers and the consultants should have said, ‘you should be able to work out your strategy.’ Usually, when you are raising money from the stock market- you know in those days, I don’t know what happened in this case- the minimum you can buy…, I remember in 1978 when this indigenization process began and people were going to the stock market, some companies said, ‘you shouldn’t buy more than a thousand shares or ten thousand at most. Somehow in this case, that was not done; I don’t know why it was not done. You see, sometimes, as an economist, when you are reviewing everything, it is not nice for minority shareholders to be too weak or diverse. Usually, what the major investors want to achieve is 51 per cent, but for the other minority investors, if you have less than ten per cent, I tell you, you have no vote. So, in order words, if you have three, four other major shareholders who have ten per cent each, then you have forty per cent minority but strong minority. If you have people with one hundred shares out of two hundred and forty million, does it make sense? And then the administrative cost of printing annual reports and sending out notices is much more than the worth of the shares. This company has been quoted in the stock exchange since 1978. I tried to look through the analysis of returns to shareholders vis-a-viz dividend payment. The company looks a bit conservative. The returns have not being as impressive as I expected. Was there any special reason for this? I only joined this company three years ago. May be the MD will be in a better position to answer that. I don’t want to answer it as an economist.

Regulatory body should not be profit-making body. Here we are making regulatory and monitoring bodies as profit making bodies. If it becomes a profit making body, its loyalty moves from regulating to supporting whosoever helps it to make money

ing. You were there when they said that the market price is about N1.05 and the company is saying that ‘we will add some premium’ which is yet to be decided, or which they are working on and have been negotiating with shareholders. What do you do with companies that didn’t pay at all? What do you do with their share certificates? Of course, you throw them away. That’s the thing about the market, just as there are some others that have been paying dividend. In any case, in this particular case, shareholders will

ing N5.00? I think they just put it as a wish. People are perfectly free to make a wish. I am concerned about the economy, and I also know that you are concerned as well. What precisely do you think can be done to address this problem?

be adequately compensated. Some minority shareholders are demanding for N5.00 compensation as an exit price. Do you think the demand is feasible? Let me ask you, do you think that is possible? You are an economist, that’s why I am asking if it is possible I am not an economist. I am only a director. Sometimes, journalists are more informed. If the market price is N1.05, would you be pay-

ou see as she said and I repeat, we are not competent to comment on some things, but I want to comment on few things. One is that Regulatory body should not be profit-making body. Here we are making regulatory and monitory bodies as profit making bodies. If it becomes a profit making body, its loyalty moves from regulating to supporting whosoever helps it to make money. We have seen recent publications on SEC and stock exchange in the Newspapers, it disturbs everybody. Because our regulatory bodies are not powerful, how can you be protected? Today, we read in Newspapers that companies should adopt IFRS. Federal government is now supporting it. Why is the government supporting it? All over the world, small and medium industries are not subjected to

all those things. Here we are bringing everybody under IFRS. It is very difficult for small companies to abide by what they are saying. Banks, yes; multinationals, yes, but small and medium scale industries whose turnover is few billion naira a year should be excluded from the IFRS. In England, you don’t even require audited balance sheet if your turnover is not in excess of five Pounds. What you need is only certified accountant report. Here we are, close to eight hundred thousand private limited companies are public companies. Even this eight hundred thousand limited companies, let’s say fifteen (15) per cent are in existence and those fifteen per cent are close to FGN requirement as IFRS required. Nobody will be monitoring all the report and nobody will be reading the report. The stock exchange should not be compared with Nestle, Cadbury, Coca Cola or Pepsi. Nigeria has so many breweries. Is any brewery owned by small entrepreneur still alive? They are buying them off because they couldn’t run them. So let’s stop mixing things up and misguiding the public.

C M Y K

34 — Vanguard, MONDAY, MAY 28, 2012

Vanguard, MONDAY, MAY 28, 2012 — 35

Mortgage Finance By YINKA KOLAWOLE

ome investors, both foreign and local, have indicated interest in the land swap scheme initiative of the Federal Capital Territory Administration (FCTA ) to accelerate delivery of affordable housing in FCT. The land swap policy is a development initiative recently introduced by the FCT administration under which the administration would give land to investors in exchange for infrastructural development. FCT Minister Bala Mohammed, disclosed this in a presentation at the ongoing Ministerial Platform in Abuja, to commemorate first year anniversary of the Jonathan administration. He said all developers or investors participating in the land swap model are to deliver business plans showing their technical capacity, financial capability and managerial competence. In addition, he said each investor is to pay a commitment fee of N350 million on presentation of business plan to fund physical plan, preliminary design, detailed engineering design, survey plan, feasibility studies and preparation of agreement. They are also to provide detailed design together with infrastructure in the district within a maximum period of 48 months under strict compliance with FCDA specifications and standards for district infrastructure works.

Investors, developers scramble for FCT land swap deal *To pay N350m commitment fee

Functional one-bedroom bungalow

According to the minister, Dangote Group Plc and Edimo Gruppo of Italy top the

list of investors that have expressed interest in the scheme. Others are Adkan

Regulator queries Swedish banks’ mortgage margins

wedish banks are making far higher returns on housing loans than in other business areas, the country’s financial watchdog said, fuelling a controversy over whether customers are paying the costs of industry regulation. Bank costs are rising around the world as regulators force lenders to hold higher levels of capital to combat any future global financial crisis. The governmentcommissioned report pointed the finger at Nordea, Handelsbanken, SEB and Swedbank. “What we show here is that margins are rising more than bank costs,” Martin Andersson, head of the Swedish FSA, said. The FSA said banks had a return on equity (ROE) on mortgages of some 22 percent

in the first quarter, compared with overall profitability of 10 to 13 percent last year. “They are earning roughly twice as much on mortgages as other operations,” Andersson said, adding there was no apparent reason why mortgage margins should be so much higher than other parts of their businesses. “We are building safer banks now in Sweden, and that will also be done in Europe. The cost for that should not just be passed on to the clients but should also be taken by the shareholders.” Sweden’s government had toyed with the idea of taxing banks if home loan margins do not fall, but made no formal proposal. Swedish Finance Minister Anders Borg, said in response to the report, “it is worrying the

banks prioritise profitability over social responsibility and contributing to stabilization.” He however gave no indication the government would take action against the banks. High capital levels have also eroded banks’ profitability, making them less attractive to investors. The FSA’s calculations were based on mortgage risk-weights of some 15 percent, an indication that rules to be announced this summer could be pitched at that level. Banks currently have mortgage risk weights in single digits - well below other parts of Europe because Swedish lenders have traditionally seen few loan losses in this business line. The regulator wants them to increase risk weights.

Services Nigeria Limited; Ridley Group; AfriInternational Projects & Consulting Limited; China Railway Construction Company; Hongye Group; Rosehill Group; Nimec Investment Company limited; Balmus International Limited; First Aries Crude Oil Production; System Properties Development Consortium Limited and Gilmor Engineering Nigeria Limited. Mohammed stressed that in the event of any breach of the special contract, the minister has the power to revoke such grant, adding that the developer shall not commence real property development or sale of any land in the district until it achieves at least 35 per cent of functional infrastructure works. According to him, the funding structure of the project must include an acceptable ratio as follows: debt (50 per cent), equity (15 per cent) and off-plan sales (35 per cent). He added that while the developer is to provide an acceptable performance bond from a reputable bank or insurance company, the?FCTA is to retain at least 40 per cent of buildable plots in the district for direct allocation to people.

BRIEF Abuja housing show to hold June 28 he 2012 edition of the annual Abuja Housing Show is expected to hold on June 28 in the nation’s capital. Programme Coordinator, Abuja Housing Show 2012, Festus Adebayo, said in a statement, that the theme of this year ’s edition is “Transformation of Nigeria through the development of Nigerian Housing Sector ”. The programme is an annual event jointly organised by a Newspaper and national television station with the support of Association of Housing Corporation of Nigeria. The statement noted that Osun State Governor, Mr. Rauf Aregbesola has been nominated as its Urban Renewal Governor of the year, following the state government’s commitment to urban renewal the development of the towns in the state. Other awardees include Mr. Terver Gemade, Managing Director of Federal Housing Authority (FHA), Gov. Ibrahim Gaidam of Yobe State, Sparklight Engineering Limited and Bala Kaoje, former President, Nigeria Institute of Building (NIOB).

