Take strong action to stem oil theft, IMF tasks FG by Vanguard Media Limited

MARCH 10, 2014

CHBO DINNER - From left: Uju Ogubunka, Registrar, Chartered Institute of Bankers of Nigeria (CIBN); Anogwi Anyanwu, Executive Director, Mainstreet Bank; Caroline Anyanwu, Executive Director, Risk Management & Control, Diamond Bank and Ben Onyido, former Director, Currency Operations, Central Bank of Nigeria (CBN) at the Committee of Heads of Bank Operations (CHBO) Annual Dinner in Lagos.

Take strong action to stem oil theft, IMF tasks FG zUrges govt to cut oil subsidy, rebuild fiscal buffers,curtail waivers, boost non-oil revenue By OMOH GABRIEL, Business Editor

HE International Monetary Fund (IMF) Executive Board, has advised the Federal Government to take strong action to address oil theft and production losses. IMF also advised the

government to strengthen Nigerian oil industry regulatory framework by passing a sound Petroleum Industry Bill with enhanced oversight and transparency provisions. It said that the framework for anti-money laundering and combating the financing of terrorism could support these efforts. IMF in its review of the Nigerian

economy in its Article IV, 2014 released weekend urged the government to also highlight the need to improve oil revenue management by completing the transition from the Excess Crude Account to the Sovereign Wealth Fund. These measures, it said, should be supported by full implementation of the Treasury Single Account and the Continues on page 18

197.00 2,963.00

17.94

+2.20 +25.00

-0.38

108.31

+0.76

102.49

+0.93

CURRENCY BUYING CENTRAL SELLING DOLLAR STERLING EURO FRANC YEN CFA WAUA

154.75 258.3706 212.967 174.8983 1.5191 0.3059 238.6622 RENMINBI 25.1859 RIYAL 41.2612 KRONA 28.5343 SDR 239.429

155.25 259.2054 213.6551 175.4634 1.524 0.3159 239.4333 25.2677 41.3945 28.6265 240.2028

155.75 260.0402 214.3432 176.0285 1.5289 0.3259 240.2044 25.2677 41.5278 28.7187 240.9764

CBN Exchange rate as at 07/03/2014 C M Y K

18 — Vanguard, MONDAY, MARCH 10, 2014

Cover Story

Entrepreneurial education revolution: An imperative for sustainable development in Nigeria: Part 2

Take strong action to stem oil theft, IMF tasks FG integrated information management systems. It said that maintaining fiscal discipline in the run up to the elections is also important.

he body also urged the Federal Government to rebuild fiscal buffers, reduce oil subsidy, curtail waivers, and boost non-oil revenue in order to ensure current progress in the country. IMF board commenting on the Nigerian economy in its Article IV consultation with the Nigerian authorities released weekend emphasized the need to rebuild fiscal buffers and to strengthen the framework further. In the report, IMF said: “Efforts should be geared towards boosting non-oil revenue by broadening the tax base, improving tax administration and curtailing exemptions, and further reducing oil subsidies. “Directors underscored that adopting a rule-based reference oil price in fiscal projections and further strengthening public financial management should help the authorities achieve their consolidation objectives. Directors commended the authorities for lowering inflation and considered the current tight monetary policy stance to be appropriate, given the risks associated with potential capital flow reversals. To better manage liquidity, they generally encouraged more reliance on open market operations to guide short-term interest C M Y K

Continued from page 17

Reform efforts should also aim at enhancing the business environment, improving productivity, boosting financial access for small and medium sized enterprises, and strengthening governance and institutional capacity

rates. “With regard to exchange rate policy, directors noted that greater exchange rate flexibility could serve as an important buffer against external shocks. Directors noted that the financial system is well capitalised with low non-performing loans and recommended continued improvements in the supervisory framework, especially with regard to increased exposure from cross border financial activities. Directors encouraged the authorities to build on the progress made in strengthening prudential policies by further enhancing the framework for anti-money laundering and combating the financing of terrorism, and implementing the remaining Financial Sector Assessment Program (FSAP). The report “ welcomed the plan to wind down the operations of the Asset Management Corporation of

Nigeria, AMCON. Directors emphasized that structural reforms remain critical to improving competitiveness and productivity, and reducing poverty and inequality. They encouraged the authorities to persevere with their Transformation Agenda with continued focus on education and health reforms, the improvement of power supply, and broadening agricultural production. “Reform efforts should also aim at enhancing the business environment, improving productivity, boosting financial access to small and medium sized enterprises, and strengthening governance and institutional capacity. The upcoming release of re-based GDP data and further improvements in statistical data collection should strengthen the basis for policy and private sector decision-making in Nigeria.

ccording to the IMF, “Executive Directors welcomed Nigeria’s continued strong macroeconomic performance, underpinned particularly by sustained high growth in the non-oil sector. Inflation has continued to decline and the reserves position is adequate. While the economic outlook remains favourable, key risks include continued lower oil revenues from oil production losses and lower oil prices, the impact from the unwinding of unconventional monetary policy in advanced economies, and domestic political and security

Continues on page 19

*From left: Jack Doan, Transaction Banking, Sales Manager, Chinese Client Standard Chartered Bank, Jiang Ping Ping, China Chamber of Commerce in Nigeria, Remi Oni, Executive Director, Client Coverage, Standard Chartered Bank and Peng Gen Fang, Chief Finance Controller, CCECC Nigeria Limited during the 2014 The Chines of The Horse celebration in Abuja.

igeria faces a number of challenges that can only be met if it has innovative, well-educated and entrepreneurial citizens who, whatever their walk of life, have the spirit and inquisitiveness to think in new ways, and the courage to meet and adapt to the challenges facing them. Moreover, a dynamic economy, which is innovative and able to create the jobs that are needed, will require a greater number of young people who are willing and able to become entrepreneurs, young people who will launch and successfully develop their own commercial or social ventures, or who will become innovators in the wider organisations in which they work. Because education is the key to shaping young people’s attitudes, skills

The global arena is blind to your credentials but is a wealthcreating slave to your skills and abilities

and culture, it is vital that entrepreneurship education is addressed from an early age. Entrepreneurship education is essential not only to shape the mindsets of young people but also to provide the skills and knowledge that are central to developing an entrepreneurial culture. It is important we embrace this ‘global age’ paradigm in our education system as it has been done in China, India, Australia, Europe, U.S.A and of late, the Asian tigers (Malaysia, Singapore, Taiwan and the Koreas).The most advanced form of this new model is what is referred to as ‘TEACHERPRENEUR’ which Bill Gates was referring to in 2010 when he said ‘five years from now on the web, you will be able to find the best lectures in the world and it will be better than any single university.’ This involves embedding entrepreneurial education into education and training right

from the primary school to secondary school and tertiary institution. The essence of this is because education is key to shaping young people’s attitudes, skills and culture, it is vital that entrepreneurial education is addressed from an early age, besides, age is no barrier to entrepreneurship as Tony Hsieh of Zappos started selling worms from raw mud when he was nine years old, Steve Job, Richard Branson and Mark Zuckerberg of the Facebook fame all started off as young entrepreneurs. The time is ripe for us as a country to stop celebrating mere certificates and dormancy, while primacy and recognition should be given to creativity, skills and enterprising spirit. It has been shown over time that the global arena is blind to your credentials but is a wealthcreating slave to your skills and abilities. Anyway, it is not your credentials that guarantees success in the global/ information age but rather , your problem-solving abilities, critical thinking ability that can discern ‘fact from fiction’, your ability to adapt (un-learn & relearn), your creative and innovative abilities and your life-long love of learning. If your ‘piece of paper’ failed to deliver these then whilst it may have successfully prepared you for the industrialised 20th Century economy, it has certainly failed you in the globalized 21st Century.

s Alvin Toffler puts it, ‘The illiterates of the 21st Century will not be those who cannot read and write, but those who cannot learn unlearn and re-learn.’ It is the acceptance of this open secret that should make policymakers and the general populace to shift attention from the conventional way of thinking that you must be a graduate before achieving success. Some of the inventors such as Bill Gates and Mark Zuckerberg dropped out of school to make it in life because of their innovative, creative and enterprising spirit and not necessarily because of certificate.

Vanguard, MONDAY, MARCH 10, 2014 — 19

he decision of the Lagos State governor, Babatunde Fashola, to sue the Federal Government over what he described as illegal deduction of one per cent from statutory allocation to states in the federation, may not be a surprise to many Nigerians. Some, especially those who have sympathy for the PDP, will see it as an action instituted by opposition. In as much as the opposition has been firing some salvo at the Federal Government at the slightest opportunity, the disclosure by Governor Fashola that the nation’s economic council has not met for once in the last six months and that one per cent of allocation to states is being deducted, should give cause for worry to those who understand the precarious situation the nation’s economy borrow to keep the government states from the shackles of oil. is in. Before the discovery of oil, The governor, while going. On October 7, last year, this regions in the country had presenting the nation’s grim financial standing before column in an article entitled: their economies. They members of the State House of Nigeria will survive without survived based on primary Assembly in Lagos said the oil, warned the nation of the produce from the various decline in revenue was also consequences of over- regions. Nigeria will survive credited to decline in oil dependence on oil revenue. without oil. All that is required production, which was “In the last three months, local is for people to think. It is a adduced to pipeline governments, states and sad story that the committee is vandalism and crude oil theft Federal Government officials not querying the Federal and that the debate on have been at each other's Government for not investing accounting on crude oil is out necks over shortfalls in wisely; it is not asking for there. Fashola lamented that revenue allocation from the since October last year, the federation account. The war of Federal Government has been words is as a result of panic deducting one per cent from by state governments that they states’ statutory allocations may not be able to meet their which was said to be for Police obligations to their workers if reforms, describing it as allocations from the federation unconstitutional and vowed to account continues to dwindle. The current panic stems from challenge it in court. Nigerians who are the fact that if the revenue conversant with trends in the shortfall from the federation country, will recall that for the allocation committee to states first time in almost 15 years of falls below some levels, it will the nation’s democratic result in many of the states not experience, the country being able to pay their recorded some walkouts employees. “On two occasions now, staged by commissioners of finance during meetings of the members of the committee Federal Accounts Allocation from states have walked out on Committee in Abuja. The first the Minister of State for one happened in 2011, while Finance over the amount due the country witnessed more of for sharing. It is a shame that such walkouts in 2013 due to the committee members are not investment in the several irreconcilable accounts of the seeing the opportunity the minerals that dot the country, federation. Some states have shortfall is offering them to they are simply bickering over had, in the recent past, to think and act to remove their sharing.

Who is afraid of National Economic Council meeting?

It is a shame that the committee members are not seeing the opportunity that the shortfall is offering them to think and act to remove their states from the shackles of oil

“It is the sharing of cheap oil money that makes Nigerian politicians dummies, men and women who cannot think. They only wait to share. It is sharing that makes ministers come to office and leave without making any impact on the economy. It is the same for presidents and governors who preside over a sharing formula and nothing else. Over the years, they just become political birds of passage.

t is the sharing of oil money that is tearing the PDP apart. It is sharing that has caused the sharp division in the country — North vs South. If there was no oil revenue to share at the centre, the fight over the zone to produce the next president will not be a door-die affair. It is a shame that in the Nigerian political equation as of today, none is thinking about how to make a bigger cake for all to share. “While the bickering over sharing is on by clueless politicians and their coexploiters, it is important for the federal, state and local government functionaries to put on their thinking cap to fashion out how to generate internal revenue to sustain

their operations. It will be foolhardy for the government at all levels to continue to rely and plan on proceeds from oil sales. For a very long time, the signals are showing the simple fact that this economy cannot continue to run on crude oil sales. Many of the states whose commissioners of finance gather in Abuja to share from the federation account cannot generate up to N200 million per annum. Local governments are worse; some cannot generate even a million naira a year. Yet, all gather in Abuja to share oil money.” The challenge now is that whilst this revenue decline has gone up, the nation has been unable to hold the National Economic Council, NEC, meeting in Abuja. In the recent past, the meetings had held every month. The meeting has not been held now for at least six months in spite of clear revenue declines. The National Economic Council is an organ for the discussion of economic issues concerning the 36 states of the country and comprises governors, the Governor of the Central Bank, the ministers of National Planning, Finance and others. The question is; what is the Federal Government afraid of for not allowing the economic council to hold its meeting? Is this government afraid of being asked to give account of the operations of NNPC? In fact, what about NIMASA, NPA, Customs and FIRS? All must render proper account to Nigerians. There is no escape route for this government.

Cover Continued from page 17 uncertainties. “Directors underscored that steadfast implementation of prudent macroeconomic policies and reforms will be essential to addressing the risks and vulnerabilities, generating more inclusive and balanced growth, and reducing unemployment. “Directors welcomed the authorities’ continued commitment to fiscal consolidation and noted the improvements made to the fiscal framework. However, to ensure macroeconomic stability, they emphasized the need to rebuild fiscal buffers and to strengthen the

Take strong action to stem oil theft, IMF tasks FG framework further. “Directors commended the authorities for lowering inflation and considered the current tight monetary policy stance to be appropriate, given the risks associated with potential capital flow reversals.

o better manage liquidity, they generally encouraged more reliance on open market operations to guide short-term interest rates. With regard to exchange rate policy, Directors noted that greater exchange rate flexibility could serve as an

important buffer against external shocks. Directors noted that the financial system is well capitalized with low non-performing loans. “They recommended continued improvements in the supervisory framework, especially with regard to increased exposure from cross border financial activities. Directors encouraged the authorities to build on the progress made in strengthening prudential policies, including further enhancing the framework for anti-money laundering and combating the financing of

terrorism, and implementing the remaining Financial Sector Assessment Program (FSAP) recommendations. “They welcomed the plan to wind down the operations of the Asset Management Corporation of Nigeria. Directors emphasized that structural reforms remain critical to improving competitiveness and productivity, and reducing poverty and inequality. They encouraged the authorities to persevere with their Transformation Agenda with continued focus on education and health reforms, the

improvement of power supply, and broadening agricultural production. Reform efforts should also aim at enhancing the business environment, improving productivity, boosting financial access to small and medim sized enterprises, and strengthening governance and institutional capacity. The upcoming release of re-based GDP data and further improvements in statistical data collection should strengthen the basis for policy and private sector decisionmaking in Nigeria.”

