APRIL 8, 2013
NPA expects 87 ships at ports T
HE Nigerian Ports Authority, NPA, has said that 87 ships would sail into the nation’s ports between April 5th and April 30. The NPA disclosed this in its daily report “Shipping Position” released in Lagos weekend. “The expected ships will be laden with used and new vehicles, frozen fish, base oil, bulk urea, general cargo, containers, and petroleum products. Other ships will arrive with steel, bulk corn, and crude palm oil“ it said. NPA said that the ships would berth at ENL Consortium, Josepdam, Tin-Can Island Container Terminal, Five Star Logistics, Apapa Bulk Terminal and APM Terminals. The other terminals are Greenview Development Nigeria, Ibafon Terminal and Josep Dam. The NPA also disclosed that 11 ships laden with petroleum products were waiting to berth at various ports in Lagos. It said that four other ships, laden with bulk malt, bulk wheat, and fish, were waiting to berth at some other designated ports.
140.45
0.95
2,130.00
-11.00
17.69
0.02
104.23 -2.11 92.66
-0.60
CURRENCY BUYING CENTRAL DOLLAR 154.74 POUNDS 235.6535 EURO 200.1252 FRANC 164.547 YEN 1.6082 CFA 0.2836 WAUA 231.2676 RENMINBI 24.9491 RIYA 41.2618 KRONA 26.8399 SDR 238.1139
155.24 236.415 200.7719 165.0787 1.6134 0.2936 232.0149 25.0302 41.3951 26.9266 238.8833
FROM LEFT: CEO/Consultant, Peculiar People Management, Ghandi Olaoye, Head of Service, Ebonyi State, Chief (Mrs.) Ugo Nnachi, Programme facilitator, Dr. Myles Munroe from the Bahamas and Permanent Secretary, Ministry of Land and Survey, Ebonyi State, Mrs. Ann Agom Eze, at a retreat for top Government Functionaries held in Abakaliki
Recapitalisation of mortgage banks:
Stakeholders differ on CBN’s extension of deadline By YINKA KOLAWOLE, with agency reports
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HE recent extension of the deadline by the Central Bank of Nigeria (CBN), from April 30 to December 31, 2013, for primary mortgage banks (PMBs) in Nigeria to shore up their shareholders’ funds is
eliciting mixed reactions from stakeholders. CBN extended the deadline by eight months to afford all affected PMBs sufficient time to exercise any of the options for capital raising, business combination and downscaling. The move, according to the apex bank, is to allow more time for operators to raise fresh capital, and engage in business com-
SELLING 155.74 237.1764 201.4185 165.6104 1.6186 0.3036 232.7622 25.1113 41.5285 27.0133 239.6527
CBN Exchange rate as at 05/04/2013
Operator proffers panacea for growth of microfinance banks in rural areas
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HAIRMAN, Ikeja Branch of Na tional Association of Microfinance Banks, (NAMB), Mr Dele Oyekanmi, has advised rural dwellers to form cooperatives to establish microfinance banks. Oyekanmi said
in Lagos that such initiative would help to address the shortage of microfinance banks in the country. “The best way to have microfinance
Continues on page 18
bination options towards meeting the capital requirements for each category and for rationalising the existing branches/cash centres, among others, where necessary. Mortgage Banking Association of Nigeria (MBAN), the umbrella body of mortgage banks in Nigeria, said although most of its members have been gearing up to meet the initial deadline, the move is a welcome development. Executive Secretary of MBAN, Mr. Kayode Omotosho, told Vanguard that the extension will enable some of their members not based in Lagos more time to conclude their consolidation arrangements. “The statement credited to our former President, Mr. Abimbola Olayinka, in a recent interview that sufficient time had been given for PMBs to recapitalise and that
Continues on page 18
18 — Vanguard, MONDAY, APRIL 8, 2013
Cover Story
The Basic Guide to Starting Your Business Part 5
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L-R: Dr. Lawrence Sutton, Licensed Psychologist; Dr. Shirley Marks, MD, Psychiatrist, Texas, USA; Dr. Anna Lamikanra Executive Director, Blazing Trails International Center and Mrs. Lola Odedina, General Manager & Head, Corporate Communications and External Affairs, GTBank at a press briefing on the 3rd GTBank sponsored Annual Autism Awareness Campaign week held recently in Lagos.
Recapitalisation of mortgage banks:
Stakeholders differ on CBN’s extension of deadline Continued from page 17 MBAN was not expecting an extension reflects the view of the association. However, we are in support of any move that will enable as many of our members as possible to meet the capital requirements,” he stated. Omotosho noted that operators are anticipating a smooth take off of the Nigerian Mortgage Refinance Corporation expected to come onboard in the third quarter of this year, adding that it is the more reason why more PMBs should be sufficiently capitalised to achieve better impact on the mortgage sector.
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sked in an earlier inter view with Vanguard if there was any need for extension of deadline by the CBN, Olayinka had stated: “We’ve been on this for the past two, three years, so they’ve given the mortgage sector enough time for us to know what to do. And a lot of my colleagues are either going through mergers right now to meet up with the requirement with those who have scaled through. Some will like to stay as a State mortgage bank which is at N2.5 billion. So I strongly believe that between March and April, we would have sorted these out. So we will not talk about extension, it’s a done deal and we need to be well capitalised to move the sector forward. All things being equal, at the end of the day,
we’ll probably just have maybe about 25 mortgage banks from the current number in excess of 70. We will have about 25 banks that will be well capitalised.” An operator who spoke with Vanguard on condition of anonymity said the extension may not lead to any significant change in the sector between now and December, adding that most of those who were not poised to meet the April deadline are not likely to meet with the new date. He however conceded that it would afford a few players in the sector an opportunity for more time to look for investors who may be interested in their banks. But he noted that the extension may not provide the needed impetus to drive a strong mortgage sector desired by Nigerians, if other necessary factors are not in place.
Managing Director of Trans Atlantic Mortgages Limited, Mr. Preye Ogriki, said the extension may not be beneficial on the long run if germane issues affecting the sector are not properly addressed. “The extension is good and the CBN needs to be commended for that, but in my own opinion, there are issues in the sector that needed to be sorted out if we are serious about building a strong mortgage sector,” he said. According to him, the major problem facing the sector is liquidity strain, even as he added that the only solution to it is for the Federal Government to create an intervention fund of N250 billion on an annual basis which will serve as a pool of fund that mortgage banks will draw from to be able to meet the housing Continues on page 19
Operator proffers panacea for growth of microfinance banks in rural areas Continued from page 17 banks in the rural areas is for community dwellers to pool resources together and apply for a licence to open a bank. Such move will bring development to our rural communities. It will benefit traders, farmers and even the youths in such communities by way of employment,” he said. Oyekanmi said that microfinance banks in rural areas had more potential to be prof-
itable as a large percentage of the target customers lived in these communities. The NAMB official, however, said that the poor state of public infrastructure was affecting the development of microfinance banks in the rural areas. “The roads are bad; poor electricity supply and many more infrastructure lags constitute major challenges to the growth of this sub-sector,” he said.
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omething that keeps com ing up about entrepreneurs is their ability to see opportunities and make the most of it, not minding the risks they will undertake. Entrepreneurs are generally in competition with themselves and believe that success or failure lies within their personal control or influence. So it is very important for you, when starting a business, to be sure that you can identify opportunities, make the most of them
and have the wherewithal to thrive even in the midst of risks and unforeseen circumstances and that is why carrying out a self analysis cannot be over emphasized. Entrepreneurs are leaders, prime movers, authors, pacesetters, investors and risk bearers. They are usually pioneers who strategize and formulate the rules for the general interest of the enterprise for others to follow. An entrepreneur conceives an idea and brings it to life through systematic and well-articulated planning, driven by the passion and the need to
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WHO IS AN ENTREPRENEUR? here are many differing views on what makes someone an entrepreneur and what an entrepreneurial venture is. The term itself is believed to have originated from French, coined by a French economist, Jean-Baptiste Say, in about 1800, who defined an entrepreneur as “one who undertakes an enterprise , especially a contractor, acting as intermediary between capital and labour”. But it was first defined in English by the Irish economist Richard Cantillon, as” a term applied to the type of personality who is willing to take upon herself or himself a new venture or enterprise and accepts full responsibility for the outcome”. The definition of entrepreneur is not limited, as various writers and world renowned entrepreneurs have given it various meanings. For instance, one of the great motivational speakers and writers of our time Robert Kiyosaki, in his book “ Retire Young, Retire Rich” defined an entrepreneur as “someone that sees an opportunity, puts together a team, and builds a business that profit from the opportunity”. As you can already see, the word entrepreneur is inexhaustible. According to the Merriam-Webster online an entrepreneur is “one who organizes, manages, and assumes the risks of a business or enterprise”. A more detailed definition given by Daile Tucker, an entrepreneur herself, who in her own words describes an entrepreneur as “a person who has decided to take control of his future and become self employed whether by creating his own unique business or working as a member of a team”.
Entrepreneurs are generally in competition with themselves and believe that success or failure lies within their personal control or influence
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achieve uncommon things. An entrepreneur not only assumes responsibility and the risk for a business operation with the expectation of making a profit, the entrepreneur also generally decides on the product, acquires the facilities, and brings together the labour force, the capital and production materials. Simply put entrepreneurs are people who choose to see positivity where negativity abounds. Bear it in mind, however, that if a business succeeds, the entrepreneur reaps the reward of profits; on the other hand, if it fails, he or she takes the loss. Successful entrepreneurs are not perfect people but are brilliant, productive, and articulate; it takes both the heart and the head to successfully run an entrepreneurship. Also note that an entrepreneur is an inspirer, a motivator, a coach, a great listener, attentive, consistent and enthusiastic. A lot of people go into business for the sole reason of making money; this is not a good idea.
