Financial Vanguard by Vanguard Media Limited

JANUARY 13, 2014

From left: Managing Director & Head of Syndications, Europe & Africa, Standard Chartered Bank; Mr. Hiren Singharay; Director, Financial Institutions, North Africa Coverage of Commerzbank AG; Mrs. Mathilde Anthuber; the Deputy Managing Director of First City Monument Bank Limited, Mr. Segun Odusanya and the Bank’s Group Head, Treasury & Financial Markets, Mr. Gerald Ikem, at the signing ceremony for $150million loan, which took place in London recently.

come the registrar is asked to pay N5 million and another fine of N5,000.00 per day from the day of default (2008) to date . It is not done, even in advanced economies. We should also realise that the case was not disposed on time from 2007 till now. The fine is inhumane. SEC should return their licence and allow it to pay the fine. The commission should temper justice with mercy. I am a customer of Sterling Bank. We just gave the bank some money to further boost its capitalisation through rights issue”, he said. However, Chief Timothy Adesiyan, President, Nigerian Shareholders Solidarity Association (NSSA), the oldest shareholder group in the country and some other stakeholders do not share this view. “The action by SEC is a welcome development as it will help sanitise the market from all kinds of fraudulent practices. Even the former Managing Director of Sterling Bank, Akabueze, should be questioned since he was still with the bank when the public offering of Japaul was done in 2007 and he even assured us that there will be no problem from the offer,” Adesiyan told Financial Vanguard Continuing, he said, “The investigation should be in-depth , even Japaul should be involved in the case as well. The company has

Continues on page 18

SHARE SCAM: Stakeholders divided over penalty imposed on Sterling Registrar BY PETER EGWUATU

takeholders in the Nigerian capital market are divided over the penalties imposed by the Securities and Exchange Commission on Sterling Registrar over its role in the unlawful allotment of Japaul Oil and Maritime Services Plc’s shares. Last week, the Administrative Proceedings Committee (APC) of the commission fined Sterling Registrar, Kalstead Farms Investment Ltd and five others culpable in unlawful allocation of the shares of Japaul Oil and Maritime Services Plc. In

addition to cancelling the registration of Sterling Registrar, SEC also imposed a fine of N5million and ordered it to pay the sum of N5,000 (Five thousand naira) from the day of the illegal allotment (6th May 2008) to the date the decision was made. Some stakeholders, however, believe that the penalties were too heavy. “It is a welcome development, but I think the penalty is too much”, said, Chief Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria, ISAN. In an interview with Financial Vanguard, he said, “Anyway, Sterling

Registrar has the option of appealing the case to get mild penalty. In my own opinion, I think the commission should not have revoked the licence of the registrar and as well impose fine on them. What the commission should have done is to ask it to pay fine so that it will serve as a deterrent to others. Revoking its licence will not be to the interest of shareholders as well as the market in general.” His position was supported by Chief Joseph Okelano, Chairman, Shareholders Mobilisation Association of Nigeria. “It is a good development for our market, but the sanction is too heavy”, he told Financial Vanguard. “How

120.75

1.4

2,711.00

+27.00

15.58

0.1 +0.21

106.60 92.28 CURRENCY BUYING CENTRAL DOLLAR POUNDS EURO FRANC YEN CFA WAUA RENMINBI RIYA KRONA SDR

154.72 254.0812 10.4811 170.0407 1.4756 0.3017 236.3162 25.3402 41.2488 28.2048 237.0775

155.22 254.9023 211.1613 170.5902 1.4804 0.3117 237.0799 25.4225 41.3821 28.2959 237.8436

+0.62 SELLING 155.72 255.7234 211.8415 171.1397 1.4852 0.3217 237.8436 25.5049 41.5154 28.387 238.6098

CBN Exchange rate as at 10/01/2014 C M Y K

18 — Vanguard, MONDAY, JANUARY 13, 2014

Cover Story

The Basic Guide to Starting Your Business Part 3

R-L; President, Association of Foreign Airlines and Representative in Nigeria (AFARN), Mr. Kingsley Nwokoma, Managing Director, Skyway Aviation Handling Company Limited (SAHCOL), Olu Owolabi, Business Development Manager, Mazin Engineering Nigeria Limited, Mr. Nico Els, Project Manager, Mazin Engineering Nigeria Limited, Mr. Mohammed Johari and Others, during the Tour of the Facilities of Ultra Modern Ware House of SAHCOL at Murtala Mohammed, International Airport Lagos. Photo by Lamidi Bamidele.

SHARE SCAM: Stakeholders divided over penalty imposed on Sterling Registrar Continues from page 18 of the securities' laws and regulations. The APC was set up to resolve conflicts, disputes or grievances in the Nigerian capital market. The Committee consists of the Director-General of the commission (who presides), members of the Board of the commission, directors in the

been convening its Annual General Meeting, AGM, in areas that are not comfortable for shareholders and we are not happy with it.” Similarly, Alhaji Gbadebo Olatokunbo, former National Publicity Secretary of the NSSA, commended SEC for the investigation and the sanction imposed on Sterling Registrar. He said, “Whoever that err should not be spared. That is the only way to sanitise the system and prevent further crime in the market. “This shows that SEC has woken up from its slumber. It is not good for a regulator in the market to keep warning defaulters without appropriate sanctions. If they keep warning without imposing sanction, you will see people committing crime and going scot-free. On his part, Ambassador Olufemi Timothy, President, Renaissance Shareholders Association, said, “It is a welcome development. This is one thing that investors all over the world expect from the market. We the investors have been agitating that regulators should be proactive. We are not happy with some of our registrars. They commit all sorts of unlawful acts. The SEC should put up more actions that will put fear on scrupulous operators. A lot could still be discovered by the commission with further investigation. The Administrative Proceedings Committee (APC) is an internal administrative committee of the Securities & Exchange Commission (the Commission) established to afford the opportunity of hearing to parties alleged to have breached the provisions

Akeem (7th Respondent). The commission accused them of: Unlawful allotment of shares; payment of return monies to persons not entitled thereto; violations of the SEC rules and regulations (As Amended) and the Code of Conduct for capital market operators and their employees. The APC, investigating the case, found that, the first to the 6th respondents “engaged in u n l a w f u l allotment of shares of Japaul Oil & Maritime Services Plc during its initial public offer of 2007, which contravened the provision of the Investments and Securities Act 2007, SEC Rules and Regulations 2000 (as amended).” It also found that, “The 1 st Respondent (Sterling Registrars) issued questionable return money warrants of N445, 867.71 (Four Hundred and FortyFive Thousand, Eight Hundred and Sixty-Seven Naira, Seventy [-One Kobo) and N791, 447.32 (Seven hundred and Ninety-One Thousand, Four Hundred and Forty-Seven Naira, Thirty Two Kobo) respectively to Mr. Akin Ekundayo and Aina Folasade “That the 1st, 2nd, 3rd, th 5 and 7th respondents

We the investors have been agitating that regulators should be proactive. We are not happy with some of our registrars. They commit all sorts of unlawful acts. The SEC should put up more actions that will put fear on scrupulous operators. A lot could still be discovered by the commission with further investigation

operations departments of the commission and observers who are representatives of trade associations in the market e.g. the Associations of Stock brokers, Registrars, Trustees, Issuing Houses etc. The commission had dragged to the APC, Sterling Registrars Ltd. (1 st Respondent) , Mr. Giwa Olayinka Takiudeen (2 nd Respondent), Mr. Adeniji Adetokunbo ( 3 rd Respondent) , Kalstead Farms Investment Ltd (4 th Respondent), Mr. Omodele Teluwo (5 th Respondent), Mr. Kolawole Teluwo (6th Respondent), Mr. Ganiyu

Continues on page 19

opportunity to meet the demands of consumers. The following make up the mindset of successful business men. Optimism Optimism continues to be a primary factor in whether or not an individual will stay focused on goals rather than be thwarted by the negative events that would impede progress. It is the absolute ideal that leads to achievement as nothing can be done without hope. Therefore, it is the very essence of success. If you want to have a successful business, it is important that you start out as an optimist, refusing to see impossibilities and obstacles. An optimist is not discouraged, but rather looks for other ways

WHAT IS NOT BUSINESS? ften time people engage in all sort of shady deals and call it business. This should not be, because any act/trade that is not genuine and is to the detriment of others cannot be called a business, especially if it doesn’t fall within the confines of the law or is aimed at getting profit wrongly. Some of these wrong businesses include, money laundering (government officials), abuse of office, stealing, defrauding, internet scam otherwise known as yahooyahoo, 419 and a host of others. If you are involved in any of the above, then you cannot say that you are in a business as the above named are prohibited by the laws of the land and they do not create opportunities. Rather they ruin or cripple the country, portraying it in a very bad light to the rest of the world. It is only a lazy man that looks for an easy way out all the time, not wanting to go through the right process and procedures. THE MENTALITY OF A BUSINESS MAN: We have discussed what a business is in the previous chapter and what business is not; we have also looked at the importance of self analysis in starting a business as well as the disadvantages and advantages. Now it’s time to talk about the mentality a business man should possess. We cannot underestimate the power of the mind and I make bold to say that that is where every idea and dream is born. The good book also emphasizes this by saying “as a man thinketh in his heart, so he is”. When starting a business, you would need to ask yourself if you possess what it takes to run it efficiently and get the desired results. Every successful business man has a mentality and should possess a strong sense of character. That is why it is important to carry out a self analysis before commencing a business. The business man does not see failure as a reason to quit; to him failure is a stepping stone that launches him to his next level. He is not afraid but is a risk taker, possessing the utmost desire to succeed; he is not just out to make money, but rather to bridge the gap between demand and supply. He is a sharp thinker and very witty, seizing every available

If you want to have a successful business, it is important that you start out as an optimist, refusing to see impossibilities and obstacles

to make things better. A good business man will always diligently search for answers that will work. He possesses the “yes I can” aura and mentality which will endear him to clients and friends alike. Before you start a business it is very important that you have a very optimistic mentality, one that is not easily swayed by various obstacles you will encounter in the course of carrying out your business. This is because nobody wants to do business with a pessimist. Creativity A creative ability is a very vital tool in the hands of a person who intends to start a business, although sometimes even as a business owner there is a risk with being creative; it is not possible to do something the same way and expect a different outcome. You have to be very dynamic in your choice and approach to the business you intend to start. Brainstorm a list of possibilities no matter how wild it seems. Look for the unusual but plausible.

Vanguard, MONDAY, JANUARY 13, 2014 — 19

hen in the late 70s, General Murtala Muhammed came on the Nigerian political scene, he created an unusual sensation. His words were laden with ‘immediate effect.’ He had a vision of what he thought Nigeria should be that it was not. As a military general, who participated in keeping Nigeria one, he was consumed with the passion of a

Time for Nigerians to ditch ethnic arithmetic, state of origin and federal character zones. These zones were artificially created along political leanings and not comparative economic advantage in any sense. The idea of political zoning, which ought to have been a party affair within the PDP,

nation back. State of origin in Nigeria’s body politics is the evil machination of Nigerian politicians that has hindered even economic development in Nigeria. A Nigerian is a Nigerian. The national conference must free

Nigerians will not be interested where the president or governor comes from if the economy is growing and absorbing able-bodied men and women as they come out from schools. Nigerians will be gladdened to see any president where ever he comes from who will guarantee them 24 hours of power supply, access roads, security of life and property, freedom of movement of goods and services

united Nigeria. A Nigeria that is free from the encumbrance of North-South dichotomy. He wanted to see a Nigeria where there was justice and fair play to all, no matter where they came from. That was what led to his renaming states he created and those created before him according to landmarks instead of the North, South, West and East naming of states in the country before him. Nigerians have come to agree that the greatest danger facing the development of this great country is not necessarily corruption, but lack of national identity and sense of belonging in the country. Most Nigerians owe their loyalty to either the north or south. Politicians who want to get undue advantage not necessarily for the north or south, usually fan the embers of North/South dichotomy. The ideals of Murtala was catching on, in that most Nigerians were beginning to see themselves as belonging to particular states and not region before the men with flowing agbada returned to the scene to reintroduce the North-South equation and ethnic arithmetic into the body politics of Nigeria. It was at the Constituent Assembly that these old politicians, whose interest is their pockets and stomach, smuggled into the national dialogue, geo-political zones. It was in a bid to continue the old political economy and ethnic arithmetic that has dragged the nation backward for years. The PDP then latched on it by its constitution insisting in power rotation and sharing according to the defined six geo-political

has been turned into a national issue depriving the nation of the best hand to serve the fatherland Nigeria. As Nigeria prepares for a national conference, the conferees must agree to dispense with issues of zoning, state of origin, federal character, and catchment area admission policy in federal schools that have dragged the

Nigerians from this baggage. A Nigerian can be born anywhere but must be free to live, work and own properties anywhere in the country he chooses to live in without let and hindrance. The constitution that will come out of the conference must make it a criminal offence for any official of federal, state or local government or private sector

employer to ask any Nigerian of his/her state of origin. Nigerian politicians should be ashamed of themselves to have allowed this for so long. Countries like America, Australia and Canada are asking millions of citizens of other countries to migrate to their countries yearly. It is because of the economic advantage a growing population confers on a country. China today is an economic powerhouse because of its market size and a huge productive population that offers cheap and affordable labour to international businesses. In China, it is not just that there is corruption, it is of high magnitude, yet the country is moving forward economic wise. Here at home, we have human resources we are wasting on the basis of state of origin. Many Nigerians who ordinarily would have been gainfully employed have no access to such job opportunity because of their state of origin. It is an act of political intolerance to see a fellow Nigerian as a foreigner in his homeland. It is this political intolerance that would make a state governor to deport a Nigerian from his state to his home state. It is only in

Nigeria that there is deportation within a nation’s sovereign borders. A Nigerian from Sokoto must be able to live in Rivers, work in Rivers and become a governor there if the people so desire. Same for an Edo, Ijaw, Yoruba or Ibo man living anywhere in the northern part of the country. It is by so doing that Nigerians can ever give their best for the nation. This is what will encourage mobility of labour. Nigerians will not be interested where the president or governor comes from if the economy is growing and absorbing ablebodied men and women as they come out from schools. Nigerians will be gladdened to see any president where ever he comes from who will guarantee them 24 hours of power supply, access roads, security of life and property, freedom of movement of goods and services. The conferees must also be ready to confront the issue of federal character that has enthroned mediocrity in public service. A Nigerian from anywhere in the country must aim at being the best. It is unfortunate that today, the question of federal character has been stretched to a ridiculous limit. Nigerians must deal with it if it intends to develop knowledge economy. It must also deal decisively with the question of catchment area in university admissions in federal institutions that have made it near impossible for national integration. There is no better place to handle this than the forthcoming national conference.

COVER

SHARE SCAM: Stakeholders divided over penalty imposed on Sterling Registrar Continued from page 18 violated the provision of Rule 43 of the SEC Rules and Regulations (as amended) by not observing fair and equitable dealings in securities and not maintaining proper standard of conduct and professionalism in securities business. “That the 1 st – 7 th respondents violated the provisions of Rule 110 of SEC Rules and Regulations (as amended) when they engaged in manipulative and deceptive devices and contrivances. “That the 1st, 2nd, 3rd, 5th and 7th Respondents violated the provisions of Article 1(I) & (III) and 2 (I) & (II) of the

Code of Conduct for capital market operators and their employees as contained in Schedule IX of the SEC Rules and Regulations (as amended).” Consequently the APC decided that “By their actions 1st, 2nd, 3rd, 5th and 7th respondents have engaged in acts capable of adversely affecting the investing public’s image of and confidence in the capital market; That the 1st respondent did not exercise utmost good faith in the discharge of its functions as a registrar; That pursuant to Section 303 of the Investments and Securities Act (ISA) 2007, the

1 st respondent be and is hereby ordered to pay a fine of N5, 000,000.00 (Five Million Naira) only and a further sum of N5,000 (five thousand naira) only per day from the day the illegal allotment was made (6th May 2008) to the date of decision hereof, for its unprofessional conduct and breach of the provisions of Investments and Securities Act (ISA) 2007 and SEC Rules and Regulations made pursuant thereto; “That the registration of the 1 st respondent (Sterling Registrars Ltd.) be and is hereby cancelled; “That pursuant to Schedule VII Rule 11 of the

SEC Rules and Regulations, the 5th respondent, who is a director of the 4th respondent (Kalstead Farms Investment Ltd) and also a staff of the 1st respondent (Sterling Registrars Limited) be and is hereby banned from engaging in capital market activities for 20 (twenty) years for his role in designing and masterminding the irregular transaction in this matter; “That pursuant to Schedule VII Rule 11 of the SEC Rules and Regulations, the 4 th respondent (being the company unlawfully allotted shares in irregular transaction) and the 6th respondent, being the (Chairman / Director) of the

4 th respondent (Kalstead Farms Investment Ltd) be and are hereby blacklisted for colluding with the 5 th respondent in carrying out the irregular transaction; “That the 7th respondent be and is hereby banned from engaging in capital market activities for twenty years for colluding with the 5 th respondent to pay and clear third party cheques through his employer ’s (Quantum Securities Ltd) account; “That the 4th, 5th, 6th and th 7 respondents be and are hereby ordered to disgorge all benefits enjoyed as a result of these transactions. C M Y K

20 — Vanguard, MONDAY, JANUARY 13, 2014

Business & Economy BY EMMANUEL ELEBEKE

Heineken’s Sunrise campaign encourages responsible drinking

H from the stable of Nigerian Breweries Plc has

eineken larger beer

launched a new campaign: ‘Sunrise,’ as part of the latest phase to encourage responsible consumption by its consumers. The campaign themed “tomorrow belongs to moderate drinkers,” leveraged on the beer brand to deliver and reinforce its responsible consumption message. According to Mr. Kufre Ekanem, Corporate Affairs Adviser, Nigerian Breweries Plc, the Sunrise campaign is a key part of the awardwinning “Open Your World” global initiative, which celebrates and encourages aspirational behaviours among consumers. Heineken, decided to roll out the Nigerian campaign during the festive season to maximize the message’s relevance and impact. Hence, millions of adult consumers got the message via print media, social media pages as well as through out of home platforms strategically placed in locations around Lagos.