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20 — Vanguard, MONDAY, MARCH 10, 2014

Business & Economy

Agric attracts $9bn investments — ADESINA American household wealth up $10trn in 2013

he boom in the stock market and the recovery in house prices led to a nearly $10 trillion increase last year in the net worth of American households, according to data released Thursday. The net worth of American households grew last year by $9.8 trillion, or 14 percent, to $80.66 trillion, according to the Federal Reserve. That includes a nearly $3 trillion jump in the fourth quarter alone. Most of the gains in net worth, $5.6 trillion, came through the stock market, as the S&P 500 climbed nearly 30 percent, and $2.3 trillion came in the value of real estate as home prices rose. U.S. home prices grew over 13 percent last year, according to the Case-Shiller 20-city composite index. Those gains aren’t, of course, shared equally by Americans. A recent study from Ohio State said that the mean net worth of American households in mid-2013 was still 14 percent below the prerecession peak in 2006.

AfDB to spend $930m in Kenya in 5 years

he Africa Development Bank Group (AfDB) has approved injection of $930 million into Kenya’s economy for infrastructure development and enhance job creation for the next five years. Gabriel Negatu, Regional Director for the AfDB’s Eastern Africa Resource Centre, said on Thursday in Nairobi that the Country Strategy Paper (CSP), which was approved by the board articulates the bank’s priority areas of support to Kenya from 2014-2018. He said the CSP supports the country ’s ambitions and addresses its main developmental challenges by promoting job creation as the overarching objective. “To achieve our main objective, we have designed the CSP around two main pillars, we will continue to support the government’s effort to enhance physical infrastructure to unleash inclusive growth and secondly, develop skills for the emerging labor market for Kenya’s transforming economy,” he said. Negatu said it would also explore ways of restructuring poorly performing operations in the portfolio or cancelling them, and redeploying freed-up resources

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BY EMMA UJAH, ABUJA BUREAU CHIEF

igeria’s agricultural s e c t o r attracted $9 billion investments from local and foreign business groups in the last two years. Dr. Akinwumi Adesina, Minister of Agriculture and Rural Development, disclosed this at a chat with media executives in Abuja, on the newly established Executive Leadership of Nigerian Agribusiness Group. “We have received a total of over $4 billion in executed Letters of Intent (LOIs) for investments by 30 private sector agribusinesses. We have established relationships with over 150 agribusinesses in Nigeria. “Local fertilizer manufacturing and blending capacity has significantly expanded, with $5 billion in new investments. To fix the storage segment for all value chains, the Ministry of Agriculture and Rural Development attracted Blumberg, one of the largest manufacturers of warehouses in the world, to commit to using Nigeria as the regional hub for manufacturing warehouses in West Africa,” he said. The minister explained that the President Goodluck Jonathan administration’s resolve to make agriculture a source of wealth for Nigerian farmers and all those involved in the industry, was total and would be pursued to a logical conclusion. “We have been very clear from the beginning that agriculture will not be treated any longer as a development programme, but as a business. We will no longer manage poverty with agriculture. We will use agriculture to create the future millionaires and billionaires of Nigeria. We are determined to change the fortunes of our farmers, for the poverty we see today must give way to wealth all across our rural areas, as we make agriculture a business that helps to lift millions of farmers out of poverty. “Farmers are the largest private sector in this country. Everything from the farm, to the storage,

processing, to the value addition up to the market, must work to create market for our farmers”, he said. Dr Adesina added that the establishment of the Agribusiness Group was a demonstration of the Federal Government’s drive not only to turn around agriculture into a business, but also build institutions to sustain the significant gains being achieved in the agricultural sector under the leadership

of President Goodluck Jonathan. Our approach was deliberate: grow the agriculture sector using private sector to drive the growth, focus on value chains for all commodities, and connect farms to mills, aggregators, storage, improved logistics, processors and value addition. The minister said curbing the corrupt system of rentseeking, especially in the

purchase and distribution of fertilizer in the ministry was a blow to the old order and that everything must be done to sustain the new order. “The old corrupt system of direct government procurement and distribution of fertilizers was scrapped. Private sector seed and fertilizer companies now sell farm inputs directly to farmers, instead of to the government,” he said.

DRAWS: From left, Head of Marketing, Nutricima Limited, Mrs Wande Oluwasegunfunmi; Assistant Director/Coordinator, Lagos Zonal Office of National Lottery Regulatory Commission, Mr. Fidelis Ajibogun; Assistant Manager, Legal, Lagos State Lotteries, Gbemi Ajibose; e-raffle draw presenter, Ifedayo Olarinde; Category Marketing Manager (Standard Milk) and Director, Regulation & Monitoring, National Lottery Regulatory Commission, Prince Emmanuel Jeminiwa, at the first e-raffle draw of Nutricima Mega Cash Consumer Promo held in Lagos.

Dropped calls, unsolicited messages: CPC, telecom operators’ meeting stalled BY FAVOUR NNABUGWU

he meeting scheduled by the Consumers Protection Council, CPC with telecommunication companies over public outcry on poor service delivery to consumers, was stalled as some operators shunned the meeting. CPC had summoned chief executives of all telecom operators to a meeting to address subscribers’ complaints of poor services, compensation to the complainants as well as provision of quality services. The meeting neither reached identifiable conclusion nor practically addressed issues bordering on drop calls and unsolicited messages among others. Director-General of the Council, Mrs Dupe Atoki, after a brief meeting with the representatives of some of the telecom operators told

journalists the duo would have to reconvene the meeting. Atoki said Nigerians are faced with poor network service delivery. Among other things, she said this makes it impossible to receive calls while also experiencing drop calls, lack of sustainability of calls, unsolicited text messages at odd hours, unsolicited telemarketing, deceptive broadband speed adverts and failure to compensate consumers for poor services. Atoki said operators risk prosecution and jail terms of up to five years if investigations currently ongoing reveal that they deliberately short-change Nigerians. “CPC can make orders in the interest and protection of consumers and disobedience is also criminalised by law. While NCC can impose fines on an offending operator, CPC can in addition, commit

such recalcitrant offenders to jail terms for contravening any consumer protection enactment,” she said. It is common knowledge that the operators are practically ripping off Nigerians. As far as their services are concerned, Nigerians have been largely short-changed. The last 18 months, in particular, have witnessed the worst service regime. Making or receiving calls is a most frustrating experience. And the other services using broadband are not better. There is little v a l u e f o r m o n e y. S a d l y enough, there is no effective channel of complaints and getting redress. She reiterated that the CPC has the power to sanction, prosecute and compel any product or service provider to answer a lawful inquiry, of which disobedience is criminalised.

Vanguard, MONDAY, MARCH 10, 2014 — 21

Business & Economy

onsumer behaviour in Nigeria has revealed some interesting unique traits about the most lucrative market in Africa, a research by Nielsen, world’s leading market research company, has shown. Country Manager, Nielsen, Mr. Harshvardan Sarda, while sharing some of these market insights to clients during ‘Nielsen Client Insight Event 2014’ in Lagos, said that a typical Nigerian consumer would want to stand out and keep with the trend just as he expects the products he is willing to buy to be fairly common and available. According to him, Nigerians go after affordable and available products. But beyond availability of products, Sarda said there is a whole lot more that is unique to Nigerian consumers: “They want products that are made for them. They don’t want something that is being adapted from somewhere else. Nigerians like products which are unique to them and which meet their needs but at the same time must be products with good quality, value, fashionable and trendy.” Sarda added that forty percent of Nigerians spend their income on consumer goods, which makes it possible for growth for brands even as he revealed that the 50 percent of the Nigerian population which are youth

Anchor Insurance declares 2.5k dividend per share

OBAFEMI AWOLOWO U-10: From left, Mr Stephen Kola-Balogun, Commissioner for Youth Development, Osun State; Mr Benson Evbuomwan, Executive Director, Marketing, Honeywell Flour Mills PLC; Dr Mrs Tokunbo Awolowo Dosunmu, Executive Director, Obafemi Awolowo Foundation and Senator Bode Olajumoke at the first U-10 Obafemi Awolowo Memorial Kids Cup 2014 sponsored by Honeywell Flours in Lagos on Thursday. Photo Lamidi Bamidele.

Nigerian consumers have appetite for unique, quality products —Research positions Nigeria as a country with high possibilities for trying new products. The youth population, according to him, is educated, mobile and any serious brand targeting the youth should have presence on the social media to connect with the youth. Alisa Wingfield, Executive Director, Marketing & Communication, Africa and Middle East, Nielsen explained the purpose of the get together with clients and said: “There is more to

achieving success and you can do that by showing insight of what consumers want. Most of what is more important for us as a business is understanding what consumers want and meeting their needs. We have done concept testing of products in the Nigeria market and those that have been successful; we want to share those insights with our clients as to how to launch successful products that meet the needs of the Nigerian consumer. “Also to share some information, we have done a

Security takes center stage at Securex West Africa exhibition By NKIRUKA NNOROM

atest security initiatives, trends, challenges and emerging technologies will be the focal point of the forthcoming West Africa exhibition, billed to take place in Lagos. The exhibition will bring together leading commercial, homeland and cyber security, fire protection and safety suppliers and is targeted at delivering strategic technologies, training and intelligence solutions to the market. Evaluating existing counter terrorism policies, understanding new domain threats posed by regionally active militant organisations, cyber security, training security forces, strategic approaches to emerging threats and accessing gaps in existing commercial and homeland security infrastructure, implementing

effective resilience measures to mitigate potential crisis and more will be covered at the trade show taking place 18 – 19 March 2014 in Lagos. Speaking on the Securex exhibition, Mr Fola ArthurWorrey, CEO of Lagos State Security Trust Fund, said: “In these times of increasing concerns surrounding national and internal security, not just in Nigeria but indeed across the globe, security exhibitions such as Securex are critical in interrogating current security challenges and then designing appropriate national, subnational and private sector responses to them; and, more particularly, in driving specialisation across the broad spectrum of possible responses both human and technological. Mr. Sean McCarthy, Regional Sales Manager in the Exports Division at Elvey Security Technologies, South Africa, said: “For our

company, the greatest value we generate from exhibiting at a show like this, is the exposure we get to an expanded installer market as well as business leaders from various other sectors, such as the banking industry, for example.” The Securex West Africa trade show is being organised by Montgomery West Africa and sponsored by HIK Vision, Halogen Security, Kontz Engineering and Rapid Vigil; supported by the United Kingdom Trade and Investment, Association of Industrial Security and Safety Operators of Nigeria, Nigerian Institute for Industrial Security, Institute of Safety Professional of Nigeria, International Institute of Professional Security, Lagos State Safety Commission, World Trade Center of Nigeria, International Institute of Risk and Safety Management and Occupational Safety.

census in Nigeria, we have enumerated some retail outlets in Nigeria and have covered over half a million outlets. So it is about saying that when you have a really great product, how do you get it to the consumer and make sure that you are in the right place to reach these consumers. Again, we have used this information which we got from over 500,000 stores which are the key stores to be able to identify greatest impact in terms of reaching consumers and sales consumer brand in Nigeria”. On how to compare consumer behaviour in Nigeria and other developing markets, Wingfield said that markets across Africa are not comparable to one another because they are so diverse and cuts across 54 different countries, adding, ‘by no means can we assume that consumer needs in one country are the same as the other.’ According to her, “the first thing we know is that instead of trying to group similar consumers we know, we need to look out for the diversity and some of the keys to success is understanding consumers in different places. To make it a little bit easier, we have looked at consumer segmentation in 15 countries in Africa, trying to identify similar traits, life styles and behaviour to be able to help our clients tap into these consumer groups.”

Akwa Ibom owned Anchor Insurance Ltd has declared a dividend of N2.5k per share for shareholders for the year ended December 31, 2012. This is an increase of 25 per cent over the dividend paid in the previous year. Its Chairman, Board of Directors, Mr Senas Ukpanah, made the declaration during the rd company ’s 23 Annual General Meeting on Thursday in Uyo. Ukpanah said that the increase in dividend payment was in fulfillment of the promise made earlier by the board to its shareholders. He said that the board and management would work hard to remain profitable and make the company a rewarding institution to investors. ”I am indeed pleased to inform you that the board of directors is recommending a dividend of N2.5K per share, being an increase of 25 per cent dividend. This is an indication that the board kept to the promise made at this gathering last year to improve on the dividend payment,” he said.

Senate committee expresses concern over decline in FCT budget The Senate Committee on the FCT has expressed concerns over the dwindling budgetary allocation to the Federal Capital Territory Administration (FCTA). The committee made the observation when the Minister of the Federal Capital Territory (FCT), Sen. Bala Mohammed defended the 2014 budget estimates of the FCTA. The Chairman of the Committee, Sen. Smart Adeyemi, said that while the demands for infrastructure in the FCT increases, the budgetary allocations had continued to decline over the years. Adeyemi said considering the continued reduction in the budget of FCT, the Authority might not be able to deliver on its mandate of providing the needed infrastructure for the FCT and satellite towns.

