financial vanguard october 29th edition by Vanguard Media Limited

OCTOBER 29, 2012

Oceanic assets: Shareholders’ group demands Sanusi’s prosecution BY PETER EGWUATU

*From right; Vice-President of Nigeria, Arc. Namadi Sambo, Governor of Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi and H.R.H, Princess Maxima of The Netherlands after the launching of Nigeria’s National Financial Strategy held at the Transcorp Hiltion Abuja. Photo by Gbemiga Olamikan.

With regional trade, Africa can achieve food sufficiency; earn $20b yearly – World Bank By EMMANUEL ELEBEKE

World Bank report says that Africa’s farmers can potentially grow enough food to feed the continent and avert future food crises if countries remove cross-border restrictions on trade within the region. According to the bank, the continent could also generate an extra $20 billion in yearly earnings if African leaders can agree to dismantle trade barriers that block more regional dynamism. The report was released on the eve of an African Union (AU) ministerial summit in Addis Ababa on agriculture and trade.

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With as many as 19 million people living with the threat of hunger and malnutrition in West Africa’s Sahel region, the bank report urges African leaders to improve trade so that food can move more freely between countries and from fertile areas to those where people are suffering food shortages. The World Bank said in the report that it expects demand for food in Africa to double by the year 2020 as people increasingly leave the countryside and move to the continent’s cities. The report notes that only five per cent of all cereals imported by African countries come

from other African countries while huge tracts of fertile land, around 400 million hectares, remain uncultivated and yields remain a fraction of those obtained by farmers elsewhere in the world. According to the report, Africa can feed itself when it removes all the barriers to regional trade in food staples, noting that rapid urbanization will challenge the ability of farmers to ship their cereals and other foods to consumers when the nearest trade market is just across a national border. The bank noted that with many African Continues on page 18

hareholders’ Group, under the aegis of Progressive Shareholders Association of Nigeria (PSAN) has demanded for the prosecution of the Governor of Central Bank of Nigeria (CBN), Mallam Lamido Sanusi over wrongful denial of access to information regarding the assets and money recovered from erstwhile managing director of Oceanic International Bank Plc, Mrs. Cecilia Ibru. In a suit No. FHC/L/CS/494/12 filed by counsel to Mr. Boniface Okezie, President of PSAN, seeking the Federal High Court, Lagos Continues on page 18

159.85

-1.00

2,408.00

-90.00

19.75

0.10

107.57 85.66

-0.68 -1.01

CURRENCY BUYING CENTRAL SELLING DOLLAR 154.76 155.26 155.76 STERLING 247.8946 248.6955 249.4964 EURO 200.3678 201.0151 201.6625 FRANC 165.6073 166.1423 166.6774 YEN 1.9384 1.9446 1.9509 CFA 0.2878 0.2978 0.3078 WAUA 237.4157 238.1828 238.9498 RENMINBI 24.7686 24.8483 24.9288 RIYAL 41.2638 41.3971 41.5305

CBN Exchange rate as at 26/10/2012

18 — Vanguard, MONDAY, OCTOBER 29, 2012

Cover Story

With regional trade, Africa can achieve food sufficiency; earn $20b yearly – World Bank farmers effectively cut off from the high-yield seeds, and the affordable fertilizers and pesticides needed to expand their crop production, the continent has turned to foreign imports to meet its growing needs in staple foods, which must be addressed if the continent must realise self-sufficiency in food production. A statement credited to the World Bank Vice-President for Africa, Makhtar Diop, said; “Africa has the ability to grow and deliver good quality food to put on the dinner tables of the continent’s families but this potential is not being realised because farmers face more trade barriers in getting their food to the market than anywhere else in the world, even when communities in the continent are struggling with too little to eat.” For the World Bank’s Lead Economist for Africa, Paul Brenton, the key challenge for the continent is how to create a competitive environment in which governments embrace credible and stable policies that encourage private investors and businesses to boost food production across the region, so that farmers get the capital, the seeds, and the machinery they need to become more efficient, and families get enough good food at the right price. The report suggests that if the continent’s leaders can embrace more dynamic interregional trade, Africa’s farmers, the majority of whom are women, could potentially meet the continent’s rising demand and benefit from a major growth opportunity, adding that it would also create more jobs in services such as distribution, while reducing poverty and cutting back on expensive food imports. Africa’s production of staple foods is worth at least $50 billion a year. The report highlighted some of the key indicators as: Poor roads and high transport costs which blunt progress. The report noted that transport cartels are still common across Africa, and the incentives to invest in modern trucks and logistics are weak. The World Bank report suggests that countries in West Africa in particular could halve their transport costs within 10 years if they adopted policy reforms that spurred more competition within the region. C M Y K

Africa has the ability to grow and deliver good quality food to put on the dinner tables of the continent’s families but this potential is not being realised because farmers face more trade barriers in getting their food to the market than anywhere else in the world

Unpredictable trade policies, a liability Other obstacles to greater African trade also identified in food staples include export and import bans, variable import tariffs and quotas, restrictive rules of origin, and price controls. Often devised with little public scrutiny, it said these policies are then poorly communicated to traders and officials. A process that in turn promotes confusion at border crossings, limits greater regional trade,

creates uncertain market conditions, and contributes to food price volatility. Establishing a competitive market will enhance food distribution networks The report noted that a competitive food market will help poor people most and went further to condemn the current food distribution networks in Africa which according to the report, fail to benefit poor farmers and poor consumers.

Oceanic assets: Shareholders’ group demands Sanusi’s prosecution Continued from page 17 Division to compel Sanusi to comply with its request. The PSAN President is seeking the following: “The total cash and value of properties recovered from Ibru; The whereabouts of the money and properties recovered and what part of this cash and properties has been returned to Oceanic Bank and/or its shareholders.” According to the counsel, Chuks Nwachukwu, “The CBN Governor ignored this request for access to information and upon further instruction from my client, I instituted an action on his behalf against the CBN at the Federal High Court, Lagos Division (Suit No. FHC/L/CS/ 494/12) seeking an order of court compelling compliance with the request. On 2 nd October, 2012, the Honourable Justice Mohammed Idris upheld this part of the action and made an order directing compliance with the request within 72 hours.” He further stated that the court was careful to note that the defendant did not offer any reason whatsoever for the denial of access to information either at the time the request was made or at

the hearing of the suit. Nwachukwu declared that a case of wrongful denial to information was firmly established against Sanusi, saying; “He is liable to be prosecuted and upon conviction, to a fine of N500,000 as provided at section 7(5) of the Freedom of Information Act.” In this regard, Nwachukwu requested the AttorneyGeneral of the Federation, Ministry of Justice, Mohammed Adoke to prosecute Sanusi in accordance with the law. In a letter to the AttorneyGeneral of the Federation, he said; “ This letter is therefore to present you with a formal demand for the criminal prosecution of Mallam Lamido Sanusi in accordance with the law. I do believe that the seriousness of the offence is not lost on you. You have only recently publicly affirmed your commitment to ensuring the fullest implementation of the Freedom of Information (FOI) Act as a means of combating the virus of corruption which has invaded our public institutions and finds a breeding ground in any place where official business is done in a cocoon of darkness and misinformation.”

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

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

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As employers look for new talents every year from new graduates, it is important to not only have a solid education but graduates that have features that stand out from the rest of the graduating students

problem of poverty among the populace. Unemployment according to Olaitan (1996) leads to frustration and disillusionment which may result in crime or drug abuse in a futile attempt to escape from and forget the pains and humiliation of poverty and lack. The problem of unemployment, he further stated, has worsened as millions of school leavers and graduates of tertiary institutions have not secured gainful employment over the years. Unemployment has posed a serious problem, not only to the welfare of individuals but also to that of their families. Many able bodied and highly qualified persons who could not secure gainful employment have remained economically dependent on their parents. This is because they lack the necessary occupational skills to be self employed and to effectively function in today’s world of work. These occupational skills can be

provided by technical and vocational education. According to Abdulahi (1994), technical education is that aspect of education that involves the acquisition of techniques and application of the knowledge of the science for the improvement of man’s surrounding. Technical and vocational education prepares one for the world of work with which the individual become reliant and can make contributions to the development of the society. As employers look for new talents every year from new graduates, it is important to not only have a solid education, but graduates that have features that stand out from the rest of the graduating students. With the economy being more globalised than ever, it is important to have a background and a skill set that allows graduates to become immersed in the global economy right from graduation (Cote, 2007). It is important for these students or graduates to have skills in innovation in technology education and entrepreneurship to be ready to fit into the global market place on which today ’s economy depends on. Entrepreneurial skills needed by Technical and Vocational Education: Leadership is not a major cause of Nigeria’s underdeveloped status. Nigeria can become an economic power-house (and realise its visions) only if proper attention is given to education and technological development, promote and reward creativity, and channel its material and human resources to productive use. The leaders must recognise the relevance of technical and vocational education in national development and adopt and adapt what works in developed nations. The resources being wasted in the on-going false re-branding campaign should have been used to re-brand the nation’s education sector. No amount of rhetoric (or fanciful slogan) would solve Nigeria’s sociopolitical and economic problems. The leaders could salvage Nigeria’s image by re-branding their mentality and doing the right thing: tackle corruption, reform the electoral system and fix the dilapidated institutions.

Vanguard, MONDAY, OCTOBER 29, 2012 — 19

wo weeks ago while in Tokyo at the conclusion of the 2012 IMF/World Bank Group Annual meetings, the CBN Governor, Sanusi Lamido Sanusi, decried the dollarisation of the Nigerian economy. He said the President, the CBN and everybody is worried about the development. In Economic parlance, dollarisation of an economy occurs when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency as a store of value, unit of account, and/or medium of exchange within the domestic economy. This is exactly what is happening in the country today. Nearly every government functionary, from the presidency to governors, ministers, CBN officials and top business managers, spend dollars in Nigeria unhindered as if it has become a legal tender. Nigeria as a country has not officially adopted the dollar as a legal tender, but, unofficially, it is used as a means of exchange in the payment for goods and services. The term dollarisation does not only apply to usage of the United States dollar, but generally to the use of any foreign currency as the national currency. In economic analysis, there are two common indicators of dollarisation. The first one is the share of foreign currency deposits in the domestic banking system in the broad money, including foreign currency deposits which the CBN Governor is in good position to know, but has not disclosed. The second measure is the share of all foreign currency deposits held by domestic residents at home and abroad in their total monetary assets.

Dollarisation of the Nigerian Economy: who is to blame? As it is in most countries with high inflation rates, the naira is gradually being displaced by a more stable currency, the dollar; the store-of-value function of the naira as legal tender in Nigeria is being replaced by the dollar

In Nigeria today, many residents store their value in dollars, liquid assets are moved freely around with the dollar as preferred currency. Those who offer bribe use the dollar. In the last two weeks, several Nigerians were caught at the airport with high volume of the dollar in their possession.From records in economic history, the biggest economies to have officially been dollarised as of June 2002 are Panama (since 1904), Ecuador (since 2000), and El Salvador (since 2001). As of August 2005, the United States dollar, the Euro, the New Zealand dollar, the Swiss franc, the Indian rupee, and the Australian dollar were

the only currencies used by other countries for official dollarisation. In addition, the Armenian dram, Turkish lira, the Israeli shekel, and the Russian ruble are used by internationally unrecognised but de facto independent states. The incidence of the use of dollar in Nigeria arose from the adoption of the Structural Adjustment Programme (SAP) when the CBN officially encouraged the opening of domiciliary account, allow hotels to charge and accept dollars from foreigners. That was when Nigeria was in dire need of foreign exchange to foot the cost of accumulated foreign trade bills. This was followed by the high inflation

rates which decreased the demand for naira and raised the demand for alternative assets, including foreign currency and assets dominated in dollars. This phenomenon called the “flight from domestic money” resulted in a rapid and sizable process of dollarisation of the Nigerian economy. As it is in most countries with high inflation rates, the naira is gradually being displaced by a more stable currency, the dollar. The store-of-value function of the naira as legal tender in Nigeria is being replaced by the dollar. If this goes on unchecked, the unit-ofaccount function of the naira will be displaced as many prices are being quoted in the local market in dollars. The prolonged period of high inflation in the country has caused the domestic currency to lose its function as a medium of exchange as many Nigerians now carry out many transactions in foreign currencies. The flight from naira is because financial services regulators have not done their jobs properly to provide

Nigerians sufficient financial instrument with which to hedge. An economy with a well-developed financial market can offer a set of alternative financial instruments denominated in domestic currency, reducing the role of foreign currency as an inflation hedge. Continued dollarisation of the Nigerian economy will lead to the loss of seigniorage revenue, the loss of monetary policy autonomy, and the loss of the exchange rate instruments. Seigniorage revenues are the profits generated when monetary authorities issue currency. Continued dollarisation of the economy will result to the nation losing the right to its autonomous monetary and exchange rate policies, even in times of financial emergency. In a highly dollarised economy, devaluation policy is less effective in changing the real exchange rate because of significant pass-through effects to domestic prices. Looking at the Nigerian economy, who is to be blamed for the dollarisation of the economy - government policies, CBN or the ordinary Nigerian?