Bobo extends product line with new variants

etermined to maintain its leadership position in the fruit milk market, Bobo Food and Beverages Limited has introduced two new variants to its product line. The two products, Boyic strawberry yoghurt in the yoghurt category, and the Bobo vanilla milk in the fruit milk drink category have already hit the market. This move is geared at satisfying consumers demand beyond the existing variants of Boyic plain and orange yoghurt, and the pineapple, orange, apple and strawberry flavour milk respectively. Speaking to select stakeholders at the unveiling that took place in the company premises, General Manager, Sales and Marketing, Bobo Food and Beverages Limited, Lawrence Chimezie explained some salient features on the new package. According to him, “This new introduction is to further maintain our market leadership position. C M Y K

ollowing the controversy that trailed the controversial $49.8 billion missing from federation account, the Nigerian National Petroleum Corporation, NNPC has disclosed that the disputed balance of $10.8 billion from the original amount, which has not been paid into the Federation Account, is not missing but formed part of its operational costs within the period, January 2012 to July 2013, which was referred to by the Central Bank of Nigeria, CBN Governor, Sanusi Lamido Sanusi, in his letter to President Goodluck Jonathan on unremitted oil revenues. In a statement issued by the Corporation’s General Manager, Media Relations, Dr. Omar Farouk Ibrahim, it insisted that issues surrounding the allegation of the unremitted $49.8 billion against it had since been explained, but it appears that the initial dust raised by Sanusi’s letter was yet to settle. It explained that repairs on Nigeria’s 5,000 kilometres of petroleum pipeline network, which is constantly subjected to vandalism, unpaid subsidies on kerosene and petrol, as well as its maintenance of national strategic reserves for petroleum products, were all parts of its operational costs accounted for by the $10.8 billion. According to Ibrahim, the Corporation considered it necessary to make further clarifications on the burning issue, considering the extant media reports on the same issue, which it considered as misleading. “We are therefore constrained to respond and clarify the issues once again to help those who do not yet understand the clarification made earlier by the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, Governor of the Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi, and Group Managing Director of the NNPC, Mr. Andrew Yakubu, at a joint press conference which was widely reported in the media. “For the avoidance of doubt, there was no where it was stated or admitted by any of the parties in the course of the press conference or anywhere else that the sum of $12 billion or $10.8 billion out of the alleged unremitted $49.8 billion was missing. “The truth of the matter is that as at the time of the press conference, $30 billion of the alleged unremitted oil revenue had been reconciled by all the parties involved. Dr. OkonjoIweala did explain that the reconciliation was an ongoing

MISSING FUND:

NNPC insists $30bn oil revenue remitted to Federation Account process and that the balance of $10.8 billion was still being reconciled,” said the Corporation’s spokesperson. ”At no time did anybody, be it the Coordinating Minister for the Economy or the CBN governor say that the outstanding $10.8 billion was missing. It is simply curious how some sections of the media are not prepared to see the difference between the two positions – reconciliation in progress versus money missing. These two positions are simply not the same thing no matter the angle from which anyone chooses to see them.” Giving a breakdown of NNPC’s operational expenses, which make up the $10.8 billion, Ibrahim said, having made that point, it is also pertinent to further clarify that NNPC as a national oil company is saddled with certain onerous responsibilities that other oil companies are free from.

”For instance, as the supplier of last resort, NNPC has the responsibility of ensuring that there is adequate supply of petroleum products whether the market is favourable or not. “The yet to be reconciled $10.8 billion can be located in the expenses on some of the responsibilities, which the Corporation carries out on behalf of the federal government with respect to the domestic crude oil utilisation. “One of such issues is the unpaid subsidy on kerosene and premium motor spirit (petrol). It would be recalled that Dr. OkonjoIweala was earlier in 2013 reported to have stated that she had not paid any subsidy on kerosene since she assumed office. “The truth of the matter is that since 2007 when the late President Umaru Yar’Adua reviewed the prices of petroleum products, following the general strike in

protest against the price hike by his predecessor, the issue of subsidy payment on kerosene was left hanging and NNPC was mandated to continue to sell the product at a subsidised rate of N50 per litre. “Since then, not a dime has been paid to the Corporation as subsidy on the product. It is also on record that since January 2012, NNPC has been importing the bulk of the premium motor spirit used in the country. “NNPC has successfully kept the nation wet with products, especially premium motor spirit, these past two years as can be verified from the absence of queues at petrol stations during the end of year festivities.” Ibrahim added that another area of huge expenditure borne by NNPC on behalf of the federal government was the maintenance of national strategic reserves for petroleum products.

From left Mr Femi Ekundayo, former President, Institute of Directors; Mr Joseph Okonmah, Chairman, Nigerian Institute of Public Relatios, Lagos Chapter; Chief Alex Akinyele, former Minister of Information; Dr Rotimi Oladele; President, Nigerian Institute of Public Relations NIPR; Mr Femi Adesina, Presidnt, Nigerian Guild of Editors and Editor in Chief, The Sun Newspaper and Mrs Nkechi Ali-Balogun, fellow NIPR during a reception in Honour of Mr Rotimi Oladele and Mr Femi Adesina by Lagos Chapter of NIPR held in Lagos.

PZ Cussons launch Hot Robb relief centres BYAKINLEYE OGUNBIYI

s part of its effort to relieve Nigerians from muscular aches and pains, PZ Cusssons Plc has opened Hot Robb Mobile Relief Centres in Lagos, Ibadan, Aba and Onitsha. The Brand Manager, Mr kolawole Akintimehin said, the product is specially designed for muscular aches and pains while the Robb original is for cold , nasal congestion and mild pain. He said that a certified physiotherapist is on hand at the centres to offer free medical check up (blood pressure and consultation and free massage to consumers.He therefore urged consumers to be using the Robb original during this harmatan period because it is a

reliable lip balm. The Marketing Manager, PZ Cussons, Charles Nnochiri explained that the Mobile Relief Centre is designed to further bring the unique values and promises of Hot Robb brand to the public. “We are giving our consumer free product sampling and free massaging to assure them that the brand can deliver on its promises; we are also providing free medical checkup to ensure that our consumers have the right medical application during the activations,” he said. He stated that the campaign will give 5,000 people free medical check-up and consultation with the medical personnel, massage 2, 700 consumers nationwide and give free samples to 27,000 people.

Vanguard, MONDAY, JANUARY 13, 2014 — 21

Business & Economy BY FRANKLIN ALLI

igeria’s sugar market of over 165 million consumers and opportunities for high returns on investment have attracted $2.570 million (about N398, 350,000,000) investment from local and international investors. The investment represents funds expended to expand production capacity to meet current and future consumption. A breakdown of the figure, made available to Financial Vanguard by the National Sugar Development Council, NSDC, showed that Dangote Group is leading the pack with a fresh investment of $2 billion on projects in six states to produce about 1.5 million metric tons and to expand its Savannah Sugar Numan from current 6,500 hectare (ha) to 21,000 ha by 2018 to produce 100,000 tonnes sugar annually. On its part, “HoneyGold Group is to invest $300 million on two sites in Adamawa state to produce 200,000 tonnes sugar annually. “Similarly, Crystal Sugar Mills is spending $30 million to expand its operations to produce 60,000 tonnes sugar/ annum by 2018 from its recently acquired 1,500 TCD Sugar plant at Hadejia, Jigawa state while Confluence Sugar Coy is investing $240million in Kogi State to produce 200,000tonnes sugar/annum on about 37,000 ha of land at Ibaji. This brings the cumulative investment to more than N398 billion.” Latif Busari, Executive Secretary of the NSDCl, said the sugar investors have also projected to generate 133,300 jobs over the next seven years (2014-2020.)

MultiChoice unveils festive season promo BY PRISCA SAM-DURU

Dr. Maxwell Ubah, Motivational Speaker, Adesimbo Ukiri, MD/CEO and Kehinde Oyesiku, Head Business Development and Sales both of Avon HMO during the Avon HMO Quality Forum held at the De Renaissance Hotel, Lagos.

Nigeria’s huge sugar market attracts N398bn investment *to generate 133,000 jobs He said that currently, companies in the sector have 2,641 workers on their payrolls and have projected that the cumulative figure will hit 133,300 by 2020. “As as at last year, Dangote Sugar Refinery was the highest employer in the sector with 1,321 staff across its operation and hopes that their total workforces will hit100, 000 market by 2020. Golden Sugar Company has 695 workforces and hopes to increase it to 3,300; BUA Sugar presently has 75 workers and is targeting15,

000; Confluence Sugar 115/ 8,000; Crystal 35/ 3,500 and PSPAN currently has 400 workers and hopes to increase it to 3,000 by 2020. According to him, the story of Nigerian Sugar Industry started in 1961 with the establishment of the Nigerian Sugar Company, Bacita followed by Savannah Sugar Company, Numan in 1980. “The combined installed capacity of the two mills was 105,000MT with highest actual production of 54,000MT which could only

50 countries sign mercury regulation BY AKINLEYE OGUNBIYI

n a bid to protect human health and the global environment,over 50 countries are signing a regulation of mercury emission and reduction later this month according to United Nations Industrial Development Organisation, UNIDO. UNIDO in an online statement said, after intense negotiation, a formal agreement was made globally on mercury that the production,import and export of mercury containing product will be banned by 2020. kelvin Telmer the Executive Director of the Artisanal Gold council says “the beneficiaries of the treaty is anybody who eats fish and those who are occupationally exposed to mercury”. Presently, artisanal and C M Y

small scale gold mining is the major source of mercury release and environmental pollution. Once emitted and release,mercury persist in the air , water soil and living organisms extending environmental and health risk. In 1956, victims of Minamata disease have serious health impacts including brain and nerves damages, memory loss, damage to the digestive system among many others. Since 2008, UNIDO was able to raise USD 6million for the project fund and leverage USD12million in financing 11 countries,which France and Finland are of great support. Mercury ’s propensity for long range transport through water, its chemical transformation and tendency to bio accumulate make it a threat not only to the health of miners and ecosystems at the

local level, but also to the environmental health of the global community. According to kelvin Telmer,all the international organizations need to have some early successes to build momentum to ensure the treaty is effective and results are seen as quickly as possible. “UNEP needs to organize all stakeholders and effectively communicate between them, ensuring that experiences are shared, and coordinate efforts. UNIDO needs to increase the implementation of projects and adopt innovative approaches,something we are already seeing,”says Telmer. “Together with our financing partners,we stand ready to continue and expand our assistant to the signatories of the convention in order to ensure a rapid ratification,”says Bernaudat.

supply 7.5 percent of total demand in 1986. “All through the 1980s and 1990s no new investment came into the sector and by the late 1990s, the sugar sector had virtually collapsed while Nigeria continued to rely heavily on imported refined sugar necessitating a new government policy direction. “In 2000 and 2007, the sector witnessed new investments with the establishment sugar refineries by Dangote Group and BUA Group, respectively. “Their advent though welcome, only succeeded in substituting the importation of refined sugar with raw sugar. The privatisation of government-owned sugar companies in the mid 20032007 was intended to inject new investment in the subsector. Golden Sugar Refinery (owned by FMN Plc) came on stream late 2012 “The approval of the Nigerian Sugar Master Plan (NSMP) in September, 2012 marked a new phase in the development of the sugar industry. Objectives: Raise local sugar production to attain self sufficiency; investors’ specific fiscal incentives to attract investment into the sector. Implementation of Backward Integration Programme (BIP) with support incentives, robust monitoring and evaluation of BIP; stem the tide of high level importation; high graduated tariff structure on sugar importation; import quota allocation benchmarked on local production

ultiChoice Nigeria owners of DSTV, a pay-TV service provider has rewarded the first set of winners in the ongoing festive season promo tagged, “Let’s go to Brazil 2014". The event which held in Lagos, saw 10 subscribers out of the 60 Nigerians expected to be in Brazil, emerge winners of return tickets to Brazil while several others won prizes ranging from DStv Explora decoders, DStv Walka devices, LED TV sets, among others, through a live draw supervised by officials of Consumer Protection Council (CPC) and Alexander Forbes, leading consulting firm. Announcing the take-off of the promo, General Manager, Marketing and Sales, MultiChoice Nigeria, Martin Mabutho stated that, “We are celebrating 20 years of operation in Nigeria and the Super Eagles qualification for the 2014 World Cup. We are also, using this occasion to announce the festive season promo which as part of fulfillment of our social responsibility, extends beyond the festive season and it is tagged, DStv Samba 2014 also known as “Let’s go to Brazil,” as Brazil becomes the destination and focus of the world in 2014.”

Airtel launches new Campaign, deepen youth’s digital experience BY WILLIAM JIMOH tarting the year on a S lively note, Airtel Nigeria, has launched a new

campaign entitled; ‘Come Alive’ targeted at Nigerian youths and adults who are young at heart to enrich their digital experience while fulfilling its vision of becoming Nigeria’s most esteemed Telco brand. According to the Telco, the new campaign effectively summarizes its brand promise of empowering Nigerians to realize their full potential and dreams, enabling the youths and the young at heart to come alive and to stay in touch with their families, loved ones and friends with the latest and most innovative mobile internet and digital value offerings. It also said it is committed to exciting telecom consumers, creating the right digital environment for them to succeed and empowering young Nigerians to express themselves.

22 — Vanguard, MONDAY, JANUARY 13, 2014

Corporate Finance Stories by NKIRUKA NNOROM

Wall Street to edge up, even as payrolls disappoint

tocks were set to rise slightly on Friday even as the December jobs report came in much weaker than anticipated. Equity futures sharply pared gains after data showed U.S. employers hired in December only 74,000 workers, the smallest increase since January 2011. “That’s what markets do,” said John Canally, investment strategist and economist for LPL Financial in Boston. “You have a bunch of traders sitting there looking at a number they don’t know anything about, they see a weak number and they hit ‘sell’; and when people take a look through it again they will reconsider.” The data setback was likely to be temporary, however, amid signs that cold weather conditions might have had an impact. “It looks like it’s a weather issue,” Canally said. “The Fed will see through it as a weather issue. I don’t think they will change after one month of anything bad or good - so they are going to stay the course.” Investors are still viewing economic data through the eyes of the Federal Reserve, trying to gauge the pace at which it will continue to reduce its monthly stimulus.

European stocks rise; Stoxx 600 surrenders some gains

uropean stocks climbed, heading for their first weekly rally of 2014, as investors weighed data that showed U.S. hiring slowed in December while the unemployment rate unexpectedly fell. Stocks surrendered some of their gains after the data. Swatch Group AG advanced the most in 11 months after forecasting “dynamic growth” in 2014. Metro AG gained 4.9 percent as a report that was later denied claimed the retailer’s biggest shareholder may push for selling some units. Brenntag AG fell 2.4 percent after UBS AG downgraded the shares. The Stoxx Europe 600 Index advanced 0.3 percent to 329.33 in London, paring an earlier gain of as much as one percent. The benchmark has risen 0.6 percent this week as reports on German unemployment and U.S. private jobs beat economists’ projections. C M Y K

tockbrokers in the nation’s capital market have appealed to the Nigerian Stock Exchange, NSE, to increase the depth of the market by further introducing more quality securities that will absorb the expected liquidity inflow in the course of the year. They noted that certain positive developments in the international and domestic macro-economic environment would direct more investible funds to the private sector, which the equities market is expected to benefit from. According to them, failure to expand the product base to give investors wide investment option could lead to an overheated market. “Judging by the domestic macro-economic environment, if you look at the Federal Government’s budget for 2014, you see that the budget deficit has declined. The implication, therefore, is that the debt finance by Federal Government is definitely going to reduce. So that will make more money available to equities market and private sector. “A combination of more money going to the equity market and private sector will drive the private sector led economy, which the equities market will also benefit from. There is also an indication that the interest rate will decline this year. If the interest rate declines in the fixed income or debt market, it means the equities market will be quite active,” said Mr. David Adonri, Managing Director/

From left: Honeywell Flour Mills Plc Long Service awardees – Managing Director Designate, Mr. Lanre Jaiyeola (20 years), Executive Director, Supply Chain, Mr. Rotimi Fadipe (20 years), and Production Director, Dr. Nino Ozara, (15 years) at the company’s Long Service Award ceremony, in Lagos

Stockbrokers task NSE on market depth CEO, Lambeth Trust and Investment Company Ltd. “Then looking at the international macro-economy, a lot of financial analysts believe that 2014 will usher in a complete recovery of the global macro-economy and when that happens and the global economy improves, it will facilitate growth in equities market globally. That, therefore, reinforces our expectation in domestic market that activities will center more on equities

market,” he added. Continuing, he said, “But that also comes with its own challenge for our market that lacks in depth. So, if we have high liquidity coming into the market, the challenge is to increase the absorptive capacity of the market. And we seriously hope that it will not drag the market into an overheated entity. That underscores the importance of deepening the market.” Speaking in the same vein, Mr. Tola Odukoya, Vice-

President, Dunn Loren Merrifield, said there is need to develop a strong buy-side in the market. In his words, “We need to develop a strong buy-side (that is to have a stronger and wider investor-universe beyond pension funds and foreign investors.) Also, it would be good to attract strong non-listed companies to list on the NSE thereby increasing the securities available and expanding the market.”

IHS shareholders petition SEC over planned share cancellation, delisting S

hareholders under the aegis of Renaissance Shareholders Association have petitioned the Securities and Exchange Commission, SEC, over planned share cancellation and delisting of IHS Nigeria Plc from the Nigerian Stock Exchange, NSE, calling on the commission to halt the process until some outstanding issues are settled. They, therefore, demanded for publication and issue of the company’s IFRS audited financial statement for the year ended 30 th April, 2013 and convention of a meeting of the shareholders to consider the accounts and the concurrent months’ activities before delisting. Besides, they proposed

payment of N20.00 per share to ordinary shareholders as exit price, saying that the proposed N3.70 is not adequate. Vanguard notes that IHS Nig. Plc is seeking to cancel some of its shares at N3.70 per share and thereafter delist from the NSE’s Daily Official List, citing the cumbersomeness of raising fresh capital from the Nigerian capital market as a reason. According to the Scheme of Arrangement, the Board of IHS stated that its operation requires frequent injection of fund to keep pace with competition and developing trends in the industry, a relief, they said, the NSE no longer provides. In a petition to the DirectorGeneral of the SEC, titled ‘IHS Nig. Plc Cancellation of Shares and Delistment from NSE: Call for Accountability,’

signed by the association’s president, Ambassador Olufemi Timothy, the shareholders observed that publication of the 2013 audited financial account would show accountability, transparency, honesty, trust and overall confidence in the whole arrangement, while calling on SEC to “kindly ensure that all st audited accounts as at 31 December, 2013 or as at when due is published and approved at the statutory general meeting of the company. It is essential in the interest of investors’ confidence in the capital market.” In a separate letter addressed to the Chairman, Board of Director of IHS, the association posited that the company has no justification to say that the NSE is no longer relevant to it considering some remarkable achievements it has recorded within five years of its listing.

Part of the letter reads: “What compensation do you think will be enough for shareholders for the achievements recorded within five years of being on the Exchange? N3.70 proposed for cancellation of our shares is not adequate, unfair and unreasonably low based on the contribution of ordinary share capital holders since 2009 to date. IHS Nig. Plc came to be listed with fixed assets of only N405 million in 2009, but now delisting with fixed assets of over N28 billion in 2013 and total assets less current liabilities of N43 billion in 2012. What a great value! “We observe that without paying a fair, reasonable and commensurate price for our shares to be cancelled in the scheme, you (the Board of IHS Nig. Plc) have cheated Nigerian shareholders, the Nigerian Stock Exchange and the government of the Federal Republic of Nigeria."