Vanguard, MONDAY, APRIL 8, 2013 — 19
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n recent times, there has been growing concern over the genuineness of Chinese involvement in Africa and Nigeria in particular. The concern is borne out of the fact that China in its appetite for oil, in particular, to fuel its growing economy, is busy buying oil blocks and mineral resources from existing investments at any cost. The argument is that most Chinese companies are not ready to go into exploration which is very risky and capital-intensive. As a result, many believe that this will not lead to the ultimate development of the continent as well as generate the much needed employment and technological transfer for the continent's growing population. Truly, if China on continuous basis buys from existing facilities, when the proven reserves of crude oil in the country are exhausted, what happens to the unproven reserves? Who then will invest in it? But the widely accepted opinion about the aggressiveness of Chinese investment in Africa is not necessarily supported by available data. All in all, Africa does not account for a big proportion of China’s global activities. According to UNCTAD Statistics, Chinese investment in Africa reached its height in 2008 when Africa accounted for almost 10 per cent of its total global Foreign Direct Investment from the 4.3 per cent in 2004. But in the following year, the figure fell roughly four-fold and in 2010, the number was almost negligible at 0.3 per cent. A country by country breakdown of Chinese investment in the African continent according to the Heritage Foundation (China Global Investment Tracker Interactive, January 2012) shows that in 2012, China’s investment in Africa focused primarily on five countries – Nigeria, Algeria, South Africa, Democratic Republic of Congo and Niger. The breakdown by country showed that Nigeria has had $15.42 billion net investment from China, Algeria $9.23 billion, South Africa $6.64 billion; Democratic Republic of Congo $6.55, Niger $5.26
How real are Chinese investments in Nigeria? billion, Egypt $3.27 billion, Libya $2.68 billion, Zambia $2.49 billion, Sudan $2.210 billion, Ethiopia $1.9. In all of these, among China’s major investors in Africa are CNOOC (Nigeria), Sinopec (Angola), China Railways Construction (Nigeria), Sinomach (Gabon), CITIC and Chalco (Egypt), China Nonferrous (Zambia), Minsheng Bank (South Africa), SinoSteel (Zimbabwe), CNPC (Niger and Chad), and China Metallurgical and Sinohydro (DRC). All these enterprises invested in Africa actively in the period 2005–2008, but in 2009– 2010, their presence waned and in 2011, the only big Chinese investor in Africa was the China Railways Materials Commercial Corporation in Sierra Leone with total investment of $260 million. Nigeria in entering into contractual agreement with these new found friends called Chinese enterprises, must ensure that all the terms of the deals are open and transparent. Nigerians, in particular must be carried along to avoid unnecessary suspicion. At the moment, the way most of the transactions are entered into do not suggest that the contracts are open, transparent and with good intentions. When the Nigerian
government did the last oil bid round, most of the Chinese and other Asian companies promised out of the box investment in other sectors of the economy, but none has been fulfilled. Some of those mouth-watering promises will never be met because the companies involved have long
important. Trade between China and African countries has surged by an average annual 30 per cent for much of the past decade, driven by China’s appetite for oil and minerals, and its sales of clothes, cars, telecommunications and other goods to African
left the shores of Nigeria. Strategic thinking requires that those involved in negotiating deals with the Chinese have at the back of their minds the ultimate goal of a sustainable economy for Nigeria. Of course, this is not to say that business deals and investments in mines and oil fields by the Chinese are not
markets. Investments in mineral or oil fields must go beyond simply buying up natural resources. Nigeria in its attempt to attract investment from China must note what is happening around the continent and not confine its investment drive with China to oil and gas. China’s largest bank, ICBC at the moment owns 20 per
cent of South Africa’s Standard Bank. Shenzhenbased Huawei Technologies, China’s biggest telecoms equipment maker, is pushing south from its established stamping ground in North Africa. Peer ZTE Corp. is another Chinese player growing in importance in Africa. None of these companies have signified any intention to set up in Nigeria; they are only selling finished products. All the companies that are investing in Africa are making a lot of money. China knows too well that with developed markets either saturated or entry requirements too high, its firms see Africa as a great untapped market and it is exploiting to its advantage. Based on perceived benefits from China, the Federal Government last month called for enhanced economic ties with the Chinese Government. The Minister of Foreign Affairs, Ambassador Olugbenga Ashiru, made the call at a meeting with Mr Zhong Jianhua, Special Representative, African Affairs for China, in Abuja. Briefing newsmen after a closed-door meeting between both parties, Ashiru said that Chinese government’s investment in key sectors would facilitate economic growth. He said that both parties had also agreed to enhance relations at the international level. The developing relationship between Nigeria and China should go beyond rhetoric, but based on transparent deals open for all to see; not just in oil blocks but across all sectors of the economy. That is the only way Nigeria can truly benefit from China.
Business & Economy Continued from page 18 needs of Nigerians. “Intervention fund is the key to the development of this sector. Though, the Federal Government and CBN are currently planning a mortgage refinancing company, but what will make this work is if there is a concerted effort on the part of the Federal Government to make cheap funds constantly available. “What Nigerians need to know is that even if we have over 20 mortgage banks with N5 billion capital, it may not be able to solve the problem, because that is just a drop in the
Recapitalisation of mortgage banks: Stakeholders differ on CBN’s extension of deadline ocean of what is needed to reduce the housing stock deficit, put variously at between 16 and 17 billion units. We, as operators, need to look for ways of providing financial services to our customers,” he stated. In a circular signed by Director, Other Financial Institutions Supervision Department, CBN, Mr Olufemi Fabamwo, to all directors and shareholders of primary mortgage banks titled “Extension
of the Deadline for Compliance with the Revised Guidelines for Primary Mortgage Banks”, the CBN stated: “Further to the CBN Circulars Ref: FPR/DIR/ CIR/GEN/01/021 of February 15, 2012 and OFI/DIR/CIR/ GEN/01/08 of December 14, 2012 titled “Circular to Primary Mortgage Banks on the Revised Guidelines for Primary Mortgage Banks”, this is to convey the decision of the Management of the Central Bank of Nigeria to extend the
deadline for compliance with the Revised Guidelines for Primary Mortgage Banks (PMBs) from April 30, 2013, to December 31, 2013. This is to afford all affected PMBs sufficient time to exercise any of the options for capital raising, business combination and downscaling highlighted in th the earlier circular dated 14 December, 2012. “All PMBs are once again strongly advised to conduct due diligence and seek pro-
fessional advice in exercising any of the options and to conclude the processes before the new deadline in order to allow sufficient time for capital verification and necessary regulatory approvals. All directors, particularly the Managing Directors/CEOs of all PMBs are again reminded that prior approval of the CBN is required before the disposal of assets of the bank, as they will be held jointly and severally liable for any asset stripping.”
20 — Vanguard, MONDAY, APRIL 8, 2013
Business & Economy BRIEF Global X lists first Nigeria stock ETF in New York
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LOBAL X Funds has list ed the first exchange traded fund (ETF) on the New York Stock Exchange tracking Nigerian stocks, the head of the fund said on Friday, a move which will enable U.S. investors to buy high growth Nigerian shares at home. Nigeria is growing in popularity as an investment destination, offering the promise of 7 percent economic growth and a consumer market of around 170 million people, economists say. Its stock market rose 35 percent in 2012, making it the second best performer in Africa and one of the best in the world. The index is up 22 percent so far this year and analysts expect gains to continue as strong corporate earnings trickle in. The Nigeria ETF starts at $1.5 million, the minimum allowed for a New York listed ETF, but could quickly multiply if demand is strong, Global X Funds’ chief executive Bruno del Ama told Reuters by telephone. A fund for Colombian stocks launched three years ago started with the same amount and is now worth $200 million, he said. “We look for markets that we think will do better than others ... and provide a source of long term growth,” he said, adding that Global X Funds invested only in the largest and most liquid firms to create the Nigeria ETF. “There are a massive amount of U.S. investors looking to get exposure to Nigeria.” The Nigerian fund has 100,000 shares. Global X holds $1.8 billion in assets across 35 ETFs. The Nigeria ETF was trading at $15.7 per share on Friday, Ama said. Nigerian Stock Exchange data in January showed that offshore investors accounted for 60 percent of the total 1.22 trillion naira ($7.8 bln) trades executed in the first eleven months of last year on the local bourse. Ama said the ETF had started with 28 Nigerian firms or foreign firms with a significant portion of profits coming from Nigeria, even if not locally listed. The fund has an average price to earnings ratio of 16.36 percent, he said. Banks and energy firms make up 65 percent of the fund, Ama said, including firms such as Dangote Cement, Oando and Nestle. The Nigerian subsidiary of Standard Bank is the local custodian for the fund. C M Y K
(L-R): Mr. Femi Ajayi, Director General, National Drugs Law Enforcement Agency (NDLEA); Chief Sonny Odogwu; Dr. Ausbeth Ajagu, President, AES Excellence Club Governing Council; Barr. Emeka Wogu, Minister of Labour and Productivity; Dr. Nike Akande, Chairman, AES Excellence Club and; Dr. Ijeoma Jidenma, CEO/MD, Leading Edge Consulting, during AES Excellence Club Bi-Monthly Business Luncheon at Lekki Oxford Hotel, Lagos.
AfDB approves N47bn to support infrastructure, public financing in Nigeria T
HE African Development Bank (AfDB) has approved N47 billion ($300 million) budget support loan for improving transport network, infrastructure, agriculture and power in Nigeria. The Resident Representative of the bank, Mr Ousmane Dore, announced the approval to newsmen in Abuja weekend,
while speaking on the bank’s 2013 to 2017 strategic plan. “The board of directors has just approved N47 billion ($300 million) budget support loan to support the expansion of existing transport networks and improve public financial management systems in the sector,” he said. Dore said that the country strategy pa-
per was anchored on two pillars of creating a sound policy environment and investing in critical infrastructure. According to him, the paper is aligned with the long term development agenda of the new administration as outlined in vision 20:2020 and transformation agenda. He said that the paper was also
FG to raise N410bn via bonds in second quarter 2013
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HE Debt Management Office (DMO) says the Central Bank of Nigeria (CBN) may sell as much as N410 billion worth of bonds during the second quarter of this year. The DMO disclosed this in its provisional calendar published on its Website. It said that bond sales for the quarter would open on April 17. According to DMO, the bonds to be sold in April will include N25 billion to N45 billion bonds each of seven-year, 10-year and 20-year tenor. It said that the bonds were expected to mature in June 2019, January 2022 and July 2030 with coupon rate of 16 percent, 16.39 percent and 10 percent, in that order. The DMO also said that it would on May15th issue another set of three bonds which will include N25 billion to N45 billion bonds of five-year bonds. Others are N10 billion to N20 billion bonds of five-year tenor and seven-year tenor bonds of between N20 billion and N30 billion. The DMO also said that the N25 billion to N45 billion bond of five-year tenor would mature in April 2017 at
15.10 percent yield rate. The N10 billion to N20 billion bonds at four percent yield rate will mature in April 2015. The seven-year tenor bonds of between N20 billion and N30 billion with 16 percent yield rate will mature in June 2019. The DMO said that the sales for the
quarter would end on June 12 with the sale of N25 billion to N45 billion each of five-year debt to mature on 2017 with coupon rate of 5.10 percent. The DMO said that it would also offer another five-year tenor bonds on June 12 with coupon rate of four percent.
aligned with the country’s assistance framework currently developed by the donor community in Nigeria. On the first pillar of creating sound policy, he said that focus would be on policy dialogue; analytical works and technical assistance. He said the second pillar of infrastructure development would focus on improved fiscal discipline and effectiveness of public expenditure. On the energy sector reform, Dore said that the bank would support the privatisation process with 50 million dollars through its partial risk guaranty instrument. “The expectation is that the bank will mobilise additional funds into the sector to support sustainable reforms and transformation of the sector. As a comparative advantage, the bank is on record for mobilsing an additional four dollars for every one dollar it invests. It is expected that with an investment of 50 million dollars, the bank will mobilise some additional 200 million dollars. The net effect of such transactions is extensively beneficial to member countries,” he said. Dore said that the bank had invested N142 million to support water and sanitation in Nigeria especially in the area of rural water and sanitation programmes. He said that about 2.56 million people in Yobe and 760,000 in Osun had been provided with safe water in 2012 adding that 2.30 million and 680,000 people were also provided with hygienic sanitation facility in same states in 2012. He, therefore, said that the bank had earmarked N31.4 billion loan to support the agriculture transformation agenda in the strategic paper. “While the strategy focuses on infrastructure development, the key element of the new strategy is job creation. To achieve sustainable job creation and employment opportunities, particularly for the youth, the bank has earmarked some N31.4 billion loan towards support to the agriculture transformation agenda.”
World’s central banks fret on interest rates
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N the face of flagging economic report around the world, most central banks are moving towards either cutting or maintaining low interest rates to stimulate the economy. The US dollar / Japanese yen (JPY) is steady in advance of the first rate statement from new Bank of Japan Governor Kuroda’s first statement. Kuroda is in a tough position with the yen as he needs to stimulate the economy, targeting inflation of two percent, but any stimulus package he instigates may weaken the yen. Kuroda is known for his aggressive approach and it is likely that a tough approach may be positive for the yen in the long term, even if the immediate reaction may be a weakening. Reserve Bank of Australia announced no cut to interest rates in Australia despite indications that the economy is weakening.
While the Australian economy is certainly in no bleak hole, particularly in comparison to the Eurozone, there are fears in the market that the economy and the currency may have peaked. Keeping interest rates steady may have been a strategic move as any cut would have been an admission that the economy is struggling. By keeping interest rates on hold this has helped to stablilse the Aussie dollar. Despite local fears, there do not seem to be any indications of a drastic change in the local economy and thus the Aussie is expected to remain consistently strong for the short to medium term. Bank of England (BoE) also has a tough decision to make on interest rates this week. The economy is still struggling and disappointing manufacturing data this week has led to increasingly growing fears of a triple dip recession becoming a reality.
