Financial vanguard

APRIL 15, 2013

Top African officials meet over improving revenue administration

BY OMOH GABRIEL

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*Public hearing on PIB Bill: Chairman, House of Representatives Ad-Hoc Committee on Petroleum Industry Bill (PIB), Isiaka Bawa (middle), chatting with Deputy Chairman, Samson Osagie (right) and a Committee member, Muraina Ajibola during a press briefing on the forthcoming Zonal Public Hearing on Petroleum Industry Bill in Abuja. Photo by Gbemiga Olamikan.

Bankers Committee divided over interest rate peg for SMEs

BY BABAJIDE KOMOLAFE

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he Bankers Committee is divided over the proposed pegging of interest rate for small and medium enterprises (SMEs) in the country. The Bankers Committee is an umbrella of Banks’ Chief Executive Officers’ and the Central Bank of Nigeria. The Committee held its last meeting on Tuesday in Abuja.

Though at the post meeting media briefing, it was announced that the Committee is planning to provide credit to SMEs at lower interest rate, Investigations has however revealed that the announcement was a compromise as most of the banks were opposed to the proposed interest rate peg.

Briefing journalists, along side

Managing Director of Citibank, Omar Hafiz and Director of Banking Supervision, CBN, Tokunbo Martins, Managing Director/Chief Executive, Diamond Bank, Mr. Alex Otti said that the proposed plan to provide micro enterprises access to bank credits at lower interest rates was part of the decisions reached during the meeting. Mr. Otti said members were convinced that the move would help in redressing the constraints against optimal performance of these enterprises to create more jobs with the attendant multiplier effects on the economy.

However, it was gathered that during the meeting the CBN Governor, Mallam Lamido Sanusi, who is also the Chairman of the Committee, proposed that the Committee should peg interest rate

for SMEs in the country as part of banks contributions to the society.

The proposal, it was gathered, was prompted by increasing pressure from the prívate sector over the high interest rate regime in the country, occasioned by the tight monetary policy of the CBN. Investigation further revealed that the Banks’ CEOs initially were silent over the proposal until two of the top five Banks, aparently briefed in advanced by the CBN Governor, spoke in favor of the proposal. When it was obvious to the other CEOs that their silence might be misinterpreted for acceptance, one of them spoke, outlining the demerit of such proposal.

At this point the other CEOs appealed to the CBN Governor, to allow them

Continues on page 18

orried by the low level of tax revenue in African countries, the International Monetary Fund, IMF, last week brought together national revenue authority chiefs from across Africa in South Africa to discuss ways to improve governance of revenue administration. According to the IMF, the chief executives and board chairpersons from 12 African countries participated in an April 10-12 high-level seminar near Johannesburg.

Participants at the seminar were drawn from revenue authority chief executives and board chairpersons from Botswana, Burundi, Ghana, the Gambia, Lesotho, Rwanda, Seychelles, South Sudan, Swaziland, Uganda, Zambia, and Zimbabwe.

The seminar was organised by the

Continues on page 18

134.9

-1.9

2,267.00

+33.00

18.06

0.22

102.95

-1.32

91.50 -2.01 CURRENCY BUYING CENTRAL DOLLAR 154.75 155.25 POUNDS 237.8353 238.6037 EURO 202.0107 202.6634 FRANC 166.0408 166.5773 YEN 1.5597 1.5647 CFA 0.2905 0.3005 WAUA 232.5413 233.2927 RENMINBI 24.9894 25.0706 RIYA 41.2634 41.3967 KRONA 27.0864 27.1739 SDR 232.9452 233.6978

SELLING 155.75 239.3722 203.3161 167.1137 1.5697 0.3105 234.044 25.1518 41.53 27.2614 234.4505

CBN Exchange rate as at 12/04/2013 C M Y K

18 — Vanguard, MONDAY, APRIL 15, 2013

Cover Story

The Basic Guide to Starting Your Business Part 5

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Top African officials meet over improving revenue administration Continued from page 17 International Monetary Fund (IMF) in collaboration with the African Tax Administration Forum (ATAF). This is the first seminar of its kind where

board chairpersons and chief executives of African revenue authorities have gathered to discuss current issues relating to board governance. The event was financed by Topical Trust Fund on Tax Policy

Bankers Committee divided over interest rate peg for SMEs Continued from page 17 discuss the proposal at their Bank CEOs meeting, and reach a concensus. But the Governor was said to have insisted that the proposal should be announced at the post meeting media briefing, to which the CEOs agreed.

Further investigations revealed that the CEOs on the following day, extensively discussed the proposal at Bank CEOs’ meeting in Lagos, with most of the CEOs voicing their opposition to it.

They were said to have argued that such a proposal would increase the competitive edge of the big Banks over the smaller ones, since the big Banks have Access to cheap funds than the smaller Banks. The CEOs also argued that should the CBN compel the industry to accept the proposal it might lead to a situation whereby Banks would present sets of loan application forms for SMEs, with one showing that the loan was booked at the regulated interest rate, and the other showing the real interest rate at which the loan was booked. Some of the CEOs also argued that such policy might not go beyond the tenure of Sanusi as CBN Governor, and since his tenure would end April next year, it means the policy C M Y K

might not last more than nine months. They cited the example of a similar policy in the past, the Small and Medium Industries Equity Investment Scheme, introduced in 1999, by the then CBN Governor, Chief Joseph Sanusi. They noted that after the tenure of Joseph Sanusi, the scheme was first watered down, and then abandoned when Lamido Sanusi bécame governor.