Capital Market Company Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc 1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc Livestock/Animal Specialities Livestock Feeds Plc CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc Chellarams Plc John Holt Plc SCOA Nigeria Plc Transnational Corporation UACN Plc

Opening Price (N) 0.50

Daily Stock Market Report Closing Price (N) 0.50

Opening Price N

Quantity Traded 50,000

Year High 0.50

Year Low 0.50

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers Union Diagnostics & Clinicals Services

0.09

0.50 44.00 40.00

20,000 295,488 334,708

0.50 24.58 8.30

0.50 14.53 6.40

0.10 7.33 2.75

50.00 2.77 4.37

4.39

4.60

1,071,750

0.66

0.48

0.11

15.00

1.70 4.15 1.17 5.32 4.08 67.00

1.70 4.15 1.21 5.32 4.09 67.00

24,100 250 98,724 150 17,546,303 280,336

2.54 7.60 8.82 8.28 1.82 42.50

1.45 6.43 5.89 5.52 0.50 28.70

0.16 0.31 0.00 0.35 0.24 6.89

5.18 20.74 0.00 15.77 3.64 4.14

5.05 1.07

5.05 1.14

20,000 780,642

4 2,720,390.38

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

72.29 8.46

69.00 8.46

111,304 400

62.26 8.28

32.96 3.01

Real Estate Investment Trusts Skye Shelter Funds Union Homes Real Estate Investment CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc

P.E. Ratio

0.50 44.00 38.00

CONSTRUCTION/REAL ESTATE Building Construction/Structure ARBICO Plc Constain (WA) Plc

Real Estate Development UACN Property Development

E.P.S.

Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

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

10.11 2.26

20.90

18.43

651,200

20.15

11.59

1.69

7.33

100.00 50.00

1,000 -

100.00 -

97.00 -

11.75 -

8.51 -

103.50 21.50 2.18

2.01 0.50 3.91 3.51 2.80 68.50 2.37 1.60 7.36 1.76

Quantity Traded

Year High

Year Low

E.P.S

P.E Ratio

952,938 11,118,786

103.50 15.69 1.41

103.50 10.64 0.03

10.56 0.87 0.21

9.71 18.03 6.71

2.23

785

10.54

9.52

0.00

0.50

5,500

0.50

0.00

3.51 2.24 2.81 68.00 2.37 1.60 7.36 1.68

5,000 24,300 4,488,957 29,468 49,270 626,357 2,195 60,450

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

0.19 0.44 2.62 0.20 0.09 0.00 0.00

88.50 0.00 3.07 9.05 14.13 0.00 0.00

ICT Computer Based Systems Courteville Investment Plc

0.66

1,187,000

0.52

0.50

0.10

10.00

Computers and Peripherals Omatek Ventures Plc

0.50

4,800

0.50

0.00

12.50

16.83 2.07

613 5,000

9.31 3.59

3.25 3.25

0.00 0.01

1.43 0.00

0.50

6,800

50,000

0.50

4,000

1.47

0.50

0.00

21.17 8.40 47.98 10.48 230.00 0.50 1.48 111.15 4.65 1.95 10.93

21.17 8.45 48.88 10.99 230.00 0.50 1.41 115.00 4.65 1.95 10.93

119,471 161,053 267,841 1,696,315 2,477,542 500 394,332 707,363 108,130 100 30

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

1.71 2.70

1,000 2,717,101

6.91 3.60

IT Services NCR (Nig) Plc Tripple Gee and Company Plc Processing Systems Chams Plc 4.11 4.73

Closing Price N

103.50 21.50 2.11

as at Friday, January 10, 2014

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

0.50

15,000

0.50

0.00

16.07 235.60 29.50 166.00 0.77

16.07 237.00 29.50 165.00 0.77

2,500 168,043 49,879 480,465 10,000

4.63 255.00 7.10 100.00 1.01

2.23 186.00 5.23 72.50 0.93

0.00 9.95 0.41 5.08 0.00

0.00 19.98 16.29 22.22 0.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

71.40

109,932

51.49

,39.00

2.69

13.92

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

Tools and Machinery Nigerian Ropes Plc

7.85

8.69

8.26

9.50 11.92 88.04 3.80 14.00 0.62

9.50 12.12 89.06 3.89 14.00 0.70

94,449 2,138,140 480,768 1,440,132 245,060 1,324

19.90 16.20 95.00 6.60 6.70 0.88

4.31 4.02 57.00 2.31 3.80 0.50

0.00 0.91 4.09 0.39 1.01 1.13

16.91 14.38 16.89 16.92 5.75 8.83

NATURAL RESOURCES Chemicals BOC Gases Plc

6.66

5,000

9.20

6.80

Metals Aluminium Extrusion Ind Plc

7.75

10.50

500

12.39

10.70

0.13

85.77

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

60.68 1,170.05

60.88 1,160.00

262,805 1,645,320

37.27 840.10

8.33 400.00

Non-Metalic Mineral Mining Multiverse Plc

0.50

200

0.50

0.01

0.00

Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc

1.35 25.43

27.61 32.84

Household Durables Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc

32.27 4.70 1.82

32.27 4.88 1.73

60 453,060 2,161,203

36.19 5.54 2.88

33.96 2.91 2.88

13.89 0.61 0.00

2.44 7.07 0.00

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

37.00 51.80

37.00 53.00

413,869 1,289,234

41.02 47.39

21.02 27.60

0.82 1.44

4.39 32.91

Insurance Carriers, Brokers and Sector African Alliance Insurance AIICO Insurance Plc Continental Reinsurance Plc Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guinea Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mansard Insurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Unity Kapital Plc Universal Insurance Plc Wapic Insurance Plc Microfinance Banks Fortis Micro-Finance Bank Plc NPF Micro-Finance Bank Plc Mortgage Carrier, Broker and Sector Abbey Building SOC Aso Savings and Loans Plc Resort Savings & Loans Plc Union Homes Savings Plc Other Financial Institutions Africa Prudential Plc Crusader (Nigeria) Plc Deap Capital Management & Trust Plc FBN Holdings Plc Nigeria Energy Sector Fund Royal Exchange Assurance

9.60 7.70 17.06 2.60 4.75 28.30 4.40 2.38 8.68 10.45 0.50 1.18 23.14

9.60 7.75 17.00 2.63 4.75 28.30 4.56 2.46 9.00 10.10 0.50 1.20 23.20

8,255,830 3,415,361 35,001,800 4,331,913 865,336 13,709,846 15,772,168 3,196,649 7,920,399 481,663 11,448,304 5,662,040 19,080,551

12.39 7.51 14.04 3.47 5.70 26.09 6.50 3.05 7.69 10.60 1.22 1.75 21.49

4.70 1.92 9.90 1.13 2.90 13.02 2.65 0.80 1.64 2.34 0.50 0.52 11.96

1.42 0.90 2.81 0.43 0.00 2.10 0.71 0.54 0.67 0.00 0.00 1.34 2.09

0.50 0.88 1.15 0.51 0.50 2.00 0.50 0.50 0.50 0.50 0.55 0.50 0.50 0.50 0.50 2.40 0.50 0.87 0.50 0.51 0.69 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.14

0.50 0.89 1.19 0.51 0.50 2.06 0.50 0.54 0.50 0.50 0.55 0.50 0.50 0.50 0.50 2.50 0.50 0.81 0.50 0.51 0.66 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.14

1,000 3,479,367 272,678 570,387 74,000 9,054,578 17,000 62,500 150 150 37,218 1,670,890 105,000 7,954 300 213,600 15,000 6,480,950 2,974 120,000 114,683 2,500 50,000 200 12,971 7,464 50,800 270,000 7,416,057

0.50 1.11 1.03 0.54 0.50 2.44 0.50 0.68 0.50 0.50 0.50 0.50 0.50 0.60 0.50 2.59 0.54 0.81 0.61 0.50 1.01 0.50 0.56 0.50 0.50 0.50 0.50 0.50 1.08

0.50 0.50 0.58 0.50 0.50 1.08 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.06 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

6.60 0.75

6.60 0.85

4,100 6,410

6.00 1.18

0.00 0.92

0.04 0.92

150.00 10.56

1.49 0.50 0.50 0.50

345 200 200,000 21,000

1.57 0.50 0.50 0.50

1.37 0.50 0.50 0.50

0.19 0.02 0.00 0.00

47.6 7 25.00 0.00 0.00

3.26 0.50 0.99 15.51 552.20 0.58

3.30 0.50 0.99 15.45 552.20 0.63

4,153,498 22,000 37,500 18,430,450 2,080,000

0.75 0.50 2.02 20.00 100 0.78

0.00 0.50 2.02 8.57 552.20 0.50

0.16

0.00 0.50 0.14 0.02 0.50 0.28 0.01 0.00 0.03 0.01 0.00 0.02 0.00 0.00 0.03

8.73 8.34 5.00 7.93 0.00 12.39 9.15 5.43 11.19 0.00 0.00 0.43 10.24

0.00 0.37 0.02 0.03 0.06 0.04 0.09 0.00 0.00 0.00 0.02 0.00 0.07

0.19 0.00 0.00 2.03 12.68 0.13

0.00 22.20 6.79 27.30 10.00 7.43 50.00 0.00 16.67 50.00 0.00 25.00 0.00 0.00 16.67 16.19 0.00 2.19 26.00 16.67 15.50 12.50 5.65 0.00 0.00 0.00 25.00 0.00 15.43

9.16 0.00 0.00 9.85 43.55 6.00

1.79 2.74

5.94 1.47

0.5 0.25 0.00

0.78

39.60 9.16 0.00

7.37

Paper/Forest Products Thomas Wyatt Nig. Plc

0.87

43,412

1.38

0.00

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

1.91 0.50

65,036 840

2.50 2.58

1.62 2.58

0.11 0.00

13.15 0.00

1.44

2,000

1.51

1.33

0.03

28.80

3.98 14.55 12.68 4.30 1.05 2.92 0.63

3.98 15.27 12.68 4.30 1.05 2.78 0.66

6,888 897,853 150 29,198 200 84,311 2,749,340

3.98 15.58 15.03 4.30 1.86 2.92 0.63

3.98 12.71 13.97 3.60 1.05 2.92 0.63

0.00 3.90 0.90 1.22 0.30 0.07 0.00

0.00 3.26 0.00 3.52 6.18 41.71 0.00

Mortgage Carriers, Brokers and Se Abbey Building Society Plc INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service

0.59

0.58

9,221,717

0.97

0.87

0.19

6.06

Intergrated Oil and Gas Services Oando Plc

23.89

26.33

34,624,793

78.97

27.99

1.73

4.17

20.50 0.50 52.40 89.00 117.30 54.44 175.46

20.50 0.50 52.40 89.00 117.00 54.44 175.46

82,191 21,500 49,914 109,395 39,471 200 21,690

37.10 0.70 5.59

0.50 0.50 3.89

4.93 0.00 0.61

7.40 0.00 6.99

163.50 2,100 240.00

141.00 63.86 195.50

6.11 2.98 14.63

11.11 19.23 17.07

0.50

200

0.50

Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc Hospitality Tantalisers Plc SERVICES Afromedia Plc Automobile/Auto Part Retailers RT Briscoe Plc Courier/Freight/Delivery Red Star Express Plc Trans-National Employment Solutions C & I LEASING PLC Hotels/Lodging Capital Hotel Ikeja Hotel Plc

0.01

0.50

200

0.72

1.40

31,686

3.65

1.30

0.21

8.19

4.34

4.55 1.22

135,001 1.17

3.67 718,094

2.65 0.25

0.60 11.12

4.91

0.60

3,766,214

1.64

4.55 0.75

150 312,200

400 2.07

0.62 4.55 0.73

0.51

0.90 3.00 1.33

0.00

0.04 0.34 0.92

12.75

11.25 34.09 2.12

Media/Entertainment Daar Communications Plc

0.50

54,200

0.50

0.48

0.00

Printing & Publishing. Academy Press Plc Learn Africa Plc Studio Press Nig. Plc University Press

2.55 2.00 2.52 3.99

2.55 2.10 2.52 3.99

10,000 375,165 100 209,214

3.68

0.25

12.19

0.00 6.82

3.17 0.30 0.00 3.60

0.54

27.69

Road Transportation Associated Bus Company Plc

0.95

0.99

851,491

0.80

0.50

0.00

Speciality Interlinked Technologies Plc

4.90

1,050

5.15

4.90

0.00

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

3.32 6.02

3.35 6.08

144,390 5,716,713

2.78 11.75

1.57 6.50

0.60 12.53

4.22 8.75

Vanguard, MONDAY, JANUARY 13, 2014 â&#x20AC;&#x201D; 23

FINANCIAL SERVICES Banking Access Bank Plc Diamond Bank Nigeria Plc Ecobank Transnational Incorporated Fidelity Bank Plc First City Monument Bank Plc Guaranty Trust Bank Plc Skye Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

24 — Vanguard, MONDAY, JANUARY 13, 2014

Corporate Finance

he Standard Chartered Bank, SCB has plan to invest $20 million by the end of 2014 to provide comprehensive and sustainable eye care services to 20 million people in impoverished urban areas as part of its Corporate Social Responsibility (CSR) initiative. The board, management and staff of SCB Nigeria also held a fundraising ball tagged ‘The Eye Ball’ in support of their Group’s Seeing is Believing initiative. The Bank’s annual fundraising walk has raised over US$740,000 in seven years which has helped to fund successful cataract operations for more than 14,000 persons. The seeing is Believing project, is Standard Chartered Bank’s initiative to help tackle avoidable blindness in communities around the world, 90 percent of which is found in the developing world where the Bank’s business is rooted. In most cases, vision can be improved with eyeglasses or contact lenses. However, 80 per cent of blindness is avoidable i.e. preventable and/or treatable. Seeing is Believing is Standard Chartered Bank’s initiative to help tackle avoidable blindness in communities around the world. Standard Chartered staff in 2003 as a way of celebrating the Bank’s 150th anniversary, Seeing is Believing has raised over USD 37 million and impacted over 25 million people to date globally, including over 2.5 million who have benefited from sight restorations. The bank’s chosen implementation partners in this project are Sight Savers International and the Nigerian Society for the Blind. These are the same partners the bank has worked with over the last seven years owing to their credibility and unwavering commitment to the eradication of blindness in Nigeria. With funds raised before and during the ball, the bank gave 2 cheques totaling =N=12 million to Nigeria Society for the Blind and Sight Savers International. C M Y K

BY PETER EGWUATU

he implications of a 10 year master plan for the Nigerian capital is quite clear as it hopes to transform the market, make it competitive and contribute its quota of developing the nation through funds mobilization. Capital market master plan is good for nations that are still developing and aspiring to move to emerging market segment. The Asian countries have adopted this plan and have moved from developing to emerging market with high growth. The Asian countries, which are the pairs of Nigeria in the past 30 years, have moved faster than Nigeria with respect to their capital market growth and development. Capital markets are a critical driver of economic growth, channeling private savings toward promising public and private investment opportunities. The ASEAN countries have benefited tremendously in the adoption of capital market master plan. For instance, in macroeconomic growth, individual ASEAN nations have experienced steady economic expansion, driven by increasing intra-Asian trade and infrastructure investment. For capital markets product diversity, ASEAN capital markets have matured across the product range: - Equities: The combined market cap of ASEAN exchanges (as of end-2012) reached $2.3 US Dollars, creating the 5th largest equity pool in the Asia-Pacific region. On fixed income: local currency fixed income markets have also expanded significantly in recent years, creating Asia-Pacific’s 4th largest market by issued amount outstanding, behind Japan, China and Korea. On Over the Counter (OTC) Derivatives: Excluding Singapore due to its role as a regional financial trading hub, ASEAN onshore OTC derivative markets are still at a nascent stage. However, daily traded volumes have increased over three-fold over the past decade across Indonesia, Malaysia, Philippines and Thailand – laying the base for future development. On participants: The range of participants in ASEAN markets has

Arunma Oteh, Director General, SEC

C.S.R: Standard Chartered to invest $20m for eye programme

Implications of 10-yr capital market master plan

The Asian countries, which are the pairs of Nigeria in the past 30 years, have moved faster than Nigeria with respect to their capital market growth and development

expanded significantly over the past decade across issuers, intermediaries and investors: On established domestic markets (Malaysia, Thailand): The domestic markets of Malaysia and Thailand maintains a broad base of local issuers and investors, with domestic institutions achieving scale. Malaysia maintains regional leadership in Shariacompliant products and a robust fixed income market; however both countries lack significant OTC derivative activity. Foreign investors have considerable access; however some restrictions remain through listed

company. Malaysia had in the past discovered the need to have a capital market master plan and consequently in 2001 launched its first 10-year capital market master plan. In 2011, it launched the second capital market master plan and all these have helped the country to wax stronger in building infrastructure, industries etc. The same for Thailand, the Government launched Thailand’s first capital market master plan in early 2002 in an effort to develop and diversify the country’s sources of funds. The plan outlines broad initiatives that are considered the main policy framework guiding Thai capital market development. These initiatives include promoting good governance, enlarging the investor base, increasing the quantity and variety of financial instruments, enhancing infrastructure, and reforming the supervisory system. The second phase of the plan was released in February 2006 covering the period 2006– 2010. It was proposed by the Federation of Thai Capital Market Organizations (FeTCO) and related government bodies to the Thai Ministry of Finance. According to the authorities of the Malaysia, the lessons from past financial crises are

that rapid growth is not sustainable unless it is underpinned by wellgrounded ethical beliefs and high levels of integrity. The Malaysia capital market master plan 2 provides equal emphasis to achieving governance objectives to ensure Malaysia’s capital market continues to be wellregulated with participants strengthening their capabilities and professional standards and exercising a strong sense of responsibility towards the interests of their customers. So the plan by the Nigeria’s Securities and Exchange Commission, SEC to have a master plan for the market this year in the right direction. Last year the SEC inaugurated three committees with the mandate to draft a 10year master plan aimed at developing a long term strategic plans for a sustainable growth and development of the Nigerian capital market. The committees includes: The 10-year master plan committee, non-interest products committee and literacy committee. Former Chairman of Accenture Nigeria, Mr. Adedotun Sulaiman heads the master plan committee; Mrs. Hajara Fola Adeola chairs the noninterest committee while President, Chartered Institute of Stockbrokers (CIS), Mr Ariyo Olushekun chairs the literacy committee. The reports from the committees are expected to produce a blue print for the nation’s capital market after being fine-tuned by the commission. If this happens this year, it will be the first time the nation’s capital market will have a blue print after 54 years of Nigeria’s independence. This will be a landmark achievement, even as ongoing reforms in the market have started bearing fruits since the aftermath of the global meltdown in 2008. It should be noted that three committees inaugurated by SEC are meant to conduct a holistic review of similar emerging markets and develop blueprints to structure the market for global competitiveness. Director-General, Securities and Exchange Commission (SEC), Ms Arunma Oteh, had said while inaugurating the committee that the key areas to look into will include investor protection and education, professionalism, product innovation and expansion of the role of the capital market in economic development.