Vanguard, MONDAY, APRIL 8, 2013 — 21
International Business & Economy
Jobless claims at four-month high, cast shadow over labor market T he number of Americans filing new claims for unemployment benefits hit a four-month high last week, suggesting the labor market recovery lost some steam in March. Initial claims for state unemployment benefits increased 28,000 to a seasonally adjusted 385,000, the highest level since November, the Labor Department said. It was the third straight week of gains in claims and confounded economists’ expectations for a drop to 350,000.Coming on the heels of data on Wednesday showing private employers added the fewest jobs in five months in March, the report implied some weakening in job growth after hiring accelerated in February. The four-week moving average for new claims, a better measure of labor market trends, rose 11,250 to 354,250. “It does look like recently we’ve seen some stalling in job creation, or at least a stalling in the lowering of claims,” said Tim Ghriskey, chief investment officer at Solaris Group in Bedford Hills, New York. Last week’s claims data was probably distorted by the Easter, Passover and spring breaks for schools, which this year were early. That could make
it difficult to smooth out the data for seasonal fluctuations. A Labor Department analyst said claims for California and the Virgin Islands had been estimated. U.S. stock futures cut gains after the data, while Treasury debt prices rose. While the claims report has no bearing on Friday’s nonfarm payrolls data for March as it falls outside the survey period, it hinted at some weakness in hiring. Employers are expected to have added 200,000 jobs to their payrolls
last month, according to a Reuters survey, slowing from February’s brisk 236,000. The jobless rate is seen unchanged at 7.7 percent. New filings for jobless benefits rose 45,000 in March, which could indicate that layoffs related to $85 billion in government budget cuts known as the “sequester ” were starting to filter through. “You might be getting some effects from the sequester and the tax hikes earlier this year,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
Data this week suggested the across-the-board spending cuts took some edge off the economy as the first quarter ended. Factory activity grew at its slowest pace in three months in March. Growth in the vast services sector was the weakest in seven months. The labor market is key to the Federal Reserve’s monetary policy. This month the central bank said it would maintain its monthly $85 billion purchases of mortgage and Treasur y bonds to keep rates low and foster faster job growth.
From L – R: Chief Executive Officer, Ethel Ventures Limited, Mr. Ethel Odimegwu; Chief Executive Officer, Westgate Technologies Limited, Mr. Kizito Omonukwue; Head, Information Technology, Samsung Electronics West Africa, Ms. Folasade Oyelayo; Managing Director, Amazing Grace Computers, Mr. Tunji Agboola and Product Manager Display & Printing Solutions, Samsung Electronics West Africa, Mr. Bennett Nwogu, at the Samsung IT C.E.O Forum held at the Wheatbaker Hotel, Ikoyi Lagos.
Saudi Arabia sells share in IILM Islamic finance body S
audi Arabia’s central bank has sold its shareholding in the International Islamic Liquidity Management Corp (IILM), an unexpected blow to a body which aims to create a liquid cross-border market for Islamic financial instruments. The decision was announced by the Kuala Lumpur-headquartered IILM in a statement which did not give a reason. IILM officials declined to comment, while officials from the Saudi central bank, the Saudi Arabian Monetary Agency (SAMA), could not be reached for comment on Thursday, a holiday in their country. One member of the IILM executive board said he was unaware of the pull-out when contacted by Reuters. “You will have to ask SAMA for their reasons,” the official C M Y K
said. Saudi Arabia’s stake in the IILM was bought by the central banks of Qatar and Malaysia, bringing the number of the body ’s shareholders down to ten and casting doubt on the timing of its first issue of sukuk (Islamic bonds). The IILM’s
statement did not reveal the purchase price. It was not clear whether Saudi Arabia’s pull-out was prompted by management frictions at the IILM - the body changed its chief executive late last year - or by deeper disagreements over policy. A Dubai-based
managing director of a European bank said the IILM was viewed by some critics as too Malaysia-centric, adding that some countries were in greater need of Islamic liquidity management tools than others, which could be a reason for the rift.
ECB “ready to act” on rates as economy languishes
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he European Central Bank expects a gradual economic recovery later this year but will monitor incoming data very closely and is ready to cut interest rates if necessary, its president said. Addressing a news conference after the ECB held rates at a record low 0.75 percent, the highest level among the world’s major central banks, Mario Draghi said discussion at the monthly meeting had been extensive and the consensus was to hold fire. But he added that the ECB stood “ready to act” because there was no certainty that the euro zone economy would pick up. “In the coming weeks, we will monitor very closely all the incoming
information on economic and monetary developments, and assess the impact on the outlook for price stability,” he said.
Draghi’s predecessor, Jean-Claude Trichet, used a stock of coded phrases to signal future policy actions something his successor has not previously indulged in. One of those phrases was “monitor very closely” although in the Frenchman’s era it more often presaged an interest rate rise two months’ hence. German government bond and euro zone interest rate futures extended gains with market participants saying Draghi’s comments laid the ground for a rate cut in coming months.
BRIEF IMF team arrives in Cairo for talks on $4.8bn loan
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delegation from the International Monetary Fund (IMF) has arrived in Egypt for talks on a 4.8 billion dollars loan. The loan is to ease an economic crisis in the most populous Arab country, state news agency MENA said. After two years of political upheaval, foreign currency reserves have fallen to critically low levels, threatening Egypt’s ability to buy wheat, of which it is the world’s biggest importer, and fuel. President Mohamed Morsi’s government signed a deal with the IMF last November but postponed ratification in December in the face of unrest triggered by a political row over the extent of his powers. The IMF delegation arrived on Tuesday for a visit lasting several days, MENA said. In the talks, Cairo must convince the IMF that it is serious about reforms aimed at boosting growth and curbing an unaffordable budget deficit. That implies tax hikes and politically risky cuts in the generous system of state subsidies for fuel and bread. An IMF deal has eluded Egypt for years, in spite of on-off talks by first the army-led government and now Morsi’s. Economists say the IMF appears to question whether Egypt has the capacity to enact reforms, and doubts that the country’s political turmoil has done nothing to ease. Just before the visit, the government announced an increase in the price of subsidised cooking gas. it, however, postponed plans to ration subsidised fuel using smart cards until July 1 and some reports say that date may be pushed back. The Egyptian pound has lost nine per cent against the dollar this year and is trading even lower on the black market, driving up inflation. Shortages meanwhile threaten to exacerbate tension in the street, where Morsi’s opponents have been airing political grievances in protests that frequently turn violent.
22 — Vanguard, MONDAY, APRIL 8, 2013
Banking & Finance BRIEFS ForexTime unveils platform to monitor global trading
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OREXTIME Ltd (FXTM) has announced the launch of the revolutionary ZuluTrade; a platform that provides all ForexTime traders with the ability to follow and mirror the activities of professional and talented traders globally. Under this new partnership, traders can benefit from the superior execution, support and services of ForexTime while converting the strategies of leading signal providers into live trades. The platform provides real-time trading 24 hours a day and the choice of trading automatically or manually. Ms. Olga Rybalkina, CEO of ForexTime said: “The new collaboration between ForexTime and ZuluTrade takes the headache out of trading for our clients as they no longer have to study or monitor the market constantly. This service is particularly valuable for traders who may not have a lot of time, those who are looking to explore new trading strategies or those who are simply inexperienced.” The concept of ZuluTrade is to offer an open environment where traders globally can connect and share their knowledge. There are 70,000 talented currency traders in 192 countries worldwide whose trades can be mirrored for free, and the ZuluTrade platform is fully transparent with individual trading histories available to view and assess. Each trader can also adjust activities to suit their desired level of risk, while ZuluTrade also provides experts with the opportunity to gain commissions when traders mirror their activities.
Corruption in judiciary threatens banks’ survival, investment in Nigeria — Bakare By MICHAEL EBOH
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RS. Olajumoke Bakare, General Counsel and Senior Vice President, First City Monument Bank Plc, has disclosed that corruption, lack of transparency and accountability in the judiciary is threatening the survival of banks and hampering investment in Nigeria. According to Bakare, who was speaking at the Business Meeting of the Institute of Chartered Secretaries and Administrators of Nigeria, ICSAN, Lagos state Chapter, in Lagos, unlike in the past where it is possible to predict a judgment based on the preponderance of evidence, these days, it is very difficult, as cases are no longer determined on the strength of evidence alone. She said judicial corruption is affecting Nigerian banks negatively as it is making it very difficult for them to carry out their operations effectively. “In some cases, we will be in the office and some one will come to our office with Order 48 from a Judge, meant for our Managing Director. Before we come to terms with
INANCE Minister and Coordinating Minister for the Economy Dr. Ngozi Okonjo Iweala, is billed to deliver a speech at the International Monetary Fund and the World Bank joint conference at the IMF’s headquarters in Washington, DC from April 21-22, 2013. The conference will focus on Fiscal Policy, Equity, and Long-Term Growth in Developing Countries. The conference is open to Spring Meetings attendees, accredited press, and all IMF and World Bank staff. In a statement by IMF, the global financial crisis refo-
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what is happening, the judge will seat in his office and issue Order 49. These same judge knows that Order 49 can not be issued on some one who has not been served any notice of a court proceeding, yet he goes ahead to issue this Order,” she noted. She said judicial accountability and transparency are
necessary to growing an economy and attracting investments into the country. She maintained that no investor will invest in a country where the system is like a jungle and where the sanctity of justice can not be guaranteed, adding that investors are here today only because of what they are tapping
Diamond Bank rewards more customers in SavingsXtra Easter Special Draw
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IAMOND Bank Plc, Ni geria’s leading commercial bank, has rewarded more than 3,000 customers with over N2 billion through
Developing economies: Okonjo-Iweala to speak at IMF conference
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L-R Francess Oraukwe; Channels Services Diamond Bank; John Ogwo, Regional Manager, Port Harcourt Region Diamond Bank;Bright Anaekwe KPMG Representative; David Otukpe Product Manager, Savings Xtra and Maureen Onwochei Business Manager Trans-Amadi Port Harcourt during the Diamong Bank Savings Xtra Draws Season Five at Mile One Ultra Modern Market Port Harcourt recently.
cused interest in fiscal policy as an instrument for growth and development, while also underlining the importance of fiscal sustainability for macroeconomic stability. In an environment of low growth in the advanced economies, developing countries have a strong incentive to seek out new domestic engines for efficiency and productivity growth, as well as for greater equity in development. The potential of fiscal policy to promote these objectives is therefore of great interest to developing country policymakers.
its SavingsXtra reward scheme that commenced in 2008. Mr. David Otukpe, Propositions Officer/ Liability Products Team, made this known in Port Harcourt, the Rivers State capital at the Season five Easter Special draw of the reward scheme. “The Diamond SavingsXtra reward scheme which commenced five years ago has seen over 3,000 customers win over N2 billion both in cash and house hold items. Before now, we were giving out air- conditioners and other electronics as rewards in the scheme. We have now narrowed it down to cash prizes. This season alone, we have given out over N600 million to 1,019 customers. We are half way through as the season ends in September 2013,” Otukpe said. When asked how the bank monitors how these customers who won utilise the money beneficially, Otukpe dis-
closed that the bank has measures put in place to monitor the activities of customers who have won to make sure the money is well invested. “We always call our customers who had won prizes to know what they are doing with the money they won and how we can help them. We ensure they use the money for the right purposes.” Diamond Bank launched the Diamond SavingsXtra Reward Scheme in a bid to encourage a savings culture and also to reward customers for their loyalty. The draws are held weekly (every Friday), monthly (every last Friday of the month) and to mark special occasions as determined by the Bank. Every Friday, 5 customers win N500, 000 (Five hundred Thousand naira) each, while 15 customers win N250, 000 (Two hundred and fifty thousand naira) each in the weekly draw.
from the economy. Also speaking, Professor Mohammed Akanbi, Head, Department of Business Law, University of Ilorin, bemoaned the fact that the judiciary in Nigerian is ranked the least corrupt after the Nigerian Police, Power Holding Company of Nigeria and the Nigerian Customs Service. Akanbi, who was speaking on a paper, titled, ‘Economic impact of judicial independence, accountability and transparency in Nigeria,’ said Nigerian Judiciary still suffers from endemic corruption, with cases of bribery, unholy fraternity, missing files and case-fixing among others characterising the arm of government. He, however, noted that legal sanctity is compulsory and very necessary in growing any economy, adding that investors will be ready to stake their funds in a place where judicial uprightness is prevalent. He said a situation where justice is misapplied and misinterpreted will lead to investors recording heavy losses in their investment. He said, “investments leave a country when the country does not show seriousness in tackling corruption, especially in its judiciary. The economy of a country will plummet when it lacks judicial accountability, especially as investors rely, in most case in judicious interpretation of justice.” Speaking further, Mrs. Bakare blamed lawyers for creating an enabling environment for corrupt to thrive in the judiciary, especially for enticing judges and leading them into corruption.