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22 — Vanguard, MONDAY, MARCH 10, 2014

Banking & Finance

ccion Microfinance Bank has once again demonstrated its commitment to financial inclusion as it opens its 21st branch at Ajah within the Lagos metropolis. The opening of the new branch further enhances the bank’s mission to provide sustainable, profitable and ethical financial services with a bid to economically empower microentrepreneurs and low income earners in the country. Declaring the Ajah Branch open, Accion Microfinance Bank Managing Director, Bunmi Lawson said, “We have consistently grown our customer’s businesses as they have easy access to loans and our other products. Accion Microfinance Bank is safe and secure, and we will continue to serve our customers to give them a brighter future. This is the value we bring to the Ajah community”. With Accion Microfinance Bank formally declared open for business, several guests at the opening ceremony took the opportunity to open accounts with the bank. Officers of the bank were also on hand to introduce the bank’s products and services.

Awodein retires from Skye Bank Board

non- Executive Director of Skye Bank Plc, Mr. Kola Awodein (SAN), has retired from the board of the bank with effect from February 18, 2014. A statement issued by the Financial Institution said the Board and management of the Bank thanked the legal luminary for 12 years of meritorious service and wished him success in his future endeavors. Mr. Awodein is a Senior Advocate of Nigeria. A graduate of the University of Ife (Now Obafemi Awolowo University) and an alumnus of the Harvard Business School he started his legal career at Olajide Oyewole & Co and later established his own law practice. He has played a significant role in several big ticket transactions and has been awarded several prizes and awards in recognition of his contribution . In addition to holding several appointments, he is also a very active member of the Nigerian Bar Association. Awodein is well known for his publications and editorials. C M Y K

By BABAJIDE KOMOLAFE WADA Zakari’s countenance does not reflect the burden of the enormous responsibilities he carries as the Chairman of the State Universal Basic Education Board, Kano (Kano SUBEB). He is responsible for the payment of the salaries of over 60,000 staff of the Board. “It used to be a very herculean task with lot of challenges”, he said. Addressing a conference on electronic payment in Accra, Ghana, he explained why the Board abandoned manual payment of salaries for electronic payment. “We used to pay manually with payment vouchers (PVs) prepared manually by account clerks. But there were numerous challenges. These include delay in the preparation of payment vouchers, delay in salary disbursement due to late submission of PVs by local government education authorities (LGEAs) as well as the time consuming task of signing lots of cheques. In addition to these were, rampant complaints by staff on irregularities/ inconsistence of their monthly salaries, and risks of moving cash from banks to LGEAs, schools and individuals," he said. Switching to electronic payment did not only eliminate these problems, it made it possible for Zakari to pay the salaries of over 61,000 staff with the click of a button and from anywhere in the world. “We now do end-to-end payment from the Board’s electronic payment software to the accounts of beneficiaries in

their banks. No more delays from writing cheques, and it has helped us to reduce cases of corruption," he said, adding, “that is why I can attend this conference at the end of the month, without worrying how to pay salaries of my staff. Similar testimony was shared by Olabode Ajigbolamu, Director, Central Pay Office of the Accountant General, Ondo State. He spoke on the movement of Ondo state from manual to electronic payment through a project called Firstpay Payroll, Biometrics and e-Payment. He said the project, which was a partnership between Firstbank and Ondo State government,

Accion MfB opens 21st branch at Ajah

Cashless Policy: The Remita e-payment proposition to economy multifunctional electronic payment platform called Remita. “What Remita does is to promote payment electronically, paperless, said John Obaro, Chief Executive Officer of SystemSpecs Limited, the Nigerian company that developed Remita. He spoke to Vanguard at the sidelines of the conference, titled, Winning Big with Epayment, organised by Systemspec. “Our objective is that we do not want to see cash; we don’t want to see cheques. We believe these things can be done in an electronic manner both from a corporate

Our objective is that we do not want to see cash; we don’t want to see cheques, we believe these things can be done in an electronic manner both from a corporate perspective where you have joint signatories and from an individual perspective

has helped the state to achieve many things including: Biometric data capture for all workgroups; Live run of payroll, e-payment, and biometrics for all workgroup; Direct and timely salary remittance to staff bank accounts; and Direct delivery of staff payslips and payment alerts to their email and cell phones. The ease and comfort of paying thousands of people at the click of a button was not just made possible by switching to electronic payment, but by a

perspective where you have joint signatories and from an individual perceptive," he said. Remita, which is the Greek word for ‘remittance’ was a child of necessity. It was necessitated by the need of corporate organizations for a comprehensive purpose-built one-stop corporate e-payment solution. “The needs of these corporates keep changing,” he told the gathering of e-payment experts from Central Bank of Nigeria, Nigeria Interbank Settlement System (NIBSS) and Nigerian banks. “ First

COMMISSIONING: From left Mr Edgar Dominguez, Branch Manager, Texas Office, Hont Gllobal Services; Mr Humphrey Okonkwo, MD and Mrs Chinwe Okonkwo, Director at the press conference and commissioning of Nigeria office of Hont Global services, a logistic services company based in Hoston, USA. Photo by Lamidi Bamidele

they ask for salary payment, then after discovering their problems have not disappeared they ask for payroll processing solution, then biometrics, then human resources, while the customer continues to send manual schedules to PFAs, HMO etc, and process tax remittances manually. They want a robust e-Payment solution that can help make vendor/third party payment. They also want a collection solution with automated direct debit capability. They want something that integrates with their in-house solutions especially as they become more IT aware," he said. Efforts by SystemSpecs to respond to these needs led to the creation of Remita in 2005. Though initially developed to help corporate bodies post payroll payments electronically, Remita has moved beyond just e-Payment to an integrated one-stop solution – Biometrics, Payroll Preparation, e-Payment and eCollections for Corporates and Individuals. Thus Remita can be used to deliver funds of customers to their nominated accounts in any financial institution or purse, and “collect” funds on behalf of customers from designated accounts or tellers in any bank. This can be via standing orders, direct debit or direct credit. It can also be used for payroll preparation and processing, electronic delivery of schedules to third parties, as well as delivery of customers’ electronic schedules to relevant bodies such as pension fund administrators (PFAs), pension fund custodians (PFCs), tax offices and cooperatives. Though originally developed to meet e-payment needs of organizations, it can also be used by individuals. According to Deremi Atanda, Executive Director, SystemSpecs, with Remita, individuals can make payments to beneficiary accounts in their bank or any other bank from the comfort of their home or office. They can issue one or several cheques at a time. In addition, they can issue standing orders on a oneoff basis for the payment of their tithes, offerings, and monthly premiums, and annual subscriptions, regular and steady transfers to their parents, children, other dependents or charity organizations. Remita Personal keeps a comprehensive view of your transactions and standing orders across all banks.

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Banking & Finance

CBN, IFC partner to promote sustainable banking By JONAH NWOKPOKU

THE Central Bank of Nigeria, CBN and International Finance Corporation, IFC has entered into partnership to drive the implementation of the sustainable banking principles in Nigeria. CBN said the part-

nership is a demonstration of the strength of the sustainability agenda in the country. Speaking at an international sustainable banking forum organized by the two finance bodies in Lagos, Acting governor of CBN, Dr. Sarah Alade, said the partnership is an approach to driving socially re-

sponsible and sustainable banking. Represented by the Deputy Governor, Operations, CBN, Dr. Kingsley Moghalu, she said in a keynote address, that the forum was to upscale knowledge in emerging markets by meeting the needs of today without compromising the opportunities

of tomorrow through sustainable banking. According to her, “In the 21st century, being sustainable is no longer an option but a prerequisite for sustainable business.” She explained that the nine principles to ensure sustainable banking in Nigeria have been adopted. “The CBN has is-

sued circulars for implementation of these principles. The structures to institutionalize the principles have also been put in place. The CBN is also building capacities to strengthen competencies since it is an emerging sector,” she said. She further explained that, “After the 2007 global financial crisis, the issue of sustainability has become so crucial because we saw the shortsightedness of just focusing exclusively on profit. The crisis rose as a result of financialisation, people making money from finance in finance, but neglected the people, the sustainability, the economic development and real sector development? That is why sustainability is very important and that is why CBN is spearheading it and we are very proud that the CBN is leading the way in the financial sector. Sustainability is the future.” Earlier in a welcome address, the CBN

Deputy Governor, Corporate services, Suleiman Barau said the forum sought to offer innovative and sustainable development solutions to the banking industry as the forum provided opportunity to share knowledge and technical expertise required to drive sustainable banking. On his part, IFC Country Manager for Nigeria, Solomon Quaynor said that IFC has been committed to sustainable banking for 25 years and in Nigeria, it is contributing in that direction through the provision of gasbased power plants since they are more efficient and environmentally friendly. He disclosed IFC is about to close 450MW Integrated Power Project, IPP deal and has also advanced on its gas project. According to him,, “Sustainability is central to inclusive economic growth and aligns with IFC’s strategy for long term economic development.”

Keystone Bank promotes 627 staff EYSTONE Bank K has announced the promotion of 627

members of staff between the Executive Trainee and Deputy Manger grade. The promotion exercise according to the Managing Director/ CEO, Mr. Philip Ikeazor, is “in line with Management’s commitment to recognize merit and reward. It is also a major stride in the spirit of fostering and building a high performance and engaged workforce, delivering convenient and reliable banking services to our esteemed customers.

Criteria for promotion were based on performance assessment score, promotion readiness, tenure on current grade and absence of disciplinary actions. While congratulating the staff, the Keystone Bank boss admonished them to be spurred to “higher performance and exhibit a more passionate approach towards contributing to and achieving the Bank’s customer centric goals.” Keystone Bank is a technology and service-driven bank with over 200 business offices in Nigeria. C M Y K

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Corporate Finance

BY PETER EGWUATU

otus Capital, a company listed on the Nigerian Stock Exchange, NSE has won the prestigious 2013 Islamic Finance News, IFN African Deal of the Year Category as the Lead Issuing House for the N11.4billion Osun State Sukuk issue which was listed on the NSE in September 2013. This was the first ever subsovereign Sukuk in Africa. The issue was oversubscribed by about 20 per cent which was a positive confirmation of the trust and confidence the market placed on the offer. The Osun State Government, represented by the Honourable Commissioner of Finance, and the Solicitors to the Issue, Kola Awodein and Co, were also award recipients for the deal. According to a statement from the NSE, “Close to 400 transactions were nominated for 2013 in over 30 categories in the IFN Awards Deal of the Year, signifying a 33 percent rise in the number of nominations and a 20 percent increase in categories over the previous year.”

Centenary Celebration: FG offers N100m lottery to reward Nigerians

s part of Nigeria 100 years celebration, the Federal Government has announced a partnership with a lottery firm, Secured Electronic Technology Plc, to organise a N100 million grand prize centenary lottery promotion to reward Nigerians for their loyalty to the country. The announcement was made in Lagos by the Secretary to the Government of the Federation (SGF), Pius Anyim at a press conference to make public the modalities for the Nigerian Centenary Lottery. According to the SGF, who was represented at the event by his Special Assistant on Media, Sam Onwuobasi, is initiated by the government as a poverty alleviating and wealth creating program. Anyim who expressed the support of the Federal Government for the project also noted that the project was purely private sector – driven.

takeholders in the capital market said lack of effective secondary market trading affects Africa’s domestic bond market, just as FBN Capital, a subsidiary of FBN Holdings Plc, has advised the state governments in the continent to seek liquidity status to improve the liquidity of state government bonds. It should be noted that African economies have been growing faster than their Western counterparts in recent years. This year ’s Bonds & Loans Africa event, the continent’s only PanAfrican Capital Markets conference, which took place in Cape Town on the 26th and 27th of February 2014, offered a rare platform and opportunity for local and international banks, borrowers, issuers, investors and financial service providers, investors, finance decision-makers, and stakeholders, to hear from key decision-makers across Africa, support their economies and encourage investor participation locally and internationally. With over 300 attendees from companies and institutions across Africa and Europe, FBN Capital, along with panelists from Investec Asset Management, and Bayport International Group among others, spoke on the session exploring issues regarding why a lack of secondary market trading is damaging the progress of Africa’s domestic market. The key areas where local Fund Managers can help in kick-starting development in domestic African bond markets, and what has been done so far in reforming African Pension Funds as well as discussing where they are currently investing. The event provided an opportunity for stakeholders and potential investors to meet key market players and potential business partners, and gain an insight on where the opportunities lie on the continent going forward. Speaking at the event which was co-sponsored by FBN Capital, Tairat

•Michael Oyebola, Director & Head, Asset Management, FBN Capital

Lack of secondary market trading affects Africa’s domestic bonds — OYEBOLA

Lotus wins IFN’s lead Issuing House awards on Sukuk

Nigeria are now being encouraged to seek liquidity status to improve the liquidity of state government bonds as banks will be able to invest in these instruments and put it towards their liquidity ratio calculations. In addition, she noted that Nigeria’s Federal Government, in 2010, granted a tax waiver for 10 years on bonds, a move which improved the yield on all State government and corporate bond issues and could potentially reduce the cost if issue”. Also speaking at the forum, the Director General, Debt Management Office, DMO, Mr.Abraham Nwankwo, stated that “A useful indication of the appetite of foreign investors for Nigeria is the response to the 2013 Eurobonds issuances which

The Federal Government, in 2010, granted a tax waiver for 10 years on bonds, a move which improves the yield on all State Government and corporate bonds

Tijani, Head of Debt Capital Markets of the firm said during the panel which explored the evolution of the local bond markets in Africa, “In terms of liquidity, we see a lot of activity in sovereign bonds.