Business Economy

Visa introduces solution tool to monitor corporate spending BY EMMANUEL ELEBEKE

global payment technology company, Visa, last week introduced a new web-based tool; Visa Intellilink spend management, which allows corporate card customers monitor and control expenses and combat wasteful spending. Visa country manager for West Africa, Mr. Ade Ashaye, while speaking at the unveiling of the product, said that with the ongoing changes in the financial reporting and the current cashless Lagos project, Nigerian companies are increasingly adopting

global standards for reporting, accounting and expense management. “The addition of Visa Intellilink spend management to our core commercial card payment offerings means that corporate enterprises and public sector institution can benefit from flexible solution that will improve reporting and control and by monitoring compliance to business spending policies, it helps companies manage corporate expenditure and identify opportunities for savings,’’ he said. Ashaye explained that the solution is offered in more than 35 financial institutions

across Asia Pacific, Central Europe, Middle East and Africa, and it’s easily accessible on the web. According to him, with the product, there will be no additional hardware or software to implement the solution as the integrated solution is targeted at card programme managers, finance managers, procurement managers, travel managers, employee cardholders and auditors, who can use it to effectively monitor, control and manage expenses incurred by employees, who are spending on behalf of their company. While demonstrating the workings of the solution, the Director, Commercial Product

Engagement, Asia Pacific, Central Europe, Middle East and Africa, Mr. Nicholas Lee explained that the Visa Intellink spend management was designed to help organisations understand their spending patterns, have greater control over spending, identify opportunities for savings and monitor corporate compliances. Lee said that the solution tool can aid in tracking all cardholder activity from a high level perspective or through detailed breakdowns, create templates and view customized reports for various stakeholders in your organisation, export

reports in several formats such as pdf or csv for further analysis, scheduled reports are delivered to your home page for ease of use and compliance, Flag breach of company policies such as employee spend above preset credit limit or at restricted merchant categories such as casinos, view multi-currency statements with consolidated view of local and cross-border spend in a single currency and 24/7 access through web portal. He stressed the benefits of the Visa intellilink spend management to an organisation in three strategic parts improved profitability, greater visibility and control and better vendor management. C M Y K

20 — Vanguard, MONDAY, OCTOBER 29, 2012

Business & Economy

Federal, State Govts are committed to agric transformation —Programme Manager he Agricultural Tr a n s f o r m a t i o n Agenda (ATA) has all the potential of transforming the agriculture sector given the federal and state governments’ commitment to the success of the programme. Mr. Samuel Dung, the Programme Manager, Plateau Agricultural Development Programme (PADP) said this in an interview with the News Agency of Nigeria (NAN) in Jos. Dung said; “There is no doubt that the implementation of the ATA was faced with many challenges in the pilot year. “These challenges are being reviewed with the aim of improving the implementation in 2013 and beyond so that farmers can redeem their fertiliser and other inputs promptly.” He identified the challenges to include skepticism, leading to some degree of resistance to the new fertiliser distribution mechanism through an electronic system known as ‘E-wallet’. He explained that

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the system, which was part of the Growth Enhancement Support (GES) scheme, suffered some setbacks. They included the inability of some designated agrodealers to supply fertiliser due to their inability to access credit from commercial

banks and the fact that some farmers could not afford mobile phones and network problems, among others. “Agro-dealers’ inability to provide farmers with fertiliser under the GES on time was yet another problem, as they could not easily access credit

facility from commercial banks to supply the fertiliser as envisaged. You will recall that Plateau flagged off the sale of fertiliser in June 2012, but farmers only started getting the product in late August 2012 when farming season was almost over. Another

setback suffered by the ATA was flooding that ravaged parts of the state, especially in the Southern Senatorial zone that destroyed crops, killed thousands of livestock, damaged farmlands, roads and bridges.”

Smaller enterprises grow economies faster – World Bank BY PROVIDENCE OBUH

maller enterprises in the developing world have greater scope to grow economies faster, thus, providing better investments than a larger company, says World Bank report. The report contained in the World Development Report (WDR) 2013, released by the World Bank, stated that in some cases, microenterprises provide 10 times the return on investment than

their larger counterparts in the emerging world. The WDR which focused more on the development of jobs with smaller enterprises, states, “poverty falls as people work their way out of hardship and as jobs empower women to invest more in their children. Efficiency increases as workers get better at what they do, as more productive jobs appear, and as less productive ones disappear. Societies flourish as jobs foster diversity and provide alternatives to conflict.”

WDR noted that plenty of small companies stay small, no matter where they operate in the world, hence, the hope for growth is what keeps many of them in business. Describing what the WDR calls reluctant entrepreneurs, it stated that the only way small enterprises would grow into multinational concerns is by getting bigger and bigger. “Often, this necessitates capital investment. This is what impact investors.” However, the WDR looked at 54,000 enterprises in more

than 100 poorest countries of the world, while it found that larger enterprises are more likely to develop new products, increase employment opportunities, create higher wages, and foster exports. “That’s great for the business community, but investors may do well to seek out smaller companies. Smaller enterprises outperformed 20 per cent of the larger companies in terms of return on investment by a factor of 10.

Vanguard, MONDAY, OCTOBER 29, 2012 — 21

Business & Economy BRIEFS

BY LAZARUS IBEABUCHI

Reduce rice consumption, director urges Nigerians

he Equipment Leasing Association of Nigeria (ELAN) has expressed displeasure over government's policies on the development of leasing business in the country. The body said that one of the major issues currently at stake was in the area of taxation, where government polices appear not to be favourable to the development of leasing. To this end, it has concluded arrangements for a one-day business forum for the discussion of pertinent issues on taxation as they affect the business of leasing in the country. The forum, scheduled to hold on Tuesday, Oct, 30, 2012 in Lagos, is expected to have the Executive Chairman of Federal Inland Revenue Services (FIRS) as the lead Guest Speaker. The Chairman of ELAN, Mr. Kehinde Lawanson, said that despite the emerging nature of leasing, it has impacted positively on the nation’s economy. ‘’Today, the effects of leasing is becoming glaring in major sectors of the economy, ranging from oil and gas, manufacturing, telecommunication to transportation. The sophistication of the lease market has greatly increased, together with the number of players,” Lawanson said. Notwithstanding the usefulness of leasing as an efficient tool for capital formation, Lawanson noted that the sector still struggles for relevance among competing financing options in the country. According to him, the current state of the leasing industry cannot effectively support the provision of the capital assets envisaged for enhancing the productive capacity of the economy. “This development can be traced mainly to the regulatory environment. The present regulatory structure is inadequate to cater for the full realisation of the potential of the leasing industry,” he said. Lawanson explained that some of these policies were impacting negatively on the business of leasing. For instance, the reversal of the right to claim capital allowance in favour of the lessees in finance leases hitherto claimed by the lessors has remained a source of disincentive to the industry. He said that some countries like Denmark, France, Italy, Kenya, Uganda and Egypt, have clearly distinguished between accounting and taxation in the bid to develop leasing. “In these countries, tax calculations are based on prescribed rules and not on accounting standards, thus allowing the Lessor to claim tax benefits in both finance and operating leases.

he Director, Irrigation and Drainage, Ministry of Water Resources, Mr Joe Kwanashie,, has urged Nigerians to reduce their consumption of rice to once a week. Kwanashie said in an interview with the News Agency of Nigeria (NAN) in Abuja that the advice became imperative due to the amount of foreign exchange spent on rice importation. According to him, Nigeria spends N1 billion on rice importation daily. ‘’If Nigerians decide not to eat rice every day but once a week, it will drastically reduce the importation of the commodity. "If today we decide that instead of eating rice three times a day, we are only going to eat it once a day or once a week, we wouldn’t need to import all that rice. As a child, I know that in my house, we didn’t eat rice ever y day. Today, most households in this country eat rice every day. Must we eat rice? What’s wrong with eating eba or pounded yam that we produce locally? Will you die if you don’t eat rice? Kwanashie asked.

*From right: Executive Director, British American Tobacco Nigerian Foundation (BATNF), Mr. Gbenga Ibikunle and Honourable Commissioner for Agriculture & Natural Resources, Dr. Olufemi Bolarin at the commissioning and handover ceremony of Cassava Processing Cottage Industry donated by BATNF to Ogwozumo Fadama Users Group in Achoze Community Area of Kogi State on Monday, 22nd October.

ELAN decries govt taxation policy on leasing “In effect, the Lessor can pass on some of these benefits to the lessee through reduced rental and attract more players into the leasing market, leading to more investment in revenueproducing equipment, thus increasing the GDP, employment and even the tax base,” he said. Speaking on Value Added

Tax (VAT) on leases, Lawanson said that it amounts to double taxation as VAT has been paid at the time of purchase, thus making lease transaction to be more expensive than it would ordinary be. Lawanson noted the significant role leasing can play in capital formation and

asset acquisition, especially in the development of micro, small and medium scale enterprises considered to be the engine of growth for any economy, saying that creating favourable tax regime for the industry will invariably lead to increase in collectible taxes through the consequential rise in business activities.

Manufacturing woes: UNIDO advocates value re-orientation By NKIRUKA NNOROM he emergence and sustenance of a robust manufacturing sector requires re-thinking and re-orientation among the key actors in the sector regarding the content and drivers of economic and industrial transformation. Dr. Patrick Kormawa the United Nation Industrial Development Organisation, UNIDO, representative to Nigeria and ECOWAS and Director, Regional Office, Abuja, said this while delivering a paper on ‘Empowering the Manufacturing Sector for Sustainable Wealth Creation’, in a forum in Lagos. “In this respect, experience from several countries that have industrialised over the past 25 years indicates that an informed national leadership and effective government that is capable, credible and committed; acting

consistently to implement policies that promote industrilaisation is the key,” Kormawa added. He stated that the economic success story of the emerging economies of South East Asia, India, China and Brazil, evident in their upscale global economic ranking was essentially driven by their manufacturing sector, saying that such feat could be replicated in Nigeria. He maintained that Nigeria could by-pass several stages of development and edge into a high degree of industrialisation, adding that the challenge was to reach the threshold of competitiveness. “And this is indeed a formidable challenge. The success in converting challenges into opportunities depends on the path Nigeria decides to take given its abundant resources,” he stressed. Kormawa also stated that the calculus of manufacturing

in Nigeria has to change radically from the current inward-oriented approach to imbibe the new work ethics, propelled by aggressive technology adoption and innovations. He said that there is need to put in place support mechanisms to strengthen industrial corridors within the country based on principles of industrial location, agglomeration as a key factor in economies of scale and risk pooling. He emphasised that such industrial corridors should be provided with necessary infrastructures for promoting competitiveness and trade. “Nigeria must continue to pursue regional integration and global partnerships for accessing technology, creating a strong infrastructure base and utility services and market for manufactured goods,” he further stated.

NAICOM promises effective guidelines for micro-insurance policy he National Insurance Commission (NAICOM) has said that it will put in place effective guidelines that will propel the implementation of the microinsurance policy in the country. Mr Fola Daniel, the Commissioner for Insurance made this known in Abuja at a workshop for stakeholders in Micro-Insurance. “Insurance is a business on trust. Clients, pay premium and expect the indemnification of claims. Micro-insurance clients need to be sure that they are offered fair products, that claims are honoured swiftly, that prices are fair, that there are no hidden clauses and that disputes will be handled in a fair manner,” he said. Daniel said that the commission was at the final stage of developing a reliable micro insurance framework with clear rules for investment and for providers of operations. He added that the commission would ensure that the rules are flexible and designed in such a way that insurance providers have the freedom to use new and innovative procedures to reach the poor.

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22 — Vanguard, MONDAY, OCTOBER 29, 2012

Banking & Finance BRIEFS Sterling Bank Facebook campaign produces winners

terling Bank Plc has rewarded five winners in its ongoing Facebook Campaign meant to promote patriotism for the country among Nigerians. The winners were: Breezy Jumbo, Akinyere Uko, Timothy China, Ajayi Olabambo and Abanbola Olaniposi. Group Head, Corporate Development, Shina Atilola, explained that the bank had through Facebook, requested from members of the public to write under the topic: ‘1,000 things I can do for my country,’ and post their answers in the social network. He said that participants in the exercise sent comments on what they can do as individuals to improve the image and perception of the country both locally and internationally. Some of the answers posted on Facebook by participants were: ’I will stay out of crime; I will not be involved in bribery and corruption, I will abide by rule of law, I will not be involved in examination malpractice,' among others. He said that after the comments were sent, they were put to vote on facebook. Thereafter, comments with highest number of ‘likes’ got blackberry phones and Samsung phones while the first 100 entries got free movie ticket at Silverbird Galleria. He said the campaign started in last week of September and ran for a week and 10 days before the winners emerged. Atilola said the Facebook campaign is ongoing and will be conducted in series. He said the bank has decided to expand its campaigns from products and services to include issues that are germane and dear to lives of the citizenry. Sterling Bank had in recent months been rewarding its loyal customers under its ongoing Savers promo. The bank two weeks ago, gave out cash prize of N2 million to four of its savings customers in the third monthly draw. The four customers won N500,000 each, while 10 others won Home theatres and refrigerators. The draw brought to 42, the number of winners in the promo so far with 15 customers wining home theatres, 15 winning refrigerators and 12 winning N500, 000 each. C M Y K

*From left: GMD/CEO, Diamond Bank PLC, Dr. Alex Otti; Executive Governor, Cross River State, H.E. Senator Liyel Imoke; and Consul-General, United States Embassy in Nigeria, Jeffrey J. Hawkins (Jr.) at the unveiling of the Cross River State Tourism Brand in Lagos recently.