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Corporate Finance
NSE begins Q2 on positive note *Gains N1.76 trn in Q1 By CHINEDU IBEABUCHI
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RADING activities on the Nigerian Stock Exchange, NSE, began second quarter of 2013 on a positive note as the market capitalisation appreciated by N250 billion last week. This indicates that the marst ket sustained its 1 quarter momentum in which the NSE’s value appreciated by N1.76 trillion between January and March, 2013. By the end of Q1, the twin market performance measures, the market capitalisation and the All-Share Index both rose by 19.6 per cent and 19.44 per cent respectively. During this period, the AllShare Index which opened the year at 28,078.81 points rose by 5457 points, to close at 33,536.24 points by March ending. Looking at market performance last week, the market capitalisation appreciated by N250 billion or 2.33 per cent to close at N10.98 trillion from N10.73 trillion it opened. While the All-Share Index rose by 765.06 points or 2.28 per cent to close at 34,301.30 points from 33,536.24 points. The appreciation in the Index last week was as a result of the gains recorded in the share prices of Okomu Oil Palm Plc that gained N22.50 to close at N95.00 per share from N72.50 per share. This was followed by Total Nigeria Plc appreciating by N10.95 to close at N180.00 per share while Lafarge Wapco Plc
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gained N10.59 to close at N86.59 per share. Other gainers in top ten categories include: Nestle Nigeria Plc N10.50, Dangote Cement Plc N7.50, U A C N
Plc 4.06, Conoil Plc 2.39, FBN Holdings Plc N1.30, UACN Property Development Company Plc N1.20 and 7-Up Bottling Company Plc N1.00, among others.
Meanwhile, MRS Oil Nigeria Plc led in the losers’ chart depreciating by N2.48 to close at N22.40 per share from N24.88 per share. This was followed by Julius Berger Nigeria Plc that lost N1.90
to close at N51.10 per share while Nigerian Breweries Plc lost N1.70 to close at N 161.50 per share. However, equities transaction decreased by 0.47 per cent, as investors traded 1.60 billion shares valued at N19.09 billion in 26,281 deals, in contrast to a turnover of 1.612 billion shares valued at N13.542 billion in 23,021 deals recorded last week.
... Appoints 14 firms as designated advisors for ASeM By NKIRUKA NNOROM
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HE Nigerian Stock Ex change (NSE) has announced the selection of 14 companies as Designated Advisors, DAs, for soon to be launched Alternative Securities Market, ASeM.
Mid-sized and other upstart companies are expected to access the market through ASeM after its introduction. The companies appointed include; BGL Securities, UBA Stockbrokers, Marina Securities, FSDH Securities, Capital Asset, EDC Securities, and CardinalStone Securities. Others are Fidelity Securities, Partnership Investment, Investment One, Primera Africa, and Magnartis Finance & Investment, ARM Securities and Morgan Capital Securities. At the unveiling of the qualified designated advisors, the NSE Executive Director, Market Operations, Mr. Ade Bajomo, said that the 14 companies were selected after rigorous screening of the 21 applications that was received. He revealed that the DAs would be available to provide professional advisory services to
the mid-size companies before and after their listing. It would be recalled that the earlier disclosed plan to overhaul its second-tier market to an Alternative Securities Market (ASeM), in order to drive listing by upstart companies. The ASeM will open a new window of opportunity for emerging companies with high potential for growth in Nigeria to access the capital market under less stringent rules and requirements to raise long term, low cost capital. Commenting, the Executive Director, Business Development of The NSE, Mr Haruna Jalo-Waziri, had stated that “The Nigerian Stock Exchange is a staunch believer in the critical role of emerging enterprises in a developing economy and as such we have taken the bold step of providing a platform for sustainable growth and development of these companies. The ASeM Board will allow issuers; especially indigenous companies the opportunity to inject relatively low cost and long term capital into their busi-
nesses through flexible rules that recognize their growth potential rather than the size of operation.” Shedding light on the possibility of most of the companies expected on the ASeM board being without any professional guidance and therefore being unable to meet the post listing requirements, Mrs Taba Peterside, GM, Listings Sales and Retention, NSE said “Designated Advisers (DA) will be required for all companies listed on the ASeM Board of the Exchange to ensure compliance with all the requirements and obligations of the Alternative Securities Market. The DAs will provide professional resources to qualifying companies for guidance and advice on securities-related matters”. Information gathered from within The Exchange revealed that The NSE has already completed the selection process for the DAs and are at the verge of announcing the successful applicants in few days ahead of the official launch of the ASeM Board slated for later this month.
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Interview
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R. Kyari Abba Bukar, is the Managing Director/ Chief Executive Officer of the Central Securities Clearing System Limited, CSCS. He succeeded Dr. Onyewuchi Asinobi, the pioneer MD/CEO of the company who retired in March, 2011 . Prior to joining CSCS, Bukar was the MD/CEO of Valucard Nigeria Plc where he engineered the company’s turn-around from a nil-profit-making entity to what could aptly be termed a highly profitable entity before his exit. In this interview with PETER EGWUATU, he spoke on issues affecting the company and Nigerian capital market:
Can you tell the investing public the level of dematerialisation in the stock market? The CSCS has done nearly 300,000 dematerialisation of share certificate. You know dematerialisation is changing physical share certificate to an electronic record. In terms of percentages, we can say we have done close to between 70 and 75 percent of dematerialisation. There are about 14 to 15 percent of the investors’ share certificates in the capital market that need to be dematerialised. Shares that are in dematerialised (electronic records) format are easier to sell and buy. It is safe to have your share certificate dematerialised. We will send you an alert for any transaction done in the stock market. This year, we are going to start educating the investing public on the benefit of dematerialisation through campaign. The SEC strongly believes in it and has been doing everything for investors to embrace it. How has the use of technology impacted on your operation? Technology is significant and neces-
sary in our operation. Everything we do is driven by technology, so we don’t like to make noise about it. Nevertheless, we are working hard to have a robust technology. We want to adopt Straight True Processing (STP) machine, with no manual intervention. That is one of the key initiatives to a safe custodian. Already, we are partnering with stockbrokers on data exchange. We have given them security token to work with. All these will boost our technology. We don’t play with technology because it is a key component of our business. Probably, in a year or so, many of the projects that we intend to have would have been kicked started and some may have been concluded. The obvious among them is the upgrading or change of our system or technology platform so that we can actually be able to support the exchange with some of the initiatives that they have in introducing new products to the market.
Stock Market: Shares in electroni records are easier to trade — Bukar
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hy is CSCS interested in de materialising share certifi-
cate? The reason for dematerialisation is that it reduces the risk of theft of physical share certificate. It also makes work efficient through the use of computer and eliminate the risk of loss of share certificate, either as a result of fire or misplacement, among other factors Is there any plan in place to diversify your services? Yes, we are still deliberating. We want to provide Value Added Services to our clients. There are some investors that are sophisticated and we are looking at ways to diversify the portfolio services. We are also articulating areas that CSCS can add more value to its clients. The Board
of CSCS will have to approve the implementation of any new business strategy that would position it as a highly innovative and globally respected clearing, settlement and depository CSD) entity. The new vision of the company is to be the globally respected and leading CSD in Africa and to create value by providing securities depository, clearing, settlement and other services driven by innovative technology and highly skilled work-force.
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•Kyari Abba Bukar
render such service and the Board will have to ratify any management decision we reach. Also, if we must go into share registration, then it must be through a subsidiary. We have to establish a new outfit that will do such business. Also, we need to seek regulatory approvals before we can do share registration business. Although details of the areas where the CSCS would focus on in addition to its CDS business are still being deliberated upon, there are many areas the company can go into. It may be too early to say now but share registration business, for
There are some investors that are sophisticated and we are looking at ways to diversify the portfolio services, we are also articulating areas that CSCS can add more value to its clients
here is speculation that CSCS is planning to go into share registration business. Is it true or false? CSCS is a sub-registrar. The CSCS is currently the clearing house for the stock market. It clears and settles shares transactions in the capital market. The CSCS, which is the clearing house of the Nigerian stock market, has been operating a Central Securities Depository (CSD) for the capital market and digital data storage and retrieval system and related services. Nevertheless, as part of our diversification strategy, we are still brainstorming on how we can
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instance, is one of them. How has the CSCS being since you joined it from ValueCard? CSCS is an interesting one. There is room for improvement. For ValueCard, we found it in a dismal state and we left it in an excellent shape. The advice from my mother had always been: ‘Leave a place better than you found it’ or ‘leave the room better than you found it’. That was exactly what we did with ValuCard and now the opportunity to transform CSCS is also a significant one. Number one, the entire capital market was undergoing a huge turmoil when I came in.
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Interview
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•Kyari Abba Bukar
What is your reaction on Registrar imposing stock broking firm on investors? In fact, I was misunderstood on this issue in terms of being quoted that the registrar unilaterally takes decision in the previous publication. What I meant is that it is the responsibility of the registrars to furnish us with details of shareholders account. It is the information that the registrar sent to us that we make use of when crediting the account of shareholders with a stock broking house.
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hat changes have you effected since you came on board? A number of changes has taken place and I subscribe to the statements being made both by the SEC DG in the midst of transforming the entire industry and the new CEO of the Exchange, Mr. Oscar Onyema. Both of them are people with lots of pedigree. These are, essentially, people I would love to associate myself with. So, it was an easy decision on my path to take up the challenge of transforming CSCS. Obviously, and historically speaking, there are a number of things that could have been done with an entity like the CSCS to make it a world-class organisation. So, when I came in, I, basically, benchmarked all the processes, all the procedures of all the things we were doing, against global standards and principles by getting some consultants outside of this country who are very knowledgeable in that area and they basically benchmarked our processes against global best practices. That gave us a very honest and candid view
of how we are placed vis-à-vis what one could call the past. There are one, two and maybe three of the 23 benchmark areas where we scored better than average but very many of them. We still reached below average in many areas, which basically means that a lot of work is needed to transform CSCS. In the area of corporate governance, how has the company fared?
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You remember I took over from Mr. Emmanuel Ikazoboh, who was the interim head of the Exchange and also chairman of CSCS and was at the tail end of his winding down. The tsunami had hit the capital market and Arunma Oteh was only a little over one year old in SEC when I took over.
Technology is significant and necessary in our operation, everything we do is driven by technology, so we don’t like to make noise about it. Nevertheless, we are working hard to have a robust technology
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became better to transform it into Plc so that one can see all the shareholders that have the ownership of CSCS. There is also the board decision to bring in independent directors. Internally, internal control, risk management and the re-organisation of the company are going on. In the process, obviously, there would be people that had to go or had to leave and the fact of the matter is that whenever you are transforming an organisation, those kinds of casualties happen. They come as a matter of fact because some might be a mismatch of skills and, in other cases, it might just be redundancy, meaning we may have too many hands doing the same thing and so on and so forth. There is also a cultural transformation going on. We have a new vision, mission and core values for the company that has been articulated by the rank and file of employees and we are, basically, positioned to continue with that transformation.
It is the responsibility of the registrars to furnish us with details of shareholders’ account, it is the information that the registrar send to us that we make use of when crediting the account of shareholders with a stock broking house
We are addressing corporate governance issues. CSCS has now become a Plc rather than a limited liability company. If you are a limited liability company, you can only have a maximum of 50 shareholders and CSCS, even though it was a limited liability company, is, in reality, more than that. It, technically, had vehicles where some of the shareholders belong to those vehicles. It was like 24 or 25 shareholders belong in those vehicles; and so it was like in reality for the sake of transparency and to have proper governance structure, it
CSCS stood at 89.18 billion units of shares as against 89.58 billion units of shares in year 2011, thereby bringing about a 0.4 percent decrease in the volume of cleared and settled transactions in the year under review. From 1997 to December 31, 2012, CSCS has cleared and settled a total of 1.65 trillion units of shares.