Nationwide increases mortgage lending by 44% ationwide Building Society, UK’s largest building society, increased mortgage lending sharply last year and is now looking at lending to companies. Mortgage lending rose 44 percent to £18.4 billion in the year to 4 April, with the number of first-time buyer loans up 9 percent to 24,000. It also said it had set aside £103m to cover potential claims for mis-sold personal protection insurance (PPI), compared with £16m a year ago. Profits fell from £317 million to £203 million after a number of one-off costs. These included £75 million for the Financial Services Compensation Scheme and the bank levy, higher than last year ’s £50 million. Other exceptional costs included £61 million to cover restructuring measures. The bank said its underlying profit for the year was £304 million, up 10 percent from £276 million last year. Nationwide is also planning to begin lending to small and medium-sized businesses (SMEs).

C M Y K

36 —Vanguard, MONDAY, MAY 28, 2012

Mortgage Finance BRIEFS Ogun to computerise land administration gun State government O has concluded plans to fully automate the operations of the state’s Bureau of Lands and Survey, in order to enhance its efficiency and ensure higher productivity. Director-General, Ogun State Bureau of Lands and Survey, Mrs. Ronke Sokefun, stated this at media conference to commemorate the first year anniversary of Governor Ibikunle Amosun administration. She said government is already working on deploying a robust Geographical/Land Information System that will aid the production of appropriate maps and documents, adding that about 30,000 hectares of land had been set aside for the New Town Development Project with topographical survey being currently carried out on the parcel of land. Sokefun noted that the processing of land titles within government acquired land had received a boost with the upgrading of the Land Title Ratification Unit to a full fledge department, adding that the engagement of external consultants by the government had made title ratification less cumbersome and had also improved the bureau’s revenue generation capacity.

Sales of new US homes up 3.3% in April

ales of new homes in the US rose sharply last month, adding to evidence of gradual improvement in the housing market. The Commerce Department said new home sales increased 3.3 percent in April from March to a seasonally adjusted annual rate of 343,000, following a 7.3 percent decline in March. The report showed that sales rose sharply in every region of the country but the South. The gain pushed the annual sales pace to its secondhighest level in two years. Economists were encouraged by the increase but cautioned that new homes are still selling at half the rate consistent with healthy markets. The increase follows other reports that suggest steady improvement in housing. C M Y K

A housing estate construction site

Lagos generates N11bn land revenue in 2011 *To start issuance of e-C of O in September Stories by YINKA KOLAWOLE

agos State government generated a turnover of N10.96 billion from land administration in 2011, which is less than the over N13 billion generated in 2010. Permanent Secretary, Lagos State Lands Bureau, Hakeem Muri-Okunola, explained the shortfall was as a result of the fact that almost all the government land schemes were fully subscribed and closed for further allocations. He added that dull economic activities caused by low-key activities occasioned by low public sector spending also affected the spending power of people and impacted negatively on the bureau’s revenue. “Lack of economic vibrancy witnessed in the country during the period under review put corporate performance of land administration under severe pressure; the direct consequence of the unprecedented downturn on major sectors of the economy was lowness in expected revenue generation unlike in previous years”, he said. Muri-Okunola assured that the bureau is targeting improved revenue performance this year and beyond through a number of new land schemes and other revenue-enhancing initiatives that are in the pipeline. He said the bureau diversified its efforts by

adopting modern practices to keep up its leading position in land administration in the country. He lamented that some land schemes were not available for sale because work on the provision of the necessary infrastructure on the schemes could not be completed. Meanwhile, according to the Lands Bureau chief, the state government is set to start issuing electronic Certificate of Occupancy (e-C of O) in September this year. He said the e-C of O is designed to check the fraud associated with the old C of O which has been in existence since 1978, adding that the new C of O is geared towards providing international standard format that will be acceptable to all. “The introduction of the eC-of-O will bring to an end the issuance of the present Cof- O, which has been in existence in the state since 1978. The e-C-of-O is designed to prevent all forms of unwholesome activities perpetrated by fraudsters and to deliver to the people a current international acceptable format,” he stated. The permanent secretary noted that the e-C-of-O was supposed to have come into effect last year, but its takeoff was shifted to September this year in order to allow for the correction of grey areas identified during the pilot test that involved the government estate in Ogudu and to put all necessary infrastructure in place. He added that the state government issued 2,004 Certificates of Occupancy (C-

of-O) between January and December 2011, registered 3,548 title documents and released 230 mortgages within the period. The permanent secretary also disclosed that the state government, through the New Town Development Authority (NTDA), is intensifying efforts to meet the housing needs of Lagosians through the Lagos Home Ownership Mortgage Scheme (HOMS) Initiative. According to him, parcels of

land have been created within government schemes for the development of affordable housing, adding that the HOMS project has been earmarked in many locations with well over 300 hectares of land allocated for the purpose. These locations include Igando, Lekki Peninsula; Ijanikin, Badagry, Oba-Akran, Omole, Isheri Oshun in Alimosho, Ilupeju, Mushin etc.

‘Proper costing can avert building collapse’

nforcement of regulations that ensures proper costing of buildings by professional will go a long way in curtailing the incidents of building collapse in the country. President of Nigeria Institute of Quantity Surveyors (NIQS), Mr. Agele Alufohai, stated this in a paper presented on “Estimating the cost of building collapse in Nigeria” at a workshop organised recently by the National Building and Road Research Institute in Abuja. He said that buildings constitute economic asset, noting that collapse of buildings due to poor costing could have dire economic consequences. He said the cost of a building should be rigorously calculated by quantity

surveyors and designs are made by different professionals involved in the building process such as architects, surveyors and engineers before construction work commences. “Since buildings are investment assets which yield income directly or are used to assist the process of income generation through the production of goods and services, a collapsed building may be potentially an asset lost. The impact on the personal, corporate, state and national economy is obviously negative, and the level or extent would depend on the outstanding useful life of the building,” he said. According to him, costing is a very important factor in building procurement, noting that every building has a life cycle, which must be factored in at the point of erection.

Vanguard, MONDAY, MAY 28, 2012 — 37

Cover Continuations How excessive charges scare companies away from stock exchange infrastructural cost is reduced, if the cost of doing business in Nigeria is very competitive, oh! The companies will be begging you to come from anywhere in world because Nigeria has a big market; it has the potential. “Until we are able to explore the potentials in this country, our economy and the stock exchange will continue to crawl. Stock exchange is a place that automatically people will want to come there because they want to list; they want to mobilize fund for further growth, but if you are putting the horse before the cart, it will not work. When you are spending 30 per cent of your profit in infrastructure, and then you have the problem of security; all these factors have enormous setback on the development of any economy,” she enthused. What should be done? Reacting, an investment analyst, and CEO, Cowry Asset Management Limited, Mr. Johnson Chukwu, said he doubted if the annual listing fee as being claimed by some companies was the reason for the recent wave of delisting. He observed that other post-listing rule requirements, which according to him, could be herculean, could be behind the trend. Though he agreed that the cost of listing a company and maintaining listed company structure is quite expensive in Nigeria compared to major African exchanges, he stated that reduction in intrinsic value of quoted companies occasioned by the prolonged meltdown in the capital market has made remaining listed unattractive for some companies. His words, “If a company is trying to get delisted, it may not necessarily be because of the listing cost; it may be because of other regulatory associated burdens, particularly because the benefits of being listed seem to have reduced because of the very low market value. “Nobody will go to the market to raise fresh equity. If you do that, the market will not accept to take up the equity. Even if the market takes up the equity, you are going to have significant erosion in value or holding of the existing shareholders. You are actually going to dilute the existing shareholders by the number of shares you are going to issue.”