CIBN Fellowship: Need for Professionalism, Capacity building BY BABAJIDE KOMOLAFE

he importance of professionalism, ethics, and capacity-building in the banking industry was revived when the Chartered Institute of Bankers of Nigeria (CIBN) conferred Fellowship status on top bankers last week. "Though it is the highest grade of membership of our professional Banking Institute and conferred only on bankers who have distinguished themselves within the industry and beyond, the Fellowship status serves as a strong reminder to the various awardees and even the Institute on the need for commitment, professionalism and capacity development of young bankers." This was emphasised by the Special Guest of Honour of the Investiture programme, and President, Bank Directors Association of Nigeria (BDAN), Olorogun Sunny Kuku, who called on the Institute to be steadfast in its commitment to professional development. He also called for a framework that mandates all prospective bank applicants to undergo a basic CIBN training as prerequisite to gaining employment in the banking sector. On his part, President/ Chairman, Governing Council, (CIBN), Mr Segun

We have all the laws but what we need now is enforcement. But it is a collective thing; it is not just the CIBN. All Nigerians must ensure that we run our banks in a more professional and ethical manner and when we do that all the sharp practices we witnessed in the banks will be a thing of the past

Aina said that conferment of Fellowship status imposes additional responsibilities on the awardees. He said; “Our new Fellows, your elevation to the status of Fellow of the Institute imposes additional responsibilities on you to further contribute to the overall development of the banking and finance industry. This is in addition to continuously supporting the mandate of the Institute in promoting professional banking education and ensuring the furtherance, maintenance and observance of ethical standards and professionalism among practitioners of the Banking profession in Nigeria." The awardees include Managing Director/Chief

Executive, Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, and two deputy governors of the Central Bank, Dr. [Mrs] Sarah Omotunde Alade, Deputy Governor, Economic Policy and Alhaji Suleiman Barau, Deputy Governor, Corporate Services. The Institute also conferred Fellowship on eight banks chief executives namely: Managing Director/Chief Executive, Nigeria Export Import Bank (NEXIM), Mr. Roberts Orya, Group Managing Director, Ecobank, Mr. Ar nold Ekpe, Group Managing Director, Skye Bank Plc, Mr. Kehinde Durosinmi-Etti, Group Managing Director, First

Bank Plc, Mr. Olabisi Onasanya, Managing Director/Chief Executive Officer, Union Bank of Nigeria, Mrs. Olufunke Osibodu, Managing Director, Diamond Bank Plc, Dr. Alex Otti and Alhaji Ado Yakubu Wanka, Managing Director, Unity Bank Plc. In their various responses some of the awardees said that the Fellowship conferment is an incentive to increased professionalism and capacity-building. "It is an incentive to partner with the Institute and to build the banking profession,” said Dr. Mrs. Sarah Alade of CBN “It is always an incentive to work with the Institute and to lift the banking profession in Nigeria. To ensure that professionalism and standards are adhered to. That is what we have, but we hope that we would be able to build on what we have and make it better. So that when Nigerian bankers speak, they would be on the same standard with their peers internationally. That is bankers who are good, bankers who have integrity, bankers who know what they are doing,” she said. Similarly, Managing Director/ Chief Executive, Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, said the award is a credit to the founding fathers of the Institute who laid a foundation of professionalism, competence, integrity, and fairness. It is also a challenge to a l l o f u s i n t h e Corporation to continue to build on the foundation. “What the CIBN is doing is a boost professionalism and it will help to uplift the standard in the countr y. This is critical to the development of a sustainable and sound banking system. For us to have a sustainable, sound and safe banking system, we must have professionals that run banks in an ethical manner," said Mr. Roberts Orya. “The CIBN has done so much; they have come out with an Act which is all inclusive. I think what they need to do now is enforcement, because we have all the laws but what we need now is enforcement. But it is a collective thing; it is not just the CIBN. All Nigerians must ensure that we run our banks in a more professional and ethical manner and when we do that, all the sharp practices we witness in the banks will be a thing of the past.”

Vanguard, MONDAY, OCTOBER 29, 2012 — 23

Banking & Finance BRIEF FXTM Nigeria gives red alert on forex investments By ROSEMARY ONUOHA

*Quarterly Import and Export data

Currency in circulation rises to N1.36 trillion despite cashless policy By BABAJIDE KOMOLAFE

n what appears to be a dent on the cashless policy, the amount of currency in circulation rose by 0.4 per cent to N1.36 trillion in the month of August. Meanwhile, banks’ lending to the domestic economy struggled to rise by 0.5 per cent during the month. The Central Bank of Nigeria (CBN) disclosed this in its economic report for the month. The report said; “At N1, 368.2 billion, currency in circulation rose marginally by 0.4 per cent in the review month, in contrast to the decline of 0.1 per cent at the end of the preceding month. The development reflected wholly, the 0.4 per cent increase in currency outside banks. Relative to the level at endDecember 2011, currency in circulation fell by 12.6 per cent. “Total deposits at the CBN amounted to N6, 834.4 billion, indicating a decline of 1.5 per cent below the level at the end of the preceding month. The development reflected largely, the fall in Federal Government deposits. Of the total deposits, the percentage

shares of the Federal Government, banks and “others” were 67.2, 24.6 and 8.2 per cent, respectively, compared with 70.1, 22.1 and 7.8 per cent in the preceding month. “At N13,163.4 billion, aggregate banking system credit (net) to the domestic economy grew marginally by 0.5 per cent, on a month-on-

month basis, in contrast to the 1.6 per cent decline at the end of the preceding month. The development reflected, largely, the 1.4 per cent fall in (net) claims on the Federal Government. “Over the level at endDecember 2011, aggregate banking system credit (net) to the domestic economy, fell by 3.8 per cent. Banking system’s

credit (net) to the Federal Government, on a month-onmonth basis, fell by 1.4 per cent to negative N1,721.5 billion, in contrast to the increase of 26.5 per cent at the end of the preceding month. The development was attributed, largely, to the 19.2 per cent decline in DMBs’ holding of treasury bills.

CBN approves N145 dollar exchange rate for Christian pilgrims BY LAZARUS IBEABUCHI

he Federal Government through the Central Bank of Nigeria, CBN has approved a concessionary exchange rate of N145.00 to the US Dollar for Christian pilgrims. This represents a concession of about 7 per cent from the prevailing exchange rate of about N156 to the US dollar. According to a statement by the CBN, titled; Year 2012 Christian Pilgrimage

purchase of pilgrims traveling allowance signed by Batari Musa, Director, Trade and Exchange Department, CBN, “The exchange rate is however, for Pilgrims Traveling Allowances, PTA, between $750 and $1,000." It would be recalled that the Federal Government had in September granted same waiver to Hajj pilgrims. According to Musa, each pilgrim travelling to Israel is entitled to a maximum of $750.00 while those going to Israel/Rome or Greece are entitled to a maximum $1,000

as PTA. He, however, said that infraction of any of the requirements or abuse of any waiver shall attract appropriate penalty. He said; “The Federal Government has approved the commencement of the 2012 Christian Pilgrimage operation from October 25, 2012. The Government has also approved a concessionary exchange rate of NI45.00 to the US Dollar for purchase of Pilgrims Traveling Allowance (PTA) of $750.00 and $l, 000.00.

r. Abiola Akinyele, the Nigerian Director for FXTM Trading West Africa Limited has warned the investing public that Foreign Exchange, Forex, investment and trading is more complex than it is usually defined and there is high level of risk involved. Akinyele gave the warning on the heels of the recent surge in popularity of the Forex market among investors. Akinyele, who sounded the warning at the recently concluded FXTM Abuja Electronics Traders’ Conference organised by FXTM said the popularity is due to the huge investments potentials in the market. However, like other markets, Akinyele warned that investing in Forex involves many risks. He said; “Forex investment and trading is more complex than it is usually defined and there is high level of risk involved. It is expected of every investor to have adequate knowledge and training on how the market works before he invests.” Akinyele said that the ability to manage investment is a critical component of any long-term financial plan, adding that not everyone has the time, experience, and expertise needed for active fund management but everyone can benefit from the FXTM investment service called the PAMM account where experienced and professional Forex traders can trade currencies and other financial instruments on behalf of others. He said, as a PAMM investor under FXTM Nigeria, anyone can select and invest in an experienced account manager to trade on his or her behalf. Performance of PAMM accounts managers’ data are published and updated on the FXTM website, adding that investors will receive statements that show every transaction made on the investment account, including deposits, withdrawals and the PAMM account manager ’s remuneration.

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24 — Vanguard, MONDAY, OCTOBER 29, 2012

Micro Finance BRIEF

CBN postpones N220bn MSMEDF launch

MTN introduces …as UN envoy calls for proper coordination of software for microfinance NFIS banks Maxima said that the o enhance the efficiency of Microfinance Banks (MfBs) in the country, MTN has introduced an innovative micro-bank software called MTN XaaS, for Microfinance banks. MTN disclosed that the software which is developed in collaboration with Computer Warehouse Group (CWG) will be managed by MTN Business, the businessto-business division of MTN Nigeria, under the MTN Cloud Services platform. According to the company, ”MTN XaaS Microbanking software has been designed to enable MfBs carry out banking operations without having to pay so much in licensing, storage and implementation costs required for typical banking applications. Speaking on the development, CEO, MTN Nigeria, Brett Goschen said that the company is committed to delivering solutions that would make Nigerian businesses more productive and more profitable. Chief Enterprise Solutions officer (CESO), MTN Nigeria, Babatunde Osho, said MTN XaaS Micro-banking software as a service is just one of a number of cloud services MTN Business is launching in Nigeria. “Today ’s technology has made it possible for us to deliver robust cloud services direct to our customers via public or private connections without the need for storage, licensing and infrastructural concerns.” Osho noted that microfinance banks can access these services from anywhere via a secure private or public connection. The banking platform, he noted, is actually hosted in MTN’s state-of-theart data centre, so the only investment the bank makes in the form of hardware are the laptops and desktops that will be used to access the platform. He noted that MTN understands the need for MFBs to remain cost-effective while delivering innovative services to the nation’s unbanked poor and financially underserved. MTN believes this new service platform will save microfinance banks up to 70 percent of the traditional costs involved in procuring, hosting and implementing typical banking software today.

CBN alone cannot accomplish the implementation of the NFIS, calling on Nigerians to give priority to the strategy. “Implementation of the strategy is a key to this countr y ’s economic development, therefore the CBN should work in conjunction with the different states, the Ministry of Agriculture, the Ministry of Communications, all the population and enterprises,” she added.

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*CBN Governor, Sanusi Lamido

Stories by PROVIDENCE OBUH he Central Bank of Nigeria (CBN) has pushed forward the launch of the N220 billion Micro Small and Medium Enterprises Development Fund (MSMEDF). The Fund to be launched before the end of this year is currently at the stage where all stakeholders are looking at it and making inputs into the structure, CBN Governor, Sanusi Lamido has said. Sanusi who said this during the launch of the National Financial Inclusion Strategy (NFIS) by President Goodluck Jonathan in Abuja, disclosed that 60 per cent of the Fund is targeted at businesses owned and managed by women to provide long-term funding at single digit interest rate and specific incentives. He explained that about 39.2 million out of the estimated 84.7 million adult populations in the country are excluded from financial services. A breakdown of the data

showed that 80.4 per cent of the excluded adults reside in the rural areas, 54.4 per cent are women, 73.8 per cent are those under 45 years of age while 34.0 per cent are those without formal education. Meanwhile, the United Nations Secretary-

General’s Special Advocate for Inclusive Finance for Development, Princess Maxima of the Netherlands urged CBN to ensure a proper coordination of the NFIS so as to give room to even the last consumer, access to financial services at very affordable prices.

ommending the CBN, she said; “Writing a strategy is just the beginning of the whole process. So, the key issue here is to coordinate and to cooperate, so that we can jointly get to the last man and the last consumer can actually have access to financial services at very affordable prices. E a r l i e r, t h e U N e n v o y commended President Goodluck Jonathan for supporting the financial inclusion strategy and the Economic Management Te a m f o r t h e e f f e c t i v e coordination of the relevant ministries and departments.

MfBs to meet criteria to access N600bn agric fund icrofinance Banks in the country wishing to participate in accessing the N600 billion agricultural sector ’s Fund approved by the Central Bank of Nigeria (CBN) are to meet the basic criteria’s. This was contained in a letter of request entitled: Request for participation in the Nigerian IncentiveBased Risk Sharing in Agricultural Lending (NIRSAL) programme, to all National Association of Microfinance Banks' (NAMB) State Chairmen

requesting all zones in the federation to submit names of three microfinance banks from each local government. NIRSAL is an initiative of the CBN, designed to support lending to the agricultural sector of the Nigeria economy, while MfBs are recognised as a sub-sector that is very close to the primary producers, processors and distributors of agricultural products. “To enjoy participation in the programme, the subsector must meet basic

going concern requirements of MFBs as laid down by the regulatory authorities, registered with NAMB with all dues fully paid to date and the MfB must be operating in a rural area, the letter noted. According to the letter, “A special purpose vehicle has been set up to warehouse a total fund being estimated to be about N500 billion to N600 billion that will be accessed by MfBs for an onward lending to the agricultural sector.

Vanguard, MONDAY, OCTOBER 29, 2012 — 25

Corporate Finance BRIEF

By NKIRUKA NNOROM cobank Transnational Incorporated Plc, ETI, has said that International Finance Corporation, IFC, has invested a total sum of N15.6 billion ($100 million) in the bank by way of common equity. The bank said in a notice sent to the Nigerian Stock Exchange, NSE, that the investment followed signing of share subscription agreement between the two organisations in July, 2012. According to the bank, the investment was made through IFC’s managed Funds: the IFC Capitalization (Equity Fund) L.P., the Africa Capitalization Fund Ltd and the IFC ALAC Holding Company II. ETI noted that it has issued 1.25 billion shares in favour of the respective Funds at the agreed price of USD 8 cents per share. The notice indicated that ETI issued a total of 596.59 million units of shares to IFC Capitalisation (Equity Fund) L.P at $47.73 million; 340.909 million shares were issued by the bank in favour of African Capitalisation Fund Ltd at $27.27 million, while IFC ALAC Holding Company II got 312.50 million shares after investing the sum of $25 million in ETI, thereby bringing the total investment to $100 million. “The transaction will strengthen Ecobank’s Tier One Capital and further enhance its ability to grow its business across the African continent, the bank said in an

SADC honours entrepreneurs, as Oby Ezekwesili delivers lecture

*From left: Director, African Arts Foundation, Azu Nwagbogu; CEO, Etisalat Nigeria, Steven Evans; President, Society of Nigerian Artists, Oliver Enwonwu at the LagosPhoto Private View Exhibition sponsored by Etisalat Nigeria, held in Lagos.