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How many shares did CSCS clear in 2012? For year 2012, CSCS cleared and settled transactions valued at N658.72 billion against N634.92 billion year 2011 thereby bringing about a .7 percentincrease in cleared and settled transactions in the year under review. It is interesting to note that since 1997 to 2012, CSCS has cleared and settled transactions worth N16.97 trillion. For year 2012, the volume of cleared and settled transactions recorded by
How many number of shareholders requested for share certificates in 2012? During the year under review, 21 shareholders requested for share certificates as against 31 shareholders in the previous year thereby bringingabout a -32.26% decrease in these requests for the year under review. Since 1997 to December 31, 2012, only 13,387 shareholders have requested for their share certificates. There are now over 4.9 million shareholdersin the CSCS System going by statistics gathered at the end of 2012 in comparison with over 4.88millionshareholders recorded in 2011. These new statistics clearly represent an increase of 1.47% in the number of shareholders who maintain accounts with the CSD.
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ow many shareholders made use of shares in CSCS Depository as collateral for loan in 2012? 168 shareholders used their shareholding in CSCS depository as collateral to obtain loan facilities from financial institutions in year 2012, thereby resulting in a decrease of 48 percent in comparison with 2011 figures of 324 shareholders .In summary, more than 18,916 shareholders have used their shares as collateral for loan since inception of CSCS till year-end 2012. Looking at IST, do you think it is effective enough to allay investors’ fears as against what was seen in the past? Well, the IST initiative is a very good one. I think there is a debate on how to make it work more effectively because there seems to be conflict with the Federal High Court jurisdiction. Some lawyers will tell you that there is no reason to have a specilaised court; some others will tell you that there is reason for that. But there is a reason for all these for the simple fact that a case in Nigerian court can take ages. In fact, some people joke that Nigerian court is not for justice, but injustice because of the length of time it takes to get justice. I think the idea of IST was to make sure that there is quick dispensation of justice such that investors that have complaints can will everything resolved immediately. I must also tell you that SEC is also working towards dispute resolution mechanism that will ensure that there is quick resolution of any issue investors may have that is creating problem for them. Whether IST is made a specilaised court, or it is left the way they is now, or incorporated into the federal High Court system, there is need to have a court that can fast-track investors’ complaints and resolve them very quickly. I think that is what makes IST very relevant.
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Homes & Housing Finance BRIEF Firms launch 14-storey office building in Lagos
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ctis, aprivate equity real estate investor in sub-Saharan Africa and Primrose Development Company Limited, a Nigerian real estate company, haveconfirmed the launch of Heritage Place, a 14-storey office development located in the heart of Ikoyi, at the crossroads of Lugard Avenue and Kingsway Road. Heritage Place , according to them,will be ultra-modern by design, incorporating state of the art environmental features include water recycling, high efficiency glazing and natural ventilation. According to a release by Actis, “tdevelopment will become the first commercial building in Lagos to achieve LEED certification in both its design and construction. It a doubleheight reception area, over 350 parking spaces and a landscaped piazza with a café, restaurant and other amenities for office workers and visitors. “Actis, working in joint venture with Primrose Development Company, plans to break ground in the second quarter of this year pending all necessary government approvals. The project will be co-developed by Primrose Development Company and Laurus Development Partners, an Actis portfolio company dedicated to the construction of A-grade real estate in West Africa. “ The promoters said the property has a premium office space of 15,000 square metres, and claim that it is the first commercial building in Lagos to achieve global green certification. Actis Real Estate Director, Funke Okubadejo said: “There is a demand-supply gap in Lagos when it comes to high quality office space so Heritage Place could not be better timed. This development will redefine the local market both in terms of its design and its adherence to world-class sustainability standards; it builds on Actis’ record of delivering top quality real estate in sub-Saharan Africa.” Jide Balogun, CEO of Primrose Development Company said :”Following on with Primrose Group’s heritage of developing exceptional residential developments for discerning tenants we conceived the Heritage Place project and partnered with Actis to deliver an office development that will certainly raise the bar and be the reference point for gradeA office space in the Lagos market.”
Stories by YINKA KOLAWOLE
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IGERIA Deposit Insur ance Corporation (NDIC) has warned Primary Mortgage Banks (PMBs) not to relax their efforts at shoring up the capitalisation to the required level as a result of the recent extension of the deadline for their recapitalisation by Central Bank f Nigeria (CBN). Managing Director, NDIC, Alh. Umaru Ibrahim, who handed down the warning in Abuja, while receiving the management of Federal Mortgage Bank of Nigeria (FMBN) in his office, urged operators to see the extension as a window of opportunity to enable seek all possible means of attracting investors, warning that more drastic action may be taken at the expiration of the deadline. It would be recalled that CBN recently extended the deadline for mortgage firms to shore up their shareholders’ funds by eight months from April 30 to December 31, 2013. A circular to all directors and shareholders of PMBs, signed by Director, Other Financial Institutions Supervision Department, CBN, Mr Olufemi Fabamwo, noted that the decision is “to afford all affected PMBs sufficient time to exercise any of the options for capital raising, business combination and downscaling highlighted in the earth lier circular dated 14 December, 2012. “All PMBs are once again strongly advised to conduct due diligence and seek professional advice in exercising any
•A bungalow at Mainland Park Estate, Mowe
NDIC charges PMBs on recapitalisation deadline extension *Commences liquidation of closed PMBs of the options and to conclude the processes before the new deadline in order to allow sufficient time for capital verification and necessary regulatory approvals.” Meanwhile, NDIC has commenced the liquidation of seven out of the 25 mortgage banks recently closed by CBN with payment of compensation to their depositors. In a statement issued by the Head, Communication & Public Affairs Unit of NDIC, Alhaji H. S. Birch, the NDIC boss was said to have lamented the difficulties being
encountered by the Corporation in the liquidation process as many of them merely existed as paper institutions. “The seven were those the Corporation could identify after frantic search at the Corporate Affairs Commission (CAC) to determine the management, board, shareholders and other details of the closed PMBs,” he stated. Ibrahim further noted that it was difficult for the Corporation to determine the PMBs’ deposit liabilities due to their failure to render statutory returns to the CBN and pay man-
ASO confab: Creating a roadmap for Nigeria's housing needs
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arious issues militating against satisfying the housing needs of Nigerians will become focal points at this year's edition of the International ASO Housing Exhibition and Conference, slated for April 11, 12 and 13 at the International Conference Centre, Abuja. During the first two of the three day event, locally-based and international experts in the housing value chain will extensively deliberate on four salient topics, namely; Funding, Housing Delivery and Infrastructure, Mortgages and Legislation. The conference will be attended by stakeholders in the housing industry from the public and private sectors of the economy including policy makers in private and public enterprises, Federal and State government representatives, real estate investors, professional mortgage providers, urban and Regional planners, Home developers, Architects, State & Federal Housing Authorities, house
buyers and other members of the general public. ASO Savings & Loans Plc, facilitators of the event with the theme: "Achieving Affordable Housing Delivery by creating 500,000 housing units by 2016", explains that the initiative was conceived to create an effective template for addressing the chronic housing shortage as well as poor access to housing finance in the country. "This is with a view to creating a roadmap for private and public sector partnership for attaining the vitally important Vision 2020 objective of the Federal Government of Nigeria which is: Providing affordable homes for all Nigerians by year 2020. It is salutary that such collaborations and objectives are in line with and complementary to the Transformation Agenda of the federal government in the areas of infrastructure and housing development. This is more so because the government at several fora, has called for private sector participation in the attainment of its economic transformation
goals." At the last Presidential Stakeholders of Retreat held in Abuja, President Jonathan noted that inequitable access to land for housing development and inadequacy of housing with estimated 16 to 17 million units deficit, had remained a critical challenge to all stakeholders in the sector. In his view, if the deficit is to be bridged, ways must be sought to provide affordable housing, especially to the non-income, low income, lower-middle income and informal sector workers. He said these can only be achieved if developers in the private sector are ready to partner and complement government efforts. Panelists at the event will include: Evans Kofi Essienyi of the Affordable Housing Institute, Ghana; Dr. Delphine Sangodeyi of AHI North and West Africa Associates, Paris; Stephen Terseer ABAR, 1st Vice President, Nigerian Bar Association, Lagos; Kayode Omotosho, Executive Secretary,
datory premium to the NDIC. He said that the decision of the Corporation’s Board to reimburse depositors of the seven identified PMBs was part of its unwavering commitment to the protection of depositors of all licensed insured institutions. The NDIC boss revealed that as part of the Corporation’s effort to reposition the financial sector for greater performance, it is ready to grant financial assistance to deserving PMBs as well as microfinance banks (MFBs).
MBAN, Lagos. They will speak on various sessions. The Funding session will consider among other issues; avenues of securing funding for the creation of 500,000 housing units as well as the development of public/private partnership models for the realization of this project; while Delivery and Infrastructure session will examine current developments in innovative construction and building methods capable of creating Nigeria-specific dwellings that are affordable by the majority of the populace. The panel on Mortgages would for illustrate latest thoughts among regulators and practitioners on implementing effective and sustainable framework for mortgage lending in Nigeria, addressing capital rules, responsible lending, and consumer protection. The panelists on Legislation would consider among other issues, the contemporary relevance of the Land Use Act 1978 in the context of land use , development and maintenance of a reliable land database nationwide, property ownership rights, title, foreclosure etc. in the context of supporting the delivery of affordable housing.
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Homes & Housing Finance
Brick Matters: Nigeria’s chance to improve housing (II)
•Mass development of brick housing
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espite all of its advantages – delivering technical durability, superior appearance, and better cost – brick is used in only about 10 percent of housing construction in Nigeria. Bricks provide serious room for market expansion, and the dearth of brick homes is a dilemma. Let us examine some of the market myths surrounding bricks. Myth 1: Brick is “old school” and concrete block is “modern.” Conventional wisdom associates bricks with mud, and mud houses with the village life and the bush, as both are made with red soil. On the other hand, concrete block is industrial and modern and big men, of course, want the latest thing. Architect O.A. Alagbe of Covenant University, in discussing the history of post-independence construction in Nigeria, writes that “the crave for Western building techniques led to the gradual extinction of the erstwhile earth building techniques. Thus…earth building techniques…became associated with the poor in Nigeria and not fashionable for housing purposes.” This myth that brick is a building material that belongs in past is untrue. As we have seen from our walk through three of the world’s most prestigious city neighbourhoods, modern residential construction actually shows a high preference for brick over block.