Vanguard, MONDAY, JANUARY 13, 2014 — 25

Banking & Finance

L-R: Business Development Manager, FirstBank Ibadan 1, Mrs. Bolanle Sontan; Past Winner of FirstBank Promo Draws, Deaconess Oyebisi Omolola; Business Development Manager, FirstBank Ibadan 2, Mr. Oladipo Oyedero; Winner of the Big Splash Promo 1st Quarter’s Toyota Corolla, Mr. Ajadi Kamorudeen Oladunni and Head, Consumer Banking FirstBank, Mrs. Funke Smith at the 2nd quarterly draw of FirstBank’s ‘Big Splash Promo which held recently in Ibadan, Oyo State.

2014: African government should focus on security and job creation —AfDB STORIES BY BABAJIDE KOMOLAFE

frican Development Bank (AfDB) has called on African government to focus on security, peace, stability and job creation in 2014. President of the Bank, Mr. Donald Kaberuka made this call in Tunis on Thursday during the Bank’s annual luncheon with diplomats accredited to its host country

and mobilized senior Bank management. He observed that that demography in the continent has increased, with higher rates of schooling and lower mortality rates, also noting that export performance, domestic demand and investments have remained strong. “A third of the 49 countries will register 6.5 per cent growth this year,” he said, emphasizing that “the African Development Bank is absolutely engaged in these

issues, within the remit of its mandate, from fragile states and post-conflict countries to integration and infrastructure.” The Bank strides each and every day to keep a balance in macroeconomic indicators, Kaberuka underscored. Furthermore, he revealed that 85 per cent of Africans live in countries that are relatively stable, while almost 94 per cent of Africa’s GDP is generated in these countries. He also observed that 45

countries are stable or with pockets of instability, and nine countries have a peacekeeping presence. Kaberuka expressed optimism over ongoing pockets of violence in some parts of the region, and saluted efforts to find a peaceful resolution of such crises and their spillovers. “Our optimism is built on the fact that, despite such pockets of violence and suffering, much of Africa is at peace,” he said. Consequently, he said that, security, peace and stability as well as job creation should be the continent’s priorities for 2014. “We need, in particular, to have robust early warning mechanisms to be able to proactively manage those conflicts new and old,” Kaberuka said. He stressed that inclusive growth; economic transformation and job creation underpin the work of the African Development Bank and are the core objectives of the Bank’s Ten Year Strategy, launched last April. “Exclusion is a barrier to economic transformation. Our goal is to enter the regional and global value chains,” Kaberuka said. On Sub-Saharan Africa, Kaberuka said steady progress has been made, with dynamics of the last decade maintained, in spite of pockets of instability. He also underscored that when one compares the social and political situation in Sub-Saharan Africa today with two decades ago, significant progress has been made in anchoring economic growth and stability.

FCMB raises $150m loan to boost interest earnings

irst City Monument Bank Plc has raised $150 million loan from the international investing community, for on-lending to critical sectors of the economy. The loan will help the bank boost its interest earning capacity in the 2014 operating year. The unaudited nine months results of the bank ending September 30th 2013 show that the bank earned N41.1 billion net interest income, and net interest margin of 7.8 per cent , which translated to 7.8 kobo interest on every N1 of loan granted. Announcing the loan deal, the bank in a statement said, “ C o m m e r z b a n k

Aktiengesellschaft and Standard Chartered Bank, acting as Initial Mandated Lead Arrangers and Bookrunners, have disclosed the successful signing of a US$ 150,000,000 Senior Unsecured Term Loan Facility for First City Monument Bank (FCMB) Limited. The agreement was signed recently and represents First City Monument Bank’s largest fundraising to date in the commercial bank syndicated loan market. The Facility, which was prefunded by Commerzbank Aktiengesellschaft and Standard Chartered Bank,

was launched at US$100,000,000 and subsequently increased following a highly successful general syndication phase. Proceeds of the Facility will be used for general lending purposes. Standard Chartered Bank is acting as Facility Agent. Speaking at the signing ceremony, the Deputy Managing Director of First City Monument Bank, Mr. Segun Odusanya, said, ‘’the successful conclusion, oversubscription and the number of international financial institutions that participated in the loan

syndication indicates the level of confidence which the international banking community have in First City Monument Bank Limited and the Nigerian market as a whole”. “The proceeds of the fund raising will be used to support medium term lending to key sectors of the economy such as Power, Oil & Gas Upstream , Manufacturing and Agribusiness in line with the Bank’s commitment to supporting the critical areas to the success of the Nigerian economy”, Mr. Odusanya revealed.

More customers win at FirstBank’s promo

he second quarterly draw of the on-going FirstBank ‘Big Splash Promo' has produced three winners of the brand new Toyota Corolla cars. The winners are Njabari Mahmoud of Mayo Belwa, Yola branch, Abulu Cyril Edobor of Benin Ugbowo Branch and Ufoh R.O & Ufoh CC of Nypor Branch. The draws supervised by representatives from the National Lottery Regulatory Commission, Consumer Protection Council and KPMG Advisory Services also produced 120 winners of standing gas cookers, 120 winners refrigerators as well as 120 winners of N50, 000 cash. The savings promo is designed to reward customers for their patronage and loyalty to the brand over the years and to promote a savings culture among the youths and general populace. The promo which kicked off in July 2013 will run till July 2014 to coincide with the bank’s 120 years anniversary celebration.

Two Indian companies to establish automobile plants in Nigeria BY FAVOUR NNABUGWU

he Federal Government approved National Automotive Industr y Development Plan (NAIDP) has received a boost with the indication of interests by two vehicle manufacturing companies from India to establish automotive plants in Nigeria. The two companies that are taking advantage of the eyecatching incentives and policy objectives of the NAIDP are TATA Motors based in Mumbai India and TVS Motor Company in Tamil Nadu, India. Director General of National Automotive Council (NAC), Engr. Aminu Jalal who at separate meetings in Abuja yesterday, received top management executives of both companies in NAC Headquarters, said the companies were in the country with the same mission of obtaining all the needed technical details, administrative requirements and guidelines towards the setting up of vehicle industrial plants in Nigeria under NAIDP. C M Y K

26 —Vanguard, MONDAY, JANUARY 13, 2014

E-Commerce

Commodity Index Jan 03-Jan. 09, 2014 Market Bodija Market Oyo State

Commodity

Drum Beans (Olotu) Garri (White) Groundnut (Edible) Maize (White) Onion (Violet) Palm oil (Red) Rice (Imported) Sorghum (Red) Soya Beans Dawanau Market Drum Beans (Olotu) Kano State Garri (White) Groundnut (Edible) Maize (White) Rice (Imported) Sorghum (Red) Soya Beans Gombe Main Market Drum Beans (Olotu) Gombe State Garri (White) Maize (White) Onion (Violet) Palm oil (Red) Rice (Imported) Sorghum (Red) Soya Beans Igbudu Market Delta Drum Beans (Olotu) State Garri (White) Groundnut (Edible) Maize (White) Onion (Violet) Palm oil (Red) Rice (Imported) Sorghum (Red) Soya Beans Maikarfi Market Kaduna State

Wholesale Measure 100Kg 60Kg 100Kg 100Kg 100Kg 25Lt 50Kg 100Kg 100Kg 100kg 60Kg 100kg 100kg 50kg 100kg 100kg 100Kg 100Kg 100Kg 100Kg 25Lt 50Kg 100Kg 100Kg 100Kg 100Kg 100Kg 100kg 25Lt 50Kg 100Kg 100kg

Price(N) 22,500 10,833 18,333 9,000 14,000 6,000 10,600 10,000 8,500 13,500 6,000 14,167 5,767 8,700 5,967 7,067 14,000 10,500 5,000 13,333 5,700 8,200 7,667 8,500 27,800 19,000 10,000 22,200 6,500 12,600 16,000 12,300

Retail Measure Congo Congo Congo Congo Bottle Congo Congo Congo Tier Tier Tier Tier Tier Tier Tier Mudu Mudu Mudu Bottle Mudu Mudu Mudu Paint bucket Paint Bucket Paint bucket Paint bucket 4.58Kg Bottle Paint bucket Paint bucket Paint bucket

Garri (White) 50Kg 7,000 Tier Groundnut (Edible) 100Kg 19,000 Tier Maize (White) 100Kg 6,000 Tier Onion (Violet) 100Kg 12,000 Palm oil (Red) 25Lt 5,500 Bottle Sorghum (Red) 100Kg 5,400 Tier Soya Beans 100Kg 8,500 Tier Mile 12 Market Drum Beans (Olotu) 100kg 22,000 Paint bucket Lagos Market Garri (White) 60Kg 9,000 Paint Bucket Groundnut (Edible) 100kg 19,500 Paint bucket Maize (White) 100kg 7,000 Paint bucket Onion (Violet) 100kg 13,833 2kg Palm oil (Red) 25Lt 6,800 Bottle Rice (Imported) 50kg 10,000 Paint bucket Sorghum (Red) 100kg 11,667 Paint bucket Soya Beans 100kg 10,000 Paint bucket Mutum Biyu Market Garri (White) 100Kg 8,250 Tier Taraba State Groundnut (Edible) 100kg 13,250 Tier Maize (White) 100kg 4,600 Tier Onion (Violet) 100kg 15,000 Palm oil (Red) 25Lt 5,000 Gallon Rice (Imported) 50kg 11,000 Tier Sorghum (Red) 100kg 5,500 Tier Soya Beans 100kg 7,500 Tier Ogbete Market Drum Beans (Olotu) 100Kg 18,000 Paint Bucket Enugu State Garri (White) 100Kg 7,333 Paint Bucket Groundnut (Edible) 100Kg 18,000 Paint Bucket Maize (White) 100Kg 7,500 Paint Bucket Onion (Violet) 100Kg 23,000 Palm oil (Red) 25Lt 6,800 Bottle Rice (Imported) 50Kg 13,000 Paint Bucket Sorghum (Red) 100Kg 16,000 Paint Bucket Soya Beans 100Kg 11,000 Paint Bucket Relief Market Drum Beans (Olotu) 100kg 19,400 Paint Bucket Anambra State Garri (White) 50Kg 5,500 Paint Bucket Groundnut (Edible) 100kg 22,000 Paint Bucket Maize (White) 100kg 7,000 Paint Bucket Onion (Violet) 100kg 22,400 Palm oil (Red) 25Lt 4,000 Bottle Rice (Imported) 50kg 12,400 Paint Bucket Sorghum (Red) 100kg 15,000 Paint Bucket Soya Beans 100kg 12,600 Paint bucket KEY: W - Wholesale; R - Retail; N - Naira; P/kg - Price per kg; Kg ² Kilograms; Lt - Litre Source: Novus Agro Nigeria [Email: info@novusagro.com Tel: +234-1-8501145]

Last Week

Variance

Price(N) P/Kg(N) W(N) R(N) W(N) R(N) 330 226 22,500 330 0 0 110 92 10,625 110 208 0 257 173 18,125 253 208 4 130 108 9,000 130 0 0 - 14,000 0 220 293 6,000 220 0 0 350 292 10,700 358 -100 -8 175 111 10,000 188 0 -13 150 125 8,500 150 0 0 338 139 13,325 333 175 5 270 145 6,000 270 0 0 353 171 14,150 351 17 2 144 57 5,850 146 -83 -2 490 163 8,275 474 425 16 149 58 6,100 153 -133 -4 177 79 7,500 188 -433 -11 220 122 14,000 220 0 0 180 180 10,500 180 0 0 80 67 5,000 80 0 0 - 12,250 - 1083 227 302 5,700 220 0 7 277 184 8,200 270 0 7 107 82 9,000 120 -1333 -13 120 100 8,500 120 0 0 1,192 322 28,000 1,200 -200 -8 500 167 - 500 0 900 257 19,000 900 0 0 500 145 10,000 500 0 0 1,567 342 22,875 1,638 -675 -71 280 373 6,500 280 0 0 1,250 342 13,750 1,375 -1150 -125 500 144 16,000 500 0 0 583 181 12,000 550 300 33 220 400 150 170 140 220 750 400 717 300 517 230 800 650 500 250 350 150 1,000 700 145 225 700 367 700 350 228 1,100 500 450 850 450 900 480 180 1,100 500 550

133 172 58 227 54 87 203 138 217 77 258 319 195 169 182 134 152 56 200 318 53 85 210 126 194 90 304 284 125 126 224 155 300 130 240 268 125 145

7,000 200 0 20 18,000 360 1000 40 5,500 140 500 10 13,000 - -1000 5,500 170 0 0 5,400 140 0 0 9,000 240 -500 -20 20,500 725 1500 25 9,000 400 0 0 19,500 700 0 17 7,000 300 0 0 18,000 600 -4167 -83 6,800 230 0 0 10,000 800 0 0 17,000 750 -5333 -100 10,000 500 0 0 7,750 250 500 0 13,000 350 250 0 4,600 150 0 0 15,000 0 5,000 1,000 0 0 11,000 700 0 0 6,000 150 -500 -5 7,000 200 500 25 18,000 700 0 0 7,000 350 333 17 18,000 700 0 0 7,500 350 0 0 23,000 0 7,000 230 -200 -2 13,000 1,100 0 0 16,000 500 0 0 11,000 450 0 0 19,000 850 400 0 5,500 450 0 0 22,000 900 0 0 7,000 480 0 0 23,000 - -600 4,000 180 0 0 12,500 1,100 -100 0 15,000 500 0 0 12,500 550 100 0

From left: Mr yomi Badejo-Okusanya, Fellow, NIPR; Mr Raheem Akingbolu, This Day Newspaper and Mrs Nkechi Ali-Balogun, Fellow NIPR during a reception in Honour of Mr Rotimi Oladele and Mr Femi Adesina by Lagos Chapter of NIPR held in Lagos on Thursday. Photo by Lamidi Bamidele.

Competition drives consumer education in e-commerce - OLX boss

•Says more than 50 per cent of e-commerce market remain untapped BY JONAH NWOKPOKU

he Country Manager of Nigeria’s online classified, OLX, Adedeji Oyinlola has said that competition by different operators in the e-commerce space in Nigeria is healthy as it drives consumer education. Oyinlola stated this in an exclusive interview with the Vanguard on the outlook of online business in Nigeria for 2014. He noted that in the industry, it is the bid by operators to outdo their competition that results to competition which is healthy for growth and quintessential for consumer education. He said, “In this industry we love competition, and that is healthy because the more the competition, the more we educate Nigerians. For instance, when Jumia puts an advert out there, it benefits OLX and all the other operators, and vice versa when Konga or any other operator decides to advertise. And that is very healthy for e-commerce growth in Nigeria because, the more education the consumers have, the more users we would have in the online business space. The competition is what that now drives consumer education.” Speaking on e-business outlook in 2014, he explained that the outlook is favourable but there are still huge untapped opportunities, as more than fifty per cent of the market remain untapped. He therefore noted that creativity on the part of operators is required to successfully explore the market. “2014 will be a very interesting year. For the electronic business in Nigeria, we have not really exploited the market fully. And to do that, all the operators in the industry need to become creative. This is because we have not even tapped 50 per cent of the market. It is still a journey. What we have been able to do is to educate Nigerians. And the education we have given Nigerians over these few years is meaningful, because, perception and awareness of online business has improved significantly. There was a time in this country that if you tell people to transact business online, they will feel its all fraud. But now the momentum of business transaction is speedily shifting online.” “We are not yet there but with the

current level of consciousness, we are on our way there. What we need to do next is to extend the education to other parts of the country because at the moment, the major bulk of the online business is still in Lagos and then some gradually move to Abuja. But we need to also cover other parts of the country, because they also have viable potential. Cities like Enugu, Port Harcourt, Ibadan, Benin are all huge potential market that demands reasonable attention. For us at OLX, when the time is right, we would definitely roll out something big in these cities,” he added. He further explained that, “In 2014, a lot of new ways of doing things would play out. Not that the old ways would be completely phased out but this is year that will evolve lots of changes in the way of doing things. 2014 is a year that all of us in this industry are looking forward to, it is a year that we will not just compete against each other but also look out for each other.” Also speaking on startups in the industry and their challenges, he noted that the problem with startup is lack of original idea. “It’s like someone seeing that CocaCola is a successful product in the market and then goes ahead to create a related brand thinking it would be as successful. He would have forgotten that the creators of the Coca-Cola brand had gone through the journey process of creating that brand and had made series of mistakes and corrected them along that journey. So in Nigeria, a lot of people still think that if they design a website, display some products, get a little store as a warehouse, then they would become successful e-commerce retailers. They forget that there is a lot that goes into it. You know, the average Nigerian does not want to use his brain, he just wants to copy what the next guy has done. The entry into this market is beyond coming together as fresh graduates and building a website, there is a lot more to it. And that would come in the way of original idea. Even if there would be some replication of an idea, it could be in a very creative way and the difference could be in just the demography that you serve. For instance, what Jumia is doing, someone else could choose to do that but carve a demographic niche that he could serve efficiently instead of trying to target the entire market like Jumia and losing out to the competition.”

Vanguard, MONDAY, JANUARY 13, 2014 — 27

Banking & Finance

Naira appreciates by 400k in parallel market as CBN sells $749m *External reserve slides to $43.29bn *N532bn idle cash depresses cost of funds STORIES BY BABAJIDE KOMOLAFE

he naira appreciated by 400 kobo to N169 per dollar at the parallel market last week, even as the Central Bank of Nigeria (CBN) sold $749.84 million

through the Retail Dutch Auction System (RDAS) Last year the naira depreciated by N13 naira against the dollar in the parallel market, to N173 per dollar from N159 per dollar in January. Vanguard investigation however revealed that the

parallel market exchange rate dropped to N169 per dollar due to weak demand for foreign exchange. “There is no business, everywhere is dull, nothing is happening”, Harrison Owoh, of H.J Trust Bureaux De Change told Financial Vanguard.

It was however a different story for the naira at the official and interbank foreign exchanges markets. At the official market, the naira depreciated by two kobo, while it lost 70 kobo at the interbank market. From N155.7 per dollar, the official exchange rate rose to N155.72 at the first official dollar sale, via the RDAS on Monday. The interbank exchange rate rose from N159.79 per dollar on January 3rd, to N159.49 at the close of business on Friday. T h e s e depreciations were in spite of $749.84 million sold by the CBN during the week. Data from the CBN showed that the apex bank sold $399.98 million on Monday and $349.86 million on Wednesday. Last year, the apex bank sold $25.37 billion, up by 32.9 per cent from $19.1 billion sold in 2012. From $3.88 billion in the first quarter, foreign exchange sale rose by 70 per cent to $6.62 billion. In the third quarter, it rose

again by 22 per cent to $8.09 billion. Meanwhile, the nation’s external reserved continued its downward slide last week, declining by $321 million to $43.29 billion from $43.6111 billion at the end of 2013. In 2013 Last year, the external reserves rose from $45.98 billion in January to a peak of $48.85 billion before falling steadily to $43.61 in December. In the interbank money market, where banks lend to each other, cost of funds fell due to huge idle cash in the market. Data from Financial Market Dealers Quote show that cost of overnight lending fell by eight basis points to 10.46 per cent to 10.54 per cent, while cost of Open Buy Back (OBB) or secured lending fell by 10 basis points to 10.23 per cent from 10.33 per cent. Vanguard investigation revealed that interbank market opened with liquidity of N608.46 billion on Monday and closed with N532.645 billion on Friday. Reflecting the huge liquidity in the market, trading in government securities (treasury bills) recorded 130 per cent oversubscription. The CBN offered N300.41 billion, total public subscription stood at N690.46 billion, whileN472.78 billion was allotted.