Ecobank Transnational Incorporated gets N15. 6bn IFC facility accompanying note”, while adding that appropriate steps have been initiated for the listing of the shares on the Nigerian Stock Exchange as well as on the Ghana Stock Exchange and the BRVM (Abidjan). It would be recalled that ETI

recently entered into a cooperation agreement with Portugal’s third largest commercial bank, Banco Espírito Santo (‘BES’) to develop trade and investments between Portugal and Africa. The Memorandum of

Understanding (“MOU”), which was signed at BES’ Lisbon headquarters envisages joint effort and cooperation on the network of customers and branches of both banks to support and encourage trade and investments between Portugal and Africa

Fidelity Bank Q3 result better than expected —FBN Capital BY PETER EGWUATU

BN Capital has rated Fidelity Bank Plc third quarter result higher as its Profit Before Tax (PBT) has grown strongly for two consecutive quarters. Specifically, the Bank’s PBT went up in a row, increasing by 20 per cent quarter on quarter (q/q) bases in third quarter and 31 per cent on quarter on quarter basis in second quarter of 2012 respectively. According to the result released by the Nigerian Stock Exchange (NSE), the Bank recorded PBT of N6.7billion for the quarter under review. According to FBN Capital, “On a year on year ( y/y) basis,

r. Oby Ezekwesili, former Minister in Nigeria and the immediate past World Bank Vice President for Africa will deliver a lecture titled ‘Nurturing an Entrepreneurial Mindset – Our Pathway to a New Nigeria’ at this year’s annual entrepreneurial award organised by Success Attitude Development Centre (SADC).The 2012 edition which is the 16th edition of the award will feature a Gala Dinner and an award ceremony. Meanwhile, seven Nigerians who have distinguished themselves as entrepreneurs in their chosen businesses have emerged as winners of the 2012 edition of the prestigious Success Digest Enterprise Awards. The winners which include Tolu Ogunkoya, Managing Director and Chief Executive Officer, Media Reach OMD, Yejide Omotayo, MD/CEO Swift Movers, and Teju Oyelakin, Initiator of Teju Baby Face Show will be honoured within the premises of the Lagos Sheraton and Hotel Towers on Saturday November 3, 2012. The trio will cart away the awards in the categories of Male Entrepreneur of the Year, Female Entrepreneur of the Year and Creative Award of the Year respectively. Other distinguished budding business personalities lined up for the annual awards sponsored by some corporate organisations are Uju Onyechere, CEO Edwards & Benson Group, who won the SADC Alumni Enterprise of the year while the duo of Mr. & Mrs. Arthur Chukwuma, Founders of Hosana Broadcast and Nneka & Isaac Moses, Founders of Goge Africa on TV, emerged joint winners of Entrepreneurial Couple of the Year Award. Mrs. Adedoyin Adelaja, Founder, Hearts of Gold, will be honoured with the Special Recognition Award. According to Dr. Sunny Obazu-Ojeagbase, Chairman Board of Directors of Success Attitude Development Centre (SADC) the organisers of the annual event, the award is designed to honour Nigerians who took the bold step of actualising the entrepreneurial dreams and do so with the spirit of excellence.

PBT was up by 85 per cent , not because of reduced provisions, but because of strong topline growth. Fidelity Bank’s risk appetite has grown since 2011. We cannot comment on the drivers behind the bank’s performance in third quarter (Q3) on a q/q basis because we need clarification on the movements on the income lines – both interest income and non-interest income. The magnitude of the changes (dropped by 32 per cent q/q for interest income, and increase by 45per cent q/q for non-interest income), off the back of similar marked movements in Q2 leads us to suspect that these lines were impacted by accounting treatment of certain items that we are not privy to, different from what we would have

expected. Relative to our estimate, profit before provisions of N17.2billion (which we believe would have been unaffected by any of the unusual trends we referred to on the income lines) was in line with our forecast.” Continuing, it said, “Both PBT and Profit After Tax (PAT) of N6.7billion and N5.4billion beat our estimates by 42 per cent and 35 per cent respectively. To our minds, the most important point from these results is that Fidelity’s earnings are growing strongly again, after a very subdued 2011. Central to this has been the bank’s strategy shifting more towards growing its risk assets. Having grown by 18 per cent q/q in Q2, Fidelity’s loan book (to customers) expanded by a further 11per cent q/q in Q3. On the back

of the Q3 results, we would expect consensus estimates to move higher. Consensus 2012 PBT of N16.9billion compared with Fidelity Bank’s nine months 2012 PBT of N16.6billion.” According to FBN Capital, “The implication of the Q3 results is that Fidelity’s 2012 Return on Equity (ROE) is now firmly in the teens range. We believe that the lackluster performance of the shares in the early part of the year was because the market had its doubts as to whether Fidelity could indeed deliver doubledigit ROE in 2012. Those concerns appear to be dissipating fast: year-to-date ( ytd) Fidelity Bank shares have gained 58 per cent. We believe the market will find these results reassuring.”

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26 — Vanguard, MONDAY, OCTOBER 29, 2012

Corporate Finance BRIEF Unilever institutes N4m Knorr cooking competition nilever Nigeria Plc says it is instituting over N4million cooking competition tagged Knorr Taste Quest, as a platform for Nigerians to showcase their cooking skills. The competition, the company said, will reward the star prize winner with a new Hyundai Accent car, N1 million plus kitchen equipment worth N300,000, whilst the first runner up will go home with N1million and N300,000 kitchen equipment, even as the second runner up will win N500,000 and kitchen equipment worth N300,000 as well. Speaking, Mr. David Okeme, Brand Building Director of Unilever at the press briefing called at the instance of the company, said the competition is being introduced as a way of presenting a platform and opportunity for food lovers in Nigeria to showcase their various cooking skills. “The Knorr Cooking show is opened up to consumers from all works of life aged between 20-45 years old, who have the passion for cooking, see food as pleasure and think they have what it takes to win the ultimate prize. The show promises to be engaging and captivating as we search for Nigeria’s best.” He stated. According to him, the competition would go a long way to impact every participant as every contestant that gets to the show will leave with something worthwhile, he assured. “Our root strength lies in our expertise in local and international dishes and these we will showcase on the show.” He stressed. Speaking on the modalities for the show, he said interested consumers are to go to www.unilevernigeria.com to complete the entry form. Shortlisted participants would be invited for auditions where 20 contestants would emerge. Continuing, he pointed out that the 20 contestants would go head to head to compete for the grand prize. Contestants would be eliminated weekly based on their performance on tasks assigned. Contributing, Mrs. Oiza Gyang, Category Manager, Tea & Spread of Unilever, said the winner of the show will walk away with a brand new car and N1m cash prize and kitchen equipment worth N300,000.

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Investors lose N133bn on NSE BY LAZARUS IBEABUCHI bearish trend was recorded on the Nigeria Stock Exchange, NSE last week as the market capitalization dropped by N133.21 billion. Specifically, the market capitalisation which opened at N8.697 trillion, depreciated by 1.53 per cent to close at N8.565 trillion; while the AllShare Index, which opened the week at 27,296.35 closed at 26,876.07, thereby depreciating 420.28 points or 1.54 per cent. It was a brief trading week as the market opened for three days due to a two-day public holiday declared by The Federal Government of Nigeria (Thursday October 25th and Friday October 26th 2012) to commemorate the Eid el- Kabir. The analysis of the equity price movements indicated that twenty two (22) equities gained while thirty-nine (39) equities recorded price declines and prices of one hundred and thirty eight (138) equities remained constant. When compared with the preceding week, 27 equities gained while 46 equities recorded price declines and prices of 125 equities remained constant. Nigerian Breweries Plc led on the losers’ table, shedding N3.85 to close at N135 per share from N138.85 per share; followed by PZ Cussons Nigeria Plc which lost N3.43 to close at N26.57 per share and Guinness Nigeria Plc that lost N2.00 to close at N263.00 per share. Other share price losers include: First Bank of Nigeria Plc N0.80, Ashaka Cement Plc N0.79, Zenith Bank Plc N0.70, Cadbury Nigeria Plc N0.55, U B A Plc N0.41, Arbico Plc.N0.40 , and Access Bank Plc.N0.40, among others Meanwhile, Nestle Nigeria Plc led on the gainers’ table, appreciating by N11.50 to close at N695.50 per share from N684.00; followed by Cap Plc which gained N1.90 to close at N33.09, and Academy Press Plc that rose by N0.69 to close at N33.09, Other share price gainers in the ten top category include: Beta Glass Company Plc N0.50, Flour Mills Nigeria Plc N0.49, Vitafoam Nigeria Plc N0.34, DN Meyer Plc N0.30, Cutix Plc N0.20, Portland Paints and Products Nigeria Plc N0.18, and Nigerian Bags Manufacturing Company Plc N0.12, among others. Equities trading recorded a turnover of 794.043 million units of shares valued at N8.515 billion exchanged in 14,048 deals in the week under review compared to 1.859 billion shares valued at

N16.350 billion that exchanged hands penultimate week in 28,383 deals. The Financial Services sector dominated the activity chart (measured by turnover volume), recording the highest trading volume of 659.759 million units of shares valued at N6.377 billion traded in 8,298 deals, representing 83.09 per cent, 74.89 per cent and 59.07 per cent of the volume, value and number deals executed on the stock market respectively during the week. The Consumer goods sector (measured by turnover volume) followed with a

recorded volume of 44.008 million shares valued at N1.719 billion traded in 2,733 deals. The top two sectors accounted for 703.767 million shares valued at N8.096 billion traded in 11, 031 deals, thus accounting for 88.63 per cent, 95.08 per cent and 78.52 per cent of the volume, value and number of deals respectively. Similarly, the Banking subsector was the most active with a volume of 595.989 million units of shares. Activity in the subsector was mostly driven by shares of Zenith Bank Plc, Ecobank Transnational Incorporated

Plc and First Bank of Nigeria Plc which accounted for 281.873 million shares, representing 47.30 per cent, 42.72 per cent and 35.50 per cent of the turnover recorded by the subsector, sector and total volume for the week. Also traded during the week were 600 units of NewGold Exchange Traded Funds (ETFs) valued at N1.573 million exchanged hands in 4 deals in contrast to a total of 4,700 units valued at N12.488 million transacted last week in 12 deals.

*Mr. Clifford Nzimako, Managing Director, Oculus Pharmacare Limited, Mr. Gagan Datta, Regional Director, Africa Business, Acino Pharma AG and Chairman, Oculus PharmaCare, Alhaji Abdul Latif at a cocktail party in honour of the visiting Acino Pharma Regional Director organised by Oculus in Lagos last week.

GTB Asset unveils virtual investment simulator BY PROVIDENCE OBUH TB Asset Management Limited (GTBAM) has introduced the ‘Virtual Investment Simulator,’ a flexible online game portal with in-built capabilities to enable potential investors and researchers to interact with the dynamics of the Nigerian equities and financial asset market. Speaking during the launch of the gaming platform, Managing Director of GTBAM, Mr Nicholas Nyamali, explained that the “Virtual Investment

Simulator” was designed to educate prospective participants made up of potential investors and researchers, practical investing skills as well as enable them interact with the Nigerian equities and financial asset market in an online gaming environment. According to Nyamali, “By launching the simulator, GTBAM has further broadened its “Investment Education Project,” which is designed to teach the public the art and science of investing”. He added that the virtual gaming portal is initiative which encourages

participants to learn about how to make informed investment decisions and how the financial market works and also gives them a chance to win N500,000 cash reward for being the best investor between now and 31stDecember 2012. The gaming portal also allows investors to form exclusive investment clubs within the portal whereby participants can invite friends and colleagues to join, compete with one another as well as share ideas and post comments on the portal blog page. Winners will be contacted via Email and telephone, he said.

Vanguard, MONDAY, OCTOBER 29, 2012 — 27

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28 — Vanguard, MONDAY, OCTOBER 29, 2012

Interview

From N200, I gre a multi-billion na

BY EBELE ORAKPO

F life gives you lemons, go ahead and make lemonade. With God, nothing shall be impossible. Nothing can stand in the way of a man with a dream and determination. These sayings proved true in the life of Dr. Cosmas Maduka, the chairman of Coscharis Group of Companies, a Nigerian conglomerate. Jack of all trade and master of all, best describes the man who rose from the proverbial dunghill to the mountain top. In this chat with Financial Vanguard, Maduka speaks of his humble beginnings, how he started with virtually nothing to build a multibillion naira business in the space of 32 years. All these, he attributes to the Almighty God whom he confesses, has made all these achievements possible. Excerpts: The early years: I am Dr. Cosmas Maduabuchukwu Maduka. My middle name is kind of inspirational; my parents alone knew the reason they gave me that name. Maduabuchukwu means ‘man is not God.’ I lost my father at the age of four years, automatically, my mother became a single parent. For some reason, they had four children in four years. It was as if they knew something was going to happen. I was the second in the family. I have a senior brother and two younger ones. It was a rough time for my mother taking care of all of us, but she was a godly woman, a very devout Catholic who worshipped God the best way she knew; never missed her morning mass. She taught us to pray the Catholic rosary. She was my angel. I owe everything I am today to her. She told me stories about my beginning, she told me they were scared when I walked at six months instead of the usual nine months; things that sounded incredible then. The stories only inspired me because she made me believe I could go places and that I should believe in God and in myself. So I believe that mothers play very important roles in moulding their children’s future. My mother could have told me I was useless and never going to amount to anything, abused me mentally and think she was trying to help and mentor me, but she always said inspirational words to me and that kept me motivated and gave me the courage that no matter the odds, I could go places. She did her best; she made me go C M Y K

—COSMAS MADUKA foundation.

orking as an apprentice: I worked for my uncle for six years as an apprentice. Many do not realise that the people that trust us are those who educate us. It was Robert Koizaki that said; ‘Work to learn, don’t work for money,’ so my uncle was my mentor. I slept at No 88 Griffin Street Oyingbo Bus stop where his store was for several years and at the end of my six years apprenticeship, in the 7th year, he gave me N200 as my start-up capital.