As future-looking “green” technologies, renewable resources, and energy-saving methodologies continue to gain more acceptance and market share worldwide, lowenergy, renewable-resource laterite bricks appear even more relevant in today ’s market. Bricks are actually the modern, more beautiful, greener choice. Myth 2: Bricks are difficult to use, blocks are easy Whereas it is true that it takes more bricks than blocks to build each square meter of wall, bricks are just as easy to lay as blocks - with the proper skills training, of course. It is ironic that in today ’s Nigeria, artisans who build with blocks are known as “bricklayers”, referring to the time in the past when tradesmen were trained in building walls with red bricks. Using red bricks properly is a matter of appropriate skills training, not a difficulty inherent in the bricks themselves. The myth that bricks are difficult to use is likewise untrue. Nigerian artisans are fully capable of doing good quality brickwork; otherwise, this sells short the skills of Nigerian workers. Myth 3: Bricks are hard to find, blocks are everywhere This is true superficially – there are literally tens of thousands of small-scale block makers across Nigeria. Most of these block makers have modest capital investments in their manufacturing operations, and are simply responding to current market demand. They could easily convert to making bricks, should the market demand
them. As pointed out above, bricks can be made locally on a small scale using raw materials found across most of the country. The Ministry of Science and Technology’s Nigerian Building and Road Research Institute (NBRRI) has developed small scale brick making technology appropriate to Nigeria; the
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By RON ASHKIN
Brick is not the only affordable housing material that can be sourced locally in Nigeria to drive down the cost of housing and create more jobs on construction sites and in the construction sector supply chain
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private firm Bolyn Constructions in Lagos, whose designs are based on German technology, manufactures and markets affordable small scale brick making equipment nationwide. Bricks could be more widely available in Nigeria in a very short period of time
should market demand be present. The investment can be modest and the materials are readily available. This myth can easily be decertified. A Call to Action More widespread use of bricks will not only help housing become more affordable, the construction of new homes will lead to job creation for Nigerians. Bricks present a win-win scenario. But the market can only respond if there is demand, not only from buyers of homes, but also from those designing, developing, and building homes. What can be done to accelerate more widespread adoption of brick construction? Prospective home buyers can express their preference for brick construction to builders, contractors, and real estate agents; Individual home builders can choose to use brick, and even make their own bricks; Architects can incorporate brick construction into their designs; Developers can plan and market communities of affordable homes built from locally-sourced brick and; Contractors can use more brick in constructing structural elements such as walls. More Green Technology More Good News More good news is that brick is not the only affordable housing material that can be sourced locally in Nigeria to drive down the cost of housing and create more jobs on construction sites and in the construction sector supply chain. For example, lumber can be seasoned in Nigeria using solar energy, eliminating the need for costly imports, and low cost roofing materials can be made from recycled plastics. Recycled roofing tiles are already available on the market from Chartwell Industries in Lagos. These and other innovative, “green,” and future-looking technologies will help address the nation’s housing deficit in a systemic and sustainable manner. Will your next home be built of brick?
*Mr. Ashkin, Technical Director, GEMS2 Programme supported by UKaid, is a private sector development consultant and manager with professional experience in 60 countries around the globe, on enterprise development, competitiveness, strategy, and international trade.
BRIEFS Africa’s real estate asset constitutes 1% of global value The gross real estate value in Africa which is estimated to be •113 billion constitutes a meager one percent of the world’s total value. Prof. Andrew Baum disclosed this at a roundtable for stakeholders in the Nigerian real estate industry organised by Stanbic IBTC Capital, in partnership with Actis and Resilient Africa, which recently held in Lagos. Baum, a thought leader on global real estate investments from the University of Cambridge, said Africa’s relative low real estate asset value is in spite of the fact that the continent accounts for 15 percent of the world’s population. According to him, being underweight in asset value of real estate relative to other geographies, however, makes Africa an attractive prospect for investible funds in real estate. Reviewing the global performance of REITs, the professor noted that domestic and foreign investors were more attracted to markets with properly structured REITs sector and encouraged Nigeria to develop this asset class to harness the investment opportunity.
Niger gives ultimatum to housing beneficiaries Niger State government has given winners of houses sold by government about two months ago a four-week ultimatum to make necessary payment for the houses or forfeit them. It was gathered that under the agreement, those who won the bids for the houses were to pay an initial deposit of N9 million to a mortgage institution, which would give the government bulk value for all the houses and ensure commencement of construction of new sets of houses. However, Commissioner for Lands, Dr. Peter Sarki, said that the government was disturbed that those that won the bids for the houses had not been able to meet the minimum requirement for them to take over the buildings.
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Insurance BRIEFS IEI pays out N1.2bn claims in 2012 By RITA OBODOECHINA
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NTERNATIONAL Energy Insurance Plc, IEI, said it paid out N1.2 billion on claims settlement within the twelve calendar months of 2012. A statement by the firm said that this was part of the company’s promise to settle claims to its insured clients promptly. According to the statement, prompt payment of claims goes a long way to demonstrate the company’s commitment to its policyholders that it will always come to their aid when they suffer losses. The claims paid by IEI are categorised into motor, fire, general accidents, marine cargo, marine hall, bond, oil & gas, industrial all risks, public liability and aviation. Commenting on why the company resolutely stands on delivering on its promises, the Managing Director/Chief Executive Officer, Mrs. Roseline Ekeng, said transparency and reliability were the most enduring values to earn customers trust. She affirmed that without transparency and dependability, no company will remain in business. According to her, IEI is one company that got right its core strategic business direction which is energy insurance, adding that it has sound technical and experienced energy underwriting unit, and with the best crop of hands and sound management, it has demonstrated a consistent growth-led business model that has withstood the test of time.
Jobs go as Zurich scuttles Associated Marine
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URICH has laid off up to 27 staff as it absorbs the former Associated Marine operation into its mainstream business. The changes, which were announced in a low-key marketing note to brokers, mark the end for the once-dominant Associated Marine brand. In 2004 Zurich took full control of the company, which was originally set up as a joint venture between several major insurers. A statement supplied by Zurich says control of the marine insurance operation company will move from Associated Marine’s Melbourne base to Zurich’s Xpress Underwriting Centre in Sydney.
From Left: Medical Director, Oral Health Scientific Excellence, Sensitivity and Acid Erosion, GSK, UK, Dr. Steven Mason, Managing Director GSK Consumer Healthcare Nigeria, Mr. Chidi Okoro and Sales Director, GSK, Vaibhav Bhanchawat at the unveil of Sensodyne Rapid Action in Lagos..PHOTO; Kehinde Gbadamosi.
South-Easterners embrace Takaful insurance By ROSEMARY ONUOHA
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ONTRARY to belief that Takaful insurance is solely for Muslims, reports have shown that South-Easterners who are predominantly Christians now have the highest subscribers’ rate of the products. The Vice-Chairman, Chartered Insurance Institute of Nigeria (CIIN) Oyo State Chapter, Babatunde Omosola, who disclosed this at the 2013 Media Retreat Organised by CIIN, for members of National Association of Insurance Correspondents (NAICO) in Ibadan, said South-Easterners have embraced Takaful insurance products because of its simplicity. He noted that though Takaful which means joint guarantee or share responsibility in Arabic, operates in accordance to Islamic laws, the products
are designed to carter for Muslims and non- Muslims alike, adding that the products are meant to encourage saving culture and build capital, over a period of time to meet personal or business needs.
He said, “Under Takaful plan, you can save regularly for a fixed period that is convenient for you. The accumulated targeted amount can be used to fund obligations such as purchase of land, house, marriage
CIIN to open College of Insurance By CYNTHIA MGBEOKWERE
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HE Chartered Insurance Institute of Nigeria, CIIN, is set to open its college of insurance in no distant time. Dr. Wole Adetimehin, President of CIIN who stated this in Ibadan at a media retreat for insurance correspondents, noted that the CIIN is optimistic of commissioning the college’s first phase before the end of
May, 2013. Adetimehin said, “This will mark a significant step in the direction of commencing activities at the college. We are on the verge of employing a rector of the college, who is expected to fast- track the vision of the Governing Council and ensure that the College project becomes a reality. The CIIN president said that across all fronts, the institute will continue to make progress in guaranteeing the goals and
NB enters with Star league promo
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or hajj. It could also be used to meet other long term financial objectives, such as retirement, children education, travelling expenses as well as expected commitment.” According to Omosola, reports have shown that in many countries, Takaful products have been bought by non-Muslims due to some of its attractive features, which are not offered under conventional insurance, adding that the implication of this trend is that there is a promising market and potential growth for Takaful business. He said investment of Takaful funds is done in compliance with sharia law which prohibits gambling and profiteering and consumption of alcohol, including brewing alcohol, noting that the fund should not be invested into economic activities that negate Islam and sharia laws. Meanwhile, President of CIIN Dr. Wole Adetimehin, said the institute has over the years remained focused in supporting the industry through building human capacity. He noted that aligning with the transformation agenda of the present government, the institute is poised to ensure that the insurance potentials in the nation are harnessed. He called for the infrastructural development, adding that it is when the economy thrives people would buy more insurance products.
OW, Star beer from the stable of Nigeria Breweries (NB) Plc said it intends to engage consumers of the brand with Star league promotion. The Star league is a text and play promo that will end on 31st May, 2013, where consumers are expected to earn points as they progress in the league. The promo is also a Lucky-bottle-top-offer (LBTO) promotion with two categories of crown corks. The first category crown corks has code with differentiated points in five bands of 10 points, 20, 30, 40 and 200 points. The second has the brand’s website address. For consumers to participate, the consumer will text his or her state of residence,and
automatically becomes the state league the consumer chooses to play in, and is registered for that State league as indicated. Speaking at the press briefing to intimate Newsmen of the promo, Mr. Walter Drenth, Marketing Director, NB said that after entering for the league consumers will have the opportunity to view their position by the points accumulated on a specially designed league table per state of entry on the star. He went further to say that at the end of the offer period, participants with the highest points from each State league will be rewarded with ipads for 15 winners, 550 head phones, and 1,000 Star DVD players, he said.
objectives engendered by the institute’s charter, chief of which is the determination of skills and knowledge required for the professional and ethical dispensation of insurance services by persons who hold themselves out as insurance practitioner in Nigeria. He said “In this direction, Council has continued to strengthen the institute branch machinery by empowering men and women who can translate the broad objectives of the institute action.” Adetimehin said that the institute has continued to reposition itself for the task of providing platforms for the propagation of insurance education in Nigeria, adding “The Professional Examinations in its 24 years of successful conduct has become firmly rooted and has continued to produce home-bred professionals who can hold their own anywhere in the world. The Institute’s Mandatory Continuous Professional Development (MCPD) programme has continued to provide ample opportunities for skills development and recreation whilst also bridging the skills gap, especially among the middle level management work force.
Vanguard, MONDAY, APRIL 8, 2013 — 33
EN make history; but not just as they please”. Karl Marx, 18181883. The first part of this series ended last week with the observation that the singular leadership provided by former Governor Victor Attah gave the oil producing states the economic power they now enjoy. If they want to extent that triumph or even consolidate the gains made on account of the fight for Resource Control, they need another leader to fight for PIB 2 – not Jonathan who is too involved in 2015 to fight for anything else. Read on. Quite rightly, the people of the Niger Delta reason that this is the best opportunity to redress the inequities of Decree 33 of 1977, and create a more level playing field for all; but with more concessions given to the oil producing communities. To that extent, they are correct; this is the best, and, perhaps, the last chance for such a revolutionary change. But, they have started this economic “ war ” like the Christian Crusaders of
PIB 2: A tale of two mobs — 2 several centuries ago who thought that “right” without leadership or strategy will bring victory. History was not kind to the crusaders. History has also not been kind to the promoters of PIB 1. They were so naïve, so complacent and so sure that, with Jonathan and Diezani on their side, passage of PIB 1 was assured. I was sure they made a mistake. The defeat of PIB 1 is now a part of our history.
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owever, this column is not being written to tell readers about the defeat we handed PIB 1 promoters the last time around. Now, for reasons best known to myself, I am in support of PIB 2 – despite its obvious flaws which can, and should, be amended. Defeating PIB 2 would have been easier than torpedoing PIB 1; that is clear to me for various reasons. The problem is that, with an easier to defeat bill, and lacking a powerful ally in the IOCs, the proponents of PIB 2 are still as naïve, as complacent and
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Odds are against its passage and, at the moment, time has become one of the major obstacles against PIB 2
major obstacles against PIB 2. There are others, but, those will be disclosed only to interested parties. Permit me to finish this column by pointing out, briefly, how critical time has become to the passage or failure of PIB 2.