“The fact is that when the market value of shares is below the net asset value in the hands of investors; if the investors have to mark his holding in the market, the investor will document notional loss and he needs to make provision for that notional loss. So, whenever the market prices are below the net asset value, investors that are holding quoted companies shares will suffer loses in their book and that also discourage core investors from remaining listed because the value that will be attached to the company will be based on the market valuation. Also, the valuation that will be attached to investors’ wealth will depend on the market condition. When the valuation of a particular company is below the intrinsic worth or cost of that investment, you can no longer use that investment to borrow an amount that is equivalent to the initial capital invested because whosoever is lending will base the valuation on the market value. Those are some of the challenges we are having at the moment,” he explained. He further explained that due to the recent directive that quoted companies adopt International Financial Reporting Standard (IFRS), companies that are not willing to strictly adhere to the transparent requirements of the reporting standard will choose to exit the market. “The only thing I know that came up recently is that companies that are listed have to comply with IFRS and that requires a lot of transparency. So, if a company wants to run away from transparent disclosure, it might want to delist. I don’t think it is the N4.2 million annual listing fees that is driving away already listed companies. On what could be done to encourage companies to remain listed, Chukwu emphasized that introducing fiscal incentives such as tax waiver, tax deferential, including tax waiver on dividends for quoted companies will compel unquoted companies to access the market, while already listed ones will have no choice, but to stay. He said, “The government should consider things like having deferential corporate tax regime for quoted companies. If a quoted company instead of paying 30 per cent income tax is now required to pay either 25 or 15 per cent, it will encourage more companies to get listed because that will be immediate financial benefit. Again, if the government should remove tax on dividend, the shareholders of

From left: Mr. Ranti Okanlawon, General Secretary, Lagos Island District Society of The Institute of Chartered Accountants of Nigeria (ICAN); Chief Patrick Akujobi, Chairman and; Mr. Kola Olaitan, Vice Chairman during the 2012 Annual General meeting of the Society held at Metropolitan Club, Victoria Island, Lagos on Thursday. Photo by Lamidi Bamidele. companies should compel them to get listed because the value of being shareholder of a listed company will be higher than that of unquoted company. Even if they are paying the same amount of dividend, quoted company will not deduct with-holding tax, whereas unquoted company will deduct withholding tax of 10 per cent. “Once you have those fiscal instruments incentives in place, more and more companies will get listed. Now, shareholders will be considering, why will I buy shares of quoted companies and pay tax. You find out that

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listed.” On total elimination of transaction cost on certain products as obtainable in some climes, Chukwu maintained that reduction of cost will serve the interest of all stakeholders better, rather than complete elimination. NSE’s effort to effect changes Only recently, the NSE reduced the initial listing fee for growth companies that want to list in Alternative Investment Market to flat fee of three hundred thousand naira, comprising of one hundred thousand naira application fee for new or

Unlike other capital markets around the world, the Nigerian market provides no tax incentive for companies coming to list on the exchange

once you remove corporate tax for quoted companies, their net returns will increase; their residual income will increase, the distributable profit will also increase. If the distributable income increases, it is possible that the amount of dividend those quoted companies will pay will also increase. When such dividends are not subject to taxation, it is natural that shareholders will prefer shares of quoted companies and shareholders of those companies that are not quoted will likely compel them to get

additional listing and annual fee of two hundred thousand, bringing the initial listing fee to a total of three hundred thousand from original 0.3 per cent usually charged based on the market capitalisation of the prospective company. According to the NSE, the reduction was effected in line with best global practices. While acknowledging the excessive charges shares transaction attracts for investors on the NSE, the Chief Executive Officer, Mr, Oscar Onyema, said there was need for the Securities and

Exchange Commission, SEC, to effect reduction on the Value Added Tax, VAT, charged on shares sold and bought on the exchange. For him, the complete elimination of VAT from NSE transactions will make the market more competitive as investors buying and selling investment products were not engaging in governmentrelated transactions. Onyema also called for removal of stamp duty on transactions, saying that t investments on the capital market are not supposed to be categorized as consumer goods. He said, “Total taxes as a percentage of transaction fees are currently as high as 12 per cent; Seven per cent in Vat and five per cent in stamp duties, causing high frictional costs on transactions. This is quite significant as it does not take into account the VAT on brokerage which account for the largest proportion of transaction cost, which is 52 per cent of total transaction fees. He continued, “Unlike other capital markets around the world, the Nigerian market provides no tax incentives for companies coming to list on the exchange. Other nations (e.g., Kenya, Morocco, etc.) provide such incentives to encourage companies to move their businesses to these countries or to encourage them to list on their exchanges as a means to fuel economic growth.” Onyema insisted that the federal government should as necessities consider granting tax holiday to businesses that are quoted on the Exchange, saying that it would give the NSE competitive advantage over other emerging markets. C M Y K

38 — Vanguard, MONDAY, MAY 28, 2012

Capital market wrecked by NSE and SEC — 1 “The easiest way to destroy any organisation is to put liars and unethical people in charge” — Anonymous 1979

igeria’s capital mar ket is totally wrecked. It had been partially demolished by 2008, but there was still some hope. Now it is in ruins – thanks to the heads of the two institutions controlling it. The global community, and nations with honest capital markets, whose shares are heading for the basement, must be amused that in Nigeria those who are supposed to build the capital market – the NSE and SEC— are exactly the ones destroying what is left of it. Two “ladies” are involved. In fact, they now constitute the leading edge of the wrecking crew. The first is the former Director General of the Nigerian Stock Exchange, DG-NSE; the other is the Director Gen-

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Nigerian Stock Exchange building

eral of the Securities and Exchange Commission, DGSEC. By the time those two women are done with each other and the capital market, there will be no market worth talking about. They have devastated it through unethical conduct on both sides. The road to capital market

ruin was first paved by the former, the DG-NSE, and she started in 2003 when she headed an illegal group called CORPORATE NIGERIA to raise campaigns funds for the re-election of President Olusegun Obasanjo and Vice-President Abubakar Atiku. Companies listed on

the Nigerian Stock Exchange were asked to donate to the fund. Only God knows how all the companies which made the donations forged their books to cover up the illegal payments. And till today, nobody else knows how much was collected, how much was spent on the gala night and how much was pocketed by the convener – the DG-NSE. But I recollect warning her then that if she continued to mix illegal political activities with the highly technical management of the Nigerian Stock Exchange, she will go down in history “not as the woman who built it, but as the one who wrecked it”. In 2008, the former DG-NSE was back with the same political stunt. That time she publicly announced raising funds for the Obama campaign – something totally illegal in the US. She raised millions which could not be sent to the Obama campaign, and that would have been the end of the story until the Economic and Financial Crimes Commission, EFCC, stepped in and forced her to disclose the amount collected and she was

forced to forfeit the funds and given a warning. What made the 2008 escapade more galling was the fact that Dr Ndidi Okereke-Onyuike was undertaking this unnecessary and unsolicited assignment at a time when the NSE was in deep trouble and the market was in a free fall. The greed inducing this and the degree of irresponsibility underlying the actions speak volumes for her. Again in October 2008, in my SUNDAY VANGUARD column I wrote the DG-NSE another warning as follows: Finally, I wish Madam will take a piece of advice, even though unsolicited. She should quit while there is still a send-off party to be given. For it is a fact that: Volat ambiguis Mobilis alis hora, nec ulli Praestat velox Fortuna fidem (Latin) On fickle wings the minutes haste And Fortune favours never last. — Lucius Seneca, c4B.C-A.D 65. (VANGUARD BOOK OF QUOTATIONS pp 65-66). P.S. I don’t expect her to take the advice, but there are two men in Nigeria today, once immensely powerful, who would have been happier if they took the ones given them.