AfDB adopts Integrated Safeguards System

he Boards of the African Development Bank have adopted the Integrated Safeguards System (ISS) – a cornerstone of the Bank’s strategy to promote growth that is socially inclusive and environmentally sustainable. Safeguards are a powerful tool for identifying risks, reducing development costs and improving project sustainability, thus benefiting affected communities and helping to preserve the environment. With this Integrated Safeguards System the Bank will be better equipped to address emerging environmental and social development challenges. The Integrated Safeguards System not only promotes best practices in these areas but also encourages greater transparency and accountability. It upholds the voices of people who are affected by Bank-funded operations, especially the most vulnerable communities, by providing, for example, project-level grievance and redress mechanisms – a structured, systematic and managed way of allowing the voices and concerns of affected people to be heard and addressed during project planning and implementation. The AfDB, in accordance with its mandate views economic and social rights as an integral part of human rights, and accordingly affirms that it respects the principles and values of human rights as set out in the UN Charter and the African Charter of Human and Peoples’ Rights. These were among the principles that guided the development of the Integrated Safeguards System. The AfDB encourages member countries to observe international human rights norms, standards, and best practices on the basis of their commitments made under the International Human Rights Covenants and the African Charter of Human and Peoples’ Rights. The Integrated Safeguards System has been developed through extensive consultations. C M Y K

28 — Vanguard, MONDAY, JANUARY 13, 2014

Interview

2013: Banks s income and inc of the bank if he had wanted to. As to running the bank, I have two Deputy Managing Directors assisting me. We have one of the largest numbers of executive directors in the industry. Our workforce both directly and indirectly totals about 25,000 people across the globe.

*Mr Phillips Oduoza....In addition to that, we operate in 19 other jurisdictions in Africa, therefore, we are not a Nigerian bank

ast Tuesday the Group Managing Director of UBA, Mr Phillips Oduoza had a panel discussion with some selected reporters. He debunked insinuations that Tony Elumelu was teleguiding the bank and why the share price of the bank is low at the moment. He gave insight into the tough banking environment in 2013. He also spoke on the bank’s journey in its foreign operations and what investors should expect going forward. Excerpts: hardly has the time. So to answer your question, Tony is not involved in any way. He is How will you react to the preoccupied with his various speculation that the former businesses which he is Managing Director of the growing not in just in Nigeria, bank, Mr. Tony Elumelu is the but across Africa. unseen hand behind the UBA is a bank that prides itself running of the bank? on continuity and stability. The Tony Elumelu is into power, good thing about a very big healthcare, hospitality, bank like UBA is that it is not a agriculture, oil and gas. He is one man show. We came up fully engaged and does not with a blueprint and all of us have time for UBA affairs as were together when we were being speculated. Recall he crafting the blueprint and has been a CEO for 13 years deciding what we want to do. and I have just spent three To a very large extent, we have years. I like to tap into his continued with the blueprint experience and knowledge of which we all agreed together the banking industry but he and that is what we are C M Y K

BY OMOH GABRIEL

What will you list as your achievements in office in the past three years? We have kept the bank profitable. The profit the bank made last year was over N50 billion. The African countries that were just being set up have started scaling up gradually from almost making losses to the profit level that we have today, with 14 of them making profits. UBA came first and got an award from CBN as the most agric-friendly bank. The portfolio of UBA was such that the loan-deposit percentage level was in the 30s, today; the loandeposit has moved up significantly, the loan portfolio has moved up significantly to the extent that the loan deposit-ratio is over 40 per cent. The share price has moved to almost N10 today and it has been moving and this is value creation for the shareholders. There are very many things we can talk about. It starts from where the balance sheet was when we started in 2010 to where we are today. We have been able to re-establish our-

We regard the Power sector reforms as a revolution just like what we have experienced in the telecommunication sector; the overall impact in the economy is going to be very significant. It will have a multiplier effect on the economy

implementing. The question of who is in charge has been on for a while. If Tony wants to come back to UBA, there is nothing that stops him from doing that. First and foremost, he has done the mandatory three years. You are also aware that effective from this particular month, we appointed a new chairman of the board. This happened towards the end of last month, so Tony was at liberty to become the chairman

selves in the domestic market, remaining a tier-one b a n k . The future of the bank is very bright. We have laid a very good foundation. We have made our mistakes in the past and we have learnt from them. There are certain sectors we don’t operate. For instance, we don’t operate in the downstream, we don’t do margin trading in any form because this is an area that has created

problems. UBA has continued to grow very strong in the emerging sector. We have the telecommunications, power, infrastructure, oil and gas, in the upstream sector. In fact, there is no big transaction you can talk of today that the UBA is not participating in. Any of the major tickets, UBA is there. So the brand remains very strong. In spite of the laudable efforts you have taken to clean your books and return to profitability, these measures are yet to reflect in the pricing of your stocks like other frontier banks in the capital market. What can you do more to convince the market that you are like other top banks in the country which will reflect in the payment of premium for your stock? For UBA, you are right that the price to book is low compared with other banks and I believe this situation is going to change. In 2011 when we cleaned up our books, we declared a loss which was very strange in this environment. We had to meet all stakeholders at the stock market; stockbrokers, financial journalists and other players in the market and addressed them on why we decided to clean up our books. What we did was new in this environment but very common amongst major global financial institutions. Given that we operate in major financial centres with regulators in 21 jurisdictions, it was expedient for us to do the right thing and it is in line with global best practice. As you know, we operate in London where we are regulated by the Financial Regulatory Services Authority (FSA) and New York where we are regulated by the Office of the Comptroller of Currencies (OCC). In addition to that, we operate in 19 other jurisdictions in Africa, which makes us not a typical Nigerian bank. So, we wrote off all the distressed loans and sold others to Asset Management Corporation of Nigeria (AMCON) while taking the corresponding haircut. Let me emphasize that when we presented this plan, people asked us, why do you want to do this? They told us we could write it off over a period of time but we said no. We insisted we had to do that. We believed that once we clean our books, we would then start on the path of renewal. Stakeholders on the Nigerian Stock Exchange (NSE) were initially alarmed. So, some people started selling their shares and UBA shares dropped to a low of N1.65. But some analysts saw the wisdom in our decision and they started buying gradually and the share price of UBA started to move back upwards. In the subsequent first quarter of 2012, UBA made a profit, second quarter, we made a profit and everybody started picking their shares. In 2012, UBA had the most appreciation in its share price in the stock market among financial services institutions and we closed 2012 with a return to profit. In 2013, the share price sustained its

Vanguard, MONDAY, JANUARY 13, 2014 — 29

Interview

aw regulatory-induced reduction in creased funding costs

How has the raft of tough regulatory measures put in place by the Central

The actual reason why interest rate is very high in Nigeria is because of infrastructure that are not there, the deposit rate may not be as high as you will think but the additional cost that go towards the generation of that deposit is very high

Bank of Nigeria in recent times affected UBA operations especially in the past one year? Year 2013 was a very challenging one for financial services institutions in Nigeria with the resultant effects of regulatory-induced reduction in income lines and increase in funding costs. Commission on Transactions (COT), which used to be at N5 per mille maximum, was reduced to a maximum of N3 per mille. As you know, COT is a major component of the income lines for banks. There was also the removal of the N100 that was charged by banks for ATM usage. In addition, there was a an increase in savings interest rates leading to costs for banks because significant portion of our deposits comes from savings deposits especially for banks like us that have been around for a very long time. Whilst these happened in the second quarter of last year, another major one was thrown in by the third quarter. The cash reserve ratio for

and they did not apply to the various African countries where we operate. UBA operates in 18 African countries outside Nigeria, so we intensified our activities in these countries. The income losses that we suffered in Nigeria, we try to make from our 18 African countries where our subsidiaries operate. So, the first strategy was to increase revenue from the various African countries. Luckily for us, we had finished the first phase of our African expansion by last year, and had entered the consolidation phase. Therefore, we deployed more resources; we made some changes at senior levels in the various African countries. We intensified activities in the area of remittances and intraAfrican trade and the noninterest income arising from these activities were very substantial though not enough to completely cushion the impact of all these changes in general. The second thing we did was to start ramping up on our electronic banking services.

Does UBA’s support for the Power sector symbolise belief in the Power sector reforms? For us, the Power sector reform is going to be a revolution just as we have experienced in the telecommunications industry. The overall impact on the economy is going to be very significant with a multiplier effect on the economy. It is going to impact hugely on the operations of SMEs. The country is going to reap the full benefits of the privatization of the Power sector across all sectors of the economy. For us, as a bank, our support to the sector is longterm financing that will provide a steady cash flow and income for the period of that funding. Some of those fundings are for seven years; others are for five years or thereabout. So, over that period, the bank will continue to enjoy that revenue stream. In summary, we believe the Power sector reforms, just like that of the telecoms sector, will have significant and far-reaching positive impact on the economy and the livelihood of N i g e r i a n s . Secondly, we believe in the Power sector reforms because of the derived value that will come from banking the value chain of the Power sector. The balance sheet of the bank is very robust. UBA still remains one of the banks that have significant room to create risk assets. So even in 2014, we look forward to more quality asset creation in the Power sector. The non-performing loans for UBA remains one of the lowest in Nigeria. The previous year, for Nigeria, it was under one per cent and for the group as a whole, it was within three per cent and this is within the Central Bank’s limit of five per cent NPLs. If you recall, sometime in 2011, we cleaned up our balance sheet, realigned our position and this has resulted in one of the cleanest bank balance sheets.

upward momentum and by December of last year, UBA had seen a significant appreciation in the stock market. I believe the same thing will repeat itself in 2014. I also believe analysts will see UBA from a new perspective in 2014. Analysts will recognise that the bank’s growth has been a sustained growth. If anything at all, the balance sheet is getting stronger. The profit margin is showing a significant improvement over and above competitors. So, I believe that an upward review of the bank’s rating is going to take place. Our current pricing is based on people’s memory not on our performance and prospects. Investors also lost a lot of money during the financial crisis, so a lot of them have not come back to the market and may not come back to the market for some time. There is definitely going to be an upward movement in our share price because our current performance shows that we are a bank to invest in.

Electronic payment generates revenue for us arising from the card usage (point of sale usage) and other income associated with that; card usage also reduced our costs as customers migrate transaction from the banking halls to electronic space

public sector deposits was increased from 12 per cent to 50 per cent, meaning that for every N100 that you generate from the public sector, you must sterilise 50 per cent of the amount or keep N50 at zero yield. How did we deal with this? This is where our African operations came into play. All these initiatives basically affected the Nigerian market

Electronic payment generates revenue for us arising from the card usage (point of sale usage) and other income associated with e-banking play. Card usage also reduced our costs as customers migrate transaction from the banking halls to the electronic space. Serving customers through electronic banking is just a fraction of what it actually cost you to serve the

customers through the banking hall. So, increased electronic banking did two things for us, significant reduction in our operating cost and an increase in the income level. Our third strategy was shift that we made from investment in government securities, in treasury bills, and related instruments, into quality asset creation. Our risk asset portfolio last year increased significantly as you are going to see when we release our 2013 full year

the generation of that deposit is very high. As we speak, UBA has about four generators that run simultaneously. Each of them is 1,500 KVA. So this office alone is generating six megawatts. It’s a mini power station. Diesel consumption alone is extremely high. Each UBA branch has two generators. One is the main generator while the other is for standby. We have cards all over the world; we cannot afford to go down for one second. People are using our cards in Japan, South Africa and America. Therefore, that

*Mr Phillips Oduoza.....The balance sheet of the bank is very robust. results. We are focusing basically on emerging sectors, like telecommunications, the Power sector, oil and gas upstream, agriculture and Power thereby optimizing the balance sheet of the group. UBA is probably the biggest lender in the power sector under the new power sector reform and we are going to do more this year. Agriculture remains a very big area for UBA. Today, it actually contributes about seven per cent of our portfolio compared to the industry average of four per cent. These were some of the strategies we adopted to cushion the impact of the crunch that we experienced last year. What is driving the high interest rates charged by banks? It is true we are all feeling the pain of high interest rates. I also want a lower rate. But when you look at it, you find that banks are an integral part of the economy. The actual reason why interest rate is very high in Nigeria is because of infrastructure that are not there, the deposit rate may not be as high as you will think but the additional cost that go towards

infrastructure has to be there. If you go to our offices you will see a whole lot of security people that are in place. We have to pay for that. So all these are costs that if you have to remain in business you must bear. This is why interest rate is very high. The cost of taking care of the cash is also very high. If you go to the banking hall, you will see how the note counting machines break down everyday. So you either replace them or get the people who repair them. You have tellers lined up. This is why we are pushing cashlite banking. As cashlite banking takes firm root, you will find out that the cost of handling cash will go down significantly, impacting positively on interest rates. If you compare the financials of the Nigerian banks with those of other emerging and frontier markets, the cost-toincome ratio of the Nigerian banks are in the 60s. Some extreme ones are in the 70s. The cost-income ratios of all the other emerging markets like Turkey, Malaysia and co, are in the 40s. So, if we are able to deal with all these cost elements, I can tell you that the interest rate can come down to single digit. C M Y K

30 — Vanguard, MONDAY, JANUARY 13, 2014

C M Y K

Vanguard, MONDAY, JANUARY 13, 2014 — 31

Insurance

GNI pays out claim to fire victim SA initiates restructuring process

Stories by ROSEMARY ONUOHA

reat Nigeria Insurance Plc has paid out the sum of N1.6 million to Mr. Victor Okosieme in settlement of his claim on the fire insurance policy he had with the company. Okosieme was one of the fire victims and tenants at Great Nigeria House, Lagos who lost all his property in the inferno that engulfed part of the GNI House late last year. Okosieme, whose property was destroyed by the fire, bought one of GNI’s eBusiness products; Fireproof and paid a token N4,000 premium. He became a cynosure to his friends who were at the cheque presentation ceremony. It will be recalled that GNI had two years ago introduced some insurance products into the market and also sold on its eBusiness platform, one of which is Fireproof to cover against possible loss of property through fire; Great Savers Delight, which is a savings investment scheme; Motorflex is an improved version of third party motor insurance policy; and GNI Personal Accident Insurance product is for injuries sustained in accidents. At the presentation ceremony in Lagos, Okosieme in the company of his wife expressed appreciation for the promptness at which GNI

From left: President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Ayodapo Shoderu; the Iyaloja General of Nigeria, Mrs. Folashade Tinubu-Ojo; Deputy President of NCRIB, Mr. Kayode Okunoren and Mrs Ekeoma Ezeibe, a board member of the NCRIB, during the visit of NCRIB President to the Iyaloja in Lagos. paid his claim. “I am so happy that GNI paid me on time and I can now look forward to starting my life again, all what I thought I have lost, I can now buy back with this money,” he said. Head of Brand Management of GNI, Mr. Tunde Lawanson, who presented the payment cheque at the ceremony, said that GNI is committed to fulfilling its obligations to its

customers. “Furthermore our presence here today is a demonstration of this commitment and this delighted customer did not need to have stressed himself further after his loss before the payment of his claim was processed and eventually made by us,” he said. Vice Chairman of Traders Association, Mr. Julius Uzowum, commended GNI for the prompt action and

STI reorganises operation for 2014 T

he management of Sovereign Trust Insurance Plc, STI, has announced the reorganization of its operations for the year in its bid to continually deliver optimal service and enhance its operational efficiency. According to the company, the development is coming on the heels of the recently concluded management retreat/budget session of the underwriting firm. To effectively optimise operations in the new financial year, the performance of the company was brought under review while at the same time, xraying the challenges encountered in the course of the past year with a view to identifying opportunities in the challenges posed and as well chart a positive way forward in 2014. The company said in its ever-dynamic posture of positively putting to use its robust human resources, has approved the implementation of a new organisational chart for the operations of the company in 2014. Under the new dispensation, all revenue

generating units are now to function under the Marketing and Business Development Division with supervision from the Divisional Head/ General Manager, Ugochi Odemelam while Tolu Fasoranti will be responsible for operations as it relates to Brokers’ business. Tayo Ogundipe takes charge of the operations in the Ikeja Area Office and as well supervise the affairs of all the other three Area offices in Lagos; namely, Apapa, Surulere and Lagos Central. An Assistant General Manager, Emmanuel Anikibe will now head the retail business department of the company. The eastern offices operations will now be coordinated by the Area Manager based in Port Harcourt, Angela UcheOnochie, while Muyiwa Awodire, the Head of Ibadan Area Office will monitor the activities of all the branch offices in the western region. To further ensure actualisation of the organisation’s operational set goals and objectives, the Management has also

engaged the services of an insurance marketer to assist in deepening the growth of the organisation in the Northern Region and subsequently, increase its market share in that clime. The new addition to the professional team of STI is Mr. Mohammed Bako Alfa, who joins the organisation as Assistant Director/Head, Northern Area Operations. He is saddled with the responsibility of ensuring the development and increasing the company’s public sector business portfolio at the federal level and the supervision of the area and branch offices in the Northern Region. Mohammed Alfa holds the Bachelor of Science, (B.Sc) degree and an MBA in Business Administration from Ahmadu Bello University, Zaria. Mohammed is a Member of the Chartered Insurance Institute of Nigeria, (CIIN) and the Nigerian Institute of Management, (NIM) respectively. Managing Director/CEO of STI, Mr. Wale Onaolapo said

encouraged Nigerians to embrace insurance adding, “With the level of integrity shown, this will encourage us to take insurance henceforth.” Head, Direct Marketing of GNI, Mrs. Bose Ibesanmi advised Nigerians to embrace insurance, stating “Having insurance will help to restore the loss suffered if it eventually occurs.”

that the change was necessitated by the need to sustain high level performance, ensure staff optimisation, promote exceptional customer relationship management and most importantly, to grow the company ’s balance sheet size meteorically in the New Year and beyond. He further stated that management will continue to make appropriate changes in the company’s structure and processes to achieve the set goals and objectives while strategically exploiting the under developed areas of the market. Conclusively, he enjoined the new entrant to judiciously contribute his own quota to the advancement of the STI brand. The company maintains that it will continually strive to achieve the business objectives, vision and mission of the company in order to remain a major pacesetter in the insurance industry while creating exceptional value for its numerous shareholders home and abroad.

he board and management of Standard Alliance Insurance Plc have initiated a process of restructuring and rightsizing as part of its corporate strategy for growth and efficiency in 2014. According to the company, the restructuring exercise involved the creation of two major divisions within the company to be led by General Managers with over 20 years’ experience in the insurance industry and the reduction of its regional offices from five to four nationwide. In a statement signed by the company ’s Corporate Communications Manager, Mr. Nelson Egboboh, the exercise also involved the rationalization of branches nationwide for business optimization and resource management. Egboboh said “Several staff were promoted and reshuffled to fill key positions in line with the new structure while others who could not be accommodated were properly compensated for their dedicated and invaluable service to the company.” While noting that the initiatives were part of the company ’s comprehensive strategic plan to align its operations, Egboboh said “Ms. Anietie Udoh, a General Manager who was before now heading the company’s SouthSouth Regional business has been moved to the company’s head office in Lagos to lead the Financial Institutions/MultiClients and General Business Division while Mr. Ebose Austin Osegha who was Head, Public Sector, Energy and Telecoms has been appointed a General Manager to drive the Public Sector/Brokers’ Division.