Whilst we have seen some sub sovereign issues, these instruments have not been as liquid as the bonds issued by the Federal Government”. Tairat further stated that state governments in

saw the subscription of about 191 reputable Fund Managers and investors in the July issuance”. He said Nigeria has a strong resource base and urged that the financial markets focus on the big picture and not react to small events.” FBN Capital Limited is a full service Investment Bank and Asset Management Company, and a subsidiary of FBN Holdings Plc, one of the strongest and most dependable financial groups in Africa. The firm was recently recognised as Best Investment Bank in Nigeria for the third year running by Global Finance Magazine, and in 2013 was also named in the World Finance Banking Awards as the Best Investment Bank in Nigeria and the EMEA Finance African Banking Awards as the best local Investment Bank.

Arqaam Capital plans trade in African bonds, derivatives estate, aviation and other sectors, Abbott said. The firm

rqaam Capital Ltd., a D u b a i - b a s e d investment bank focusing on emerging markets, said it plans to trade African bonds and derivatives after opening a brokerage in Johannesburg in January. Arqaam became the first broker to join Johannesburg’s stock exchange in three years, pitting it against research teams from Deutsche Bank AG (DBK), Renaissance Capital Holdings Ltd., Standard Bank Group Ltd. (SBK) and JPMorgan Chase & Co. (JPM)

“We’re under no illusions that this is a tough market,” Ross Abbott, head of Arqaam in South Africa, said in an interview in Johannesburg last week. “We believe we’ll be the first Cape-to-Cairo broker. We started with cash equities and we’re looking at the bond market, derivatives and maybe asset management with an Africa fund” Abbott added. Arqaam plans to extend its coverage to the mining industry from the 49 African financial-services stocks it covers, before building research on consumer, real

plans to trade over-the-counter bonds and is focusing on countries including Kenya, Ghana, Nigeria, Morocco and Egypt, he said. RenCap, the Russian investment bank controlled by billionaire Mikhail Prokhorov, said Feb. 24 it had hired Rupert Preece to head sub-Saharan fixed-income trading as demand for African bonds increases. Last year Credit Suisse Group AG (CSGN) switched its coverage of fixed income in sub-Saharan Africa from London to Johannesburg to boost emerging market revenue.

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Corporate Finance

DISCOURSE: From left, Managing Partner, SIAO, Pastor Ituah Ighodalo; CEO, Prima Garnet Africa, Mr. Lolu Akinwunmi; COO/GM, Cutler Communications, Ms Laura Oloyede; and CEO, Business School Netherlands, Nigeria, Mr. Lere Baale, during a public discourse on ‘Job Creation: Harnessing Entrepreneurial Skills,’ in Lagos.

SMEs urged to leverage NASD platform for funding needs STORIES BY NKIRUKA NNOROM

mall and Medium scale Enterprises, SMES, have been urged to take advantage of the platform provided by the National Association of Security Dealers Plc, NASD, to access funds for their operations. Bola Ajomale, Managing Director/CEO, NASD, made the call at the Fidelity SME Forum, a weekly radio programme organised by Fidelity Bank Plc. Speaking on the ‘Sources of Capital for SMEs: Options and Requirements’, Ajomale explained that NASD does not provide fund but a market for those who have funds and those who are seeking funds to meet their operational needs. “If a company wants to raise money, they would approach us through an adviser and they showcase themselves as well as their funds. They can also promise their shareholders or those that invest in them that they can sell down through the market. “A private equity firm or venture capital firms actually have their own funds from managed funds that they are seeking to invest. So, we are not seeking to invest, rather we are creating a market where both existing and prospective investors and shareholders can meet and trade.” He explained that NASD is

a collection of capital market operators under the umbrella of the Securities and Exchange Commission, SEC, mandated to trade on nonlisted securities. “The whole idea was that there are a lot of securities that are not listed on the Nigerian Stock Exchange, NSE, but the investor still needs liquidity and essentially the SEC challenged the capital market industry to create an avenue where this can be traded easily. “Our platform provides an avenue through which you can at least show that you

have these shares to sell and also allows people to see what is available to buy because as some people want liquidity, other people are looking for investments to get into. We match both the investor and one who is getting out on investment together.” On how a company can qualify to take advantage of this platform, Ajomale stated that there is an eligibility criterion for every single entrant and stage, stressing that there are large and small companies already trading on the platform. “Essentially, what we do, we categorise them. You have

the blue category and the pink category which is probably younger with corporate governance issues to deal with. They probably have some finance issues to deal with. They need to have a certain amount of structure also for them to be attractive to investors. ”They must have advisers. We would encourage them even if they just haVE seven shareholders and once you have shareholders, you can register as a Plc. We would encourage them to be a public limited company because that way, they can access a wider range of funds. We do not have a number of size of the capital per say but we’ve started talking to SME companies.” Fidelity SME Forum is a deliberate attempt by the bank to resuscitate the Small and Medium – scale Enterprises (SMEs) and create a new generation of entrepreneurs with the “I can do” spirit in Nigeria. This is not only seen as the bank’s believe in SMEs as a growth catalyst but also a clear commitment to efforts aimed at revamping the Nigerian economy. The weekly radio programme, essentially seeks to empower Nigerian entrepreneurs with knowledge, know-how and expertise that will help them build successful businesses. This it does by bringing renowned entrepreneurs to the show on weekly basis to share their experiences and encourage potential and existing entrepreneurs. This is aside the other financial, legal and business advisory services the Fidelity Managed SMEs Business renders to customers

NSE facilitates capacity training for dealing clerks

ollowing the need to keep stockbrokers operating in the nation’s capital market abreast of latest technology in the market, the Nigerian Stock Exchange, NSE, said that arrangements have been concluded to carry out its Continuous Professional Development (CPD) training for dealing clerks. The programme, which is scheduled to take place at The Stock Exchange Building in Marina Lagos on March 15, 2014, will offer brokers insight into how to reach the retail market using new technology implemented with X-GEN. “The objective of the workshop is to provide practising stockbrokers with a strong grounding in the advanced functionalities of the new trading system -X-GEN, explained Mr. Ade Ewuosho, Acting Head, Market Operations, NSE. He noted that it will also provide stockbrokers with detailed understanding of the new market structure recently introduced in late 2013.

According to Ewuosho, “The broad-based programme will also provide the participants with an opportunity to hone in their existing skills as well as interact with other stockbrokers to deepen their knowledge of the new system. This will be the first CPD programme since the Exchange went live on their new platform in September 2013. Emphasis will focus on the market participants, minimum operating requirements amongst other new developments in the capital market.” Continuing education programmess benefit both businesses and workers; businesses encourage continuing education in order to sustain a highly skilled and specialised workforce –one with the skills to perform a variety of tasks or workers with “crossfunctional” skills. Dealing Clerks, on the other hand, may receive promotions, gain more power in the job market, or become more valuable employees by enrolling for continuing-education programmes, he stated.

Old Mutual set for public offering, proposes dividend Old Mutual Plc has announced intension to proceed with an initial public offering of a minority interest in its US Asset Management (USAM) business in 2014, even as the company has proposed 6.0p per share dividend for the year ended December 31, 2013. The company in a statement said the public offering, which is being undertaken to enhance USAM’s financial and operating flexibility, would be subject to prevailing market conditions. It further stated that the public offer will help the company to deploy capital to continue to grow and further develop its multi-boutique asset management business. We expect that this offering will broaden USAM’s access to capital to pursue future growth initiatives across its business, including collaborative investments in affiliate growth and further penetration of non-US markets through its global distribution platform, as well as strategic partnerships with high quality boutique asset management firms with complementary investment products, the company said.

ETI shareholders approve governance action plan Shareholders of Ecobank Transnational Incorporated, ETI, have ratified the Governance Action Plan proposed by the Board of Directors in compliance with the recommendations of the Securities & Exchange Commission, SEC. The implementation of the detailed 51 point plan, according to notice to the Nigerian Stock Exchange, NSE, will commence immediately. The bank stated that at their meeting, which was attended by institutional shareholders as well as minority shareholders, the current 12 person Board of Director was retained following the decision by the institutional shareholders of the PIC, AMCON and IFC to withdraw a motion which they had proposed to create a smaller Interim Board.

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Commodity index Feb 28-Mar 6, 2014

Micro-Finance

UPMfB disburses N886m loans in one year Stories by PROVIDENCE OBUH

muchinemere Pro-credit Micro Finance Bank (UPMFB) has disbursed total loans of N886.23 million to 4,174 active poor, in the financial year ended, December 31, 2013. Also, it gave out a total micro credit fund of N1.05 billion under loans and advances to a total of 5,288 beneficiaries pursuant to its goal of eradicating

poverty in the society and improve quality of life. In a statement, Head of the bank’s Credit Department, Mr. Odinaka Okeke, said the bank surpassed its target of N595.89 million in 2013, with the total disbursement of N1.05 billion. Okeke assured of improved performance in 2014, stating that the bank is targeting a total micro credit facilities disbursement of N1.3 billion, made up of N550 million micro loans,

From left: Mr. Yemi Cardoso, Chairman of the Board, EFInA; Ms. Salah Goss, Programme Officer, Bill & Melinda Gates Foundation; Ms. Modupe Ladipo, Chief Executive Officer, EFInA; Mr. Peter Goldstein, Vice President, InterMedia.

N500 million other loans and N240 million advances. He urged the customers to use the facilities wisely and ensure prompt payment, so as to continue to receive more from the bank. The Credit manager said the facilities were aimed at creating maximum wealth for the beneficiaries, hence he advised them to manage it with prudence and honesty. UPMFB’s Head of Finance and Accounts, Mrs. Bibbian Ofoje, said the bank recorded an unaudited total income of N372.08 million with a total unaudited profit of N121,242, in 2013, which she attributed to increase in the bank’s financial activities in the year. Chairman of the bank and a Roman Catholic Prelate, Msgr. Obiora Ike, said the bank would not relent in its effort to improve the quality of lives of the poor within the Nigerian environment through micro financing.

R Wells calls for proper place for mothers in society …holds 2014 mothers day fiesta

Wells Media and Advertising Company Limited has called for a proper place for mothers as important tools for nation building, while announcing its 2014 mothers day fiesta. The fiesta tagged: ' C e l e b r a t i n g Motherhood” is scheduled to hold in Lagos. Managing Director, R Wells Media, Mrs. Jibe Ologeh, made the call at a press briefing heralding the fiesta, stating that the fiesta is centered on mothers' world, where the new wave of the game movement is no longer acceptable to mothers. Describing mothers as very important in nation building and in the family, Ologeh cited Prof. Grace Alile Williams, saying that the hand that rocks the cradle rules the world. She said, “if mothers

are properly positioned in the scheme of things in the society, in the family and in the nation, am sure you will have less destitute children and men who beat their wife and less children who drop out of school. “This is not only to

celebrate mothers, it is also a call for mothers to be responsible and responsive to their initial role of raising the family. On mothers world, we say the new wave of the game movement is not acceptable to mothers."

IFC, Goldman Sachs launch $600m facility for female entrepreneurs

nternational Finance Corporation, IFC, in collaboration with Goldman Sachs has launched a $600 million global facility that will increase access to finance to as many as 100,000 women entrepreneurs in emerging markets. The Women Entrepreneurs Opportunity Facility is the first of its kind to be dedicated exclusively to financing women-owned small and medium businesses in developing countries. In a statement, IFC said that it will invest an initial $100 million and the Goldman Sachs Foundation will provide $32 million and manage the facility expected to mobilise up to an additional $468 million from public and private investors. “The facility is part of the World Bank’s overall strategy to promote gender equality and ensure the social and economic welfare of one-half of the world’s population. C M Y K

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Homes & Housing Finance d i f f e r e n t categories, only 98 met the requirements and cut-off date for submission of forms for the first draw, out of which only 31 beneficiaries e m e r g e d . According to him the remaining 169 houses from the first draw would be rolled over to the next draw for next month where both those who could not win this month and those who did not meet the requirement for the first draw will have another opportunity without having to apply again. Two hundred homes were put up for the draw but only 98 applicants were successfully pre-qualified, out of which a total of 31 homeowners were produced through the draw. Six persons won one 3-bedroom flat each while another six won one 2-bedroom flats each and two persons won one 1bedroom flats each in Shitta Scheme in Surulere; four persons won one 3-bedroom flats each in Hon Olaitan Mustapha Estate, Ijaiye, Ojokoro; ten persons won one 3-bedroom flats each in Oba Lateef Adams Estate, Iloro, Agege; two people won 3bedroom flats each in CHOIS Gardens, Abijo; while one person won a 3 bedroom flat in Alhaja Adetoun Mustapha Estate Ijaiye, Ojokoro. Some of the winners are Mrs Bukola Lawal, Mrs Nkiru Omenyi, Mr and Mrs Taiye Hassan Laaro, Mr. Olusegun Babalola , Mr Olukayode Adegboyega for the Shitta housing scheme.