*Dr. Cosmas Maduka....It's not too late for anybody to become anything he chooses, but it's good when people do not waste their youthful years. to church regularly, she trained me in the way of God to the best of her knowledge. Questions my mother could not answer led me to Christ: But by the time I turned 11/ 12 years, I started asking questions that she couldn’t answer and of course, when I turned 15 years, I made a commitment to Jesus Christ. I became a born again Christian. This gave me the faith and courage to really take inventory of my life. The greatest book that is greater than any human intellect is God’s word, the scripture, because it is written by inspiration. Prophets of God spoke God’s thoughts not man’s words. Sometimes they themselves did not understand what they were saying but by inspiration, they said it. Otherwise, how could Isaiah have said a virgin will conceive? Scientists and intellectuals would have laughed him to scorn, but he went ahead to say it. It was over 700 years later before a virgin conceived and some people are still asking whether a virgin truly conceived. All the things that my mother said to me made me believe in myself. The death of my father deprived me of the opportunity of going to formal school. I dropped out of

elementary three. I could have practically become a hunter or at best, an okada rider, but God’s grace was upon me, moreso as I had embraced the gospel. When I told my mother that I had repented, she said; “What? What did you repent from?” Of

N200 start-up capital: Like many youths, I could have spent that money in a restaurant that evening in frustration and cursed everybody around me and blame God for taking my father when I was four years old, but I had a different mindset. In fact, my senior brother who went with me asked me to reject the N200 and I asked him if he had anything to give me and he

I did things that many of my peers would never even consider doing; by age 14, I had smoked, drank, watched pornography, so I had things to repent of that my mother did not think I did

course she thought she had an angel in her house but growing up as a young man, I had peer pressure like every other young person. I did things that many of my peers would never even consider doing. By age 14, I had smoked, drank, watched pornography. So I had things to repent of that my mother did not think I did. She said that only retired criminals needed to repent of their sins; that I was too young for that. Too bad, I knew enough to repent. We have all sinned and need to repent and make peace with our creator. That kind of put me on the right

said no, so I told him I better hold the N200. That was how I started life.

aunching out: I had a mind to succeed so I teamed up with my brother and we set up a company called Maduka Brothers at Nnewi, Anambra State. Somebody gave us one quarter of his store free of charge because we could not pay for a store. We were there for six months. We would come to Lagos, buy merchandise and sell. We struggled, and by the sixth month, we started differing in ideology. I would go to church

and give an offering of N1 and he would feel it was too much. He told me that they give 10 kobo in their own church and I told him he drank beer and I did not. So, flimsy things created problems between us and we parted ways. Going solo and first breakthrough: I was on my own and he was on his own. Things started working together for me. I had my first breakthrough when I came to Lagos and went to Oregun, Ikeja where I bought some motorcycle crash bars from a company representing Suzuki. I went to the East, sold them and made a lot of money. I took the night bus back to Lagos, bought some more and went back. Before people got to know where the crash bar was coming from, I had made enough money because each time I went; I will tear off the address from where the crash bars were coming. I bought myself Honda 175 motorcycle which was like a BMW 7 series then and everybody was saying 'this boy got rich overnight.' That was my first breakthrough in business. By this time, I was 19+ and was thinking about getting married. Role models: I had embraced the gospel and did not want to fool around, so I got married before my elder brother. I will be 54 years on December 24 and I celebrated my 34th wedding anniversary on September 24. It’s all about mindset. I had a mindset that I was going to not just survive, but I was going to succeed. It did not matter the odds in my life. I found characters in the Bible like Joseph and David who became my role models. They inspired me. Coscharis is born: At a time, I teamed up with a friend of mine, David Nwosu and we formed a company called CosDave Motors and later we parted ways. In 1982, I formed Coscharis, a combination of my first name and my wife’s name. I am Cosmas and she is Charity. We have grown the business to what it is today and by the grace of God, today we do various things from sachet/bottled water, to yoghurt, to motorcycle parts, to automotive components, to representing big names like Ford, Landrover, Jaguar, BMW. We are into medical equipment, and a whole lot of other things. By the grace of God, we have built a

Vanguard, MONDAY, OCTOBER 29, 2012 — 29

Interview

grew my business to naira conglomerate

A Nigerian conglomerate, and that is something that many people find incredible.

dvice to youths: The matter is simple. It is not too late for anybody to become anything he chooses. But it is good when people do not waste their youthful years. Statistics show that 86 per cent of success occur between 16 - 25 years. Many young people live a wasteful life, hoping they are going to catch up down the line. I think it is best if no time is wasted. Somebody who is going to be a doctor, by 16, he should already be reading science subjects. You cannot be at that age and still not be clear about what you want to achieve. If you don’t know where you are going, any road can take you there because there is no clear sense of direction. You can still make it at 40, 50, 60 but the chances are very slim because when you are young, you have all the energy and zeal. You need to sow the seed at younger age that you are going to reap when you grow old. So when you waste your youthful age, you pay for it down the line. Not all rosy: There was an agony period. I went through different things in

are possible and that you can succeed. We have been able to build an institution today called Coscharis Group of Companies. Our success story sounds actually incredible, it is like a paradox; the reality is that it stares you in the face that you cannot dispute it and it leaves a clear example that with dogged determination, and a sense of purpose, anybody can achieve his goal.

ntrepreneurship programme in school: It is a step in the right direction. Like I said, although mine was not through a formal school, but my mother did exactly what you are referring to. She did not just inspire me to success but at the age of five, I was already hawking. People do not believe it. I will get up in the morning to go and sell akara before going to school. That was in elementary one. People would see me and say, ‘ who is sending this child out?' They looked at me as a child that was being abused but my mother discovered the

We all have an inherent capability God has put in us to be creative so we need to get to a point where we should begin to challenge our imagination

life but you know, it is easy to talk about success, you just tell all the good sides but I can tell you that I had rough times growing up. Even when I started my business, there was a time things went bad. A young man was asked to differentiate between finish and complete and he said; “A man who marries a good woman is complete and a man who marries a bad woman is finished. A man who marries a bad woman from a wicked family is completely finished. I thank God for my wife because after I got married, she supported me with her meager salary and we lived peacefully. So it’s all about determination to believe that with God, all things

entrepreneurial capability in me. I learnt to smile at people, get their favour and sell things to them; so I have been selling all my life. So growing up to become an adult selling, I know exactly what the customer expects. He wants service, he wants a good smile, somebody who can explain, invalidate their objections and tell them why they should deal with him. So if it is incorporated into the curricula, I think that will be a right foundation for our people. What that will do is to create more people who are independent-minded. We all have an inherent

capability God has put in us to be creative so we need to get to a point where we should begin to challenge our imagination. It was Napoleon that said ‘Imagination conquers the world,’ and Ivan Aston said ‘Imagination is more important than knowledge,’ and when you get to a position where you can task your mind to start thinking, that is actually being creative, that is being like God. That is why God said ‘BE FRUITFUL’, a demand on the potential He has put in man. But in the African context, people think about making babies whenever you talk about being fruitful. But in brain work, they are not fertile. People do not task their brains to give birth to ideas. Everything we enjoy today is somebody ’s brainchild electricity, automobiles, airplane, computers etc. Somebody thought and created them.

ono product economy: Way forward: The truth is 'No light, No future'. Energy is power. When God started the work of creation, the first thing He said was ‘Let there be light and there was light.’ God did not say let there be seed, when there was light, because the seed was already in the heart of the earth, the light came on it and the seed sprung up. If we don’t solve the power problem in Nigeria, we are living in a dark age. That is fundamental to everything. Once there is light, many industries will spring up. Many things are dependent on it so the authorities should know that they need to fix power. It is wrong that we are all depending on oil because before the advent of oil, Nigeria’s economy depended on agriculture and many Yoruba elites went to school on scholarship from Cocoa Board.

*Dr. Cosmas Maduka...The truth is 'No light, No future'

The Easterners with their palm plantations, did what they did with Okpara and the northerners with their groundnut pyramids. This nation is blessed. We have eight climatic conditions and we can farm eight times in a year. Malaysians came here to take oil palm seedlings and today, if you go to Malaysia, palm oil contributes 30 per cent of the GDP. They have crude oil but that contributes only about 30 per cent of the revenue, other things come from agriculture, tourism etc. So we know what to do but we mismanage things because we lay too much emphasis on oil and sharing oil revenue, therefore, so many people have become lazy and other aspects of our lives are actually being wasted. There is so much disequilibrium between the rich and the poor today, everybody wants to migrate to the cities, the rural areas are neglected so they are not attractive to people. So it is a problem that needs to be solved but the leaders need to think right and begin to put things in order. They need to make the rural areas attractive for people to come back and stay and be able to make a

decent living so that everyone does not migrate to the city. For the first time, I see the government is not paying lip service to power. I think they are on the right course. Finally, PHCN has been unbundled and they are going to be selling it. They just need to attract private investors. It is not something Government can do anymore. The regulatory authorities should know that you don’t neglect people’s investment when you are not putting any money. I was discussing with someone recently and he told me that one of the GSM companies pays N1 billion in tax. All of these things were possible because the telecommunication industry was liberalised and there was competition so phones going for N20,000 those days have come down. In commerce, they tell you that availability comes first before affordability so the thing has to be available before you can think of whether someone can afford it or not. We are still living a wasteful life. So they should allow investors who take risk to invest in the power sector, produce and sell. Let those who want to buy, buy, and people will become more economical. C M Y K

30 —Vanguard, MONDAY, OCTOBER 29, 2012

Housing Finance BRIEFS New UK mortgage rules set for 2014

he Financial Services Authority Thursday announced new mortgage rules that will be put into practice by 2014. The regulations are designed to help both lenders and borrowers after both groups suffered in the global credit crunch which began five years ago. Yes, the new rules state that lenders must verify potential borrowers’ incomes with employers, rather than just believe what is written on a form. And yes, a strict affordability criteria must be followed by all lenders to make sure people who want to buy a house can afford the monthly repayments even if interest rates go up, which they will. And, while it is true that this could make it more difficult for some potential home-buyers to get a mortgage, it is also true that it will help to safeguard against huge numbers of people taking on a mortgage that they really cannot afford. “Lenders became too exuberant at the height of the crisis,” said Martin Wheatley, managing director of the FSA and CEO-designate of the Financial Conduct Authority, speaking on BBC radio Thursday. “What we’re doing today is announcing a package which puts common sense back into mortgage lending.”

Businessmen jailed in $20m mortgage scam

wo business associates of former Dallas Cowboys linebacker Eugene Lockhart Jr. have been sentenced to prison in a $20 million mortgage scam. A federal judge in Dallas sentenced William Randolph Tisdale Jr. on Wednesday to 10 years for conspiracy to commit wire fraud and bank fraud. Hubert Jones III of Garland must serve nearly five years in prison for wire fraud, conspiracy to commit wire fraud and bank fraud. Lockhart pleaded guilty to wire fraud in August 2011 and awaits sentencing. He faces up to 10 years in prison. Tisdale and Jones were convicted in February. C M Y K

A State government-sponsored housing development

FCTA set to introduce rent regulatory agency By FAVOUR NNABUGWU The Federal Capital Territory Administration (FCTA) will in line with its ongoing efforts to sanitize the real estate sector in the Nation’s Capital, introduce Rents Regulatory Agency (RERA), in order to ease the burden imposed on the residents through costly annual rents. FCT Minister, Senator Bala Mohammed, said the agency will be backed with necessary laws that will require property owners to collect rents on monthly or quarterly basis instead of the current annual or biannual arrangement. Mohammed hinted on this move while responding to questions from FCT residents last month during the Town Hall Meeting to mark the end of the four-day Good Governance Tour embarked upon by the Federal Ministry of Information to asses various Federal Government Projects in the FCTA. He noted that tenants in Western countries pay rent for between two weeks and six months and lamented that in Nigeria, particularly in Abuja, tenants were forced to pay two years and above at a time. Mr. Aliyu Hakeem, the FCT Council Chairman of Trade Union Congress (TUC), urged the Federal

Government and the FCT Administration to check the excesses of Abuja landlords whom he identified as “ retired military officers, retired permanent secretaries and politicians”. Hakeem promised that organised labour would support the bill that seeks to sanction property owners in Abuja who demand a two-year advance payment for rent. He

said the high cost of owning and renting a house in Abuja had fuelled corruption in the public service. “Our members believe that corruption and can be eliminated by up to 80 per cent. This will be if civil servants in the FCT are not made to live and exist as settlers and second-class citizens, while the ruling class lord it over them as indigenes

and shylock landlords. The inability of our members to meet up with these extremely high cost of rent has made many of them to be living outside the FCT, thereby commuting several kilometres to work,” the TUC official said. Hakeem expressed regret that this development had led to workers’ reporting late for work, with a significant loss of man hours on a daily basis.