Ecobank Nigeria promotes 400 staff cobank Nigeria has E announced the promotion of over 400 members of staff

across all cadres of its workforce. Those promoted constitute about 10 percent of the workforce. The staff were selected through an appraisal exercise conducted using the Bank’s performance management system. In his comments, the Managing Director of the bank, Mr. Jibril Aku said the promotion exercise is to keep the desired level of excellence in order to “maintain service quality standards, uphold customer satisfaction and enhance brand experience”. Mr. Aku said Ecobank maintains a high professional culture where exceptional performance, innovativeness and hard work are recognized & rewarded. C M Y K

32 — Vanguard, MONDAY, JANUARY 13, 2014

Global Finance

Europe is making progress but not all is well- Lagarde E

ost of the demand for European goods and services comes from abroad, not from within, leaving the economy at the mercy of the ups and downs of global trade. European demand for European products remains lackluster, despite a small revival in investment in recent months. Beyond the short term, more fundamentally and much more worryingly, what is at stake is Europe’s potential for growth in the future. One factor at work is that the crisis has taken a severe toll on the young and the vulnerable.

decisively resolving the problems of an ailing financial sector. Europe has lagged somewhat behind other countries in this regard.

t is critical that the flow of credit on reasonable terms to businesses and households be restored. That means restoring the health of weak banks by resolving the problem of bad loans on their books and making sure they are holding sufficient capital to be viable once again. Reviving credit growth also entails properly accounting for, and disclosing, how bank assets and liabilities are valued so that investors and depositors may regain confidence. With these objectives in mind, Europe is now set to undertake a comprehensive, complex, and ambitious exercise to clean up its banks under the aegis of the new European bank supervisor, the European Central Bank. A job well done will set the stage for a return of confidence, credit and growth. In that context, completing all elements of a banking union remains a priority.

•Christine Lagarde Unemployment at a young age means a lack of on-the-job training, depreciating skills, and possible withdrawal from the labor market. Experience tells us that long spells of unemployment lead to a less productive workforce down the road. Another factor is the dearth of investment—be it private or public—that in many countries erodes the capital stock and depletes the productive capacity of the economy. Thus, a failure to revive investment and employment will not bode well for Europe’s future. Jump-Starting Growth All in all, it is therefore premature to declare victory. The only durable solution lies in jump-starting growth. This means growth not only from stronger exports, but also from a robust recovery in domestic demand, especially investment, that touches all corners of Europe. History gives hope. Countries have emerged stronger from a crisis before. Sweden is such an example. After a banking crisis devastated the economy in the early 1990s, Sweden adopted wide-ranging reforms, liberalizing product markets, privatizing, and deregulating services. This helped boost productivity and vaulted Sweden to one of Europe’s top performers since 1995 while

urope seems to be turning the corner. Progress in tackling big challenges has been made. Signs of growth have begun to emerge after several years of declining activity, and question marks about the viability of the monetary union have dissipated. Some countries, hit hard by the crisis, had to undertake a great deal of adjustment, but they appear to be stabilizing. Financial markets are more upbeat and foreign capital that fled Europe is gearing up to return. There is a palpable sense of optimism in some quarters that the European crisis is over. But can a crisis really be over when 12 percent of the labor force is without a job? When unemployment among the youth is in very high double digits, reaching more than 50 percent in Greece and Spain? And when there is no sign that it is becoming easier for people to pay down their debts? Indeed, looking past the headlines, there are clearly signs that not all is well. First and perhaps most important, growth rates and output levels still remain well below where they should be. With unemployment rates as high as they are, this gap between actual and potential growth rates is likely to remain large for the foreseeable future. This keeps a check on price increases, which helps consumers in the short run; but if this were to persist long enough, it could lead to a vicious cycle of low demand and activity as it also affects capital spending and hiring. Second, growth has not been balanced across Europe and, therefore, may not be sustainable. There are pockets of stronger growth and high employment, for example in Germany, but growth is low or declining elsewhere.

A job well done will set the stage for a return of confidence, credit and growth, in that context, completing all elements of a banking union remains a priority

also safeguarding employment and equality in a strong welfare state. For the euro area, securing growth will be a more complex challenge. It will require comprehensive and multi-layered solutions to unravel the Gordian knot of obstacles that are holding back domestic demand. I will touch on what we see as the priorities to jumpstarting growth, many of which will be discussed in a book on employment and growth in Europe that we will be releasing in January. First priority: Reviving credit The experience with financial crises has shown that a robust recovery cannot resume without

A second priority: Supporting demand In the interim—while banks are being cleaned up and credit flows have yet to resume fully— public policy needs to do as much as it can to support demand. This means, the ECB needs to keep interest rates low and convince investors that it will do so for as long as is necessary. It must act preemptively to stall further declines in inflation and inflation expectations. It needs to find ways to reduce the cost of lending to small- and medium-sized enterprises, the largest employers within Europe. In contrast, government budgets have less scope to support growth, given large—and, in some cases, growing—debt. But there may be room to relax nominal budget deficit targets if growth forecasts fail to materialize. And in the event growth is low for a protracted period of time and monetary policy options are depleted, fiscal policy will need to provide more support to domestic demand. A third priority: Reducing debt Growth will not pick up substantially unless households, corporates and sovereigns also get their finances in order. Reducing the debt burden will make borrowers more attractive

in the eyes of lenders, and revive prospects for credit. It will free up income from the need to service debt toward supporting consumption and investment. For the private sector, this means that governments need to put in place the structures to facilitate private debt restructuring. This includes effective national insolvency frameworks to reduce the time it takes to restructure debt. We also need to address public sector debt burdens. In many countries, fiscal consolidation is hard to avoid, and our experience suggests that this is best done in the context of a medium-term framework and in a transparent manner. But ultimately, bringing down debt levels in a sustained way requires higher growth. Finally, it remains important to break the pernicious links between banks and sovereign balance sheets. This can be done by creating the conditions to ensure that the future cost of fixing banks will no longer fall primarily on the public sector. All this would help put debt on a downward trajectory. A fourth priority: Fostering growth-friendly labor and product markets The goal of reform is to break down barriers to growth. There is no “silver bullet.” This means taking on entrenched positions and vested interests. It means bringing in more competition and flexibility to spark innovation, boost competitiveness, and enable resources to go where they are most productive. But it also means helping labor markets to support growth and adjustment. To be clear, reforms are needed across all of Europe. For example, in countries with large external surpluses, reforms should be targeted to boost investment to ensure that resources are invested where they will maximize returns. In countries with external deficits, prices must be adjusted through improvements in productivity of workers and firms; this would make the tradable sector more competitive and generate more demand.

•Speech delivered by Christine Lagarde, Managing Director, International Monetary Fund (IMF) at the European Economic and Social Committee held recently in Brussels.

Vanguard, MONDAY, JANUARY 13, 2014 — 33

People in Business employed inside a company. Every company needs a good accountant so there is always room for a good accountant. Then, there is public accounting which is auditing; auditing registered companies. Again, it could be very lucrative but three things are hampering it in Nigeria. These are: Crowding out by the big four who always seem to get the big ticket items. As a matter of fact, a lot of these international organisations like the World Bank, IFC and multilateral agencies that want to assist indigenous companies tend to insist that your auditor must be one of the big four; this crowds us out so it is not quite as lucrative as it should be for the indigenous firms. "Secondly, a lot of companies that should be having their accounts audited do not do so because the policing by the government is poor, therefore, a lot of them are shelf companies or seem to be shelf companies. Some are doing very well but they don’t do their auditing, they don’t pay tax, they don’t do anything so even the government is losing quite a bit of revenue by not policing and monitoring these companies very well. “The third thing is that a lot of others who even try, do not appreciate the services and therefore are unwilling to pay appropriately for the services so that really makes the profession rather challenging in Nigeria but elsewhere in the world, it is a bit more open, a bit more interesting; there is a lot more room because all the necessary tools to make it a good business are there."

BY EBELE ORAKPO

Coping in Nigeria’s business environment: “Nigeria has a very challenging business environment especially for accounting practice where there is still this dominance or over-dominance by what we call the big four, the international accounting firms. A lot of people tend to want to go to them because of their reputation and because they have been in business for a very long time. So there is what we call crowding out of the younger indigenous accounting firms. This is really affecting accounting practice in that a lot of people are not encouraged to start their own firms or to go into public accounting. Everywhere else in the world, they have a way of encouraging indigenous firms like reserving certain jobs for indigenous firms or they manage the jobs in certain percentages like in

We are working hard to truly institutionalize SIAO – ITUAH IGHODALO

astor Ituah Ighodalo is a Managing partner at SIAO, a leading indigenous firm of chartered accountants, described as a onestop shop for audit and assurance, tax and advisory services. In this chat with Financial Vanguard, he speaks on the accounting business in Nigeria and appeals to the government to create an enabling environment for indigenous accounting firms to grow and be able to compete favourably with the big four. Excerpts:

South Africa and China so that younger firms are encouraged to grow. "In terms of reputation and in terms of international network and reach, there is no way a 20-year-old firm can have the reputation of 100 or 150-year-old firm, so they crowd the younger firms out a lot so what we are trying to do now is to get the government in Nigeria to encourage indigenous firms by having a local content policy in this area as they have in the oil sector and even in the legal sector. No foreign firm can come into Nigeria and practice law. Every legal firm is an indigenous firm; the same is obtainable in architecture and engineering. So we need that same sort of atmosphere in accounting practice in Nigeria so that it can help the development of local firms,” said Pastor Ituah, as he is fondly called. Encouraging indigenous firms: ontinuing, Ighodalo who is also a member of the American Institute of Management said: “We are not saying they should not do their own business but there should be a kind of process of really

pon completing his primary school education in Ibadan and secondary school in Kings College, Lagos, Ighodalo, who is a fellow of the Institute of Chartered Accountants of Nigeria, fellow of the Chartered Institute of Taxation and a member of the Nigerian Institute of Management, went on to the International School, University of Ibadan for his ALevels. Thereafter, he proceeded to England where he obtained a BSc. combined honours in Economics and Accounting in 1982 from the University of Hull in the United Kingdom. “I started working with Price-Water House in Lagos, now called Pricewaterhouse Coopers. When I left Pricewaterhouse in late 1984/early 85, I did a few businesses here and there and finally started Ighodalo-Ighodalo and Co in 1987 as a firm of chartered accountants. I began to build it up from there till today where we are now called SIAO which is a merger of four firms. One of our partners has gone back into banking so we are now three founding partners and a total of about six or seven other partners. “We like to think that SIAO is between numbers five and seven depending on what yardstick you use. I have been in accounting business since 1987 and we have been together as a partnership since 2005,” said Ighodalo who sits on the board of 12 non-governmental organisations.

What we are trying to do now is to get the government in Nigeria also to encourage indigenous firms by having a local content policy in this area as they have in the oil sector

*Pastor Ituah Ighodalo...Everywhere else in the world, they have a way of encouraging indigenous firms encouraging indigenous firms. So that is the situation we are in right now but we thank God. He has been faithful to us. We have grown from just, if you like, one staff, to five. I started alone and eventually, I was able to get an assistant, then a secretary, the next assistant, then an accountant and so on and so forth. By the time we merged, we had about 40-50 staff and now, we have over 100 members of staff and we are now able to compete favourably for a lot of jobs out there.”

sked whether the accounting business is lucrative, he said: “Yes. From what I have described, there are two types of accounting. There is the accountant who is

Looking into the future: “We are working hard to truly institutionalize the company and to hopefully transfer it to the next generation. We are working hard on developing our junior partners and directors so that we can have an organisation that we, the three founding partners, can retire and look back and know that we worked very hard to become one of the biggest in Africa by God’s grace. At SIAO, we believe that the approach is as important as the services offered. Thus, our approach ensures that our clients benefit immensely from our depth of knowledge and experience. We hope we get the support of government and the environment to help us achieve our dreams and it will be good for the economy because there are a few other firms like ours who need this sort of encouragement too.”

34 — Vanguard, MONDAY, JANUARY 13, 2014

ne of the biggest problems Presidents and Prime Ministers face, virtually all the time, is who to believe among their Ministers and Advisers – especially those who are recruited from international organisations. President Ibrahim Babangida, IBB, had nothing less than four Nigerian economists who had worked for the World Bank before coming on board to help midwife the Structural Adjustment Programme, SAP, which was later to give his administration, the bad name it has failed to shed till today. SAP was introduced in 1986; and by 1987 claims about the gains of SAP were being made by all those who sold IBB that poison pill. But, by 1990, a bewildered military President, who could see clearly that all was not well with the Nigerian economy; that the gains of SAP were becoming increasingly elusive; asked publicly. “Why is it that economic policies which work well elsewhere don’t work in Nigeria?” I was a Senior Lecturer/Consultant at the Nigerian Institute of Management, NIM, not chartered at the time, and my answer to IBB in my Monday column in Vanguard, almost 24 years ago, remains as valid today with regard to SURE-P, as well as the Rice Policy being pursued under Jonathan. Like IBB, Jonathan is not an economist. I don’t blame a President for anything outside his area of competence – except when he fails to listen to dissenting voices outside his administration. By 1990, Nigeria was not the only country undergoing structural adjustment. The oil boom, which started after the 1973 Yum Kippur war between

The famine this year Israel and the Arab countries, resulting in oil embargo and skyrocketing crude prices, had substantially run its course. Most of the oil-producing countries, like Nigeria, were not highly industrialized nations; so the windfall they made from escalating crude oil prices had led to global hyperinflation. The boomerang effect was the rapid rise in the prices of manufactured goods from the developed countries. On the eve of our own SAP, a Peugeot 504S/R/AC, could be purchased officially for N15,000 and unofficially for not more than N17,000. I should know, I bought one six days from the announcement of SAP for N14,468. I sold it, 10 years and 560,000 kilometres after for N99,000. And, the buyer considered it a gift because by then, a new model was going for N2.7 million. The question is: how did we get there? The answer is: too many officials of governments, especially Ministers, were not telling the Head of Sate the truth. Unfortunately for us, one of the lessons of history is that people never learn from history. People who lived among us; who, at one time, joined us in complaining that Presidents don’t listen to people outside their group of advisers, on reaching office, repeat exactly the same mistakes. It was not as if IBB had no dissenters to the introduction and execution of SAP, he just trusted his advisers totally – until it was too late. Millions of lives were necessarily ruined on account of Nigeria’s brand of SAP. Why have I gone all the way

back to IBB’s administration to draw the example? Because, Babangida also introduced two food policies during his regime – the Sugar Policy and the Rice Policy – just as Jonathan had done. The first, we were told would make us self-sufficient in sugar production and the second in rice production by the year 2000. On account of the rice policy, I left the brewery and headed for Sokoto to engage in rice farming, buying, milling and marketing. One cardinal aspect of the rice policy, at the time, was the introduction of high tariff to discourage imports and the promise of incentives – including low interest loans, development of several varieties of rice which were best suited for our different ecological zones and assistance with human resources development. Then, as now, the entire policy programme was accompanied by unprecedented hype by some of the most gifted conmen who ever wore designer suits to government office. It did not take long before those of us who invested heavily in that government’s promise to realise we had been “robbed”. First, the high tariff introduced did not stop a single bag of Thailand rice from entering Nigeria. A whole generation of Customs men and women became enormously rich by encouraging or undertaking rice smuggling themselves. On one night in December 1989, I watched helplessly as over 50 trailer loads of rice entered

Nigeria through Ilela into the Sokoto and Kebbi markets. As if that was not betrayal enough, the government soon “discovered” that Nigerian rice producers could not satisfy the aggregate demand in the country. So, an exclusive import licence was issued to one company – that launched one of the greatest personal fortunes in the world today because the same company soon received exclusive sugar import licence as well. So the dreams of self-sufficiency in rice and sugar production died in the hands of the government which started them. Today, another experiment with self-sufficiency in rice production is underway. Like its predecessors, it has been associated with more fiction than fact and like the farmer who planted 50 tubers of yam, while claiming to have sown 200, will, after eating 50 yams, eat lies for the rest of the year. Now, what are the truths being suppressed by official falsehood promoted by the Minister of Agriculture, Dr Adesina? First, Nigeria does not now grow enough rice to be selfsufficient. In fact, we are so far from adequate supply, we still import close to 85 per cent of our rice needs. The rest comes from imports and mostly, now, from smuggled rice. Neighbouring African countries are experiencing a boom in landing fees collected from ships laden with rice bound for Nigeria. Another generation of Customs staff is now becoming rich on account of official self-delusion. The options are very clear. If we stop smuggling (a mission impossible) large scale scarcity will result and famine will follow because we don’t

produce enough of any substitute to fill the gap. If we fail to stop smuggling, the latest attempt will end like the first – after struggling and losing their shirts and underwear, the investors will close shop and we will be back to Thailand. Incidentally, the development of several varieties of rice is a sword cutting two ways. Positively, it increased the potential acreage which can be brought under cultivation nationwide. The problem comes with parboiling and milling. Most mills can handle, very well, one or two varieties of paddy rice and not at the same time for optimum results. Unfortunately, the aggregate national yield of any variety of rice is so small, millers are forced to mix varieties – a wasteful approach to milling rice. That is why local rice is more expensive than imported rice; even if the exporting countries are not subsidizing their farmers and millers. With nationwide drought in 2014 a distinct possibility, production of food in general at anywhere near the levels of the past three years will pose a challenge. Food prices will climb and making rice more expensive will result in unintended consequences – widespread famine. CHRISTIAN GOVERNOR 2015: PRAYER SUMMIT 2014. We wish all our friends a prosperous 2014. Christian Conscience is organizing the first Prayer Summit to wish the State and all its residents a prosperous 2014. Please join us on Saturday, January 25, 2014 at Christ the Light Church Alausa, Ikeja at 12.00 noon. Visit: www.delesobowale.com

Micro Finance Stories by BY PROVIDENCE OBUH

otal assets of Microfinance Banks (MfBs) in the country increased by 25.2 per cent, said Central Bank of Nigeria (CBN) in its Stability Report for the financial year ended June 2013. According to the report, “Total assets of the MfBs increased by 25.2 per cent to

MFBs asset increases by 25% in 2013 N278.9 billion at end-June 2013, from N222.8 billion as at December 2012. The paid up share capital and loans/ advances also increased by 14.0 and 46.1 per cent to N69.2 billion and N141.7 billion, respectively, in 2013.” Access s to finance t h r o u g h the MfBs improved during the period, even as

aggregate reserves increased to N5.8 billion in June 2013, from a negative N7.4 billion as at December, 2012, reflecting a significant tun around in their operational performance. CBN explained that t h e Microfinance Certification Programme (MCP), designed

to bridge the observed skill gap of operators of microfinance banks, entered its third year in 2013. “In the period under review, 650 and 439 participants attended the Levels one and two of the programme, respectively, with 238 completing the Certification

CBN grants state licence to Equitor Microfinance Bank

he Central Bank of Nigeria (CBN) has granted Equator Microfinance Bank Limited (MFB) approval to operate as a state micro-finance bank. The bank currently operates in Yenogoa, Bayelsa State, providing banking services to the economically active poor in the area in line with statutory mandates of C M Y K

microfinance banks. Managing Director, Equator MFB, Mr. John Daria, said that the bank has made significant strides in the market by offering quality microfinance banking services via innovative product development. “It has empowered people and assisted local fishermen, artisans and craftsmen to set

up businesses. It has worked very well with multilateral and government agencies in poverty reduction programmes as disbursing agents. “The bank runs on a robust IT infrastructure and has concluded arrangement with its correspondence bankers to roll out ATM services to

enable its customers have access to their accounts 24/7 via ATM machines across the states.” With the upgrade in status, he said that the Board, management and staff of the bank were excited at the prospect of spreading quality microfinance banking services across the state.