Vanguard, MONDAY, MAY 28, 2012 — 39

40 — Vanguard, MONDAY, MAY 28, 2012

Vanguard, MONDAY, MAY 28, 2012 — 41

42 — Vanguard, MONDAY, MAY 28, 2012

Appointment & Promotions vicahiyoung@yahoo.com

Thorhauge new CEO of Maersk Nigeria, Central West Africa

From Left: Winner of the Consolidated Breweries Plc Managing Director’s Award for 2011 Highest Volume growth, Mr. Godwin Onyisi, Managing Director, Godwin Onyisi, Trading Stores (left), with General Manager, Commercial, Consolidated Breweries Plc, Mr. Ed Weggemans, at the Company’s 2012 Annual Customer Award Nite in Enugu.

NSITF recruits 1,400 workers to boost ECS operations workers to fully commence the this development in Abuja at

IGERIA Social Insurance Trust Fund, NSITF, has employed more than 1, 400

Employees C ompensation Scheme, ECS. Managing Director, Alhaji Abubakar Munir, announced

an induction workshop for some of the new employees on the managerial cadre. The Managing Director,

ISTER Jan Thorhauge, has been named Managing Director and Chief Executive Officer, CEO, of Maersk Nigeria Limited, MNL and Central West Africa. Taking took over from Mr. David Skov, the new MD said the company was committed to maximising Nigeria’s trade potentials and satisfying its customers. According to him, “I am excited to arrive in Nigeria at a time where Maersk Line is introducing 22 brand new container ships tailor-made for Nigeria designed to enable higher port productivity, increase trade potential and reduce logistics costs. Nigeria is heavily dependent on international trade to stimulate economic development and alleviate poverty and port efficiency is a key driver. Maersk Line’s new WAFMAX vessels will support the port of Apapa in reducing their port turnaround times, thereby allowing exporters and importers to reduce their total logistic costs and creating conditions for continued trade growth. We have had excellent collaboration from NPA to facilitate WAFMAX vessel calling Apapa and we hope to replicate this success in Onne and Tincan. You can take pride from the important role your company plays in the economic development of the nation.” JThorhauge, 52, joined AP Moller-Maersk Group in

Copenhagen as a trainee in 1979 and holds amongst others INSEAD recognition having completed its Advanced Management Program. He has spent the last 15 years leading various organizations in Africa. Thorhauge joined Maersk Kenya in 1994 and spent seven years there getting the group’s organizations and East African network off the ground. He spent four years as head of the Cameroun Cluster and the last two years in Angola. In between he was the Managing Director of Maersk Sri Lanka and prior to his East African adventure, he had also worked in Denmark, USA, South Korea and Saudi Arabia. “Some of the characteristics that embody what I value and stand for are in no particular order: teamwork, customer focus, learning & education, salesmanship and humanity”, the new MNL boss stated.

Mister Jan Thorhauge

Royal fathers honour Oshiomhole

OYAL fathers of Avi anwu, South Uneme and Ekperi Kingdoms in Etsako Central Local Government area, have bestowed a chieftaincy title of Oshiozokhai of Etsako Central on Governor Adams Oshiomhole of Edo State in appreciation of his good works. Speaking on the occasion, the Ogieavianwu of Avianwu, His Royal Highness, Joseph Etu said “what you have done in the local government area has never been seen before.” The chieftaincy title on the Governor is coming on the heels of another title of Adolor of Esanland bestowed on the Governor by twenty-three royal fathers in Esanland. According to Olota of South Uneme, HRH Gym Ugbodaga, “we thought it is wise that there is need for us to appreciate you. Almighty Allah chose you, you did not choose yourself. Without Almighty Allah choosing you nobody would have been able to choose you. He is going to C M Y K

protect you and guide you anytime, anywhere”. He declared “we are in support of your re-election b id and we will give you our total support”. Also at the palace of the Okumagbe of Weppa Wanno, His Royal Highness, Dr. George Egabor said the governor has done well and has brought new meaning to governance. According to him, “everybody can see what you have done. In the past we have been made to believe that government cannot work, that certain projects cannot be executed. We have all seen what the state government has done in the area of infrastructural development in the area. I cannot believe it, because we have been brain washed that it cannot be done. Even if it can be done it can only be done by the Federal Government. You have also made us to know that with good management of scare resources a lot of things can be done.

Vanguard, MONDAY, MAY 28, 2012 — 43

Agric

African nations urged to use agriculture to increase food security, fight poverty STORIES BY JIMOH BABATUNDE

he Commissioner for Rural Economy and Agriculture at the African Union Commission, Mrs. Tumusiime Rhoda Peace, has appealed to African nations to use agriculture to combat food insecurity, unemployment and population increase in the continent. She made the appeal at the 8th Comprehensive Africa Agriculture Development Programme’s Partnership Platform in Nairobi recently. The Commissioner, who was among the main speakers at the conference, praised countries that have increased their funding of agriculture in line with the goal of CAADP initiative. She urged them to ensure implementation of their agricultural investment plans and to meet their funding commitments. Noting that this year’s meeting was taking place when the Horn of Africa and the Sahel regions are experiencing drought and food insecurity, Rhoda Peace said 70 percent of the population in the Horn lack food security. Food insecurity and malnutrition

are a recurrent situation in the region, she added. The commissioner informed the meeting that the AUC, NEPAD Agency and the World Economic Forum would soon launch the Grow Africa Partnership platform, with the goal of “accelerating investments for sustainable growth in Africa agriculture.” Also, the Director of Programmes at the NEPAD Planning and Coordinating Agency, Mrs. Estherine

Fotabong, who represented Dr. Ibrahim Mayaki, the agency’s chief executive officer, said Africa would need to match Asia’s agricultural productivity if it hopes to address the problems posed by rapid urbanisation, unemployment and massive population growth. According to her, Africa’s agricultural production doubled in the last 50 years while Asia’s output tripled during the same period. But

with the right policies and support for the agriculture sector, the Asian success story could be replicated in Africa, she said. Development partners, in an address delivered by USAID’s Jeff Hill, commended African countries and regional economic communities for raising their agriculture and food security agendas through the CAADP process.

NEPAD agency, FAO begin joint fisheries project

he NEPAD Agency and the Food and Agriculture Organisation have begun implementation of a joint project aimed at boosting fisheries development in Africa and improving the standard of living of fishers on the continent. The NEPAD Agency and FAO partnership is a collaborative undertaking with the objective of supporting regional efforts to attain the Millennium Development Goals (MDGs). Its expected long-term impact is a significantly enhanced contribution of fisheries and aquaculture to poverty alleviation, food security and economic growth through improved and sustainable management of the fishery and aquaculture sectors. This partnership will focus on the environmental sustainability of ecosystems in both marine and inland fisheries and aquaculture. This approach, appropriately dubbed the Ecosystem Approaches to Fisheries and Aquaculture (EAF/EAA), also has a second focus area - that of Climate Change Adaption

(CCA). Other elements of the NFFP will deal with sustainable development of aquaculture businesses, postharvest value chain and Disaster Risk Management (DRM). “The implementation of this programme has been long awaited, and now it’s time to deliver for the benefit of the African people continentwide,” Dr. Sloans Chimatiro, NEPAD Agency’s Fisheries Advisor, said at the inauguration of the project. The NEPAD Agency is grateful to FAO and the Swedish International Development Cooperation (SIDA) for harmonizing their fisheries development efforts in Africa, through NPCA’s Fisheries Programme. NFFP Co-ordinator, Ms. Gunilla Greig, expressed the hope that the programme would make a significant contribution to NEPAD’s fisheries agenda and further promote long-term NPCAFAO co-operation, for the benefit of the many people depending on fisheries and aquaculture in Africa.