•Lagos HOMS housing estate in Shogunro

Niger to build 1,000 housing units this year

iger State government has concluded arrangement to construct additional 1000 housing units in the state before the end of the year, with Suleja and Minna getting 500 housing units each. Governor Mu’azu Babangida Aliyu said the idea is to reduce housing deficit confronting the two towns in the state. The governor made this known when he hosted the management of an indigenous firm that will handle the project. He directed the ministry of lands to make available the necessary documents to the construction firm so as to commence work immediately on the sites. Aliyu admonished the company to ensure that it keeps to the terms of the agreement, adding that government will not hesitate to revoke the contract if found to be in breach of the agreement. He noted that the administration had gone into partnership with many companies to provide cheap and decent houses for the people because of its belief that if people were made to live in decent environment they will give their best to the service of the state and the nation.

Kaduna seals PPP deal on mass housing

aduna State government has signed a Memorandum of Understanding (MoU) with Trans Atlantic Integrated Development Limited for the construction of 3000 units of houses under a Public Private Partnership (PPP) mass housing scheme. Governor Muktar Ramalan Yero who attributed the widespread corruption in the country to desperate efforts by citizens to own personal houses, said with this type of development people will no longer be under pressure to own their houses. “Our administration attaches great importance to housing development in Kaduna State and government is concerned about finding ways to address the huge deficit in housing,” he said. Under the arrangement, Trans Atlantic Integrated Development Limited is to construct 3000 units of houses, while Kaduna State government provides Certificate of Occupancy for 100 hectares of land to be used for the project.

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Lagos HOMS to become self-sustaining in 7yrs — FASHOLA Stories by YINKA KOLAWOLE

he Lagos Home O w n e r s h i p Mortgage Scheme (Lagos HOMS) will become self-sustaining in seven years if all beneficiaries of the scheme pay up their mortgages promptly. Lagos HOMS is an initiative of the state government to help residents of the state own houses in a sustainable way. Governor Babatunde Fashola stated this when the first draw to pick homeowners under the scheme was held in Lagos last week. He emphasised the need for prospective home owners under the scheme to pay their monthly mortgages regularly, pointing out that this would ensure that money is always available to build more houses and give other tax-paying Lagosians the opportunity to also benefit from the scheme. “By so doing, you will bring back a pool of money into the system that allows us and enables us to build for other people who have also paid taxes and who are waiting on the queue. If all mortgage owners who benefit from the scheme pay up their mortgages promptly, in seven years time the scheme would become self-sustaining and government would not need to commit money to the scheme. In that case the Lagos State Government will no longer need to put any more money into this scheme because of the money that will be coming out. So that is the biggest responsibility that home owners have,” he stated. Fashola also charged the beneficiaries to ensure they pay

up their maintenance charges so that the houses would not be like that of Jakande estates that the people failed to maintain. “The owners must take responsibility of paying rates and charges that come with the privilege and the right to own a home, such as maintenance charges. If you see many of the homes built by Alhaji Lateef Jakande over the last few years, government still has the responsibility to go and clean, to go and paint, to go and maintain homes that it has sold. This will not be allowed under this scheme. Home owners must take responsibility for their homes and pay maintenance charges,” he said. Meanwhile, the governor said that the second phase of the Lagos HOMS project would soon commence with the involvement of private sector

participants. He said under the second phase, the private sector would be allowed to build houses for the scheme with government being the guarantee purchaser of the houses for sale to the public under the scheme. “By so doing, we will be in the position to either double or triple the number of homes from 200 to 600 or 800 per month if we allow private sector to build. We will buy from them and put into the mortgage pool and distribute out,” he said. In his remarks, the Executive Secretary of the Lagos Mortgage Board (LMB), the board saddled with the responsibility of managing the scheme, Mr. Akinola Kodjo Sagoe, explained that a total of 200 houses were available for the draw. He, however, noted that of the 322 applicants in the

FG moves to review PPP housing projects

he Federal Government has commenced moves to review the implementation of all Public Private Partnership (PPP) projects in the housing sector. Erstwhile Supervising Minister of Lands, Housing and Urban Development, Mr. Muhammad Sada, who disclosed this in Abuja, said that the ministry has set up a task force for this purpose. He said the task force is to develop appropriate guidelines and eligibility criteria for the participation of qualified parties in the design and implementation of PPP projects in the ministry. The minister further disclosed that the move was aimed at further strengthening the PPP arrangement in the ministry for effective contributions to sustainable housing delivery in the country. He said the ministry was determined to actualise the long term development agenda in the housing and urban development, adding that it will continue to collaborate with the private sector to accomplish the task. “The ministry will also continue to collaborate with governments at

the state and local levels to actualise President Goodluck Jonathan’s aspirations for the housing sector,” he said. Sada said the housing ministry has reached an agreement with Home Builders Institute in the U.S. to train 1,000 artisans and craftsmen within the year to enhance their competence. He said the training will focus on building structures, building services and finishing. He said the ministry has also entered into an agreement with the Ministry of National Development in Singapore to build Nigeria’s institutional capacity in the housing sector. According to him, participants would be drawn from block and brick layers, plumbers, painters, carpenters, aluminum fabricators and welders, adding that the training would also include landscaping and solar energy facilities maintenance. “This is to enable us to competently address the developmental challenges of sustainable land administration, management, affordable housing and urban development on a long term basis.

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Insurance

Experts urge insurers to prioritize training Stories by ROSEMARY ONUOHA

here is need for the board and management of insurance companies to set aside yearly budget for training and re-training of all staff in order to boost human capacity and enhance productivity. Director General of the Chartered Insurance Institute of Nigeria, Mr. Kola Ahmed who made this assertion in Lagos, noted that the importance of regular training for insurance practitioners cannot be over emphasised. According to Ahmed, the insurance industry still needs to do more as regards training of their workforce to enhance productivity. Ahmed said that the budget for training should not be skewed towards the top echelon of insurance companies alone, but must be spread to accommodate both junior workers. This he said is necessary if the board and management expects the performance of workers to increase going forward. Meanwhile, Managing Director of FBN Life Assurance, Mr. Val Ojumah, has charged insurance operators to regularly send their staff for training in order to equip them to play effective role in the oil and gas risk business. According to Ojumah, the level of knowledge on oil and gas business by some insurance practitioners is relatively low therefore one way of ensuring that companies play actively in the oil and gas business is to demonstrate and show that employees are sent to training institutions. Ojumah noted that training of insurance personnel could

serve as key for the industry to break the myth that surrounds the oil and gas industry. Also, former Managing Director of Crystalife Assurance Plc, Mrs. Oluseyi Ifaturoti said that the success of the insurance industry is

hinged on the effective training and retraining of human capital in the industry. Ifaturoti said that training and retraining programmes must assume a different dimension with emphasis on preparing the workforce for

VISIT: President of the Nigerian Council of Registered Insurance Brokers,(NCRIB) Mr Ayodapo Shoderu (right), in a handshake with the Group Managing Director of Geepee Group of Companies, Mr. Prakash Vaswani, when the former paid a visit to the NCRIB Secretariat in Lagos. With them is the Director, Human Resources of the NCRIB, Mr Lukeman Adeleye (left) and the Council’s Director of Finance, Mrs Lola Ogedengbe.

College of insurance to kick off in June … CIIN appoints rector By GODFREY ONORIODE

he Chartered Insurance Institute of Nigeria, CIIN, said that the College of Insurance and Business Management will take-off for business by June 2014. Accordingly, the College Rector, Mrs. Yeside Abiodun Oyetayo is billed to assume

duty in April with expectation of fast-tracking the initiation of college programme in the course of the year. Director General of the Institute, Mr. Kola Ahmed, disclosed this to Journalists at a press conference held in its Secretariat in Lagos. According to Ahmed, the institute is in the final phase of completing the college. He said that the first phase

Corporate businesses advised to utilise services of brokers

higher challenges. The CIIN, according to Ifaturoti, is statutorily empowered to cater for the insurance industry educational and training needs, a function which has become more imperative in the emerging scenario.

orporate business institutions have been advised to utilise the services of insurance brokers in sustaining their business prospect. President of the Nigerian Council of Registered Insurance Brokers, Mr Ayodapo Shoderu gave the advice when the Chairman of Geepee Group of companies, Mr. Prakash Vaswani paid a courtesy visit to the NCRIB Secretariat in Lagos. According to Shoderu, the fortunes of businesses and their sustainability are determined by risk management strategies put in place by management, of which insurance is pivotal. “The extent of risk exposures by most business concerns, especially in the

changing global environment calls for proactive initiatives by business managers and this will determine their continued existence,” Shoderu noted. The NCRIB President said that insurance brokers assist their clients in maximising their insurances as they provide them with different profitable rates, in addition to their rendition of personalised services. Shoderu disclosed that public confidence in insurance brokerage services had been enhanced by the promulgation of the NCRIB Act 2003 through which the Council regulates the ethical conduct of its members and provide them with regular training exposures, to catch up with changing dynamics of the profession.

which includes the Admin/ Multipurpose block, the restaurant and three Chalets were on ground as at May 2013 while the second phase was also completed last year. He said that six additional structures has been added to the third and final phase which includes 50 bedroom (all ensuite) hall of residence, 1 storey 2,3-bedroom senior staff quarters and four units of chalet which are expected to be completed before the end of April. He said that the four buildings under constructions are 1-twin duplex rector ’s lodge and 3 additional chalets. He noted that these efforts represent an uninhibited commitment towards actualisation of the college project and ultimately launching it for full take off. On staff renumeration, the CIIN boss said that the Governing Council has approved new salary structures and promotions of three erstwhile deputy directors to full directors; they are Mr. Joseph Obah, Director/Head Corporate Affairs, Admin & HR Directorate.

Business journal holds insurance summit

he first Business Journal Insurance Summit & Exhibition 2014 is set to hold today in Lagos. The theme is: ‘Closing Insurance Awareness Gap for Business Growth.’ Mr. Prince Cookey, Publisher/ Editor-in-Chief of Business Journal, stated that the summit is to provide a platform for stakeholders in the insurance industry to brainstorm on key issues driving the immediate and future growth of the market. “It is also our desire to keep insurance on the front-burner of national discourse to create better awareness and understanding of the industry and ensure sustainable growth,” Cookey said. “As the theme suggests, we strongly believe that closing the yawning insurance awareness gap in Nigeria will lead to dramatic increase in the fortunes of the industry for the overall benefit of all stakeholders-regulators, operators and consumers.” The Business Journal publisher urged current stakeholders in the industry to seize opportunity of the summit to honestly address the challenges retarding rapid growth of the market to re-write the history of the insurance sector in Nigeria. He described the summit as the little contribution of Business Journal magazine to the development of the insurance industry in Nigeria. He promised that the summit would be an annual event to constantly evaluate the progress of the industry, identify weak spots and generate ideas to address them and move the market forward. Cookey said Mr. Fola Daniel, Commissioner for Insurance, National Insurance Commission (NAICOM) would be the Special Guest of Honour at the event to be chaired by Mr. Fatai, K. Lawal, President/Chairman of Council, Chartered Insurance Institute of Nigeria (CIIN). The Distinguished Guest Speakers include Dr. Akin Ogunbiyi, Group Managing Director/CEO, Mutual Benefits Assurance Plc; Mr. Gbolahan Olutayo, Managing Director/ CEO, Goldlink Insurance Plc; Mr. Abdul Koledoye, President/ Chairman of Council, National Institute of Marketing of Nigeria; Chief Yemi Soladoye of the Insurance Consumers Association of Nigeria; Mr. Ademayowa Adeduro, Managing Director/CEO, C M Y K

32 — Vanguard, MONDAY, MARCH 10, 2014

Okonjo-Iweala vs Sonala Olumhense: Tag teams (1) n the end it will not matter to us whether we fought with flails or reeds. It will matter to us greatly on what side we fought.” GKCHesterton1874-1936. (VANGUARD BOOK OF QUOTATIONS p 60). “The recovered amount was channeled into rural projects and programmes as per the agreement with the Swiss Government which repartriated the funds. A combined team of Nigerian and Swiss NGOs , with the World Bank, later verified the use of this money…” Paul Nwabuikwu, Special Adviser to Minister of Finance. Guardian, March 2, 2014, p 53. This is going to be war of words; but, it will be hot and relentless between the two tag teams – Okonjo-Iweala/ Nwabuikwu versus Olumhese/ Sobowale. And, it is all about YOU Nigerians. More specifically, it is all about what had happened to the Abacha loot which were recovered from abroad – how much, who received the funds and what happened to them? The first question that comes to your mind is: why team up with Olumhese? The answer is simple. For years, if I had to choose one columnist to read every Sunday, and no other, it would be Olumhese. I stopped buying Guardian on Sunday when he left. Today, March 2, 2014, I just asked for Guardian, and there was Olumhese in a battle of words with Paul Nwabuikwu, spokesman for the Finance Minister. Spokesmen are echoes, not voices; they are like microphones. They can only say out loud what someone else had said. Unfortunately, on an issue such as Abacha loot, they become part of a tag team – the Minister and the “echo.” Like Olumhese, I have had considerable data on Abacha loot which are at variance with what the Minister of Finance and her “partner” are trying to peddle to the public. So, I have invited myself to Olumhese’s corner – as his tag team partner, of course. I feel sorry for the other side already. They are lying through their teeth – all 32 of them. But, before going into specifics, permit me a little digression. All is fair in war, after all. Long-term readers of this page must remember how painful it had been for me as one respected columnist, after another, had left the fourth estate of the Realm to join the First. Suddenly, the “highly intelligent” writer dies and is replaced by someone worse than an envoy – who has been described as “an honest man [woman] sent to lie abroad for the good of his country”, by Sir Henry Wolton, 1568-1639. (BOOK OF QUOTES p 9). When our former colleagues disappear into governments, they emerge as people sent out to lie to Nigerians for the good of the government they serve. The last thing on their minds when they operate is, what is good for Nigeria? That is why some of them make statements which, if they were not in government, they would be ashamed to be associated with. The statement which was lifted from Paul Nwabuikwu’s rejoinder to Olumhese in the Guardian, titled Where Olumhese Goofed on Okonjo-Iweala, is a classic C M Y K

example of an intelligent Nigerian lending his powers to deceive Nigerians on a matter of grave importance – just because he is a spokesman for minister. Is this the same Paul we used to read with great admiration or has there been an identity theft? I wonder. For those who might not understand what the palaver is all about, let me quickly explain. First, there is a dispute about how much was repatriated. Then there is a query regarding what happened to the money. Finally, Olumhese is requesting, on behalf of Nigerians, for accountability – what happened to the money; how was it spent, can we verify the claims? To me, nothing could be more patriotic and clearer. Instead of providing answers, the Minister, through her spokesman (tag team partner), had resorted to falsification of all available records and insults. We set aside, for now, the question of how much? Rest assured that the Minister and Paul will be taught