Programme by passing the Level two programme. As at June 30, 2013, a total of 8,182 operators had participated in the training sessions designed to prepare them for the 2-level examinations of the Chartered Institute of Bankers of Nigeria (CIBN). “Out of the 5,100 candidates that had sat for the examinations,1,657 successfully passed at both levels, which qualified them for induction as Certified Microfinance reduction of the current financial exclusion rate of 46.3 percent to 20 percent by 2020 . “Pursuant to the implementation of the financial inclusion strategy, the CBN launched a pilot financial inclusion project in Borno state in the review period.

Vanguard, MONDAY, JANUARY 13, 2014 — 35

Agric

he Fishery Society of Nigeria (FISON) has urged the Federal Government to facilitate the creation of fish markets across the country to boost production and income of farmers as well as ensure adequate protein intake. The National President of the society, Dr Abba Abdullahi, made the call in an interview with the Vanguard in Abuja. Abdullahi spoke against the background of the declaration of 2014 by the UN General Assembly as the International Year of Family Farming (IYFF) in a bid to prioritise agriculture in various countries. It will be recalled that the International Year of Family Farming 2014 is an initiative promoted by the World Rural Forum and supported by over 360 civil s o c i e t y, f a r m e r s ’ organisations and the 37th Food and Agriculture (FAO) Conference. This worldwide celebration, declared by the United Nations General Assembly, aims to become a tool to stimulate active policies for sustainable development of agricultural systems-based farmer families, communal units, indigenous groups, cooperatives and fishing families. The work is being done from the perspective of effectively combating poverty and hunger and the search for a rural development based on the respect for environment and biodiversity. The FISON President said:“We have gone ahead already as far as fish farming is concerned in this country. “What we really want now is markets for our products so we can sell and make a better living from what we do.’’ He urged fish farmers to cooperate with the society “so that we can better share knowledge to solve problems

Good har ves ts harves vests nudge cereal and sugar prices down

GES: Farmer advocates law to ensure sustainability

he FAO Cereal Price Index averaged 191.5 points in December, down 2.8 points from November, and the lowest monthly value since August 2010. Large global supplies, following record harvests in 2013, continued to exert downward pressure on international prices of wheat and maize in particular. By contrast, rice prices were up slightly in December. For all of 2013, the Cereal Price Index averaged 219.2 points, down as much as 17 points, or 7.2 percent, from 2012. FAO’s Sugar Price Index averaged 234.9 points in December, a sharp slide of 15.8 points from November. This was the third consecutive monthly decline, with the sugarcane harvest in Brazil the world’s largest sugar producer and exporter exceeding expectations. Adding to the downward pressure on international prices were reports of record production in Thailand, the world’s second biggest sugar exporter, as well as good harvests in China. Overall, in 2013, sugar prices were 18 percent lower than in 2012.

Dair Dairyy and meat hit record high

From left: Ogun State Commissioner for Environment, Hon. Ayo Olubori, Commissioner for Education, Science and Technology, Hon Segun Odubela; Mrs Rolayo Ogbonnaya of International Church of Christ (ICOC), Ogun State Commissioner for Agriculture, Hon. Mrs Ronke Sokefun; ICOC Board Chairman, Mr Ndu Eke at the launch of the first harvested Ofada Rice of the ICOC Agric Venture Farm in Obolo Imeko, Ogun State

Family Farming:

FISON, RIFAN task FG and increase production’’. In a separate interview, the President, Rice Farmers Association of Nigeria, Mr Abubakar Wodi, confirmed the readiness of rice farmers to key into the UN declaration. Wodi noted that farmers were always ready to do their jobs, if the government and the sponsors of the programme would play their role. He, however, a c c u s e d

Jigawa-based rice farmer, Alhaji Maiunguwa Jaga, has appealed to the National Assembly to promulgate a legislation that would enhance the implementation of the Growth Enhancement Support (GES) programme. Jaga, who made the call in an interview in Hadejia, said it is good to provide sound laws on GES programme to

government officials of initiating programmes without following up to ensure proper execution and the media for also publishing the take-off of agricultural programmes without monitoring their execution. Wodi also alleged that publications by the media were not often a true reflection of the situation on the farms.“Farmers are ever ready to do their jobs, but are the

ensure its sustainability. He commended the Federal Government over the introduction of the GES programme, noting that it had ended fertiliser scarcity and enhanced farmers’ access to seeds and other inputs. Jaga also called for the review of agricultural loan facilities provided by banks in the country. “It is desirable to review

ICCO plans markets, econometrics seminar for stakeholders

n international seminar that is meant to improve policy makers and other stakeholders in the cocoa sector, particularly from the African region, an understanding of the functioning of cocoa terminal markets and the enhanced ability to use econometric models to forecast market developments is set for next month. The International Seminar on Terminal Markets and Econometric Modelling of the Cocoa Market, that will take place in Abidjan, Côte d’Ivoire is being organized by the International Cocoa Organization in conjunction with the Ministry of Agriculture of Côte d’Ivoire and the Conseil du Café-Cacao.

Terminal markets, also called futures markets, play a vital role in the world cocoa economy. They allow those in the trade and industry to manage their price risk, provide valuable information on storage decisions, and collect and disseminate information on world prices. In addition to examining in detail the functioning of these markets and recent regulatory changes, the participants will review, among other subjects, the impact of speculative trading on cocoa futures prices and volatility, and price transmission between the futures markets and the physical markets at origin.

government and sponsors of such programmes committed? “In Thailand, Japan and China, farmers are on the farms, but here in Nigeria, some farmers are on paper.’’ Wodi urged rice farmers in the country to keep working hard to feed the nation ahead of Federal Government’s plan to ban rice importation.

loans designed for the smallholder and largescale farmers. “Farmers are not accessing the facilities due to cumbersome processes and it became a major obstacle to effective agricultural financing,” he said. NAN reports that GES is a critical component of the President Goodluck Jonathan Agriculture Transformation Agenda (ATA). It is designed to enhance supply of fertiliser and other inputs to registered farmers through direct allocation via electronic messages otherwise called e-wallet. The programme also focuses on encouraging private sector participation and reducing government control in the distribution channel of fertilisers and other inputs. Jaga said that farmers in the area had redeemed fertilisers and seeds in the last dry and rainy seasons.

airy prices, on the other hand, were up for both December and for 2013 as a whole. The FAO Dairy Price Index averaged 264.6 points in December, a rise of 13.2 points over November. Demand for milk powder, especially from China, remains strong, and processors in the southern hemisphere are focusing on this product rather than on butter and cheese. During 2013, the dairy index averaged 243 points its highest annual value since its inception. The FAO Meat Price Index averaged 188.1 points in December, just slightly above its November level. Prices for bovine and pig meat moved higher: demand from China and Japan have resulted in beef prices showing consistent growth since last June. Prices for poultry were stable, while those for sheep meat moved lower. Still, in 2013, the index remained historically high, well above pre-2011 levels. C M Y K

36 — Vanguard, MONDAY, JANUARY 13, 2014

Aviation

Char tered Chartered air cr af aircr craf aftt not denied landing right at Gombe Air por AAN Airpor portt –F –FAAN By LAWANI MIKAIRU The Federal Airport Authority of Nigeria, FAAN, has denied refusing a chartered aircraft conveying some officials of the All Progressive Congress (APC) to Gombe landing right at the Gombe Airport last Thursday, December 2. FAAN speaking through Mr Yakubu Dati, General Manager, Corporate Communication, said, “The attention of the Federal Airports Authority of Nigeria has been drawn to a mischievous and obviously misleading story in some sections of the media alleging that a chartered aircraft conveying some officials of the All Progressive Congress (APC) to Gombe was denied landing right at the Gombe Airport on Thursday, December 2, 2014 by officials of the Federal Airports Authority of Nigeria.” Dati said what happened “ is that Gombe Airport is not a 24hour airport which means that the airport’s runway is not open for flight operations, both scheduled and unscheduled, for 24 hours and a Notice to Airmen (NOTAM) to that effect is well known to concerned stakeholders in the industry.”

Arik introduces mobile booking app

rik Air has introduced a mobile and tablet booking app that can provide the airline with booking services. A statement by the airline’s Spokesman, Mr Ola Adebanji, said the app would present consumers with an ‘easy-to-use interface’. And it was introduced to enhance customer experience. Mr Adebanji explained that customers would enter their preferred dates and number of passengers, then select the flight or flights from their desired schedule.“Payment is similarly simple, because the app is unique to Arik; there are no fees levied by thirdparty booking services, leaving customers with the best possible rates.”

FAAN has no business in cargo handling says Owolabi …demands more space to improve cargo handling operations By LAWANI MIKAIRU & DANIEL ETEGHE

anaging Director, Skyway Aviation Handling Company, SAHCOL , Mr. Oluropo Owolabi has said that the Federal Airports Authority of Nigeria ,FAAN, has no business in handling cargoes at the airport. Speaking to Aviation reporters at the training centre of SAHCOL, in Ikeja, Lagos, Mr. Owolabi said, “FAAN is our landlord, they built the airport. FAAN has no business in cargo handling. Since it is private partnership, when the private investors invest, how do they get their money back when we have a landlord who is a competitor? ‘’All I am saying is that when we need land, FAAN should give us land rather than take it, if we are denied, how do we meet up? Government should assist us in some issues like issue of space, the tarmac and the terminal." ‘’Government should create space at the tarmac at the cargo wing of the airport. It has been

awarded before but it was left undone, it should be expanded to allow aircraft to park. We don’t need to be begging for space especially as private owners,” he added. He affirmed that when this is done, SAHCOL will be able to expand its services and provide world class services to the airlines as well as contribute immensely to the growth of the aviation industry. He further noted that

SAHCOL as a ground handling company needed more space to operate at the tarmac at the cargo wing of the airport in order to prevent the re-occurrence of aircrafts having severe incidences at the airport. It will be recalled that two aircrafts had an incident last year when the wings of the aircrafts clipped each other. Asked about the level of competition between Nigeria Aviation Handling Company,

Nahco, and Skyway Aviation Handling Company, SAHCOL, Mr. Owolabi said that there has been a healthy competition as that will help to improve the quality of service. He added that there was no price war between both companies stressing that the focus was to improve the quality of service both companies were rendering to airlines.

From left: Assistant General Manager , Sales and Marketing, Skyway Aviation Handling Company Limited (SAHCOL), Mr. Olaniyi Adigun, Head, Corporate Communication, Mr. Basil Agboarumi and Managing Director, Olu Owolabi at the Media Chat on the activities of the company at SAHCOL Training School in Lagos. Photo by Lamidi Bamidele.

Chanchangi, IRS Airlines to resume flights operation By LAWANI MIKAIRU

trong indications have emerged that Chanchangi and IRS are likely to resume flight operations before the end of the month after several months of stopping operations following “technical advise “ by the regulatory body, Nigeria Civil Aviation Authority (NCAA). A source from Chanchangi, who preferred anonymity, disclosed this last Thursday. According to him, “God’s willing we will be resuming flight operations either on the 12th or 13th of January, 2014. We will operate Kaduna, Abuja and Lagos

routes respectively as soon as we resume duty. Also another source from IRS airline at the airline’s ticketing stand said that they are also likely to re-commence flight operations once their aircraft is back on ground from maintenance check. In his words, “Once our machine is back from maintenance check, we will resume flight operations by end of January or first week of February,” he said. It will be recalled that the aviation industry regulator, the Nigerian Civil Aviation Authority, NCAA, grounded the operations of IRS Airlines and Chanchangi Airlines following a memo signed by the Director-General of the NCAA, Captain Fola Akinkuotu, ordering all scheduled airline operators whose fleet size had been

reduced to only one operational aircraft to immediately stop flight operations. The memo, which was addressed to all scheduled airline operators and dated October 14, 2013 read in part, “You will recall that recently, the NCAA, through the Director-General, expressly suspended the continued operation of airlines possessing otherwise valid Air Operators Certificate, but who were operating with a single aircraft. “The Nigerian Civil Aviation Authority regulations provide for more than a single aircraft for any operator to secure or operate under a valid AOC. “This directive is, therefore, issued to formalise and clarify that prior order suspending

such operations. As such, all AOC holders or operators whose operational fleet has been reduced to a single operational aircraft for whatever reason shall immediately and forthwith suspend their flight operations. “Such operations may only resume upon clearance from the NCAA that there is more than one operational aircraft for continued flight operations and satisfaction that such AOC holder has the capacity to have safe flight operations prior to commencing any such operation.” Chanchangi airline had only three aircraft in its fleet and two of the aircraft had gone for routine checks in Belgrade, Serbia and South Africa, respectively, while only one was operational.

Vanguard, MONDAY, JANUARY 13, 2014 — 37

Tax Matters

Tax enforcement: Investigation and litigation under Nigerian tax laws: Raising the standards and protecting rights and responsibilities ( 1)

• Kabir-Mohammed-Mashi , Ag DG, FIRS other provision of this Act, or any other Law listed in the first schedule to this Act, any amount due by way of Tax shall constitute a debt due to the service and maybe recovered by a civil action brought by the Service.” Civil litigation presupposes that the Federal Inland Revenue Service (hereinafter referred to as FIRS) has legally engaged the defaulting Tax payer with all the statutory demand Notices, Reminders and Distrain. Civil litigation is therefore undertaken as a last resort to redress a particular civil wrong perpetrated against the Service. Under the Federal Inland Revenue Act, the Tax Appeal Tribunal also has jurisdictions to deal with tax related matters which are civil in nature. It is important to note that for reasons of the nature of the private rights sought to be enforced, the proper parties in any civil litigation undertaken by the Service are: FEDERAL INLAND REVENUE SERVICE Vs. ABC TAX PAYER/A COMPANY. C R I M I N A L PROCEEDINGS: A criminal proceeding is defined as action or proceeding instituted or prosecuted by the state in its own name against a person(s) who is accused of a crime to punish him therefore. A criminal proceeding is ordinarily one which if carried to a conclusion may result in the imposition of a sentence such as death, imprisonment, fine or forfeiture of property.

It is important to note that the gamut of legal rules that govern the mechanism under which investigation, prosecution, adjudication and punishment of crime as well as protection of the constitutional rights of the accused, constitutes a criminal procedure. Under the Federal Inland Revenue Act, offences and penalties are listed under Part VI of the Act. JURISDICTION: Note that the Federal High Court of Nigeria (FHC) has Original Jurisdiction in all causes or matters(civil or

INTRODUCTION: DEFINITION OF TERMINOLOGIES: t remains incontrovertible that defining Legal terminologies has been a problem to lawyers. This much was noted by a Professor of Jurisprudence, J.M.A Ojomo when he said; “As long as definitions are a translation of thoughts into words, they create problems for lawyers. Law itself is an exercise in controversy. And for as long as the teaching of Jurisprudence begins with the hypothesis that words have no particular meaning except in the context within which they are used; therefore depending on the speakers’ abstraction, words are not more than verbal recommendations of what the speaker feels they are in the context which they are used.” Litigation has been variously defined. Justice Y.V Chandrachud in his book Advanced Law Lexicon described Litigation as: “A Judicial Controversy, a contest in a Court of Law; a judicial proceeding for the purpose of enforcing a right. Law Suit; process of carrying on a law suit.” The Black’s Law Dictionary defines litigation as: “The process of carrying on a law suit. A law suit itself or several litigations pending before the Court. From the foregoing, it can be said without much fear of contradiction that the category of definitions to litigation and indeed other legal terminologies are never closed and almost always depend on the context in which these definitions are used. However, for the purpose of this paper, Litigation procedures are all those processes involved in undertaking a lawsuit; be it civil or criminal before courts. CIVIL LITIGATION: A civil action is often brought to enforce, redress or protect a private or civil rights; a non-criminal litigation. It is a personal action which is instituted to compel payment or the doing of some other thing which is purely civil. It is a proceeding in a court of competent jurisdiction by one party against another for the enforcement or protection of a private right or for the redress or prevention of a private wrong. The civil action maybe involving a private party suing another private party or a private party suing or being sued by the Government but the proceedings do not involve criminal proceedings. Under the Federal Inland Revenue Act civil actions are provided for under Section 34(1) and states as follows: “Without prejudice to any

confer power on the Service. CIVIL PROCEDURE IN LITIGATION: Under civil litigation, the Federal Inland Revenue Service strives to enforce its civil right against a particular Tax payer(s) who has defied all the Statutory Assessments and Demand Notices issued by the Service and duly served on them (the Defendant(s)). The process culminating to a civil action instituted by the Service is as follows: The L&P Department of FIRS as Claimant, files a specially endorsed Writ of Summons and Statement of Claim at the Federal High Court in the location where the Defendant(s) resides or carries on business. The Writ of Summons is accompanied by the Claimant’s Witness Statement on Oath which itself is supported by Certified True Copies of all Public documents used in the course of correspondences (Assessments, Demand Notices, Reminders etc.) from the FIRS to the Tax payer. The Suit is also supported by the Claimant’s Written Address. The Claimant Witnesses must be officers of the Service who are competent and conversant with the facts of that case as per their involvement in the process of Tax Administration with the officers/Agents of the Defendant(s). The Claimant’s witnesses must also be conversant with the documents attached to the

The Claimant Witnesses must be officers of the Service who are competent and conversant with the facts of that case as per their involvement in the process of Tax Administration with the officers/ Agents of the Defendant(s)

criminal) initiated by the Federal Inland Revenue Service. Additionally, any dissatisfied party has the constitutional right of appeal against the decisions of the FHC to the Court of Appeal and where necessary to the Supreme Court of Nigeria. The Federal Inland Revenue Service has a mandate among other things to administer all the enactments listed in the first schedule to the act or any other enactment or law on taxation in respect of which the national assembly may