BRIEFS IITA gets $7m approval for commercial products project

he International Institute of Tropical Agriculture (IITA) has received approval of about US$7m from the Bill &Melinda Gates Foundation for the implementation of the second phase of the Commercial Products (COMPRO-II) project, says IITA Director General Nteranya Sanginga . Tagged as ‘Institutionalization of quality assurance mechanism and dissemination of top quality commercial products to increase crop yields and improve food security of smallholder farmers in subSaharan Africa,’ the COMPRO-II project aims to institutionalize quality assurance mechanisms and facilitate the rapid dissemination of top quality commercial products to increase yields and improve the food security of smallholder farmers in the region. “The plan is to raise awareness among over two million smallholder farmers

Fish farmer seeks tax incentives on agric products

fish farmer, Mr. Godwin Emakenemi, has called on government to make every aspect of agricultural production tax free as a way of boosting food production and employment to fast track national development. Emakenemi who is the Managing Director/CEO of Dickem Farms said in Lagos that the major challenge facing fish farmers in the country is power supply. He said: “We need regular supply of electricity to produce our feed and aerate the juveniles. So, we spend a lot of money on diesel which is over 30 percent of total production cost.” Emakenemi maintained that if there was regular power supply fish farmers would employ more people. He noted that the Boko Haram attacks was another major challenge farmers were facing as this has led to an increase in the cost of soya bean cake which comes from the northern part of the country. C M Y K

44 — Vanguard, MONDAY, MAY 28, 2012

Aviation

Overland Airways resumes flight operations from Bauchi to Abuja

By LAWANI MIKAIRU & DANIEL ETEGHE

verland Airways Business Flyer will resume scheduled services from Bauchi Airport to Nnamdi Azikwe International Airport , Abuja with effect from Wednesday, May 23, 2012. The resumption of the Bauchi route operations, in addition to the existing routes across the country, is part of Overland Airways’ objective to improve interconnectivity within the country.

The new operations will offer connecting flights from Abuja – Bauchi and Bauchi – Abuja Mondays to Fridays. Flights from Abuja will depart at 10.00am and arrive Bauchi Airport at 11.00am, while the return flights from Bauchi Airport will depart at 11.30am and arrive Abuja at 12.30pm. The airline will operate on the Bauchi route with its ATR-42 aircraft. According to the Chief Operating Officer of Overland Airways, Mrs.

Aanu Benson, “core among Overland Airways’ route expansion objectives is to improve interconnectivity within the country, promote economic growth and also facilitate speedy business transactions for investors and leisure travellers, who are in search of new opportunities and destinations.” Mrs. Benson stressed that despite the fact that Bauchi State was a gateway into several northern states of Nigeria, it also has huge

economic potentials and holiday and tourist resorts including the Yankari Games Reserve, adding that the introduction of the new route would boost the development drives of the state and neighbouring states as well as support other private initiatives geared at improving the socioeconomic lives of the people. Meanwhile, the Chief Executive Officer of Overland Airways, Capt. Edward Boyo, congratulates the State Governor, His Excellency,

Mallam (Dr.) Isa Yuguda for the modernization and upgrade of Bauchi Airport to international standard, by increasing the length and width of the runway, providing fire protection, perimeter fencing, upgraded control tower and improved security. He further thanked the State Government for providing the enabling environment for the airline to return to the State to continue offering its innovative services to the people, having suspended flight operations on the route in 2008.

Vanguard, MONDAY, MAY 28, 2012 — 45

Tax Platform

Guiding Principles For Stakeholders Roles, Responsibilities And Relationship Between The Stakeholders Stakeholders are those persons / entities that contribute to and derive benefits from th country’s tax system. This broad definition therefore includes every Nigerian citizen an resident, corporate entities, Government at all levels and government agencies a stakeholders in the country’s tax administration. However, for the purpose of the National Ta Policy, certain groups of persons have been identified as relevant stakeholders. It is therefor necessary to identify these relevant stakeholders before discussing the guiding principles which would be applicable to them. The relevant stakeholders in the Nigerian tax system can be broadly categorized into th following: The Executive Arm; Presidency, Federal Executive Council in general and the Ministries of Finance, Information an Education in Particular National Economic Council, National Council of States , State Governors, State

Executive Council in general and the Commissioners of Finance, Information and Education in particular As earlier stated, the National Tax Policy shall be guided by the provisions of Nigerian1s Constitution in respect of all fiscal issues. Accordingly the following shall be the guiding principles of the Stakeholders in the Nigerian tax system: adherence to Constitutional Federalism and the Rule of Law at all times; strict adherence to Constitutional provisions relating to fiscal matters; adherence to the concept of Fiscal Federalism and separation of powers in relation to fiscal matters; recognition and respect for the rights and powers of each level of Government in relation to collection and control of revenue within its jurisdiction; strict adherence to the provisions of tax legislation in the administration of taxes; Commitment to the enforcement of tax laws in a legal and Constitutional manner; commitment to the peaceful resolution of all disputes and respect for Judicial , pronouncements on disputes submitted for adjudication; commitment to the creation and sustainable development of a stable, secure and workable tax system for Nigeria; and commitment to the Unity, Development and Progress of One Nigeria, in the acknowledgment that the Tax System can be used as a major pivot for achieving National evelopmental Goals. Further, there are certain universal principles which are necessary to ensure cordial interaction between stakeholders in the administration of taxes in Nigeria. These principles include: affirmation and acknowledgement of the importance and contribution of all stakeholders in the administration of taxes in Nigeria; provision of specific and general feedback by all stakeholders, in a proactive manner on issues and developments that are relevant to tax administration in Nigeria; ensuring that the principle of good faith is observed by all stakeholders, especially between the taxpayer and tax authorities on one hand and the government and the authorities on the other; fairness in the treatment of all stakeholders by each other. This is particularly relevant in the allocation of resources and consideration of each party’s viewpoints. Having set out the general guiding principles for the stakeholders, we proceed to a discussion of their roles and responsibilities as follows: The Executive Arm The Executive Arm of Government encompasses the organs of Government at all levels, which are involved in the implementation and enforcement of tax laws. We

National Tax policy guidelines and rules (4)

•Ifueko Omoigui-Okauru

have set out each organ’s roles and responsibilities; The Presidency is the organ of Government that is responsible for initiating policy and implementation and enforcement of laws at the Federal level. The Presidency also oversees the activities of Government agencies at the Federal level. In this regard, the Presidency would be required to provide leadership and direction on

he convenience of the taxpayer and minimal compliance cost should guide the design and implementation of every tax in Nigeria. A key feature of a good tax system is that the cost of administration must be relatively low when compared to the benefits derived from its imposition. There must therefore be a proper cost benefit analysis before the imposition of any taxes and the entire machinery of Tax Administration in Nigeria should be efficient and costeffective. Nigeria’s tax system should be fair and as such observe the objective of horizontal and vertical equity as mentioned above. Based on the foregoing, there must be overwhelming reasons for granting tax incentives and concessions to some preferred sectors over others within the economy. Otherwise incentives and concessions shall as much as possible be general and apply to all taxpayers. Taxes in Nigeria should be flexible enough to respond to changing circumstances. Prevailing circumstances should also be considered before the introduction of new taxes or the review of existing ones. The Nigerian tax system shall at all times strive to minimise the negative impact of taxes on economic efficiency by ensuring that the marginal tax rates do not distort marginal propensity to save and invest.

Presidency would also be responsible for signing and implementing all International and Regional treaties entered in to by Nigeria. In addition to the above, the Presidency shall be responsible for moderating the relationship between the different organs of Government and provide all the necessary tools for effective and efficient tax administration in Nigeria.