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as sure that the passage is assured. I have bad news for them. PIB 2 is also heading for the same graveyard where PIB 1 was buried. PIB 2 is also in danger, unless, there is a drastic change in approach. President Jonathan and I are fighting on the same side for a change, and the Minister of Petroleum (also a comrade in arms for once) alone cannot get it done. The odds are against its passage and, at the moment, time has become one of the
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y the time you are reading this, Jonathan would have completed 22 months out of 48 allotted to him. You would think he has 26 months left, and, you will be wrong. By December 31 of this year, GEJ will close shop to anything else but his re-election programme. If PIB 2 has not been passed by then, you can then rest assured that it will not get passed by 2015. That is what constitutes the greatest danger for PIB 2. This time, they only have to wait, until the President becomes totally distracted by his second term campaign – without making the amendments which will make PIB 2 acceptable to a
majority of the National Assembly, NASS, to defeat it. Incidentally, there is another mistake made by the supporters of PIB 2. They talk as if only the Senate has to approve the bill. Nothing can be further from the truth. Both the Senate and the House of Representatives must vote in favour. Then another bill will need to be sent to the NASS to repeal at least two other existing Acts before PIB 2 can become law. In reality, PIB 2 faces a stiffer test in the House than in the Senate. A negative vote by the House will all but bury PIB 2. PIB 1 was a war fought by enthusiastic warriors – without a leader or a central command post staffed 24/7 to prosecute it to a successful end. It resulted in failure; PIB 2 should not proceed the same way. This might be the last chance for the oilproducing areas to redress the greatest injustice in the country today. P.S. There is more to PIB than I can disclose here. A word is sufficient…
www.delesobowale.com
Micro-Finance
MfB operators laud NDIC’s framework to reposition sector Stories by PROVIDENCE OBUH
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ICROFINANCE Bank operators, weekend, commended the Nigerian Deposit Insurance Corporation (NDIC) for having developed framework to reposition the sub-sector. Some of the operators, who spoke to Financial Vanguard said that it was a step in the right direction as it would further boost confidence in the Microfinance Banks (MfBs). The Managing Director, Fortis Microfinance Bank, Mr. Kunle Oketikun, who hailed the development, said, “This development makes a lot of sense, if we understand what they actually want to do.” Oketikun said it is a step in the right direction while soliciting that the corporation help in resuscitating some of the ailing MfBs in the country. In the same vein, Mr. Femi Fapohunda, Managing Director, Ospoly Microfinance Bank, said that it was a wel-
come development, stating that it will make the sub-sector more vibrant. Fapohunda said, “It is a welcome development that would further impact on the sub-sector; we like groups or organisations that support MfBs.”
Commenting on the corporation’s condition for assessing the fund, he said, “He who pays the piper dictates the tune. Since they are the proprietor, they are free to disburse the money according to plan.” Meanwhile, NAMB Chairman, South West Zone, Mr.
Olufemi Babajide, noted that such financing would aid the sub-sector to do better; pointing out that the sub-sector has anticipated such support over the past eight years. Babajide revealed that the sub-sector is doing less than
Redcard Revolution kicks against brothel business in Ajegunle
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Brothel is suppose to be a place where people engage in sexual activity with a prostitute, but in contemporary times most people build brothels under the guise of a hotel. To this end, a group, Redcard Revolution in Ajegunle, Ajeromi Ifelodun Local Government Area of Lagos State, has lamented the increasing number of brothels built in the community for business purposes, asserting it to breed prostitutions. Redcard Revolution is a project designed to impact over two million young people below 18 years to as low as 11years that lives in the local government area.
According to the group, “In recent times, teenagers have taken the centre stage in sexually related vices: teenage prostitutes, underage alcoholism, hotels and brothels with unmonitored young patronisers, beer and illegal drug joints at every street.” Lamenting further, the group urged the state government to ensure it places age restrictions on prostitution, even as it hinted that ages below 18 years are the highest numbers found in brothels in the community. Redcard Project Director, Mr. Raymond Okpara called for urgent intervention by the Lagos State Government in order to cub the situation.
Opara said that health centres, recreational centres destitute homes, schools, among others should be considered rather than brothels even as he pointed out that there are over 25 brothels in the community. Meanwhile, Ajeromi Ifelodun Local Government Education Secretary, Mr. Adeogun Adewale advised parents to keep an eye on their wards, stating that the children have more hours to spend with their parents than the teachers. According to Adewale, “it is imperative for us as teachers to do our beat and the parents also have to do their beat.
20 percent optimisation, but with the development, it can yield 100 percent given that they can deliver on promise. “It is a positive development, when investors and depositors see this, they will want to be part of the support and it will make them have a positive attitude towards us. We will begin to have good deposits, it will generate donor agencies, I am elated,” he said. It will be recalled that the corporation issued a report, last week, where the Managing Director/Chief Executive, NDIC, Alhaji Umaru Ibrahim, said that the corporation is developing a framework for granting financial assistance to primary mortgage banks (PMBs) and microfinance banks (MFBs) as part of efforts to reposition the sub-sector for greater performance, saying that stringent conditions would be put in place to ensure that only deserving MFBs and PMBs benefit from the proposed assistance. Ibrahim said this while receiving the Board of Directors and Management of the Federal Mortgage Bank of Nigeria (FMBN) that paid him a courtesy visit at his Abuja office. The framework would be made public once approved by the Board of the corporation.
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•Victor Famuyibo
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People in Business Stories By EBELE ORAKPO
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r. Muyi Lawal is the Managing Director/Chief Executive Officer of Solar Electric Systems (SES) Limited which specializes in the provision of alternative power for rural infrastructure using solar and other forms of renewable energy. He is also the President of Association of Nigerian Solar Energy Promoters. In this chat with Vanguard in Abuja, the engineering graduate from the University of Ibadan speaks on why he got into the renewable energy business and the challenges. Excerpts: How it all began: Mr. Muyi Lawal said he picked up interest in renewable energy, especially solar in the late 70s when he saw their American missionary neighbours in Jos generate electricity from the sun using solar panels. “That caught the attention of those of us living around them." After his one year national youth service, he taught for a while then got a job with NASCO in Jos. He also had a short stint in the family business before venturing out on his own. It was only natural that he followed his passion. Why solar energy? “It was just interesting. When I got my first panel, it was interesting that I found a group of people who were interested in what I was doing. For those of us in the sciences, once you develop a passion for scientific experimentation, you will fall in love with it. I have always wondered how plants manufacture their food from sunlight. We were experimenting with my first solar panel, just having fun, not looking for gain at the time but it later transformed into a business venture as we began to read developments in renewable energy all over the world and we were developing our own techniques and training in different countries and here we are today!” he exclaimed. SES Ltd which commenced business in Nigeria in 1997 and incorporated in 2001, is a manufacturer's representative and affiliated to about six corporations all over the world. "We represent Dometic Medical Systems, the largest manufacturers of solar refrigeration for medical purposes.," said Lawal, noting that Nigeria has to adapt renewable energy technology to suit her environment. "You just can’t take it the way it is in the US or Germany. Some of the things they do there need to be interpreted scientifically, socially and economically to be implemented here. When we are not so sure some things will work in our environment,
*Mr. Muyi Lawal...What solar energy can do is extremely underestimated in Nigeria
We have to adapt renewable energy technology to suit our environment — Muyi Lawal we adapt so we are here to serve the country,” he said. Solar for industries: Puncturing the arguments of those who say that solar energy
you can as much as possible tap the energy that is available to you depending on what you want to run, whether an industry or home or business
(most of whom are uneducated) know that when you put a 60watt bulb in a room, you are generating heat as well as light? But when you buy an energysaving bulb of 11 watts, it gives you just as much light without the heat and you save money and energy? When this is done on a nationwide scale, you find that the energy consumption/ footprint per individual becomes more efficient and therefore, it is easier to meet the requirements of the larger society. "If you discover that your refrigerator wastes energy, you can switch over to solar refrigerators. For example, if the refrigerator consumes 1,800 watt-hour a day, a solar
refrigerator consumes 250 watt-hour a day," he said, noting that Dubai has converted all its cars to hybrid so you can charge with solar or use fuel. Now multiply the number of cars in Dubai by the amount of savings in petrol; that makes petrol available but Nigeria is just focusing on importing petrol. If for example all the water heaters in the country are solar- powered, a lot of energy will be saved for other uses. We see it quite clearly but it appears those in positions of authority are not seeing it. What solar energy can do is extremely underestimated in Nigeria. A lot of people are asking for 4000 mw which is what we are generating now off and on, but they don’t appreciate that if we have 100 watts in 4,000 homes, it will go a long way. It is very easy to put 400 watts in a million homes, it can be done overnight and it will give you reliable power for the next 25 years." He harped on the need to invest in renewable energy, especially solar, saying; "If we manufacture some of the parts here, they will be cheaper and create jobs at the same time. Solar energy is cheaper in the long run so it is the upfront payment that people complain about and that is where the banks come in." Challenges: "Funding is a major challenge. The awareness in the banks is still very low and they are not being stimulated to invest otherwise there is no reason why an average family cannot get a N500,000 loan to get solar electricity and then pay back gradually. Of course the bank should derive its funds from long-term credit financing available for such infrastructure development. That is what we need but what the banks do is give you a loan and have it back in 30 days with profit. We can’t blame them, that is the way the economy is structured," he said.
One product per ward devt, panacea for joblessness - Jibrin
*Solar vaccine refrigerator and icepack freezer
cannot power industrial machines, Lawal said; “Solar can do nearly anything that hydro can do. You can go for a large scale installation using PSP and you can use solar palmer which generates electricity from the heat of the sun. The whole world is trying to make it work so as to preserve our environment. So adapting solar energy is a combination of two things –
but you must also use that energy as effectively as possible.” Energy conservation: "We waste a lot of energy in Nigeria because our energy consumption is inefficient. We in the business see it clearly but we are finding it difficult to get consumers to appreciate that they are wasting energy they cannot produce. How do we let 150 million Nigerians
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overnment has been urged to look seriously into the issue of job creation. Speaking with Vanguard recently, the Director, Technology Incubation Centre, Kano, Dr Mohammed Jibrin said making jobs available to Nigerians is very easy. Suggesting a way out, he said; "We need to make use of the departments of knowledge (universities, polytechnics, research institutions) in collaboration with entrepreneurs, to create jobs and wealth. "As a strategy, we need to identify one product per ward in all the 9,955 wards in Nigeria. This will involve the academia, the
community as well as entrepreneurs and technocrats who will come up with a blueprint that can be implemented within a reasonable time frame. We need to bring out one product per ward and get funds from good funding agencies. At the end of the day, that simply implies that we will produce 9,955 businesses that will employ people. If for example on the average, each creates 1,000 jobs, that means we are already creating one million jobs and this will be on a continuous basis. In no time, we will be exporting to other countries," he stated.
Vanguard, MONDAY, APRIL 8, 2013 — 39
Advertising, Media & Marketing
BRIEFS
Stories by PRINCEWILL EKWUJURU
Chi targets kids, unveils Capri-Sonne promo
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ince Unilever Nigeria Plc took over the manufacture and sale of Knorr seasoning from Cadbury Nigeria Plc in December 2005, there’s been a clear shift in reward schemes to edge out competition. Today, Knorr is rattling other seasonings in the menu recipe of many Nigerian homes for top spot in the seasoning market. That’s why food seasonings like Maggi, Vedan, Royco, Onga, rested Ajino Moto, A1 etc queue behind rewards to drive competition in the market, as well consolidate their position in the seasoning market . Hardly, do in a meal pot, whether Stew, Soup, Jollof, Fried rice, Beans porridge, etc, being served in a restaurant or in any social gathering, one will not miss the taste of these seasonings. It’s a different ball game today that brands evolve new reward systems to etch their way to the subconsciousness of the consumer to retain their position in the market. Knorr today, is not left out of these marketing genre that bears on consumers hearts, this
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From left: Sam Omojola, Human Resources Manager, Sweet Sensation, Damilola Ajayi, Horeca Account Manager,GSK,Yemi Opedemowo,Financial Controller, Sweet Sensation, Mrs.Faboro,Lagos Transit Home, LTH, Idi-Araba, Mrs. Osinfowokan, LTH, Idi-Araba, Bolaji Sanyaolu, Communication and Engagement Manager,GSK, Kemi Adewole-Ojo,AGM Front Operation, Sweet Sensation, Kunle Oloko,LTH, Idi-Araba and Yemi Yusuf, Marketing Manager,Sweet Sensation during the restaurant and GSK charity visit to LTH Idi-Araba on Good Friday in Lagos.