US mortgage rates tick up Average U.S. mortgage rates rose only slightly last week and continued to hover near record lows, a trend that has helped boost home sales and refinancing. Mortgage buyer Freddie Mac said that the rate on the 30-year fixed mortgage edged up to 3.41 percent, from 3.37 last week. Three weeks ago, the rate touched 3.36 percent. That’s the lowest level on records dating to 1971. The average rate on the 15year fixed mortgage, often used for refinancing, rose to 2.72 percent. That’s up from last week’s record low of 2.66 percent. “Mortgage rates remained relatively unchanged this week and should continue to support the housing market and mortgage refinance,” said

Frank Nothaft, Freddie Mac’s vice president and chief economist. The rate on the 30-year loan has remained below 4 percent all year, helping drive a modest housing recovery. And rates have fallen even further since the Federal Reserve started buying mortgage bonds in September to try to encourage more borrowing and spending. Home sales have increased from last year, and prices are rising more consistently in most areas. Builders are more confident and starting more homes. Lower rates have also persuaded more people to refinance. That typically leads to lower monthly mortgage payments and more spending. This week brought more

positive news on the housing front. U.S. sales of new homes jumped last month to the highest level in more than two years, the Commerce Department said Wednesday. And slightly more Americans signed contracts last month to buy homes, the National Association of Realtors reported Thursday. Still, the housing market has a long way to a full recovery. And many people are unable to take advantage of the low rates, either because they can’t qualify for stricter lending rules or they lack the money to meet larger down payment requirements. To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

Vanguard, MONDAY, OCTOBER 29, 2012 — 31

Insurance BRIEF Employees risk losing pension benefit over late remittance —Yola By RITA OBODOECHINA mployees whose organisations delay in the payment of their outstanding pension remittance risk losing their pension benefit when they retire, says Yola Mishbahu, Managing Director of Legacy Pension Managers Limited. Yola disclosed this during his paper presentation at a workshop organised by National Pension Commission, PenCom, in Abuja, with the theme; Effective Administration of Benefits under the Pension Reform Act, 2004. He said; “Late verification and enrollment with Pencom by federal government employees, delay in submission of complete documentations and delay in payment of outstanding remittances of employees by employers, are some of the challenges faced in payment of benefits” He noted that withholding the issuance of retirement letter by employer, as well as lack of agreement between retiree and Pensions Fund Administrator, PFA, are not exceptional in the payment of benefits. The Legacy Pensions Managing director said delay by the employer in providing the confirmation of the status of past service benefits (private sector /self funded institutions), untimely submission of letter of administration in cases of death benefit, delays the payment of benefit. On the remedies to avoid delay in payment of benefits, Yola said closer coordination and cooperation between employers and employees to facilitate timely remittance of accrued benefits by private employers will enhance payment of benefits. He added that PFAs should maintain cordial working relationship with concerned pension desk officers of employers to gather information as it concerns retirees and deceased employees. According to him, there should be a continuous enlightenment and sensitisation of pension desk personnel officers, thereby updating them with any changes or new development in the payment of benefits in line with PenCom regulations and guidelines.

C M Y K

FBN Life aligns with NAICOM’s vision of repositioning insurance By ROSEMARY ONUOHA he Nigerian insurance industry, according to the Commissioner for Insurance, CFI, Mr. Fola Daniel, is still crawling. Penetration remains very low with life insurance still below 0.3 per cent and non-life slightly above 0.5 per cent. It is in this light that Daniel vowed that the industry will make every attempt to run going forward. With the mandate to banks to divest by the end of this year, some stakeholders are worried that the penetration level might shrink further when the banks that are not maintaining a Holding Company, HoldCo, structure finally pulls out. However, the CFI has assured that whatever be the outcome of the banks divestment at the end of the day, the insurance industry will be better for it. It is in line with this determination of the National Insurance Commission, NAICOM, that the board and management of FBN Life Assurance Limited have mapped out strategies to change the face of insurance landscape in the country. FBN Life believes that the proposed First Bank Holding Company structure is a very pragmatic step that will enhance the separation of functions in the financial services sector and give a respectable identity to FBN Life. It would be recalled that after the close of the recapitalisation exercise in the insurance sector, NAICOM was hesitant to give operational licence to prospective insurance companies. Instead, the industry regulator encouraged mergers and acquisition. However, when FBN Life applied to NAICOM for an operational license, the request was granted, albeit, delayed. Hence, as the first company to receive license in Nigeria in over 10 years and coming into the industry at a time when many of the operating companies were going through enormous challenges, FBN Life had a stormy weather to contend with. Bearing this in mind, the management of the company anchored their strategy on doing things differently by giving to the customers bespoke products at least cost. Innovation was

•Mr.Val Ojumah the watchword. With the new excitement that the company brought into the industry, FBN Life products and services have been very

Our products have received very wide acceptance much to our surprise and delight; all our products have been designed with the consumers in mind and have all been made to address specific gaps in the existing product offerings in the market

well received. According to the Managing Director of the company, Mr. Val Ojumah, the old operators who seem to have been complacent have been awakened by their impetus while shareholders of the company have shown a lot of understanding even as the directors are in support of the strategies. Ojumah said, “Our products have received very wide acceptance much to our surprise and delight. All our products have been designed with the consumers in mind and have all been made to

•Mr. Fola Daniel

address specific gaps in the existing product offerings in the market. Some of our retail products that are selling the most in the market include Flexi Savings Plan, Flexi Cash flow, Flexi Education Plan, Extended Family Support Plan etc.” FBN Life is now able to bring insurance closer to potential customers using its growing team of financial advisers and the extensive network of First Bank of Nigeria. “We have extended our reach beyond Lagos with branches in Abuja and Port Harcourt and desks in many First Bank branches. We have held several seminars in Lagos and are extending various educational programmes to schools and associations across Nigeria to enhance the public understanding of insurance,” Ojumah said. “We planned certain standards from inception, setting for ourselves very high targets. At this time, I can honestly say, we are still not where we want to be in service delivery considering the time it has taken our software vendors to fully automate our processes. However, we are all certain that our service delivery will achieve the lofty heights we planned before end of 2012, but I dare to say that even as we are today, we are miles ahead of other competitors,” Ojumah said. Prompt claims payment is a central deliverable for insurance firms.FBN Life, according to Ojumah, has met and sometimes exceeded standard in claims payment from day one making claims payment within 24 hours. Because the industry is plagued with large scale outstanding premiums, Ojumah said that in life business, only group businesses are written on credit as most individual life policies require premiums to be paid in installments and in advance. “Outstanding premiums are challenges attributed to corporate clients and large group businesses. At FBN Life, we have been very selective of the businesses we write and the clients we accept. Therefore, outstanding premiums have not been a major challenge for us. During the first 12 months of our doing business, we collected over 98 per cent of our written premiums. We believe it does not make sense to carry receivables in our books,” Ojumah said.

32— Vanguard, MONDAY, OCTOBER 29, 2012

Insurance

Ghana insurance regulator admits constraints, challenges BY FAVOUR NNABUGWU n its effort to leverage the saturation of foreign companies in its markets, Ghana Insurance Commission has admitted that it has some limitations and challenges but is, however, undeterred in its efforts to achieve effective regulation like other countries. Speaking at the recently held International Association of Insurance Supervisors (IAIS 2012) conference in Washington, Mrs. Nyamikeh Kyiamah, Commissioner of Ghana’s National Insurance Commission, said developing

markets like Ghana face challenges that are far different from those seen in established markets. She said; “We would like to achieve the same level of effective regulation other countries have, but we also live in the real world where we have constraints on resources and are dealing with unique corporate governance issues.” Kyiamah at the conference held in Washington mid October 2012, with theme,

Foundations for Global Financial Strength, noted that developing markets simply do not have the financial resources to launch farreaching regulatory programmes that offer the same level of protection seen in the U.S. and EU markets. She said; “In Ghana, we have been able to launch a threeyear programme designed to educate our regulators on the questions they should be asking insurance executives and how to obtain the

information they need, but we have only been able to do that due to the largesse of some financial donors. That situation makes us very fortunate. However, the situation is very different in many other emerging markets.” Some months back, Kyiama had in line with the regulator’s determination to achieve effective regulation signed a Memorandum of Understanding, MoU, with Nigeria’s National Insurance

Commission. At the MoU signing, Kyiama said, “Our collective commitment and efforts to formalise the cooperation and collaborative framework between our two organisations have culminated in this signing ceremony. I believe that one of the ways to meet the challenges is to ensure that our regulatory and supervisory systems address the increasing presence in our markets of insurance groups and financial conglomerates, as well as financial convergence. For us as supervisors, there is the need therefore to cooperate to help ensure that our licensed entities are effectively supervised for the protection of insurance policyholders."

Go4Bunker launches Go4Bunker Cambodia to create new Jobs o4Bunker Denmark, an established and highly experienced Danish company has launched the Go4Bunker (Cambodia) Co. Ltd, (Go4BC). In a statement, the official launch was held on October 10, 2012 at the Hotel Combodiana, Phnom Penh, Cambodia. Go4Bunker Denmark, partners Cambodian companies to develop not only Cambodian offshore marine fuel oil business, but also related business in connection with Cambodian National Petroleum Authorities, CNPA, offshore exploration and local service which creates opportunities for development and countless jobs in various sectors. According to the statement, Go4BC will create a new industry for Cambodia in offshore/marine fuel oil supply and will create countless jobs for Cambodians ranging from entry level to senior management positions within the sector. The endeavour brings Danish quality in the offshore and downstream sectors with a goal to the transfer of know-how and technology. Go4BC is committed to educating Cambodian managers to meet the upcoming challenges within the newly created Cambodian oil & gas sector. The company will leverage its Danish education, field knowledge, educational programs and trainee exchange programs with the Danish oil & gas sector to assist in Cambodia to be positioned on the World map. “After 12 years developing the Go4Bunker concept in the global bunker industry and four years developing in the Gulf of Thailand (Thailand, Cambodia, Vietnam, Singapore), we are pleased to introduce the Go4Bunker Concept in the Cambodia Offshore Economic Zone/Gulf of Thailand” said Tommy Christensen, CEO of Go4Bunker(Cambodia) Co. Ltd. “Go4BC will leverage the Danish Go4Bunker technology and experience, to create an internationally known and reputed bunkering facility in Cambodia. This will mean many new jobs and new opportunities for Cambodians,” Christensen said.

C M Y K

Vanguard, MONDAY, OCTOBER 29, 2012 — 33

34 — Vanguard, MONDAY, OCTOBER 29, 2012

People in Business BY EBELE ORAKPO

ngineer Andrew Idowu Desmen is a mechanical engineer who runs an organisation called The Facilitators working in partnership with Taiwo Fadare of Project Bureau and Mr. Pelumi Aribisala. The Ibadan-based outfit is into training programmes and facilitations for moribund organisations. In this chat with Financial Vanguard recently, Idowu said they are in the business of reviving stagnant organisations, assisting farmers and scientists to get to the end-users directly. Excerpts: Upon graduation, Engr. Idowu started running training programmes for different groups of people. According to him, he has never worked for anyone. "I was on my own for almost 25 – 30 years, running training programmes, we train industrialists and their staff on what to do. “We run training programmes, facilitations for moribund organisations and those that are into production but have problems. We assist scientists who are developing products like biochemicals, bio-fertilisers, biogas, organic and inorganic fertilisers etc., to get to the end-user directly, not through government/ middlemen although we use the government sometimes like in Oyo State where we have the Oyo State Agricultural Development Programme and through them, we have lots of farmers working through their extension. That is basically what we do,” Idowu said. Restoring dying companies: “Any company that is down, we assist them to wake up. For instance, we look at a company that needs electricity, we relocate it to a place where there is electricity. We bring in those who are going to supply the raw materials; we bring in those who are going to buy the finished goods. “There is a company that owns a cassava processing plant in Ibadan. They have been down for over two years for lack of electricity and funds to buy raw materials, diesel, and marketing system. They have locally-manufactured equipment that can process cassava into flour, the type that flour mills need, but because of money, they could not operate. They had applied to the Agric Bank for loan. It went through a bank and that bank sat on the money. Just three-four months ago, that same bank was asking them to come and pay back the loan

Our business is reviving moribund companies -- ANDREW IDOWU because there is a new management now. So they asked him which money? The money they never got? "So we are trying to see how we can break that chain so that even if you have to go to the bank, it will be to go and deposit your money and if you want to go and get some money from the bank, it will be from what you deposited," he said. What we did: "We arranged and moved their equipment from where they were to a place where they can have at least 18 hours electricity supply, even if they are running a shift of 10 hours, it is okay for them." Not yet done, Idowu said his organisation went further to connect the company with farmers to supply them raw materials. Said he: "We connected them with farmers

Foundation along with some other well meaning philanthropists). Funding: "We are building that factory back and it is not costing the man a kobo, neither is it costing us any money. Someone is paying somewhere. There is somebody who wanted to process plantain into flour; he has already dropped some money for the processing so the money is what we are using to install the equipment in the new place. The machine can process plantain, cassava and even yam, into flour. Any tuber can be processed into flour. So when the processing starts, he will just bring his plantain and they will process for him with what he has deposited." Continuing, Idowu said; " "We are training some corps

I don’t own a factory but I just go into the factory, they process for me and I take it away, branded in my name; what the factory needs to do is to maintain the standard and quality of the products

who will bring in their cassava, the proximity is so close that they don’t need to travel 10 kilometers to get the cassava. We have already introduced marketers who will supply the cassava flour to the market. Fortunately, government is saying that vitamin A should be incorporated into flour and the rest, so there is vitamin A cassava that will flood the market in the next six months and it cannot serve more than two flour mills for one year. But as the year progresses, the cassava will flood the market because it is being processed by HarvestPlus in IITA, (HarvestPlus belongs to Bill and Melinda G a t e s

members so we went to NAFDAC to find out the requirements for someone who wants to do this business; they said such a person does not need to own a factory. They c a n produce in our factory and

*Engineer Andrew Idowu Desmen

just go to NAFDAC for marketing licence, they will have their own brand name. So you will have your brand name - AZ Poundo Yam for instance, I have my own, BC Cassava Flour. I don’t own a factory but I just go into the factory, they process for me and I take it away, branded in my name. What the factory needs to do is to maintain the standard and quality of the products. Once the quality is controlled, NAFDAC does not have any problem with it because they will be coming once in while to check and they will be going to the market to pick and assess what is being produced. So we introduce this to companies that are dying, that look moribund or already moribund. "It is a chain; you don’t have to run everything in your head. You have a bottling plant, you need to have a borehole but you don’t need to have the bottles, labels, or be the marketer. If I have a contract with Mr. B, to supply

him water, all I need to do is come to your factory where you are bottling, pay you and give you my label. You give me 200 cartons of water with my label, I pay y o u a n d g o . Yo u h a v e nothing to do with the marketing, I am the one that will now be selling at N50 or N30 to Mr. B and Mr. B can sell to his customers at whatever price he chooses. You are just collecting N10 for the bottling and because you will be bottling for more people and you have less overhead, you have less problem and less headache. These are the trainings we run and the things we do," he stated.