Witness Statements on Oaths and the relief sought from the Court. The Claimant’s Court processes are then served on the Defendant(s) who either by themselves or by a Legal Practitioner of their choice files a Memorandum of Appearance and a Statement of Defence along with the Defendant(s) Witness Statements on Oath supported by necessary documents in their Defence. There is also a Defendants Written Address in reply to the issues of Law and fact raised in the

Claimants Written Address. The Defendant’s Memorandum of Appearance, Statement of Defence, Witnesses Statements on Oath and Written Address are then served on the Claimant (FIRS) through the Legal and Prosecution Department (L&P). The Solicitors after a careful perusal of the defence may decide to file an Amended Statement of Claim or further address or Reply as the case may be. At a fixed named for Hearing of the case, the Claimant applies to the Court that pleadings have been exchanged and calls on its witnesses to adopt their statements and exhibits on oath in cause of Examinationin- Chief. At the end of the Examination –in –Chief, each Claimant’s Witnesses is Cross-Examined by the Counsel for the Defendant(s) and where necessary ReExamined by the Claimant’s Counsel. At the close of the Claimants case, the Defendant(s) commences its Defence by calling on its Witnesses to adopt its Defence Witnesses Statements/Exhibits on Oath. At the end of the testimony of each Defence Witness, he/she will be Cross-Examined by the Counsel for the Claimant and where necessary ReExamined by the Defendant’s Counsel. At the end of the case for the Defence, Counsel for the Defence and Claimant are respectively called upon to adopt their Written Addresses in support of their arguments and thereafter the Court takes a date for Judgment. N/B: Apart from the ideal case scenario stated above, it is worthy to note that there are always a lot of interlocutory applications (e.g. Injunction, Production of documents, interrogatories etc) that are considered by the Courts before Hearing and Judgment. These Statutory Interlocutory Applications follow the same pattern of Front Loading in terms of Procedure and Rulings. See generally Orders 26 to 43 of the Federal High Court Act Civil Procedure Rules (2009). However, the Court is duty bound to consider and determine on the merits all interlocutory applications pending before it, before it proceeds to consider the substantive Civil suit. See the case of: MOBIL OIL NIGERIA UNLTD Vs. MONOKPO. C M Y K

38 — Vanguard, MONDAY, JANUARY 13, 2014

Business & Economy

Stakeholder raises alarm over near extinction of Friction Industry …Calls for Federal Government support By NKIRUKA NNOROM

he Managing Director/CEO of Star Auto Industries Limited, the manufacturers of Apex Brake Pads and Lining, Mr. Chidi Ukachukwu, has raised alarm over threat of extinction of companies in the Friction Industry following massive dumping of inferior vehicle components from China

as well as inconsistency in government policies. Consequently, he called on the Federal Government to create enabling environment that would encourage manufacturing of vehicle components locally rather than importation of finished products, which is the order of the day. Speaking to newsmen during a factory tour of the company, Ukachukwu said that

StarAuto Industries is the only surviving friction company out of six other companies that were in existence in Nigeria as at the time they commenced operation in 1999. Friction industry comprise of manufacturers of vehicle components, which Brakes Pads and Lining are part of. He noted that the company has been in and out of operation in its 13 years of

operation due mainly to summersault in government policies and heavy taxation from various agencies of government among others. He also lamented the epileptic power supply, stressing that 40 percent of the company’s cost goes into power generation. According to him, this has been one of the issues threatening the existence of the business, besides summersault

in government policy. Ukachukwu explained they have put all that is required to go back to production into place given an enabling operating environment, even as he assured of the quality of the company’s products, saying that Star Auto has improved much more than what it used to be when it commenced operation in 1999 with new and improved technology. “Now we see that with government policy and what we are doing, if we are given the chance, we will be able to come back fully to production. We have decided to go back to production after closing shop for some time because the banks we are owing have the freedom to sell our building to recover their money because that is the security they have. If we just fold our hands without anybody knowing what we are dong, they will sell off our property before we know it,” Ukachukwu lamented. Emphasising on the company ’s quality assurance, he said, “In the past when we were fully in business, I sponsored creation of standard of friction being used by the Standard Organisation of Nigeria, SON, today; their reference point was sponsored by me. “Today, we are the only friction company in Nigeria that has the testing equipment to decide the quality of vehicle components. We have the testing room where you can determine the quality, hardness, and the friction Brake Pads you produce.” He posited Nigeria could not meet up with 80 percent local content on locally manufactured vehicle components due the challenge of sourcing raw material locally. “For friction industry, you can develop a formulation that is 80 percent local content, but today, am not sure we can meet up with that because there is no processing industries in Nigeria to process these raw material. If as a manufacturer in friction industry, you decide to process it yourself, it becomes very expensive.

Vanguard, MONDAY, JANUARY 13, 2014 — 39

Advertising, Media & Marketing

Woolworths pull out from Nigeria will not deter SA retailers, Says Sander Stories by PRINCEWILL EKWUJURU

hile Woolworths has canned its three-store pilot project in Nigeria, citing a mismatch with the Nigerian consumer and climate, Broll Nigeria says this need not deter South African retailers from profiting in the country. In fact, Broll expects more South African retailers, especially value retailers, to seek opportunities in the Nigerian market in the coming months and years. “Yes, doing business in Nigeria is a challenge. But if you can offer middle class Nigerians the right price, product, service, quality and choice, the sky is the limit,” says Norman Sander of Broll Nigeria, who manages Ikeja City Mall in Nigeria. South African retailer Shoprite is notching up exceptionally strong trading at Ikeja City Mall, according to Sander. Sander says South African retailers should be prepared to change their models for the Nigerian consumer. If they do so, they stand to gain a firm foothold in a marketplace in a country where consumers are brand loyal and value good service, which is in short supply. He adds the Nigerian market is vastly different from that of South Africa and its neighbouring countries. “Research is essential to understanding this unique set of consumer needs and norms, before venturing into this exceptional territory.” Broll is increasingly being called upon for its professional property services and insights to support retailers and property owners alike seeking to unlock the many retail opportunities in Nigeria. “The market and spend needed for retail success is here and growing. Retailers wanting to crack this market need to customise their models to meet the unique consumer needs and aspirations,” says Sander. He also notes the call of the mall is gaining the support of more Nigerian shoppers. “Nigerians enjoy a firstworld shopping environment that is pleasant, safe, cool, unrushed and offers a complete retail experience from shopping to relaxing at the food court. Mall dwell times are increasing and foot counts are growing.” Sander offers a few suggestions that Broll has picked up for retailers planning to enter the Nigerian market, starting with using a cash-based model initially, rather than counting on sales from accounts or cards.

Telecom Service Quality: The Customer Perspective

Norman Sander He explains that there is little, if any, brand recognition for South African retailers in Nigeria, where consumers are more familiar with US and European retailers. This requires a marketing strategy that goes beyond advertising store opening and extends to launching a new brand. The markets’ buying patterns are also different to what South African retailers are used to. For fashion, there’s no seasonal shopping – Nigeria is hot year round. Sizes are also important and different to Europe and South Africa. Some 50% of men’s shoe sales are sizes larger than size 10. And, while there’s a market for luxury goods, prices that are noticeably above those of Europe won’t be tolerated. With the mobile phone boom in Nigeria, and an increasingly tech-savvy population, Sander says digital and social media marketing are effective tools for retailers. “Offering guarantees and sticking to these promises is a tremendous way of growing

customer loyalty,” says Sander. “We’ve also found that give-away events enjoy great participation at Ikeja City Mall. At first journalists were genuinely surprised to find that these were fair and above board.” Despite all the opportunity, Sander cautions that retail in Nigeria is not for sissies. “Mall rentals are high because of infrastructure and development costs which, in turn, demands high turnovers. Infrastructure is poor, redtape is plenty and officials often interfere. The supply chain also takes far greater focus, with a host of potential obstacles to be navigated.” Sander explains that retailers will need excellent warehousing to overcome shipping issues in Nigeria, where goods don’t move as fast as they do in South Africa. “The choice of clearing agents is important and there is often a price attached to clearing goods,” notes Sander. Yet, with all these challenges, Nigeria’s retail opportunities keep on growing on the back of mass urbanisation, the emerging middleclass, rising retail awareness and an increasing consumer culture.

Polo stirs watch market with new TVC

olo Limited, Makers of Polo wrist watches has entered the market with new television commercial, TVC to drive the brand in Nigeria. The TVC titled ‘Celebration’ is to project Polo as the number one luxury brand in Nigeria. The TVC which prides itself as synonymous with the celebration of life that is assocuiated with glamour, style and elegance, is a new TVC that has models like Richard Mofe Damijo, RMD, Geneveviene Nnaji and others. According to the Executive Director of Polo Limited, Jennifer

Obnayuwana, the choice of the models celebrates youthfulness and Nigerians who have made a mark for themselves and have risen to great heights in their fields of endeavour through hard work within the African continent and beyond. Speaking on the message the TVC is conveying to its target audience, she said: ‘’Polo conveys to our esteemed customers a renewed desire for glamour, poise and elegance with our new TVC. We convey a message of celebrating every passing moment of one’s life.” She added also that in the coming year, polo customers should expect experiential treatment in the provision of luxury products.

he press was recently awash with the news that the Minister for Communication Technology, Mrs Omobola Johnson, has warned telecom operators in Nigeria to improve their service quality or face sanctions. According to the reports, from 2014, telcos that fail to meet agreed key performance indicators (KPIs) will face penalties including fines, withdrawal of licences and five-year jail terms. This sounds like good news. For too long, customers have suffered poor telecom services delivered with impunity, without any decisive intervention from industry regulators. That’s why customers lug about three or four mobile phones, hoping that at least one will work when required. With dual-SIM phones, the stress is less. But before anyone shouts “Hallelujah!,” we need to ask some questions. Who measures the key performance indicators? How and when are they measured? If the telcos are fined, who benefits from the fines? How will the customer be compensated for poor service? In short, how does the customer feature in the entire plan? After all, the customer bears most of the cost – monetary, time and psychic – for service failures. Whatever else they do, regulators must ensure that customers are duly compensated for service failures, except when customers are informed of service disruptions for routine maintenance. Compensation should be mandatory for services with short validity periods such as data bundles, Blackberry subscriptions, etc. As an advocate of service excellence, I find the service delivered by telcos in Nigeria very appalling. Barely two weeks ago, my Glo line went dead for 48 hours although I had enough airtime and a valid data subscription. All I could get on a line I had registered four times was: “This call cannot be completed. Please contact your mobile operator.” Four times, I called the Glo customer care – that was the only number I could reach! Four times I received canned, monotonous responses from customer care representatives who couldn’t identify what was wrong. The only help they could offer was to say “sorry” and report the issue to “the appropriate department.” It wasn’t amusing. At the time of writing, I am yet to receive any explanation or compensation from Glo for such inexplicable service failure. The point is not to demonise Glo. Only recently, I stopped using the MTN Blackberry Service (after four years) because of poor service. At various times, I have also used the services of Airtel, Etisalat, Visafone, Multilinks and Starcomms. At best, they all deliver average service. This is why I find number portability amusing. Beyond retaining one’s number, I can’t see any other benefit! Telecom operators need to up their game. Many of them have excelled in executing laudable corporate social responsibility projects, but they must not forget their core mandate: excellent telecom services. That’s what we pay for. Interestingly, the Nigerian Communications Commission (NCC) has reported that there were over 121 million active lines in Nigeria as at September 2013. About 98 percent of those lines were GSM. Yet, we have only four GSM operators. Is it surprising that service fails often? Is it not time to licence more GSM operators or are there no willing investors in the sector anymore? Considering that many Nigerians have two, three or four GSM lines, it is likely that there are only 50 to 60 million subscribers, leaving a huge population unserved. As a people, we love talking. We’re now also pinging and surfing a lot. It’s time to lower the entry barrier and license more operators.

40 — Vanguard, MONDAY, JANUARY 13, 2014

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

“CBN Defended naira with $26.6bn in 2013”: True or False? ultimately determine official rates. The naira exchange rate is further characterized by the paradox of depreciation despite significant increases in dollar revenue and imports cover! For example, the naira exchange rate remained consistently at N80/$1 between 1994 and 1998, despite barely $4bn total reserves, while it has officially fallen below N150/$1 in spite of buoyant reserves consistently remaining above $40bn with more than 10 month’s demand cover in recent years!

he Punch Newspaper recently carried a report titled “CBN Defended Naira with $26.6bn in 2013.” The report, apparently obtained from the Central Bank’s website, indicated that this amount was sold to currency dealers in 94 foreign exchange Dutch Auctions between January and December 2013. Indeed, in consonance with Lamido Sanusi’s promise to maintain stability, the official naira rate of exchange against the dollar has ironically remained stagnant between N153 and N156, despite our increasing foreign reserve base. Regrettably, however, the unofficial (street market) rate has gradually moved from a deviation of N1 or N2 to N20 per dollar; thus, an ‘ingenious’ bank or Bureau de Change could easily make a monthly profit of about N20m by simply buying $1m directly from CBN’s allocations and selling same dollars elsewhere! The resultant abuse of CBN’s wholesale forex auction inevitably induced unbridled capital flight, characterized by huge bulk movements of hard currency through our airports and other land and sea borders. The CBN’s recent reintroduction of the earlier discredited Retail Forex Auction, has once more restricted direct sales of foreign exchange specifically to end users, in place of the former speculative hoarding by banks, under the Wholesale Auction System. Furthermore, CBN has also reduced its weekly dollar allocations to BDCs from $1m to $250,000; regrettably, however, in spite of (or maybe we should say because of) these measures, the apparent shortfall in dollar supply to the open market has instigated a widening gap between official and Bureau de Change rates. Consequently, the naira exchange rate mechanism has generally been a clear case of the tail wagging the dog, as increasing black market rates

unemployment is to increase government spending, and thereby create jobs and stimulate demand. Consequently, IMF’s recommendation and CBN’s inappropriate tight monetary policy instruments, which also fuel inflation, and trigger cost of funds in excess of 20 per cent to SMEs, will invariably only deepen poverty nationwide! Nonetheless, some observers blame our parlous economy and weak naira on our ‘inability’ to diversify our economy. However, these observers have never

Nonetheless, some observers blame our parlous economy and weak naira on our ‘inability’ to diversify our economy

Inexplicably, however, in 2012, the IMF recommended a formal further naira devaluation, in order to reduce the size of government spending and also reduce budget deficit, and hopefully also restrain spiralling inflation, fuelled by stifling systemic surplus naira! Nevertheless, with heavy unemployment (over 25 per cent) particularly amongst youths, and an inflationravaged economy, discerning critics and observers might see IMF’s prescription to reduce government spending as ironically socially antagonistic! Undoubtedly, the universal antidote for low consumer demand and high

satisfactorily explained how our economy can be diversified when the growth engine of SMEs is constrained by high cost of funds, and low consumer demand caused by dwindling job opportunities plus increasingly low-income values, induced by oppressive inflation. Conversely, however, I have consistently, rightly observed for several years, that our economy will remain distressed and unable to satisfactorily diversify because of CBN’s unconstitutional capture of our export dollar revenue and the substitution of exclusively naira payments for monthly allocations to constitutional

allocations for dollar revenue, naira cash supply would increase by over N6tn (i.e. N155/$1), while commercial banks could also leverage almost tenfold on the fresh naira inflow to create systemic naira liquidity of about N60tn. Consequently, the total available spendable naira in the system would adequately purchase over ten times (i.e. over $400bn) the actual $40bn earned from crude oil sales in 2013! Thus, CBN’s substitution of naira allocations actually weakens the naira exchange rate! Worse still, CBN’s confirmation that only $26.6bn (i.e. 65 per cent) out of the total $40bn revenue collected was auctioned, suggests that naira exchange rate would be under greater pressure if 35 per cent of the dollars earned (i.e. about $14bn) was short-supplied by CBN, despite the earlier provision of full naira cover for the total actual revenue of $40bn! It is not rocket science to deduce that systemic surplus naira and rationed dollar supply will deliberately artificially skew the exchange rate mechanism in favour of the dollar! So, while it is true that CBN sold $26.6bn in foreign exchange auctions in 2013, it is not true that the sales process realistically defended the naira exchange rate; if anything, CBN’s monopolistic rationed dollar auctions, after consciously flooding the system with naira allocations, should more appropriately be recognized as a contrived mechanism to continuously depreciate the naira, especially more so, whenever we earn increasingly more dollars!

beneficiaries. Furthermore, CBN has belatedly recognized the poisonous impact of commercial banks’ ability to leverage on the monthly heavy inflow of naira allocations, which precipitate the unending spectre of excess cash, and the attendant necessity for CBN to reduce such surplus naira and contain inflation by borrowing from the same banks at oppressive rates of interest, only for the apex bank to inexplicably, thereafter, sequester the loans as idle funds, which cannot be applied for infrastructural enhancement or appropriation!! Indeed, it is also instructive that CBN’s cache of selfstyled “own dollar” reserves accumulated from substitution of naira allocations increases in tandem with increasing naira surplus in the economy and deepening poverty nationwide! Incidentally, CBN’s current ‘own reserves’ of over $40bn is not also available for reduction of our heavy debt burden; curiously, however, the apex bank still consciously seeks opportunities to invest ‘its dollar reserves’ in foreign economies, despite the paltry yields associated with such investments! Nonetheless, Sanusi confirmed in his controversial letter of September 25, 2013 on “$49.9bn Unremitted Oil Revenue” to President Jonathan, that the treasury had received about $22bn as at July 2013 for oil exports. Consequently, since oil prices remained consistently over $100/barrel, cumulative oil earnings should exceed $40bn in 2013. Thus, with the practice of CBN’s usual substitution of naira

SAVE THE NAIRA, SAVE NIGERIANS!!

Business & Economy

Fuman restates commitment to product quality

umman Agricultural Limited, producers of Fumman fruit juice has underscored its commitment to manufacturing products with innovation and consistent research to retain product quality. The brand according to Mr. Layi Adeyemi, the Managing Director is poised to meeting the taste of consumers and that is why the naturalness of Fumman juice appeals to the consumers. Adeyemi stated that it is as a result of this that the company pursues a research and innovation policy to ensure that Fumman juice brands retain their natural

taste pedigree. The company has not deviated from its pure natural taste and is continuously working assiduously to embark on several innovative strategies to remain the fruit juice brand of choice in the country. According to him, for any brand to remain competitive in the market place, the offerings should be distinctive.This is the compelling factor that drives the brand essence of Fumman to sustain its pedigree of product naturalness to achieve exceptional customer satisfaction Fumman Juice has over the years carved a niche through

natural taste. The brand has been one that thrives on the pure natural and distinct taste of its brands. The brands have been able to properly define its identity and what makes it stand out from competitors. This has greatly positioned the brand in the minds of consumers as a healthy product. The unique selling proposition of the brand is natural taste as the juices are processed from freshly harvested fruits. What the brand is known for in the market place is nothing but fruit. This has endeared the brand to several consumers as it aligns with the healthy lifestyle of the consumers.

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

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CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT

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