The Nigerian tax system shall at all times strive to minimise the negative impact of taxes on economic efficiency by ensuring that the marginal tax rates do not distort marginal propensity to save and invest

all tax matters to the Ministry of Finance, the Federal Inland Revenue Service, the Nigeria Customs Service and other relevant revenue generating agencies involved in tax administration in Nigeria. The Presidency shall provide necessary approvals (or assist in obtaining such approvals from the relevant bodies), funding and be responsible for the appointment of competent personnel to head the relevant agencies and also initiate the process of drafting tax legislation for enactment by the· Legislature. The

The National Council of States (NCS) is created by the Nigerian Constitution and assigned the responsibility of advising the President on the exercise of his powers ..• with respect to certain matters specified in the Constitution. While taxation or fiscal issues are not specifically listed in the Constitution as matters upon which the NCS can advise the President, the Constitution however provides that the NCS may advise the President on such matters as the President may direct. Accordingly, when required, the NCS shall provide relevant advice to the

President on matters pertaining to tax and fiscal issues. Given that the NCS is made up of distinguished and experienced persons such as former Presidents and Chief Justices of the Federation, current State Governors, the President of the Senate and Speaker of the National House of Assembly, it is expected that the NCS would provide deep and varied insight on the matters upon, which it would be called to advice the President. State Governors would also be required to provide advice to the Federal agencies and bodies responsible for tax policy, legislation and administration in the country. Overall, it is expected that State Governors shall provide additional oversight in respect of all tax and fiscal matters at State and Federal level. The National Economic Council (NEC) was created by the Nigerian Constitution and assigned the responsibility for advising the President on economic matters. Given that taxation plays a major role in the economy of the country, the NEC would be required to deliberate on and identify policies, which can be implemented and assist the President draw up road maps for the development of the Nigerian economy with particular emphasis on taxation and other fiscal related issues. The NEC would also be required to cooperate with similar advisory bodies to ensure the consistency of advice provided to the President on fiscal issues. State Governors are expected to playa similar role to that of the Presidency at State level. They would be responsible for the development of State Tax Policy which shall be complementary to the National Tax Policy. In addition, they are responsible for the enforcement of Federal and State tax laws in the States and carry out general oversight functions on tax and revenue authorities at the State and Local Government level. State Governors would be required to provide guidance and direction to the State Ministries of Finance, the State Boards of Internal Revenue Service and other relevant revenue generating agencies involved in tax administration in the States. They should also ensure adequate funding and autonomy is provided to these agencies in the discharge of their functions.

C M Y K

46 — Vanguard, MONDAY, MAY 28, 2012

ICT BRIEF Cisco declares Dimension Data partner of the year CT services and I solutions provider, Dimension Data has been declared partner of the year 2011 by Cisco. The honour was conferred to Dimension data at its 2012 Partner Summit. Cisco said that that Dimension data scooped the 2011 Europe, Middle East, Africa and Russia (EMEAR) Partner of the Year for its entrenched service performance. Meanwhile, Dimension Data South Africa also won the Global Partner of the Year award recently when Cisco unveiled the winners at its annual channel partner conference held in San Diego, California. Cisco Partner Summit global awards are designed to recognise exemplary channel partners who demonstrate best in class business practices and serve as a model to the industry. Areas of consideration include innovative practices, application successes, unique programs, problem solving and sales approaches. All winners are selected by a group of Cisco Worldwide Channels and regional executives. “Cisco is privileged to work with some of the best channel partners around the world, and it is my honour to recognise Dimension Data as a Cisco Partner Summit global award recipient,” said Edison Peres, senior vice president, Worldwide Channels at Cisco. “The Global Partner of the Year award presented to Dimension Data recognises its outstanding achievement as a Cisco channel partner in the Middle East and Africa in 2011.” Tony Munro, Solutions Executive: Dimension Data Emerging Africa, said: “We are delighted to be recognised with this award. This year brings to 21 the number of years Dimension Data has been working with Cisco. Technology partnerships are important as we aim to represent the world’s leading technology vendors to our clients. This year ’s Cisco awards once again validate Dimension Data’s global breadth, technical excellence, and execution capabilities across 51 countries in all Cisco theatres.” C M Y K

CBN, E-PPAN move to break cashless implementation challenges for MDAs *Hold 2-day e-payment for Govt forum in Abuja

rrangements are on top gear to gather government officials and stakeholders relevant to the implementation of the Central Bank of Nigeria’s new cashless policy in Abuja to have more insight into the implementation strategies, This is as the CBN in collaboration with the ePayment providers association of Nigeria, E-PPAN is organising a two day intensive forum to strategise on the best implementation methods of the cashless policy by the Ministries, Directorates and Agencies, MDAs ,of government to implement the new government cashless society being preached by the Central Bank of Nigeria, CBN. The event tagged "Epayment for Government Summit", is slated to hold at the Shehu Musa Yar ’Adua centre Abuja. The summit would feature series of workshops which would be facilitated by the Central Bank Officers, Commercial Bank Officers and the top relevant organizations in electronic payment. The summit would also provide avenue for all public officers to ask relevant questions which feedback, at the end of the day, will be used to shape the new policy further. The workshops would foray into wide areas of importance in the implementation of the government’s cashless scheme, including What role will e-payments play in driving down the cost to serve citizens? How can e-payments complement the country ’s vision 20:20:20 initiatives? How can senior officials build business cases for new epayments programmes that best meet the needs of their MDAs’? Key government officials including the central Bank governor, Mallam Sanusi Lamido Sanusi, Lagos state governor Babatunde Raji Fashola amongst a host of others are billed to participate at the forum while the MD of Nextzon Business services and the association’s President Mr Macaulay Atasie is to give the welcome address. It could be recalled that the government through the CBN has decided to use e-payment as a driver of a new generation of e-services in public sector in a bid to entrench the cashless society and has set January 2013 target for Nigeria to embrace the cashless economy. However, the MDAs are currently facing a lot of uncertainties and challenges in implementing the Federal Government policy on electronic payment. The

Stories by PRINCE OSUAGWU summit would serve to release relevant government officials of the pressure which the new policy seems to be putting on them. According to the Executive Secretary/CEO of E-PPAN, Mrs Onajite Regha, “the EPAYMENT FOR GOVERNMENT SUMMIT aims to promote the cashless Nigeria project and assist in developing and discussing the strategies for the transition of the Nation from cash to cashless in government circles to achieve global competitiveness. It will provide an exciting platform for industry experts, key government representatives, and professionals from various MDAs at the 3 tiers of government to discuss the latest issues and trends related to electronic payments. Overall, the forum’s objective is to create a framework for developing outstanding e-payment models and formulate winning e-payment strategies, which will enhance government administrative productivity, efficiency and transparency as they transit from Cash to Cashless”. The programme is structured for knowledge building and skills development, designed

•Lamido Sanusi, CBN Gov.

•Mac Atasie, E-PPAN President

to feature special workshop sessions facilitated by industry experts from various commercial Banks and epayment Service providers. Regha said that there would also be a dedicated workshop session for the Cashless Nigeria, adding that “the EPayment for government Summit is a closed door event, keeping senior officials away from the distractions of their daily routine, and allowing them to engage in open, free flowing conversation with one another, and with the world class solutions providers who have answers to the issues that matter most to government decision makers”

The summit is open to all top level government executives, decision makers and senior government officials in the Audit dept, Revenue generation and collection departments, Banking Operations/Banking Relationships departments, Cash Management, Risk, Inspection/internal Control, Treasury Officers & Managers and all those who are involved in the implementation of policies of the Agency as well as those involved in the implementation of the electronic payments systems at the Federal, state and Local governments.

Intel pools resources with Shell for young scientists in Rivers state

p p a r e n t l y complementing Nigeria’s effort to create an army of young Nigerian scientists who would keep the country’s flag flying in the world science and technological developments, world’s largest chipmakers, Intel Corporation, has pooled resources together with

petroleum giants Shell and a Non Government Organization, the Initiative for Science Education Development (ISED), to promote the 8th edition of the National Festival of School Science and Quiz in Rivers state. The annual science fair creates opportunities for

Students of Brookstone Secondary School, Port Harcourt conducting a judge round their science project (unmanned th oil spillage chemical treatment plant) at the 8 National Festival of School Science and Quiz held in Port Harcourt recently.

hundreds of the best and brightest post primary students from about 40 schools across the country to compete and interact with their peers at the national level and win scholarships and prizes. The overall winners also get an opportunity to participate as Nigeria’s top flight contingent at the world acclaimed International Science and Engineering Fair in the United States. At the just concluded edition held at the amphi_theatre of the Rivers State University of Science and Technology (RSUST), Nkporlu, Port Harcourt, students participated in project exhibitions, written and oral quizzes to test their knowledge of English, Mathematics and other science subjects, musical performances and social networking. To test their mastery and creativity, science projects showcasing the talents of the pupils were assessed by a panel of independent judges including, scientific scholars and field experts.