”

Nigerian money, stolen by Abacha, was traced to Swiss banks; the Swiss Government, instead of returning our money, insisted they were going to supervise how the money was spent

a lesson they will never forget. Let us take a look at the statement made by Paul, quoted above. What Paul is saying, in the usually, tall grammar of officialdom, when out to deceive, is simple. Nigerian money, stolen by Abacha, was traced to Swiss banks. The Swiss Government, instead of returning our money, insisted they were going to supervise how the money was spent. This arrangement received the blessing of the World Bank – when Okonjo-Iweala was there. OkonjoIweala and Paul applaud this insult to our sovereignty. Nothing can be more unpatriotic. Would the Swiss Government have insulted America, Russia, or China the same way if their stolen funds find their way into corrupt Swiss banks? Here was a country which had developed itself on stolen funds from every country, as well as funds from criminal activities globally, telling a victim of its corrupt banking establishment how to spend its own money. Furthermore, Okonjo-Iweala and Paul know too well that the Nigerian constitution stipulates that any funds belonging to the country should be paid into the federation account – first and foremost. Thereafter, it would be allocated, on agreed formula, to all the three tiers of government. Since, it was not clear that the loot was taken from the Federal Government alone, even any agreement to dispense the funds between the Federal Government and any other party, including the World Bank, was unconstitutional.

Vanguard, MONDAY, MACRH 10, 2014 — 33

Aviation

Airline operators yet to pay NAMA N4bn en-route charges STORIES By LAWANI MIKAIRU

igerian Airspace Management Agency, NAMA, is yet to be paid its outstanding N4 billion debts airline operators owe the agency as enroute charges. The operators have refused to pay these charges for some years now and the charges have accumulated to more than N4 billion. NAMA last month won an appeal by the Airline Operators of Nigeria, AON,

as the Supreme Court in a unanimous judgment, dismissed the appeal by AON over the payment of enroute charges. It will be recalled that after the Supreme Court judgment, the former Managing Director of NAMA, Engineer Nnamdi Udoh had appealed to the domestic carriers to “commence the process of liquidating their respective outstanding bills of more than N4 billion on the enroute charges.” According to the General Manager, Public Affairs, NAMA, Mr Supo Atobatele,

“NAMA is statutorily empowered to charge the domestic airlines on the controversial en route services like their foreign counterparts. “The Supreme Court thereafter awarded a cost of N100,000 in favour of NAMA. NAMA on record loses an average of N500milllion accruable revenue annually following the refusal of the domestic carriers to honour bills on enroute services as they often claimed to have 'godfather ’s right' to evade payment.” NAMA had in 2006 won an

appeal by domestic airline operators over the same issue at the Appeal Court in Lagos which declared that the airlines had no cogent reason not to pay for services rendered to them by the agency. Engr. Udoh had said: ‘’From the beginning of this case in 2006, we have chosen not to disrupt the activities of the airlines, even when the Appellant Court in Lagos gave us the power to collect our charges. ‘’We were patient enough not to rock the boat and that is why we followed it up to the Apex Court with the AON and today (Friday), the panel of judges in a unanimous decision dismissed the appeal to our favour.”

Dana Air supports child education D

ana Air has extended the focus of its corporate social responsibility to child education as the airline in partnership with Bi-Courtney Aviation Services Limited (BASL) took pupils on an educational excursion of airport facilities that included having a firsthand experience of how an airplane works. The week long programme saw the airline opening its aircraft doors to over 500 pupils drawn from various schools across Lagos State. According to Samuel Ogbogoro, Media Relations Manager of Dana Air, while welcoming the pupils to the aircraft provided by Dana Air for the expedition purpose, the Chief Pilot of the airline, Captain Segun Omale expressed happiness that Dana Air is once again leading in the drive to impact on the lives of children. Captain Omale said that Dana Airline identifies with all global and local initiatives to improve the education pursuit of children. “We are a caring airline that will continue to pay serious attention to issues that concern proper education of the future generation and our commitment to take the children on this all important excursion is anchored on our firm belief that a well informed child represents hope for the future of mankind as information drives the development of any nation.”

PRESENTATION: From left, former Minister of Foreign Affairs and chairman of occasion, General Ike Nwachukwu, Mrs Nnenna Orji, wife of the author; Dr. Herbert Orji, author, and Aigboje Aig-Imoukhuede, former GMD/CEO, Access Bank Plc/chief presenter, at the official presentation of the book “Platinum Essays in the Philosophy of Applied Economics of Development” in Lagos.PHOTO BY AKEEM SALAU

Aviation stakeholders worry over Nigeria's Category-1 status A

viation experts and stakeholders have expressed fears that the removal of the Director-General of Nigerian Civil Aviation Authority, NCAA few days to the visit of Federal Aviation Administration, FAA, of the United States inspectors to Nigeria to re-certify the country’s Category-1 status, may send wrong signals to the inspectors and consequently affect the country’s chances. The D-G of NCAA is supposed to have a tenure after being cleared by the Senate. This is to create stability in the system and allow the D-G concentrate on his job of providing safety for the delicate aviation industry. The former DG of NCAA, Captain Fola Akinkuotu had told aviation reporters last week that “the Federal Aviation Administration (FAA) has once again written to inform us that they will be visiting Nigeria for a mandatory reassessment of our Category One certification.” “It is, however, important to make it abundantly clear that as part of the conditions attached to certification is that there will be a re-assessment of the receiving country after every three years. Towards this re-assessment, the Nigerian Civil Aviation Authority is putting

all hands on deck to ensure that the nation acquits itself very well in the impending exercise. “To this effect, a Technical Committee has been inaugurated to provide fillip and drive all the preparation process.” The team of American inspectors will be coming to Nigeria on 31st of March. The recertification of Category 1 Status by FAA is a regular exercise and those countries that have not met the re-certification processes have had their certificates withdrawn. Reacting to the sack of the DG of NCAA, the President, Aviation Roundtable, Capt. Dele Ore, said: “I actually think the removal of NCAA DG, Captain Fola Akinkuotu is an aberration. I think the removal of the man shows that we have shot ourselves in the foot by that particular action. It is likely to weigh against the country in terms of the oncoming audit by the United States Federal Aviation Agency. “The painful part of the removal of Akinkuotu is that Oduah actually did not allow that man to do anything in the very few months he was DG. She tied his hands.”

SAHCOL restructures workforce By LAWANI MIKAIRU

he Skyway Aviation Handling Company Limited ,SAHCOL, has commenced restructuring of its workforce. According to Basil Agboarumi, Assistant General Manager, C o r p o r a t e Communications, the exercise is to, “ refocus the company in line with current realities and make it more prepared to face future projections of surpassing customer ’s expectations” In the new structure, Olumide Odebiyi, David Olorundade, Adigun Olaniyi and Lanre Adekola, who were formally Assistant General Managers, Operations, Human Resources, Sales & Marketing, and Engineering & M a i n t e n a n c e , respectively, have now been elevated to the position of General Managers. Also, Olujimi Osho, Formerly Company Secretary/Legal Adviser, is now General Manager, Legal Services/Company Secretary, Lawrence Adejo, the erstwhile Chief Accountant, is now General Manager Finance, while Basil Agboarumi, formally Head Corporate Communications, is now Assistant General Manager, Corporate Communications. Furthermore, Mrs. Boma Ukwunna deployed from the Sifax Offduck Okota, a subsidiary of the Sifax Group, is now the General Manager, Cargo Services. “In a letter detailing this new structure, the Managing Director of SAHCOL, Olu Owolabi, disclosed that the restructuring exercise which is on-going, will spill-over to all staff, hence called for the support, loyalty, and commitment of every staff to realize the company goal.”

C M Y K

34 — Vanguard, MONDAY, MARCH 10, 2014

People in Business out with a collective position.” Health sector problems: “There have been problems in Nigeria’s health sector – between the doctors and other health professionals. The medical doctors try to prove that they are the most senior having had the most extended years of learning and therefore the ones who should be the administrators in hospitals.

Skytrend News formed to render national service —FEMI ADEOYA

r. Femi Adeoya is the Chief Executive Officer of Skytrend Consulting Ltd, a business development and accounting solutions firm which recently added another feather to its cap, Skytrend News, an online news publication. In this chat with Financial Vanguard, Adeoya, an accountant by profession, speaks on Skytrend’s newest initiative and how it is impacting society for good. Excerpts: •Femi Adeoya ....It is our considered opinion that such unilateral closure should not happen in a democracy.

Why we started Skytrend News: ccording to Adeoya, Skytrend News is another initiative from the stables of Skytrend Consulting. “With my knowledge of the emerging market in the online world, I thought of getting Nigerians acquainted with relevant information to help them make informed decisions. I have been a social crusader passionate about good leadership in Nigeria for quite some time now and also being a member of a few civil society organisations, I felt the need to set up a medium to share socio-political and economic information with Nigerians. It was this passion that brought about the idea of Skytrend News which is not your regular online news web site. It is unique in the context of being a web-based news site established primarily to herald the news of Nigeria to Nigerians and to be an active stakeholder in the socioeconomic development of the country in particular and the world at large. Skytrend News is not a business-focused venture, it was formed mainly to render a national service – to provide factual information to Nigerians that will help them make informed decisions as citizens in every area of our national life and as it affects the enthronement of good leadership which will in turn help the nation’s socio-

C M Y K

By EBELE ORAKPO

It is not just about news reportage, it is about giving back to society, being a sort of watchdog to the government, it’s about providing alternative solutions and making policy suggestions .... it’s about being the conscience of the nation

economic development. “ I n Skytrend News, our vision is to champion a knowledge-based growth and be the leading voice in the establishment of good leadership, expose corruption and social ills in the society, establish sound corporate culture, promote the right of every citizen, and the political/socio-economic development of our country. We hope to achieve these by educating, re-orientating and informing with a view to building an egalitarian and equitable society,” Adeoya said. Recounting some of the strides made by the outfit between August 2013 when it started and now, Adeoya said: “We have been able to make some meaningful development. Prof. Wole Soyinka once said: ‘The man dies in him who keeps quiet in the face of injustice.’ Nigeria started her 4 th Republic on May 29, 1999 and since then, we have had a lot of ups and downs in our political life.

"Our nascent democracy is still developing and we feel that there is need for a platform that would be able to provide information that will help the citizens and the country not only develop faster but get to her desired haven," he said. Selling point: deoya noted that Skytrend News follows every story to its logical end. "In Skytrend News, we don’t just break the news but we act on the story with our readers and stakeholders, and that forms our unique selling point. We will never stop at just reporting, our aim is always to dig deeper, get to the bottom, right the wrongs, dot the ‘i’s and cross the ‘t’s.” xplaining further, Adeoya said: “What most of the regular web sites do is to break news, inform people and then stop at that but we are different. We don’t just want to break the news and inform or just educate, we want to act on the story, and we want to develop the story

l i k e CNN d o e s . When CNN breaks a story, they will say ‘developing story.’ That is their unique selling point so they don’t just stop at bringing the story, they report every area as it develops and they analyze it. Once we get a piece of information, we try to get to the root of it and when we are acting on it, we don’t just act unilaterally, we do so in partnership with our numerous followers and stakeholders. "An example is the recent closure of Iponri market in Lagos. For us, it was not just enough to report that story, we followed it up, we interviewed the Surulere Local Govt Chairman, we spoke with the traders and we were able to discover that the reason why it was locked up was not acceptable and the process ill-thought out. It is our considered opinion that such unilateral closure should not happen in a democracy and that processes should be well spelt out and defined to guide market activities. his was not the case in this particular situation. So when we have a ‘market leader ’ locking up a particular market for pecuniary gains or such untoward motive and asking traders to bring certain documents before reopening, we want to investigate the reason(s) for that. So we act on the story and in doing this, we involve concerned Nigerians in such trending issues and we come

e published an article on the need for relevant stakeholders to quickly address this issue. Thanks to modern online communication technology, we were able to assemble stakeholders to have an indepth discussion on our web-based discussion platform where we engaged them thoroughly, having identified the core problems in the sector. “Many of the health professionals wrote us and made practical and pragmatic contributions for a solution that would be acceptable to all, and we in turn published them for our readers to digest. Whenever we have strikes in this sector, patients bear the brunt. That sector has been bedeviled by a lot of problems and the patients are the ones always at the receiving end. Today, you have medical doctors going on strike and once they resolve with government and the strike is called off, the other health professionals also call out their staff on strike. This is not acceptable. “So in cases like this, we want to partner with stakeholders in the health sector, not just reporting the health problems, but along with them to look for a solution and see how we can resolve the problems. That article in question attracted a lot of readership and we postulated some areas we feel the government and National Assembly should look into to resolve the problems. "We also encouraged our government to deploy international best practices in the health sector. Hopefully this can resolve the lingering problems in that sector. So this is one of the ways we tr y to help society. Basically therefore, it is not just about news reportage, it is about giving back to the society, being a sort of watchdog to the government, it’s about providing alternative solutions and making policy suggestions to the government and more importantly, it’s about being the conscience of the nation."