Vanguard, MONDAY, OCTOBER 29, 2012 — 35

Aviation

Nobody can hold aviation industry to ransom — Oduah By LAWANI MIKAIRU & DANIEL ETEGHE

inister of Aviation, Princess Stella Oduah has reiterated the need for all Nigerians to key into the transformation going on in the aviation industry while warning that nobody can hold the aviation industry to ransom. The Minister said this while speaking with aviation reporters after the commissioning of the remodelled General Aviation Terminal, GAT, Murtala Muhammed Airport, Lagos. Princess Oduah while fielding questions from reporters said the General Aviation Terminal, GAT, is not

part of the concession agreement entered into by the Federal Government with Bi-Courtney. It will be recalled that Bi-Courtney Services has maintained that GAT is part of the concession agreement it entered into with the government and threatened to sue to stop the commissioning and operation of the remodelled terminal. The Minister said; ‘’Well, it is a free country, we are all entitled to talk, for overridding public interest, this airport belongs to the Federal Republic of Nigeria, by extension the

Arik boss applauds FG on commissioning of GAT terminal M

anaging Director of Arik Airline, Mr. Chris Ndulue has applauded the Federal Government for its giant stride in commissioning the newly constructed General Aviation Terminal, GAT, Lagos as well as transforming 10 other airports to world class airports. Mr. Chris Ndulue made the commendation during the commissioning of GAT, Lagos. He noted that the commissioning of GAT was the beginning of good things to come in the aviation industry adding that when other airports are fully completed and commissioned, there would be a major turn around in the aviation industry. “Yes, this is the beginning of good things to come and as you know, about 11 airports are being remodelled, though this is the first one to be commissioned and you can imagine what it will look like if all those other ones are commissioned like this one. It is a major turn around for the aviation industry,” he stressed. Commenting on the kind of terminal built, Mr. Ndulue said; ”Well, it is a good thing that the terminal has been completed and commissioned today, and this is something that has taken a lot of time to come, so that is why we salute the courage of the Aviation Minister and the Federal Government of Nigeria for being able to achieve this, and you can see that this is a modern terminal by all standards because it is spacious enough and it is going to impact heavily on the services delivered by the airlines and on the comfort that the passengers enjoy while travelling. So this is a very good day for us as well as the ministry of aviation and FAAN. We are very happy about this and we want to also commend the Federal Government, the President and the Minister for achieving this and everybody who has been part of this, it is quite commendable.” Earlier, the Minister of Aviation, Princes Stella Odauh affirmed that after the commissioning of the GAT terminal in Lagos, the next airport to be commissioned will be that of Yola, then Benin and Kano, stressing that about seven to eight airports would be commissioned before the end of January 2013.

people of Nigeria and government on that note ensures that you have the airports that you have today. Many of us who use this airport before knew it was an eye-sore and if this airport had rightly belonged to as you call him, your neighbour, he would not have allowed the airport to have gone to that decay stage where we met it but as far as we are concerned,

the airport doesn’t belong to him, the airport belongs to FAAN again by extension, to the Federal Republic of Nigeria and to all of us and nobody can hold a nation to ransom, nobody can hold all of us and any of us to ransom, we must be progressive, we must let this country grow, we must do that which benefits our people.’’ The commissioning of the

remodelled terminal was done by the Secretary to the Federal Government, Senator Pius Ayim. Speaking during the commissioning, Senator Ayim said the Federal Government programme in the aviation sector is not limited to the remodelling of the airports and the reconstruction of new ones, but also covers all aspects of the industry including acquisition and distribution of modern equipment that will ensure safety in the Nigerian airspace, adequate weather reporting, comfort and security of passengers as well as the safety of aircraft.

36 — Vanguard, MONDAY, OCTOBER 29, 2012

LYING ABOUT FOOD:

Governments endanger millions of lives “Every government is run by liars and nothing they say should be believed”, I.F. Stone (VANGUARD BOOK OF QUOTATIONS p80). ast week, one of the officials of the National Emergency Management Agency, NEMA, the same agency which underestimated the flood disaster which had paralysed the nation, was reported to have said that there would be very little food crisis next year contrary to what people were predicting. He gave as his reason the fact that the Federal Government had “substantially increased the budget allocation to agriculture in the 2013 appropriations. One can only hope that the official is not as sloppy with his tasks in his area of presumed competence as he is with his knowledge of farming. Three facts account for this observation. First, this writer is not an official of NEMA or the Ministry of Agriculture. But, as early as May this year, a warning had appeared on these pages urging governments to take proactive steps to avert disasters which unprecedented flood would bring in its wake this year. When, indeed the flood occurred, governments and NEMA were caught pants down. Virtually, all the deaths which Nigeria suffered can be partially blamed on government officials. Their defence that people were

warned to evacuate were at best disingenuous or at worst cynical. Asking millions of people to relocate, without telling them where to, can only be regarded as a solution by those who “don’t give a damn.” It would never work and it did not work. Second, the Federal Government had been carpeted by the National Assembly, NASS, for failure to implement the 2012 budget. There was no Ministry cited as an exemption; certainly not the Ministry of Finance. In fact, that Ministry ranks among the worst performing of the lot – despite the razzmatazz of the Minister who had hoodwinked President Jonathan into

accepting cassava bread as some sort of innovation when indeed it is years away from reality. Meanwhile, flood in at least 24 states had carried away most of the cassava meant for harvest later this year and early next year. Whereas, professional farmers know that it will require at least six months to harvest cassava – if planted today – the armchair farmers of NEMA and the Ministry of Agriculture are boasting of “fast growing” varieties which will be distributed early next year to farmers. Early next year, unless the Ministry operates on another calendar, other than the universally accepted one, cannot be earlier than January 2013.

By then, two iron clad constraints will make planting, on a large scale, impossible. First, with more flood, black flood that is, expected in November, most farmlands will still be under water and will not be suitable for cultivation. So, that shifts the starting date until, perhaps, February. Even if the water recedes, farmers will be confronted with farms littered with all sorts of debris which must first be cleared before tilling can start. Some of the farms might have been polluted and might not be suitable for several months for planting. And, new farmlands are not easily acquired. At, any rate, farming might not even be the first priority of the rural people when they return home. Shelter might be the first item on the agenda. Obviously, the NEMA official who is giving the assurances is engaged in the worst form of wishful thinking, which ordinarily would be good as a joke but, which if taken as the basis for government policy, will lead to disastrous results. Third, the 2013 budget had not even been passed. So, the significant increase in budgetary allocations to agriculture exists, at least for now, only on paper. Most farmers will not receive a kobo from this pool of funds until late in the year. By then acute food scarcity would have been experienced by millions of people in Nigeria. And, if that is not enough reason to be pessimistic, the heavy rainfall which accounted for the floods this year will most certainly be repeated next year. Climate change which brought all these about will not again reverse itself next year. If

anything, all forecasts point to more of this year’s downpour. Whereas, farmers started planting this year ’s crops on arable land and with hope that the yield would be as good as last year ’s, they will start next year’s activities with less assurance. Most are already in debt, in any case, as a result of this year ’s catastrophe. Obtaining credit for next year will constitute another handicap which will slow down planting considerably. Let me close this column by reminding us of what was written on this page in September this year after my first tour of some affected states. What was written then remains true today. Government officials should stop lying to us. We are already in deep trouble. Lying can only make it worse. Nigeria’s story, this year, is easily told. On September 14, several newspapers reported floods in Enugu, Anambra, Taraba and Kogi. On September 17, it was Cameroon dam water destroying 49 communities in Cross River, destroying farms and homes. The same dam from our neighbour had inundated thousands of farms in Adamawa State and sent unknown numbers of people into early graves. Ogun, Oyo, Kano as well as 20 other states add to the list. Even the village idiot knows that when farmers and farms are swept away, severe food scarcity looms; malnutrition (in a nation whose people are generally malnourished) is a certainty. The question is “what are governments doing about the inevitable emergency?”…..

Business & Economy BY BABAJIDE KOMOLAFE

et foreign exchange infow into the Nigerian economy rose sharply by 80 per cent to $9.06 billion in August. The Central Bank of Nigeria (CBN) disclosed this in its economic report for the month released last week. The report stated, “Provisional data on aggregate foreign exchange flows through the economy indicated that total inflow was US$12.04 billion, representing an increase of 39.5 and 25.9 per cent above the levels at the end of the preceding month and the corresponding month of 2011, respectively. The increase in inflow was driven mainly by crude oil receipts,

Net forex inflow rises to $9bn in August non-oil exports and invisibles which rose by 24.6, 32.6 and 35.5 per cent, respectively. Inflow through the CBN accounted for 49.7 per cent of the total, while inflow from autonomous sources accounted for the balance of 50.3 per cent. “At US$4.53 billion, oil sector receipts increased by 24.5 per cent above the level in the preceding month and accounted for 37.6 per cent of the total inflow. On a Month–on–month basis, non-oil public sector inflow, a US$1.45 million, rose by 192.9 per cent and accounted for

12.0 per cent of the total inflow, while autonomous inflow, at US$6.06 billion, rose by 34.9 per cent and, accounted for 50.3 per cent of the total. “At US$2.98 billion, aggregate foreign exchange outflow from the economy fell by 6.4 per cent below the level in the preceding month. Thus, foreign exchange flows through the economy resulted in a net inflow of US$9.06 billion in the review month, compared with US$5.44 billion and US$5.21 billion in the preceding month and

the corresponding month of 2011, respectively. The outcome reflected, largely, a 7.0 per cent decline in the wDAS utilization of foreign exchange, during the month. “Foreign exchange inflow and outflow through the CBN in the month of August 2012 was US$5.98 billion and US$2.84 billion, respectively, resulting in a net inflow of US$3.14 billion, compared with the net inflow of US$1.13 billion recorded in July 2012. Relative to the level in the preceding month, inflow rose by 44.8 per cent, and was 37.3

per cent above the level in the corresponding period of 2011. The development was accounted for by the increase in receipts from its oil and non-oil components. “Conversely, outflow through the CBN fell by 5.5 and 32.9 per cent below the levels in the preceding month and the corresponding period of 2011, respectively. The development relative to the preceding month was attributed to the 7.0, 34.8 and 51.2 per cent, reduction in wDAS utilization, drawings on LC and external debt service, respectively.

Vanguard, MONDAY, OCTOBER 29, 2012 — 37

ICT BY PRINCE OSUAGWU

BRIEFS

TN Nigeria at the weekend cried out that the flood ravaging most parts of the country has also affected its operations, appealing to its customers and other key stakeholders for patience and understanding. The operator said that the most unfortunate effect of the flood to its activities is the disruption of its ongoing network modernisation and swap-out exercise. The company’s Corporate Services Executive, Mr Wale Goodluck said; “Although the various activities related to MTN’s Network Modernisation are progressing steadily, we regret, however, that the pace of work has been considerably challenged by the spate of insecurity coupled with the unprecedented flooding being experienced in many parts of the country.” The network optimisation exercise will affect over 4,000 base stations out of over 10, 000 across the country. Goodluck added that the task that MTN was undertaking was like building a new network, considering that it was seeking to replicate what it achieved over a six year period in just nine months. He explained that “several swap-outs have reached very advanced stages of

Ericsson debuts with mobile device browser

*At the recently concluded ITU World forum in Dubai, Vice-President Namadi Sambo, represented President Goodluck Jonathan. Photo shows from left: Vice-President Sambo, Secretary-General of ITU, Dr. Hamadoun Toure and Mr. Navin Kapila, Non-Executive Director, Telkom South Africa.

FLOOD DISASTER

MTN rues flood impact on network modernization completion. The entire network modernisation process is a very logisticintensive one and the problem of insecurity has seriously affected the pace of work in some parts of the country. In at least 13 states, flooding has created additional logistic impediments such that the pace of the ongoing network

modernisation efforts has slowed down”. On the challenges the network’s teeming subscribers have been going through in recent times, Goodluck acknowledged some disruption over the last few weeks saying; “We sincerely express our thanks to our customers for their

patience. As much as possible, we would stick to our original plan of carrying out the network procedures only at night, in order to minimize disruptions to services. We are doing everything possible, including doubling the work teams, to finalise the project as quickly as possible.”

Virtualization: ‘Only 3% of Nigerian businesses online are safe’

hief Architect of global IT security and risk management company, Wini Group, Mr Tim Pearson last week dropped an alarming hint that unless various Nigerian businesses littering the online space take issue of virtualisation seriously, they may likely suffer one form of malicious attack or the other. Pearson said that of all the Nigerian businesses, including the banks, online, only a paltry three per cent have full proof virtualization technology on their networks. He said that the unfortunate situation gives hackers easy access to deploy distributed denial of service (DDOS) attacks on the remaining 97 per cent which can cripple the economy especially the banking system. Pearson, noted that not only are these 97 percent businesses vulnerable, they are also losing 50 per cent of their revenues due to absence of virtualization technology. He said such businesses would particularly need outside help to be able to bring about some change that can move them up in today’s

economy. According to him, “ right now, only about three per cent of companies here are virtualised, they are wasting a lot of money. Virtualisation technology can make them more secure than ever with physical technology. “Currently at Wini Group, we are consulting with many banks, businesses and also providing educational

infrastructures, getting the best teachers to train the students who will train the masses very efficiently. Nigeria’s challenge to this last mile and it is going to depend on Oxygen Network to be able to provide the last mile. “However, there are terabytes of bandwidths lying at the seashore courtesy of Main One Cable, Glo 1 and

WAC S. It is like water everywhere yet there is no drop to drink because of last mile problem. If there were, we could save over 50 per cent in human capital, electrical resources and move to the cloud,” he noted. Wini Group, is a global IT security, risk management and financial technology company made up of the top 25 global IT security firms.

ricsson Research has announces the introduction of world’s first WebRTC-enabled browser for mobile devices. Known primarily as Bowser, WebRTC is based on work ongoing within the World Wide Web Consortium and the Internet Engineering Task Force to develop a standard, interoperable approach to real-time communication using audio and video in Web browsers without the need for any plug-ins. Kristofer Dovstam, Master Researcher at Ericsson Research, said that “ we believe WebRTC is a very important part of future communication solutions in our industry, and are excited to provide developers with the first version of our experimental WebRTCenabled browser.” Ericsson Research is heavily involved in the standardization of WebRTC, and has been developing prototype implementations of the evolving standard for over two years. With Bowser, developers can finally start experimenting with real-time audio and video functionality in mobile web applications. Ericsson also has solutions to let WebRTC enabled browsers easily connect to IMS based communication networks. Ericsson said that Bowser is available today as a free download on different mobile application stores.