Vanguard, MONDAY, MAY 28, 2012 — 47

Media & Advertising De-marketing: A battle axe or market leadership tool?

e- marketing, that ugly unhealthy marketing practice that caused ripples within the banking industry some years back may not be bad in the marketing cycle after all or Is it the case of an axe or a leadership mechanism.? In the marketing circle, professionals agree that demarketing is synonymous to competition, but bearing in mind market cluster and consumer decision instability. They also described it as a game of the smart, but caution should be applied so that industry players should not callously engage in marketing gimmick to achieve their long term business objective. However, it is not uncommon to see market leaders, major industry players, decision makers, fight to sustain their positions. It is not a sin either to see leaders dropping from the ladder of success to become laggards. But it is unbecoming to engage in deadly acts (unprofessional tactics) in order to remain on the ladder. The question that readily comes to mind is: should players in the same industry destroy one another? Is it worth it? If marketing strategies are rightly calved out from the onset, industries

Stories by PRINCEWILL EKWUJURU will rather focus on adding value rather than engaging in marketing gimmicks that are basically propelled by selfish interest. Any number of strategies can be used to achieve a business goal. In fact, it often takes more than one strategy toachieve a lofty goal, and each strategy involves its own unique tactical plan.

Unfortunately, a lot of industry players simply throw together a list of theunverifiable tactics they concoct to drive sales; impose products and put unnecessary pressure on their target audience, and they call it a strategy. A great strategy does not depend on brilliant tactics for success. If the idea is strong enough, industry players can get by with mediocre tactical execution. However, even the

best tactics can’t compensate for a lousy strategy. Steven Covey, in his highly-acclaimed book Seven Habits of Highly Effective People said: “It’s incredibly easy to get caught up in an activity trap, in the busy-ness of life, to work harder and harder at efficiently climbing the ladder of success only to discover it’s leaning against the wrong wall. It is possible to be busy – very busy – without being very effective.”

From Left: Mrs. Ngozi Igbokwe, Managing Partner Bales of Mercy orphanage (standing left), receiving a donation of two hundred and thirty thousand naira worth of shopping vouchers from Adeola Kagho, Human Resources Manager, Shoprite Nigeria, while Mr. John Reuben, a staff – Bales of Mercy Orphanage watches at the May 2012 presentation of Shoprite CSR programme tagged Change-a-Life.

La Casera unveils Latina, gets NAFDAC, SON certification

he La Casera Company Limited, a company in the Carbonated Soft drinks (CSD)market has unveiled another CSD drink christened; Latina. The product, a sugar free drink in two flavours; Spanish pear and Real fruit cocktail have already gotten the endorsement of the National Agency for Food and Drug Administration and Control (NAFDAC) and the Standard Organization of Nigeria (SON) The Launch event which was held at the Oriental Hotel Lekki, Lagos was witnessed by a pool of dignitaries drawn from different fields of life including Trade Partners, Regulatory Agencies and members of the Press. Speaking, Mr. Prahlad Gangadharan, Chief Operating Officer of the company at the launch described the launch of LATINA sugar-free fruit drink as a new chapter in the CSD category in Nigeria offering consumers more options to ensure all consumers have a product that suit their lifestyle. According to Gangadharan, “Latina is a sugar-free fruit drink which contains real fruit

juice less than 1 percent calorie per bottle, and a minimum of 5 percent juice in every 50cl bottle. Whilst stressing that the product offers consumers a combination of refreshment, wellbeing and vivacity.” The Representative of the Director General of the National Agency for Food and Drug Administration and Control (NAFDAC) who is

also the Acting Director, Registration and Regulatory Affairs of the Agency, Mrs. Ogochukwu Mainasara disclosed that the regulatory body has certified LATINA sugar-free fruit drink as a quality product having verified all the claims by the manufacturers through series of Laboratory investigations. Confirming the quality of the product Mainasara said,

“ when we say sugar-free, it means there is no sugar, it contains the real fruit juice but the sugar have been removed and a non-nutritive sweetener is added and when we say non-nutritive ,we have checked, we have confirmed, it is good, even as the Standard Organization of Nigeria (SON) endorsed the brand.

Nescafe samples over 46,000 consumers …as Magic mug flight ends in OAU, Kwara poly

he second phase of the NESCAFE panNigeria marketing campaign tagged NESCAFE Magic Mug Flight campaign has taste-sampled over 46,000 consumers as campaign ends at Obafemi Awolowo University, Ife and Kwara State Polytechnic, Ilorin. In Ife, according to a statement, the brand offered talented students the opportunity to win plasma TV, home theatre and DVD in dance,comedy and DeeJay respectively. Some consumers were also rewarded for their task on Mr. Kondyden’s Facebook. The fun continued at Kwara Polytechnic as the brand ensured that what consumers in other cities have had is not

missing in Kwara. Apart from excitement that come with flying NESCAFE hot air balloon, students in Kwara Poly were also given the chance win in dance, song and comedy competitions too. Emperor Stepper, Nwafor Stephanie and Zubair Ashiaw came first, second and third in dance. Bamidele Olateju, Adeyinka Babatunde and Shehu Azeezat emerged first, second and third in comedy while, Oluwa Simple, Slic and Adebayo Isaac were adjudged the most talented in Song competition. They were all rewarded with Plasma TV, Home Theatre and DVD respectively. Speaking on the brand activation campaign, the Category Business Manager, Coffee, Mr. Tayo

Olatunji stated that Mr. Konfydens was introduced to encourage consumers to be adventurous. In one of the witty TVCs, there is a guy who went to see his girlfriend it the absence of the father and while they were seated in the house, her father, who is a military personnel drove in and what occurred to them was how the young man would leave the apartment without being noticed by the girl’s father. However, he attempted to go through the window and while he was standing by the window wondering what to do, Mr. Konfydens shows up and reminded him that the window is not the door, essentially encouraging him to bravely face his fears.

BRIEFS Consolidated Breweries rewards customers, expands product line

onsolidated Breweries Plc has rewarded its distributors for their outstanding performance in the 2011financial year, as it expands product line. The Company in its annual customers award tagged; Winning Together, was a forum where the preceding year ’s performance was reviewed and activations for the current year wre shared with the customers. Mr. Ed Weggemans, General ManagerCommercial, while sharing business plan for 2012 with distributors, said that the 2011 financial year was challenging, but nonetheless a successful year for the company and her business partners. Continuing, he said that the company will be proactive in seizing opportunities for business growth, while various strategic acquisitions by the company, recently, represents a great opportunity for its business as the company is expected to take full advantage of the synergies offered, by tapping into the distribution networks of the acquired brewing companies – Benue Brewery Limited in Makurdi and Champion Breweries Plc in Uyo.

Malta Guinness low sugar hits market

uinness Nigeria PLC has officially brought to market Malta Guinness Low Sugar, a new lower sugar variant Malt drink. This new variety according to the company was developed in response to the growing demand from consumers across Nigeria to satisfy the desire to lead a healthier lifestyle. Mr. Devlin Hainsworth, Managing Director of Guinness Nigeria said: “We know that people across the country love our classic Malta Guinness. Today’s launch of Malta Guinness Low Sugar is not a replacement to the country’s number one malt drink, but an alternative offering for those people that want a lower sugar beverage that still tastes great. “We have seen that there are an increasing number of people in Nigeria who are becoming more health conscious when it comes to diet and exercise, and Malta Guinness Low Sugar will meet the demands of a lower sugar alternative on the market while still giving the same goodness of their favourite malt.” C M Y K