Vanguard, MONDAY, MARCH 10, 2014 — 35

C M Y K

36 — Vanguard, MONDAY, MARCH 10, 2014

E- Commerce

Police investigates another bitcoin bank failure in Canada

anadian police have launched an investigation after online bitcoin bank Flexcoin, which closed its virtual doors, last week, said that it had lost about $600,000 worth of the digital currency in a hacker attack. The company reported the theft of 896 bitcoins on its website on Monday and said it “does not have the resources (or) assets ... to come back from this loss.” It blamed the attack on hackers who had targeted its online wallet. Bitcoins stored in Flexcoin’s cold storage facility, which is basically an offline bank, were not affected by the hack and will be returned to customers, the company said. The Edmonton Police Service (EPS) said they were investigating the issue. Flexcoin’s demise comes close on the heels of the collapse of Mt. Gox, once the world’s dominant bitcoin exchange, which filed for bankruptcy last week after it said it had lost some 850,000 bitcoins.

EBay top shareholders agree on PayPal

hief Executive Officer of the global e-retailer, EBay, John Donahoe said on Wednesday that several of the online retailer’s most active shareholders have assured him they support his efforts to resist demands by activist investor, Carl Icahn for a spin-off of the PayPal unit. Donahoe told Reuters that he has spoken with as many as 16 of the 20 most-active shareholders in eBay, and most favored hanging on to the fast-growing PayPal payments unit. He did not say what percentage of the company’s shares was held by the investors who agreed with his resistance to Icahn. “I met with 15, 16 of our top 20 active investors, have engaged back and forth in dialogue with them,” Donahoe said in an interview. “The majority of them understand that they’re stronger together,” he said. PayPal had become the preferred online payment method of the online marketplace’s customers when eBay acquired it for $1.5 billion in 2002.

C M Y K

5Lab, the venture firm behind Jobberman and Cheki in conjunction with 88mph-a company that specializes on accelerating internet startup growth in Africa, have launched an investment platform called 440.ng, to assist twenty mobile and internet startups in Nigeria. The partnership which makes over $1.5 million available to new and existing mobile and internet start-ups businesses across Nigeria over the next two years will also provide training, mentorship, tech advice, and an energizing environment to help speed up their businesses while building and getting their products into the market. Speaking at the official launch of the partnership in Lagos, Chika Nwobi, Managing Partner of L5Lab, described the collaboration as an opportunity to scale their company’s impact by creating more Nigerian success stories, having made a small number of very successful investments over the last three years. She said, “We want to put some equity of between $10, 000 and $100,000 in a company and anybody that is going to invest we are going to move them into the space that we have created which will accommodate about ten companies at a time. Google is taking some part as a partner and we are also bringing some other partners into the

VISIT: From left, Olayinka Oni, Chief Technology Officer, Microsoft Nigeria, Kabelo Makwane, Country Manager-Designate, Microsoft Nigeria, Jean-Philippe Courtois, President, Microsoft International and Awawu Olumide-Sojinrin, Marketing and Operations Director, Microsoft Nigeria during the visit of Jean-Philippe to Nigeria recently.

Venture firms partner to accelerate Nigerian mobile startups growth By JONAH NWOKPOKU & WILLIAM JIMOH space so that they can get the support and all the things that they need in order for them to have the best chance of succeeding while gaining design and technical knowledge. This is to enable them build their products if they are not having one already." Also speaking, 88mph

founder, Kresten Buch, noted that, “Seeing the great potential of our existing portfolio in Cape Town and Nairobi, Kenya over the past two years, we think Nigeria is the next step for 88mph and our method of investing is accelerating startups growth. “440.ng was designed to focus at investing cash into businesses that we believe can become very successful. And like a channel partner, they work with us and that enables them to have access

to bank and other players that they may need and also, if the partnership works, it will also attract venture capitalists that are interested in putting in money to ensure that the business grows. “This is not just for people that have not yet started a company, it is also for people who already have a company running but maybe they are lacking exposure, finance or access to certain channels to partners that can help their business to grow well.”

BeyondBranches Nigeria deepens mobile money penetration BY JONAH NWOKPOKU

eyondBranches International Limited has deepened its mobile money penetration through the expansion of its agent banking service initiative to Owo, in Ondo state. BeyondBranches is a United Kingdom based agency banking and mobile payment platform with a subsidiary in Nigeria.It was setup in 2013 to support cashless, agency banking and mobile payment initiatives in the country.

The Chief Operating Officer of BeyonBranches in Nigeria, Simon Aderinlola, in statement said BayondBranches’agent, Olabisi Olaniyi, who deployed the mobile payment services to Ondo on behalf of BeyondBranches, has recorded tremendous success. Customers, according to the agent, have been delighted by the convenience that the service has been able to offer them, by enabling airtime topups, pay-tv subscriptions and cash deposits in the banks. According to him, “BeyondBranches identified

Ondo State as a key target for these innovative services in 2013. This was finalised in December 2013, when BeyondBranches visited Dr Olusegun Mimiko– Governor of Ondo State – as part of a delegation of British businesses led by Mr. Peter Carter – the British Deputy High Commissioner in Lagos. The delegation also visited Ekiti and Oyo states. Speaking on what has motivated the deployment of the services, Aderinlola explained that, “According to the World Bank, there are over 11million Micro, Small

and Medium Enterprises in Nigeria. We hope to provide valuable mobilebased services to help these businesses become more efficient in their operations. However, we have started by enabling specific and targeted over-the-counter payments for our partner organisations. We have also been running promotions to encourage agents to sign-up and get active from the outset. Our promotions also aim to drive agent transactions and repeat consumer patronage.”

Vanguard, MONDAY, MARCH 10, 2014 — 37

Tax Matters

Tax relief for pioneer companies By AHMED IBRAHIM ALIYARA

BIRTHDAY SEMINAR: From left Mr. John Ehiguese, Group MD, Media Craft Associates; Mazi Mike Okereke, Chairman of the Occasion; Mr.Nn'emeka Maduegbuna, Managing Director, C and F Porter Novelli, celebrant, and his Wife, Mrs Augusta Maduegbuna during the 60th Birthday Lecture and Celebration of Nn'emeka Maduegbuna, in Lagos. Photo by Lamidi Bamidele.

he Nigerian Government has over the years put in place many different and overlapping incentive schemes to attract both local and foreign investment. Tax exemption is generally regarded as an industrial investment device; many developing countries like Nigeria offer it as one of their major incentives. Basically, tax incentives are designed to encourage investments in certain preferred sectors of the economy and sometimes geared towards attracting inflow of foreign exchange to complement domestic supplies for rapid economic development. Tax exemption otherwise known as Tax holiday is one of the most widespread tax incentive. Tax exemption simply means a period of exemption from payment of taxes imposed by the government and this may be complete or partial. The grant of pioneer status, therefore, gives a company a preferred position in getting established, usually through exemption from income tax. A pioneer company is a company that engaged manufacturing, processing, mining, servicing and agricultural industries whose products have been declared pioneer products on satisfying certain conditions in as determined by Industrial Development Coordinating Committee (IDCC) of the Government under the Industrial Development (Income Tax Relief) Act Cap 179 LFN 1990. The pioneer Tax holiday is for an initial period of three years or subject to further extension of two years or five years (ones and for all without further extension). Enabling Act Act Chapter 179 laws of the federation of Nigeria (LFN) 1990 but first enacted by Decree No22 of 1971 and commenced on 1/4/1970. Commencement Date 1st April, 1970 •“An Act to repeal and reenact, with major changes, the industries Development (Income Tax Relief) Act and to make provision for Tax relief for certain industries that may be issued with pioneer certificates by the minister and other matters ancilatory there to” •Conditions: *Industry is not being carried out on a suitable scale as required and there

Tax exemption simply means a period of exemption from payment of taxes imposed by the government and this may be complete or partial

are prospects for further development in the country or its product. *If it is in the public interest to encourage the industry or its product. *Application may be made for the inclusion of a product on the pioneer list Mode of Application *All application to be addressed to the Minister *State the status of the company *Give details of qualifying capital expenditure to be incurred *Give sources of qualifying capital expenditure and estimated cost *Specify location of Assets *Date of production of pioneer products *Any by product not being a pioneer product TERMS OF PIONEER CERTIFICATE *Must be in terms of the application to which it relates. *Specify permissible byproducts to be produced. *Specify period within which company must be incorporated and conditions to be endorsed *Pioneer status will only be issued from a date when company was incorporated and shall be effective from a date not earlier than the date on which the application was submitted to the minister or date of incorporation, whichever is the later.

*Any other condition will be specified by the minister *The minimum Tax relief period not exceeding five years to be stated 3(6)(a-b) Amending of Pioneer Certificate to Add New Product ection 4 (1) – (3) allowed a company during its pioneer period to make application in writing to the Minister to add a new product. RETROSPECTIVE PIONEER OPERATION •Where a pioneer certificate is to be operative from a retrospective date, all Acts shall be treated as not having been closed or not having happened and all taxes paid (if any shall be repaid as soon as may after the expiration of three months from the production day. PRODUCTION DATE •No later than one month when the company is going into commercial production (marketable quantity), the company shall apply in writing for the certification of its production date. •Not later than one month after the production date or any extended period granted by the Board, the company shall make application in writing to the Board for the certification of the amount incurred as qualifying capital expenditure prior to the production date. Cancellation of Pioneer Certificate i)Company may apply for

cancellation ii)If company contravened any provision of the Act or failed to meet conditions set. Tax Relief Period i)Commencing from the production date, it shall continue for three years (but can be extended):ii)for another one period of two years (if the standard and rate of expansion are satisfactory), local raw material utilization expansion, Training and Development of Nigerians, Government Policy Priority) iii) Five years (once and for all). TRANSITION FROM PIONEER STATUS Conditions of Old Trade or Business of a Pioneer Company *The old trade shall be deemed to ceased permanently at the end of the tax relief period *The pioneer company deemed to have set up a new trade on the day next following the end of its relief period *All capital expenditures incurred and used by a pioneer company shall be deemed have been incurred on that day next following the end of its tax relief period *Where it incurs a Net loss, that loss shall be deemed to have been incurred on the date on which its new trade commences i.e. it will be allowed to deduct all the losses brought forward from the pioneer period *The company must submit to the Board a list of its assets for certification. *At the end; the Board will issue a certificate of qualifying expenditure *The Board is expected to issue the company for each

year, the amount of income as ascertained and loss as arrived at (if applicable). Treatment of Capital Allowances and Losses •A capital expenditure incurred shall be deemed to have been incurred on that day next following the end of the pioneer period. i.e. regardless of the number of years granted a pioneer company, all capital expenditures incurred in line with the provision of the second schedule within the periods shall be deemed to have been incurred after the Tax relief period. •For losses incurred within the pioneer period, the cumulative amount will be deemed for computing total profits to have been incurred on the day, next following the pioneer period i.e. it will be allowed as a deduction in the new business. D O C U M E N TAT I O N REQUIRED BY FIRS *Memorandum and Article of Association *Certificate of Incorporation *Answer to standard questionnaire *Pioneer Certificate issued *The period approved *Production date *Products and by-products *For a going concern, the Audited account ended before the production date to be furnished (regardless of the number of months). Rendition of Returns *The conditions governing the submission of tax returns in CITA are applicable to a pioneer company. *One year from commencement of production date *Period of one year successively *Last year of the relief period. *Example: Kano Money Lender Ltd was granted a pioneer status commencing from 1st July, 1999. The company has 31/12 as it’s accounting date. The period granted was for five years. *At expiration of the pioneer period, it submitted Accounts for the years ended 31st December, 2004 and 2005 you are given these additional data The data: 2004 (N) 2005 (N) i) Net Profits 16,980,155 9,758,273 ii) Depreciation 32,157,000 46,102,328 iii) Capital Allowance b/f 172,314,886 — iv) Investment Allowance 10,378,700 8,033,243 v) Initial Allowance 7 5,414,556 58,020,388 vi) Annual allowance 37,975,662 60,659,786 You are required to compute basis period and the relevant taxes payable by this company. C M Y K

38 — Vanguard, MONDAY, MARCH 10, 2014

C M Y K

Vanguard, MONDAY, MARCH 10, 2014 — 39

Advertising, Media & Marketing

New Identity: GTHomes becomes Imperial Homes Stories by PRINCEWILL EKWUJURU

n compliance with Central Bank of Nigeria, CBN directive in 2010 to revoke universal banking practice in Nigeria, GTHomes has changed its name to Imperial Homes, and expressed commitment to providing best services. The name change means that Guaranty Trust Bank Plc (GTBank) divested from its subsidiaries including GTHomes Limited. The shares of GTHomes owned by GTBank prior to the divestment were acquired by a select group of investors through a special purpose vehicle. This divestment provides the bank a fresh opportunity and imperative for achieving its internal goals and mission of being the leading Mortgage Bank out of Africa. In line with the divestment by GTBank and as with GT Assurance, GTB Asset Management, and other of its subsidiaries, GTHomes Limited was required to change to a new name, said the Managing Director of Imperial Homes Ben Akaneme, while speaking at the name change event in Lagos. According to him, “We are pleased to introduce the new identity of GTHomes Limited as Imperial Homes Mortgage Bank Limited. The name Imperial Homes reflects our desire to continue to provide our esteemed customers the best internationally benchmarked services in mortgage banking through our highly

motivated and innovative employees and expresses our identification with the vision of housing for all.” Continuing he said: “as we have done through the years, our goal will continue to be the provision of excellent services. The core values that GTHomes inherited from GTBank remain the guiding principles for Imperial Homes Mortgage Bank Limited. We remain the same people, the same institution operating with the same core values and principles despite our name

BRIEFING: From Left: The Managing Director ARESVEEPEE Limited,Ms Kemi Koyejo, the Project Consultant, Keskese Limited, Mr Tade Adekunle and the Executive Director, Nigeria Food Fiesta Limited during a press conference on the forthcoming Nigerian Foods & Drinks Exhibition held in Lagos.