Latest air freight statistics show positive African growth

he African continent continues to outperform its peers, posting impressive growth statistics in the recent Cargo Market Analysis for the third quarter report by the International Air Transport Association (IATA). It was also reported by the association that African airlines transporting freight in the region witnessed a 10.2% increase in demand in August, continuing 2012’s positive growth trend. According to Charles Brewer, Managing Director of DHL Express Sub-Saharan Africa, this positive growth

bodes well for business in the region as it translates into economic growth for the continent. Brewer says that the increasing freight volumes in the region can be linked to improved business and consumer confidence as airline industry performance tracks developments in the global economy. “It is extremely positive that emerging markets such as those in Africa continue to outpace the Western economies and, set against a backdrop of continued global economic uncertainty, job

stagnation, a very challenging European environment and a global debt crisis, this shows the continued and increasing importance of Africa. He says that the growth in both cargo and freight volumes could be linked to the fact that many businesses, both locally and globally, are looking to Africa for expansion and with the new discoveries of gas and oil fields in Southern and Central Africa, coupled with the technology and healthcare boom, we expect regional trade expansion to continue to improve.

The IATA Cargo Market Analysis report pointed to an increase in the number of air freight routes between Africa and the Middle East, with the highest rate of 17.9% recorded in February. In contrast, the route between Europe and the Middle East only showed 1.4% growth over the same period. The report noted that during the first quarter of the year, the revenue earned from cargo leaving Africa was $45.8 million, with inbound revenues totaling $333.7 million.

38 — Vanguard, MONDAY, OCTOBER 29, 2012

C M Y K

Vanguard, MONDAY, OCTOBER 29, 2012 — 39

Advertising, Media & Marketing

Mafiana nominated for AfriQan top job

BRIEF Four-year-old orphan emerges beauty pageant winner

Stories by PRINCEWILL EKWUJURU

ATIONAL Universities Commission, NUC, has nominated Professor Chiedu Mafiana to be President and Chairman of the Executive Board, African Quality Assurance Network, AfriQan), on behalf of the Commission. Executive Secretary of NUC, Professor Julius A. Okojie, who announced the nomination of Mafiana, said the commission was chosen as President of AfriQan and Chair of the Executive Board, for the next two years, at the 3rd General Conference of AfriQan, held in Abidjan, Cote d’Ivoire. The new President, and Professor of Parasitology, Mafiana was born on January 01, 1959 in Kano, and hails from UbuluOkiti, Delta State. He had his tertiary education at the University of Lagos, where he obtained a Bachelor and Master of Science degrees in Zoology in 1980 and 1984 respectively. Mafiana also obtained his Doctorate degree (PhD) Zoology, with specialisation in Parasitology, from the University of Benin in 1988. A consummate educationist and Researcher, he began his academic career in October 1989 at the University of Agriculture, Abeokuta, UNAAB, and rose through the ranks, through hard work, to become a Professor in October 2002. He served the University and the Nigerian University System (NUS), in several capacities, such as Head of Department of Biological Sciences, Director, Equipment Maintenance Centre; Director, Academic Planning, and Chairman/Member of many committees, including Committees of Council and Senate. As Director, Academic Planning, he was responsible for the successful implementation of the university’s Academic Brief and maintenance of NUC’s Minimum Academic Standards. Professor Mafiana is a Trustee and Fellow of the Parasitology and Public Health Society of Nigeria. Mafiana is a founding member of AfriQAN, and was the Executive member, representing West Africa on the Board (2010-12). C M Y K

Oni named National Technology Officer of Microsoft Nigeria M

ICROSFT Ni geria has appointed Mr. Olayinka Oni as the company’s National Technology Officer. Olayinka comes with 15 years experience in Information Technology working in Consulting and the banking sector. His most recent experience was CIO/GM IT & Operations at Wema Bank Plc, a role in which he successfully provided strategic direction for banking operations, and ensured that the IT function and capabilities was tightly aligned to the corporate goals and objectives of the company. Oni also worked with First City Monument Bank (FCMB) Plc as CIO/Vice-President Information Technology; and before then was with Accenture (Global Firm of Management Consulting) as an Experienced Manager in the Nigerian practice working across industries like Banking, Manufacturing and Government; and Access Bank Nigeria Plc., working across the Operations, Technology Support and Business Development functions. Commenting on the appointment, the Country Manager, Microsoft

Nigeria said, “I have personally worked with Olayinka for many years and his impact in the IT industry has been profound. I look forward to seeing him growing that influence even further with Microsoft”. Olayinka holds a Bachelor’s degree in Agriculture Economics from the University of Ilorin. He is an Honorary Senior

Member of the Chartered Institute of Bankers of Nigeria (HCIB), a Certified IT Business Manager, a Certified Disaster Recovery Professional, a Chartered IT Professional (CITP) and a Fellow of The Chartered Institute for IT , FBSC, and Certified in the Governance of Enterprise IT, CGEIT.

PRCAN elects new officers P

UBLIC Relations Consult ants Association of Nigeria, PRCAN, has elected new officers to run the affairs of the Association for the next two years. Mr. Chido Nwakanma, Managing Director of Blueflower Limited was elected President. The new executive include Mr. John Ehiguese, Managing Director of Mediacraft Associates as Vice President, Mr. Muyiwa Akintunde, Managing Director, Leap Communications, General Secretary; Mr. Tola Odusote, CMC Connect, Assistant General Secretary; and Mr. Israel Jaiye Opayemi, Managing Director, Chain Reactions Limited, Publicity Secretary. The two past presidents, Mr. Emeka Maduegbuna, managing Di-

rector, Corporate &Financial (C&F) and Dr. Phil Osagie, Managing Director, JSP Communications are ex-officio members of the Executive Committee. The executive emerged at the second Annual General Meeting of PRCAN held at Hotel 1960 Eagles Park in Ikeja. Nigerian Institute of Public Relations (NIPR) Registrar Dr. Steve Adebayo observed the elections. The newly elected officers have promised to deliver a “Bigger and better Association that articulates and serves the overall interest of its members in key areas of advocacy, professionalism and support for growth of PR business”. Speaking on behalf of others, Nwakanma articulated the vision of the team at a post-

four- year old Orphan; Chidera Nwosu has emerged winner of the 2012 beauty pageant competition of the Helpline Foundation, an NGO involved in supporting widows and orphans in the FCT. She was crowned the Helpline Foundation Queen and would be the face of the Foundation in the FCT until 2013. Her crown qualifies her to some benefits from Helpline Foundation which includes scholarship through her primary education at the expense of the Helpline Foundation. The emergence of Chidera as the face of Helpline foundation was the climax of a twoday event at the NGO’s Charity Shop in Kuje and the Millennium Park. Food a clothing materials were distributed to over 300 widows who attended the event with their children which many of them described as a blessings to their lives as the materials and food items would serve them for some time.

Firm nominates Zenith, Flour Mills, others for Power project award.

ROJECT Light-Up Ni geria has nominated Zenith Bank, Flour Mills of Nigeria and others State governors for Nigeria’s first annual Light Up Awards 2012 for the their contribution towards electrifying the streets and communities in the country. The annual Light Up Awards is designed to recognize and encourage public office holders, corporate entities and private citizens who are contributing to a Nigeria of steady electricity power supply and well lit up streets at night According to the national cocoordinator, Project Light-Up Nigeria, Mr Frank Aja Ukpabi, “steady electricity power supply leads to improve that economy, reduces poverty and well lit up streets at night contributes to crime reduction in a society. Nigeria’s status of being the most populous nation in Africa makes it a prime low-cost source destination and a serious competition for china, only if there is steady electricity power supply.”

40— Vanguard, MONDAY, OCTOBER 29, 2012

0817 002 3569

DEFICITS WITH BENCHMARK SURPLUSES: PROFLIGACY OR SABOTAGE? T

he debate on the appropriate crude oil price benchmark for the 2013 budget has lately attracted numerous interests in the National Assembly as well as in the media. The government’s Economic Management Team (EMT) has stoutly defended the adoption of $75/barrel as proposed benchmark for crude oil sales. Indeed, the Finance Minister and Coordinating Minister for the Economy, Dr. Ngozi OkonjoIweala and Central Bank Governor, Lamido Sanusi, have insisted that the economy will be ‘hurt’ if the budget benchmark is pitched above $75/barrel. Conversely, the legislature is in accord that $75/barrel is unduly conservative, and have instead, recommended $78 $80/barrel with crude output benchmark of 2.53m barrels/ day. The Federal Executive’s insistence on $75/barrel is obviously predicated on fear that a higher budget benchmark, if realised, would instigate an unhealthy cash surplus. Such increasing excess liquidity, it is argued, will fuel inflation with the inevitable ultimate burden of bloating government debt arising from the extremely high cost of CBN’s sale of treasury bills to reduce the excess cash. The EMT appears worried that such fortuitous increase in actual revenue would

Benchmark surplus revenue were first warehoused with little or no attendant yield, in an unconstitutional so-called excess crude account; part of these funds were designated as part of another illegal account called ‘sovereign wealth fund’

result in a cash surfeit, when CBN substitutes naira allocations for the dollar income; the resultant liquidity flush (cash surplus) would further fuel the already destabilising double-digit inflation rate in the system and deepen poverty nationwide. In order to avert such inflationary threat, CBN would be forced to continue its excess cash reduction process by traditionally crowding out the real sector from bank credits with its mouthwatering double-digit interest rates for government’s risk-free borrowings, for funds, which are inevitably kept idle in vaults or other similar accounting records! Regrettably, in spite of decades’ long burden of excess liquidity and CBN’s debt-inducing reflex cash mop-ups, inflation has remained largely untamed at between 10 and 15%!

The substance of the lawmakers’ argument, however, is simply that it does not make economic sense to deliberately understate crude price and output benchmarks, and create deceptive ‘ghost’ deficits for fear of excess liquidity and inflation. The National Assembly maintains that such deliberate understatements of benchmarks have encouraged the enactment of huge annual deficits of over N500bn in federal budgets in recent years. Curiously, however, actual crude prices and outputs have rarely fallen below budget benchmarks in so many years. Indeed, 2012 crude oil price and output have significantly exceeded the budget benchmarks of $72/barrel and 2.48 million barrels/day. In reality, crude oil prices have hovered between 90 and $115 per barrel, while the Oil Minister has often gleefully reported

outputs in excess of budget benchmarks! Inexplicably, in spite of these fortuitous benign revenue inflows, President Jonathan has alluded to a whooping deficit of N744bn in his review of the existing 2012 budget. Instructively, about N700bn has already been borrowed by the Debt Management Office through its high yielding (15 – 17%) bond sales this year, presumably to cover the 2012 ‘ghost’ deficit! It is amazing that the additional revenue brought about by higher than benchmark crude and output receipts was never harnessed to offset the serial deficits over the years. Inexplicably, benchmark surplus revenue were first warehoused with little or no attendant yield, in an unconstitutional so-called excess crude account; subsequently, part of these funds were designated as part of another illegal account called ‘sovereign wealth fund’. In spite of billions of dollars shared from these accounts this year, over $15bn still stands as credit balance. Inexplicably, Debt Management (read as Debt Creation) Office, which is responsible for putting a sustainable debt management and repayment structure in place, has apparently not shown such degree of responsibility. In this event, the 2013 budget proposal includes a N100bn sinking fund annually for the eventual repayment of over

N6tn direct government debt. Interestingly, at this rate of repayment, the debt may ultimately be liquidated in about 60 years from now by the next generation! Paradoxically, of course, such level of debt would have been avoided in the first place, if less-conservative crude benchmarks were adopted for revenue projections in our annual budgets; the illusion of bourgeoning revenue surplus would also have been averted. Alternatively, the debts would have been avoided if the ghost deficits were ultimately funded from actual surpluses above conservative revenue projections. It smacks of fiscal rascality to have consumed these surpluses and still borrow at atrocious rates of interest to offset the ‘ghost’ deficits. Incidentally, if budget benchmarks ultimately turn out to be overstated, the credit market would still be available, anyway, to accommodate any necessary borrowing to cover the shortfall! Thus, one may be tempted to see the fervent pleas of members of government’s economic team for understated budget benchmark as insincere and unpatriotic. Sadly, we may, once again, be confronted with the choice of another debt exit payment. SAVE THE NAIRA, SAVE NIGERIANS!!

Business Economy

Economic disputes are root of nation’s woes — Gbenga Daniel BY OKEY NDIRIBE

isagreements over economic issues have been identified as the root of most of the disputes plaguing the nation today. This view was expressed, recently, in Abuja by the immediate past Governor of Ogun State, Otunba Gbenga Daniel, in his remarks after he was decorated as a fellow of the Institute of Chartered Economists of Nigeria (ICEN). Otunba Daniel further stated that the major reason why Nigeria had not made C M Y K

much progress since attaining political independence 52 years ago was because the nation’s economy has not been properly and professionally managed, adding that until “ we begin to professionally manage our resources as a nation, it would never go round.” He further observed that even if it would be possible to share the N4.9 trillion being the nation’s 2013 proposed budget revenue individually to all Nigerians, reasonable economic progress would not be achieved by such a gesture. He continued: “If contracts

for public sector projects are awarded without adequate evaluation, then the nation cannot achieve economic advancement.” The former Ogun State chief executive stated that he was not impressed with the activities of accountants who colluded with management personnel of troubled banks to doctor their books, adding that their reputation became dented after the true financial state of these financial institutions became exposed. Otunba Daniel posed the question: “Why don’t we have professionals among those who manage the nation’s economy?”

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

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

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