48 — Vanguard, MONDAY, MAY 28, 2012

0817 002 3569

CBN & crime without punishment

he boisterous assurances by the last Governor of Central bank, Chukwuma Soludo that the Nigerian economy and banking subsector were firmly immune from the world’s economic meltdown still remain fresh in our memories. Indeed, barely two months before the banking crisis in 2008, the eminent professor had received a thunderous applause for the rosy picture of the banking sector and the economy that he painted on the floor of the National Assembly! Soludos braggadocio was, in spite of the warnings of those critics, who recognized that the National Assembly and a significant portion of the Media had been sold a dummy! Despite the apparent gross negligence of the CBN in the areas of banking regulation and supervision, surprisingly, no one was sanctioned or punished for the consequent pain and deprivation that Nigerians suffered. Indeed, possibly all the Deputy Governors and Directors of the apex bank, who were not due for retirement were retained by Lamido Sanusi to clean up the mess, which they themselves created by their negligence and possible collusion. After the rampaging cleansing of the banks and CBN’s insistence that banks pay more attention to risk management and control in their various operations, there now appears to be some calm in the banking sub-sector. However, some critics still maintain that the semblance of peace is akin to that of graveyard. These critics are concerned that in spite of the huge cash injections directly from the CBN and AMCON, nothing much has changed in the sub sector. Indeed AMCONs cash support of more than N3 trillion in place of the earlier speculated total toxic debt of about one trillion is ample testimony of how badly the regulatory agency lost control. Nonetheless, Sanusi remains boastful that in spite of the mess he inherited no depositor lost a single kobo. What the apex bank does not mention, of course, is the fact that the additional creation or printing of over N3 trillion to salvage the distressed banks and protect the interest of depositors has undoubtedly instigated the rate of inflation and reduced the purchasing power of millions of income earners in Nigeria. In other words, 90% of Nigerians have had to lose money (through inflation), so that the remaining 10% who were bank patrons would not lose their deposits. So far, for their sacrifice, Nigerians recognize that some sponsors and directors in five banks have been harassed, detained and ultimately released by the EFCC; but these financial

The reality, of course, is that the banks will be the main beneficiary of the huge sum of over N500bn set aside in the 2012 federal budget for debt servicing for their risk free loans to government.

miscreants obviously continue to live in affluence that would make even President Obama envious, while the rest of us wonder who may have picked our pockets as our stagnant naira incomes continue to buy less & less as a result of inflation. Inevitably, some critics, whom CBN would describe as prophets of doom, have sounded a warning that all may not be well once again with our banks. Incidentally, the core mandate of the CBN is the sustenance of price stability; Professor Olofin, a Board Member of the apex bank in a recent media interview has also confirmed the CBN’s role as facilitator and a catalyst in the development of the economy. Regrettably, after almost three years in office, Nigerians do not see any positive evidence of this objective. Indeed the humongous CBN & AMCON cash interventions have not brought much succour neither has it enhanced our social welfare. For a start, the Small and Medium Enterprises subsector, which is normally the backbone for growth and employment opportunities, has remained comatose. The inescapable truth, of course, is that the SME sub-sector cannot grow and perform their expected role if they have little access to funds or if they have to pay over 20% for their borrowings. Worst still, inflation has been targeted to reach 15% by the end of the second quarter, by the current Central Bank Governor, while the rate of unemployment has continued to rise in the last five years. In spite of these failures, the sympathy of the CBN bank remains firmly in favour of the banks. The CBN has decried the excessive cost of generating power and huge cost of handling cash as major obstacles to the capacity of the banks to lend to the real sector. Some critics have wondered whether the stakeholders in the real sector have access to cheaper sources of power than the banks! Nonetheless, the CBN has embarked on a cashless project with heavy

that if this arrangement continues, the prospect of growth of the real sector will continue to remain a mirage. We have maintained without equivocation in this column that the prevalence of excess liquidity caused by CBN’s substitution of naira for dollar allocation is the real poison in the economy. In focused economies worldwide, liquidity mop-ups are generally intermittent incursions into the money market to reduce the amount of cash in the system, especially if existence of such excess cash is adjudge capable of driving an inflationary spiral that would make it impossible to fulfill CBN’s core mandate of price stability! In any event, such mop-up in serious economies would attract interest rates of between zero and 3% as risk less sovereign securities! “In addition, the Central Bank of such economies may more appropriately choose to increase the cash reserve and liquidity ratios of banks in order to reduce excess cash at no cost to government! Our own CBN should be ashamed that like those banks who became eternally locked into the expanded discount window, the CBN had also become eternally locked into a spurious eternal liquidity mop-up, such that a series of immediate reflex mop-ups follow every time monthly allocations are made to the three tiers of government!! In spite of the fact that upward revision of liquidity and cash ratios could be used for reducing excess cash that may be perceived to exist, our own CBN chooses the path with the higher cost burden to our country, such that the 2012 budget, projects over N500bn for debt service for loans incurred by the government and for mopping up excess liquidity from the banks. Need we wonder how the banks continue to be immensely profitable even when the real sector that should ordinarily instigate their profitability is largely moribund?” So, in reality, the current

penalties for breaching deposit and withdrawal limits in order to support cost reduction by the banks. In spite of this, there is no evidence that the banks are yet ready to lend to the real sector! The CBN appears to have taken the banks under protective custody against the people just as in the days of Soludo, rather than be actively seen as the regulator and supervisor of the banking sub-sector. Thus, in spite of the unabaiting social deprivation of the masses, it is surprising that even those banks recently salvaged by CBN’s bailouts now publish trading results that would make banks in Europe green with envy. The pertinent question is, if the banks are not lending to the real sector, to whom are they lending and from where are they making such quick and huge profits? Regardless of these contradictions, Lamido Sanusi, like his predecessor, has been rewarded with the best banker of the year award by non other than the Financial Times of London, the same benefactor of Professor Soludo’s award. The reality, of course, is that the banks will be the main beneficiary of the huge sum of over N500bn set aside in the 2012 federal budget for debt servicing for their risk free loans to government. Curiously, the banks earn interest of up to 15% and above on such loans to government. Again, some critics have observed that if the banks could make such money for these risk-free loans to government, it is understandable that they have not shown much interest in servicing the real sector! So, we have a paradox of the same CBN decrying the inability of banks to lend to the real sector for various reasons, yet, in collaboration with its sister agencies AMCON & Debt Management Office, remain the real villains, crowding out the real sectors from accessing bank loans at low rates of interest. There is no doubt

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CBN administration appears to be totally on all fours with the same practices that gave the banks a clean bill of health, when, in fact, they were hemorrhaging during Soludo’s time. Worse, still, in spite of Sanusi’s recognition of negligence in his predecessor’s management of monetary policy he has shied away from inviting the investigative attention of the Economic and Financial Crimes Commission, EFCC. Inexplicably also, the current monetary framework not only contravenes section 162 but also continuously engenders the spectre of excess liquidity and the paradox of government borrowing back it own money at ridiculously high interest rates with the resultant consequence of rising inflation and unemployment and a prostrate industrial landscape. Sanusi appears to be in no hurry to stop this constitutional illegality. It may be appropriate, in this regard to end this week’s article with an excerpt from the series “The Putrid Mess Also in CBN (4)” which was first published in February 2010. It reads as follows: “In spite of unceasing assurances of former Governor Soludo that the CBN was on top of its responsibilities, the current incumbent Lamido Sanusi is reported to have noted at a ‘ThisDay’ organised conference on Thursday, 11/ 2/10 that “The sector entered a crisis situation partly because the CBN, as the regulator, lacked both the capacity and the will to supervise the banks!” In the above context “If honour and dignity mean anything, it would be appropriate for Soludo to come out and tell Nigerians what constrained his will to serve effectively, especially in view of what appeared to be his unfettered powers under the 2007 CBN Act and a very supportive and gullible President Obasanjo! Sanusi also noted at the ThisDay conference that “…for instance, the Financial Sector Regulatory Committee did not meet for three years, and no one talked…!! When you have someone responsible for financial system stability or surveillance, who has never worked in a bank, it is difficult to expect him to know what makes the bank run.” (Punch 12/2/2010). Although Sanusi has taken a swipe at the incompetence of CBN management under his predecessor, he has no overt attempt to rid the system of these square pegs, even though he continues to boast of his ability and determination to take the banking sector and the economy to the promised land with the same negligent CBN regulatory and supervisory staff who may have colluded with the banks to ruin the economy! Heaven help us!!” SAVE THE NAIRA, SAVE NIGERIANS!!

C M Y K