Mr Chef rewards distributors

einstating its commitment to the brand promise, Eat Better, Live Better, Bayswater Industries, makers of Mr. Chef seasoning cubes rewarded its loyal distributors across the country with the presentations of 11cars, cash prizes and other

Sweet sensation fetes couples

he valentine season may have come and gone, but families celebrated during the day did not forget the ingenuity of Sweet Sensation Confectionery. The couples’ dinner tagged ‘Red Hot Valentine’ in partnership with Coca-cola rounded- off this year ’s Valentine’s celebration. According to the Executive Director, Olatunji Kamson,’ 2013 couples dinner was the starting point of a creative revolution of “give back” in a love relationship between the foremost QSR Brand and its Customers. He went on further to say that the successes recorded in 2013 spurred us to bring it back but

change.”. “Our Logo has been enhanced but retains its essence. It is still a brief description of our brand. The orange and gray continue to represent our friendly, professional and trustworthy nature. The four sides of the box signify our Customer focus, Customer Service, innovativeness and Total Quality Management while the ‘I’ in the box represents our intensity and single minded focus on our customers; for us the only thing that matters is our highly esteemed Imperial customers.

in a hotter mode. The Head, Marketing Yemi Yusuf stated that to qualify to attend the dinner, couples bought any Sweet Sensation mouth-watering meal with any coca-cola products worth N1, 500 in a single purchase (with their contact details clearly written on the back of it) and dropped their purchase receipts in a designated receipt bowl in the outlet. The receipts were shuffled in a raffle draw on Thursday 13 th February where lucky winners were picked from each of their outlets. The winners were thereafter contacted and encouraged to pick up their tickets for attendance.

consolations prizes in appreciation for their patronage. Speaking at the event, the Executive Director, Chief Reggi Uduhiri, said, “Bayswater Industries, makers of Mr. Chef, have instituted the ‘Distributors Reward Scheme’ as a high value incentive to our dedicated distributors who have demonstrated commitment and loyalty to the brand.” He added that the company always believed that the three parameters behind Mr. Chef Brand success are quality, quality and quality. He explained thus “Quality in terms of Product, Quality in terms of Manpower & Marketing and Quality in fulfilling our promise.” He disclosed that the secret behind Mr. Chef seasoning success was in its natural ingredients which help in giving nutritional benefits to consumers. The event which was held in Lagos was also the celebration of the brand’s 5th anniversary, the company General Manager, Mr. Rajesh Kumar disclosed that the growing patronage testify that ‘Mr. Chef ’ seasoning is now an accepted brand leader for Nigerian consumers.

Laws of Service Excellence — Part Three

n the last couple of weeks, we have been discussing the laws of service excellence. Organisations that excel in service operate on certain principles, or laws, as we call them here. Here’s a quick recap of the principles we have discussed so far: *The customer is the boss *The frontline is the company *Service is driven and supported by organisational culture *External service mirrors internal service *Customer experience matters more than company communications. *Excellent service comes at a price *All customers are not equal *Little things matter *Most dissatisfied customers won’t complain *The customer is not always right *The customer is self-centred Should you wish to look at these principles in depth, I suggest you get a copy of 20 Universal Laws of Service Excellence. Aside from other things it contains, the book offers you 120 actionable ideas you can use right away to make your service sparkle. And if you’re looking for ways to infuse some of the ideas we share here into your business and prepare your team to compete on service, do get in touch; we might be able to help. Meanwhile, let’s consider five more laws. Frontline employees understand customers more Sales people, receptionists, secretaries, relationship officers, bank tellers, and service engineers – these are all part of the frontline of organisations. These workers are well placed to represent the organisation before the customer. Indeed, they are the company to most customers. At the same time, they are in a vantage position to act as customer advocates and transmit feedback to the organisation. Ideally, by virtue of its regular contact with customers, this category of employees knows much more about the customer than other people within the company. If you’re not taping their knowledge of customers and market situations, you’re really missing out. You need to listen to your frontline. Excellent organisations do. You get what you measure and reward People will strive to do virtually anything if they know there is a reward for their effort. Organisations that seek to instil a culture of service must have objective criteria for measuring service from the customer’s point of view and rewarding employees who deliver exceptional service. In other words, there should be clearly defined ways of measuring and rewarding excellence. Reliable service is critical Reliability may mean different things to different people in different situations, but the key thing is that the promised service is delivered when, where and how it was promised. Reliability has its rewards. Earning a reputation for reliability is one of the best things that can happen to an organisation. But it never happens! It comes as a result of painstaking effort to make sure the customer is never disappointed, barring exceptional circumstances. Marketing is everyone’s job Most great organisations usually have marketing departments; but they know that marketing is everybody’s job. The marketing departments only coordinate this job. Excellent companies go to great pains in ensuring that every employee is a marketer! It’s easier to keep current customers than attract new ones Profit comes when a customer buys again and again. Simply because we need less advertising money, fewer salesmen’s calls and less effort to get an existing customer to buy it is easier and cheaper to sell to current customers. For this reason, it also makes a lot of business sense to try to keep existing customers happy. C M Y K

40 — Vanguard, MONDAY, MARCH 10, 2014

Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

however, rather than douse demand, the vibrant forex market experienced dollar supply shortage, which expectedly intensified the pressure on the naira exchange rate. Consequently, less than 60 days later, the suspended CBN Governor, in another characteristic policy somersault, summarily lifted the limit on sales of dollars to BDC, despite the recognition of the BDC’s role in facilitating money laundering, capital flight and the ignoble smuggling enterprise, which kills our industries. Invariably, even Sanusi’s incongruous policy flip-flop could not reduce the pressure on the naira, because he probably failed to appreciate that the problem was not only dollar supply, but significantly also the unceasing deliberate creation of excess naira supply by the same CBN. For example, the apex bank’s illadvised provision of over N1tn to settle AMCON’s non-CBN debts in the last quarter of 2013 inadvertently also added almost N10tn worth more of naira liquidity into an already nairasuffocated money market to further worsen the plight of the naira against the dollar. Thus, it becomes a farcical expression of concern, when the same agency that consciously created the disenabling naira surfeit turns round to sell rations of dollar revenue it earlier captured, in its futile bid to “defend” the naira rate of exchange. Nevertheless, these unforced contradictions in the product of monetary strategy will become successfully resolved with the adoption of dollar certificates for the disbursement of the dollar component of distributable revenue.

Phony defence of the Naira and the folly of a nation of our serious infrastructural deprivations. A good example of this bizarre outcome may drive the point home; some Nigerians will recall that Mr. President was in China last year, partly to raise funds for infrastructural enhancement, and indeed, apparently raised about $1.5bn with an interest rate that may not be far short of the 7% rate on our existing Eurobonds. Interestingly, however, the CBN Governor was also in China to assess investment opportunities for some part of CBN’s dollar reserves! However, it is unlikely that Sanusi found any investment opportunity that would ultimately produce a yield of more than 4%; in such an event, there is nothing that stops Chinese investors from borrowing directly from CBN at a cheaper cost for onward lending to the Nigerian government at a higher rate of interest!

adly, the above illustration is indeed also mirrored by the process of domestic debt accumulation. To substantiate this observation, we quote Lamido Sanusi’s revelation as reported in Thisday Newspaper’s issue of 24/07/2013. “…First of all, you have got liquidity (naira) surplus in the banking industry; … there is over N1.3tr or so sitting in banks and belonging to government agencies. Now basically, they (these funds) are at zero percent interest and the banks are lending about N2tn to the

government and charging 13 to 14%! Now, that is a very good business model, isn’t it? Give me your money for free and I lend it to you at 14%; so why would I go and lend to anyone?” Worse still, the funds mopped up (borrowed) by the CBN are simply sterilised or kept idle, despite prevailing significant budget deficits! Thus, as CBN’s reserves grow, so also does the extent of naira surplus in the system expand to inadvertently

worrisome with CBN’s unceasing monthly substitution of naira allocations for distributable dollar revenue. A significant part of Nigeria’s estimated N8tn domestic debt was actually accumulated with this suicidal monetary strategy while service charges on such “useless” debts probably exceeded $3tn in the last six years.

urthermore, CBN’s forced appetite to borrow hundreds of billions of naira at

igerians generally believe that large foreign reserves are useful for defending the exchange rate of the naira. However, our total foreign reserves actually comprise of two primary income streams; the first is the Excess Crude Account (ECA), which consists of all crude oil revenue in excess of budget estimates. In the recent past, over $10bn accrued annually into the ECA. Surprisingly, however, government always managed to consume the proceeds in this account in addition to the hundreds of billions of naira, borrowed by government, at costs usually above 12%, to fund earlier projected ghost deficits, which were induced by the misguided conservative price and output benchmarks adopted in annual budgets. The inherent contradiction of federal budgets that inexplicably accommodate deficits as well as actual revenue surplus is regrettably generally lost on our people, and our illustrious Economic Management Team. The second major component of our foreign exchange reserves is what the Central Bank of Nigeria (CBN) describes as its “own reserves”; the value of this reserve is currently about $40bn. CBN’s claim to sole ownership of the $40bn reserves is founded on the principle that the federation cannot lay claim to this fund since government was already the beneficiary of the naira ‘equivalent’, which the apex bank unilaterally created and substituted as allocations for constitutionally distributable dollar revenue.” For this reason, CBN’s $40bn reserves cannot be appropriated for defraying deficits in our budgets, nor to redress some

Even Sanusi’s incongruous policy flip-flops could not reduce the pressure on the Naira, because he probably failed to appreciate that the problem was not only dollar supply

promote a conducive platform for a general price rise, and lower exchange rate as CBN’s obtuse and patently unconstitutional payments strategy constantly induces a market mix of systemic surplus naira chasing relatively few ‘goods’ and rationed dollar supply from the CBN every month. Thus, the flipside of CBN’s increasing dollar reserves is actually the constant threat of inflation as well as increased domestic borrowing, as the CBN ‘posthumously’ embarks on a borrowing spree at doubledigit interest rate, in order to reduce the burden of surplus naira that become increasingly

such high cost, inevitably also crowds out the real sector from accessing cheap funds. The scarcity of cheap funds to SMEs ultimately contracts the domestic economy, thus, inducing an increasing level of unemployment as collateral. Consequently, it seems our people have to become poorer for CBN’s reserve to grow. In a failed attempt to stem naira depreciation in the recent past, Sanusi wrongly identified abnormal dollar demand as the prime villain for increasing market pressure. The CBN, therefore, reduced its weekly forex allocations to Bureau De Change (BDC) from $1m to $250,000. Not surprisingly,

Business & Economy NBC

affirms

By PRINCEWILL EKWUJURU

he Nigerian Bottling Company (NBC) Limited has restated its commitment to preserving and protecting the environment by supporting Wecyclers Nigeria Limited. Wecyclers is an organisation that seeks to solve the urban waste challenge by using a fleet of low-cost cargo bicycles to offer convenient household collection of recyclable waste in neighbourhoods. To support and expand its current collection capacity, the company recently purchased C M Y K

commitment and handed over eight (8) tricycles, known as Wecycles, to Wecyclers Nigeria Limited. Speaking at the handover ceremony which took place in the Lagos State Waste Management Agency (LAWMA) yard in EbuteMetta, one of Wecyclers’ collection hubs, Mrs. Adeyanju Olomola, Head, Public Affairs and Communications, NBC, said the Company was delighted to support Wecycler’s drive to expand its capacity to collect waste from households in Lagos State. She noted that the expansion also had a multiplier effect on job creation as the addition Wecycles would create 10 new

waste

jobs. Mrs. Olomola added that NBC’s sponsorship and participation in recycling activities is borne out of an active commitment of the Company to Packaging Waste Recovery and Recycling, one of its seven (7) Sustainability pillars, and noted that the partnership with Wecyclers, therefore, represents a community-led, measurable, scalable and sustainable initiative. Speaking further, s h e emphasized that NBC was not only concerned with refreshing consumers with a wide range of products but is also interested in working in partnerships to minimise the impact of packaging on the environment.

recovery,

recycling

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

Group Business Editor Finance Editor Energy Editor Head, Capital Market Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Capital Market Reporter Energy Reporter Industry/Agric. Reporter Energy Reporter Maritime Reporter Insurance Reporter

CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT

Media/Marketing Industry Micro Finance Graphics Department