Reward system as route to consumers' heart ...As Unilever honours chefs has made it possible for the brand to discover chefs who ordinarily had no competition that showcase their cooking artistry, which invariably
brought to limelight Lalu Sudirham, winner of the just ended Knorr Quest Season 1 cooking competition who carted home a car, refrigerator, cartons
‘Cent enar orm tto o ‘Centenar enaryy Celebration’ is a platf platform sho wcase Nigeria’s positiv es– NO A show positives– NOA
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he Director General of the National Orientation Agency, NOA, of Nigeria has described the Nigeria Centenary celebration as a platform to showcase Nigeria’s positives rather than its negatives as reported by foreign media. He said that even though a lot of negative things happen in various countries but Nigerians appear to have overplay its greatest challenges while neglecting to celebrate the positive sides, a situation that has affected its brand positioning in the comity of nations. This is why Mike Omeri, Director General of National Orientation Agency (NOA) said the Agency is in support of the initiative by the Federal Government to celebrate Nigeria’s centenary to play up Nigeria’s milestones. “The centenary celebration will offer a unique opportunity for us to take a well thoughtout walk down the memory lane with a view to identifying the intrinsic values which our fore-bears identified and which made it possible for them to make progress handin-hand in spite of their political, religious and tribal differences’, Omeri said while speaking at the induction of
new members into Nigerian Institute of Public Relations (NIPR) in Lagos. He said notwithstanding the country’s struggles and challenges, Nigeria is privileged to attain 100 years as a united nation. “Not many nations in Africa or indeed the world have been this privileged. It is indeed an epoch worthy of celebration by Nigerians and lovers of our great nation. Government believes that the centenary celebration presents an
opportunity to count Nigeria’s blessings, celebrate its dexterity and resilience as a people and resolve to launch into the next century with renewed determination, hope and expectation. Also speaking at the induction, the president of NIPR Mohammed Abdullahi regretted that a chunk of quacks parade themselves as public relations practitioners in Nigeria with embarrassing implications for the profession’s reputation.
of Knorr, Gas Cooker and N1million, said the competition has exposed him to other Nigerian dishes as he encouraged others to participate in the next edition of the competition. Likewise the first runner up, Patricia Allison, who went home with the same prize in exception of a car, is an advertising person who was happy with the competition because of the closeness it brought to people from different background and ethnicity. Before producing the winners Brand Building Diector, Mr. David Okeme, said that the cooking competition which lasted for 156 hours, with 8,000 cooks who entered for the auditioning, was later reduced to five who are eventual winners of the prizes, cooked 130 different dishes in 13 weeks.
CAP Plc picks ‘Indigo’ as 2013 colour
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n line with the Dulux global tradition, Chemical and Allied Products (CAP) Plc, a subsidiary of UACN Plc and the technological licensee of AkzoNobel, manufacturers of Dulux premium paint brand has unveiled Indigo as the colour for 2013. The 2013 colour of the year was unveiled at an elaborate ceremony in Lagos recently and attended by the company’s key stakeholders including distributors and dealers and top echelon of the UACN group. Speaking at the event, the Group Managing Director, UACN Plc, Larry Ettah disclosed at the ‘Indigo Night’ that the celebration of the Dulux colour of the year has become a global trend which is adding colours and values to lives. He noted that the Dulux Colour of the Year is a concept that reinforces Dulux as a
global authority in colour. Ettah stressed further that with over 12,000 colours, Dulux is established as the custodian of knowledge in the area of colours with the objective of helping customers realize their wellbeing. It has consistently and innovatively introduced different colours to its customers worldwide over the years. Also speaking at the occasion, the Managing Director, Chemical and Allied Products (CAP) Plc Omolara Elemide revealed that ‘Indigo Night’ emerged the Dulux 2013 Colour of the Year after the annual meeting of the Aesthetic Centre of AkzoNobel with an international group of creative experts from the fields of colour, design, architecture and fashion, who deliberated and decided that the colour shade will be dominantly used globally during the year based on trends in colour.
hi Nigeria Limited, manufacturers of Capri-Sonne has kicked started an offer targeted at school kids tagged; ‘CapriSonne school surprises offer’. The promo which promises to reward consumers with gift items, will see the kids go home with Wrist watches, flash lights, pouches, colour pencil cases and many more packed inside every carton. The campaign also has an extra bonanza option, where customers submit CapriSonne flaps to stand the chance to getting a free jumbo crayons and water colour boxes. The campaign will be supported with a Television campaign, outdoors and an activation program where the Capri-Sonne team visit schools across Nigeria. A statement from the company said, “The campaign is expected to be a big success with a win win situation for our target audience as well as for us. This campaign will help in inducing trials and thus getting new consumers into our consumer set and of course, kids are going to love the exciting gifts that will come with Capri-Sonne.
Embassy Pharm markets Losodum in Nigeria
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m b a s s y Pharmaceuticals and Chemicals Limited has acquired the sole franchise to market Losodum salt in Nigeria. Losodum is a low salt product, which is 50 percent low sodium salt that will help consumers particularly adults to reduce the amount of salt-take. Speaking at the launch of he product in Lagos, Chairman of the company Pharm. Nnamdi Obi, said that Losodum will help reduce sodium intake, whilst stating that excess sodium makes the body hold more water to dilute the accumulated salt, this action he said increases both the amount of fluid surrounding the cells and the volume of blood in the blood stream. Continuing, he said that this means that more work will be done by the heart and more pressure on the blood vessels, which invariably will lead to stiffened blood vessels, high blood pressur, heart attack,stroke and heat failure.
40 — Vanguard, MONDAY, APRIL 8, 2013
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HE International Mone tary Fund (IMF) recently concluded its 2012 ‘Article IV Consultation’ on Nigeria. The IMF, as part of its recommendations, suggested the winding down of the operation of the Assets Management Corporation of Nigeria (AMCON). This recommendation was apparently predicated on the need to curb what it described as ‘moral hazards and fiscal risks’. We recall that Central Bank created AMCON to soak up non-performing loans (toxic debts), and stem instability and threat of collapse of the banking sub-sector with loss of depositors’ funds. The banks were consequently expected to become better positioned to offer improved services and boost employment by providing cheaper funds to the real sector, particularly the Small and Medium Enterprises, which are traditional drivers of economic growth. Conversely, IMF supports the funding of critical areas of the economies of member countries and also serves as a ‘quasi headmaster’ of their fiscal policies and financial institutions, for example, “under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials, the country’s economic developments and policies. A summary of the appraised report of findings is ultimately transmitted to the country’s authorities”. In response to IMF’s recommendations, Mustapha
AMCON tackles IMF
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We recall that Central Bank created AMCON to soak up nonperforming loans (toxic debts), and stem instability and threat of collapse of the banking sub-sector with loss of depositors’ funds
Chike-Obi, Managing Director of AMCON did not deny the challenge of moral hazard or fiscal risk but noted as follows: “they commended Nigeria for fixing the banking sector and said it should wind down AMCON; but, I find it very surprising that an institution as serious as IMF would make such recommendation like that without telling us how to do it, and in what time frame, and what assistance they can offer to us to wind down.” Furthermore, Chike-Obi sarcastically noted, “we are aware that IMF has its hands full on banking crisis all over the Euro zone that they have been struggling to resolve. Therefore, it is strange to hear such a comment about a country where the crisis has been resolved. It is part of our plans to slow down AMCON’s activities, but the comment they made is baffling”! Fortunately, we do not require an extensive search for an appropriate arbiter between the IMF’s observation and AMCON’S criticism; fortuitously, the head of our current Economic Management Team is a renowned former
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IMF Vice President, who was also Finance Minister when AMCON was established!
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onetheless, in the rest of this piece we will briefly examine the validity of IMF’s fears that the operations of AMCON may inadvertently become subject to abuse, and also ultimately deepen our debt burden with destabilising impact on fiscal stability. Incidentally, we had earlier echoed IMF’s apprehensions in our article titled “AMCON as Time Bomb” in October 2012. The following is an excerpt from that article…. ”It is worrisome that AMCON appeared to have been stampeded to pay for those toxic debts before it even considered the need for proper valuation of the acquired assets; curiously, according to media reports, AMCON has only lately begun ascertaining the real values of the assets it acquired almost three years ago! ”Considering the widespread corruption and level of impunity and insider trading in the banking subsector, Nigerians will not be surprised
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uriously, despite ChikeObi’s caustic response to IMF’s observation, the banking sector has lately declared humongous after tax profits, while AMCON on the other hand, reported a N2370bn trading loss in 2012, and may require to borrow about $11bn from offshore creditors to refinance the N2000bn the agency had borrowed domestically to fund its acquisition of the banking sector’s toxic debts. Consequently, the AMCON Boss projected about 10 years to completely free the financial system of bad loans, and confirmed that AMCON would no longer serve as a lifeline to banks with bad loans. Coincidentally, last week, the international ratings agency, Standard & Poor’s, reported that their studies portend increased losses between 2014 and 2016 in the Nigerian banking sector, even with the current wave of stupendous profits being posted. If this ‘prophecy’ becomes manifest, despite the readily canvassed ‘success’ of banking reforms, toxic debts will once more become problematic, and one wonders, whether AMCON would rescind its decision not to purchase more toxic debts! Nonetheless, even if the promise of quality banking services and access to single digit cost of borrowing to the real sector remain unfulfilled, Nigerians would, regrettably, still have to bear the burden of servicing AMCON’s estimated N5tn debt portfolio for many years to come.
if it is later revealed that AMCON may have grossly overpaid (rather than underpaid) for the redemption of some of these ‘toxic’ debts. ”In a related development, the House of Representatives also recently faulted the N140.9bn debt settlement deal between Femi Otedola, the Chairman of Zenon Oil, and AMCON, noting that the procedure adopted was suspicious and unacceptable. ”Indeed, the House Committee also questioned the rationale for the different methods adopted for loan valuation and expressed its disappointment that AMCON CEO, Mustapha Chike-Obi, could not satisfactorily defend the agency’s modalities! “The Legislature equally observed that the source of AMCON’s funding was far from transparent!” Presumably, the Legislature never exercised any oversight on AMCON’s substantial loans! The preceding excerpts seem to corroborate the expressed fears in IMF’s Article IV report of the need to curb moral hazards and fiscal risk in the operations of AMCON. In the same article under reference, we also noted, “Nigerians do not seem to recognize that the net product of AMCON’s redemption efforts is the deepening of our national debt and the perennial scourge of systemic cash surplus with the destabilizing outcome of double-digit inflation and interest rates and a prostrate economy.
SAVE THE NAIRA, SAVE NIGERIANS!!
Business & Economy Labour, allies to picket banks over unfair practices By VICTOR AHIUMAYOUNG ORGANISED labour in the nation's financial sector, has said labour and its allies are perfecting plans to picket banks and other financial institutions for alleged unfair policies and practices especially refusal to allow union and retrenchment of workers without recourse to subsisting procedural agreement and best practice. National Union of Banks, Insurance and Financial Institutions Employees, NUBIFIE, named two old generation banks and one new generation bank (names withheld) as well as insurance companies among the worst culprits. The union advised the affected banks and other financial institutions to jettison their perceived unfair labour
practices and embrace decent employment policies and positive industrial relations to save the companies from the wrath of organized labour. President of the union, Danjuma Musa, who spoke in Lagos, said the union had notified the affected banks of the impending actions, saying one of them was given a 14-day ultimatum that expired on April 2, 2013 and said the bank had not responded. According to him, the union has been having a number of challenges confronting it and noted that some of the challenges were government policy induced consequences, while others were cumulative effects of inefficient supervision by regulatory authorities thus, encouraging or creating enabling environment for corporate miss-governance and other impunities by industry
operators. "In specific terms, denial of workers their rights to freedom of association and to unionism, continuous arbitrary retrenchment of workers without recourse to collective agreement and consultation with the union, deliberate subversion of reconstitution of the Joint Negotiation Council (JNC) by withholding support to Nigeria Employers Association of Banks, Insurance and Allied Institution (NEABIAI) an umbrella organization for Employers in the Industry, exerting undue pressure on workers’ to meet-up with unrealistic deposit drive target, in the process and in some cases rendering or exposing workers to abuse and dehumanization with the attendant psychological trauma, have all become the hallmark of management practices in trying to achieve their corporate
nately emboldened various management to embark on various forms of unpopular policies against workers," he said.
goals. "The understanding the union has always displayed in the face of these challenges and more, has unfortu-
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