In deed none of the previous attempt by the CBN to either peg interest rates or compell Banks to lend favourably to a particular sector of the economy was sustained. One such attempt was the MRR plus four per cent introduced in 2002. It was prometed by the visit of the then President, Olusegun Obasanjo to the Bankers Committee where he appealed for lower interest rate. The Policy though commenced effectively October 2002 was never effective, as banks subsequently introduced all manner of fees and charges which made interest rate to remain high. The policy was eventually suspended in 2008 by the Profesor Soludo led CBN. The suspensión was announced via a circular titled, “Re: Moderation of Interest rate”. The said circular stated, “It will be

and Administration, which was established by the IMF in May 2011 to channel funds from other donors into vital technical assistance to help countries improve their tax structures and operations.

“It is a fact that a number of countries in Africa are faced with major challenges in the area of revenue administration. It is my considered view that countries should focus on improving governance or set up an effective governance framework for the revenue authority as a first step.

This seminar on governance is a timely intervention and is extremely useful to the countries that have adopted the revenue authority model for revenue administration.

“Two key benefits of the seminar are the sharing of good practice and also the establishmentof a much needed informal communication network for revenue authority boards in Africa. I’m thankful to ATAF and the IMF for this initiative which is a first in the continent,” said Mr. Ambrose Dlamini, Board Chairman of the Swaziland Revenue Authority and CEO of MTN (Swaziland).

Semi-autonomous revenue authorities are now the norm in many Anglophone African countries and interest in this organisational and governance model is growing elsewhere in Africa and beyond.

Although variations of the model exist, some common characteristics include separate human resource policies and procedures from regular government departments and strategic oversight by a board typically with a mix of private and public sector representation. This seminar aims to exchange experiences and views on this model by the key strategic leaders in countries that have introduced, or are contemplating a revenue authority.

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*Executive Director, Diamond Bank PLC, Mr. Uzoma Dozie (m) presenting a cheque to Mr. A’mani Momodu (l) and Mrs. Adesuwa Ladoja, trustees of United Kids Foundation, for the provision of basic infrastructure in various schools at the bank’s head office in Lagos.

ho is an Entrepreneur?

There are many differing views on what makes someone an entrepreneur and what an entrepreneurial venture is. The term itself is believed to have originated from French, coined by a French economist, JeanBaptiste Say, in about 1800, who defined an entrepreneur as “one who undertakes an enterprise, especially a contractor, acting as intermediary between capital and labour”. But it was first defined in English by the Irish economist, Richard Cantillon, as” a term applied to the type of personality who is willing to take upon herself or himself a new venture or enterprise and accepts full responsibility for the outcome.” The definition of entrepreneur is not limited, as various writers and world renowned entrepreneurs have given it various meanings. For instance, one of the great motivational speakers and writers of our time, Robert Kiyosaki, in his book, Retire Young, Retire Rich, defined an entrepreneur as “someone that sees an opportunity,

Something that keeps coming up about entrepreneurs is their ability to see opportunities and make the most of it

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puts together a team, and builds a business that profit from the opportunity”. As you can already see, the word entrepreneur is inexhaustible. According to the Merriam-Webster online, an entrepreneur is “one who organises, manages, and assumes the risks of a business or enterprise." A more detailed definition given by Daile Tucker, an entrepreneur herself, who in her own words describes an entrepreneur as “a person who has decided to take control of his future and become self-employed whether by creating his own

unique business or working as a member of a team.”

Something that keeps coming up about entrepreneurs is their ability to see opportunities and make the most of it, not minding the risks they will undertake. Entrepreneurs are generally in competition with themselves and believe that success or failure lies within their personal control or influence. So, it is very important for you, when starting a business, to be sure that you can identify opportunities, make the most of them and have the wherewithal to thrive even in the midst of risks and unforeseen circumstances and that is why carrying out a self analysis cannot be overemphasized.

Entrepreneurs are leaders, prime movers, authors, pacesetters, investors and risk bearers. They are usually pioneers who strategise and formulate the rules for the general interest of the enterprise for others to follow.

An entrepreneur conceives an idea and brings it to life through systematic and wellarticulated planning, driven by the passion and the need to achieve uncommon things.

An entrepreneur not only assumes responsibility and the risk for a business operation with the expectation of making a profit, the entrepreneur also generally decides on the product, acquires the facilities, and brings together the labour force, the capital and production materials. Simply put, entrepreneurs are people who choose to see positivity where negativity abounds.

Bear it in mind, however, that if a business succeeds, the entrepreneur reaps the reward of profits; on the other hand, if it fails, he or she takes the loss.

Successful entrepreneurs are not perfect people but are brilliant, productive, and articulate; it takes both the heart and the head to successfully run an entrepreneurship. Also note that an entrepreneur is an inspirer, a motivator, a coach, a great listener, attentive, consistent and enthusiastic.

A lot of people go into business for the sole reason of making money; this is not a good idea.

It’s not a good idea because the main ingredient for success is missing.

Vanguard, MONDAY, APRIL 15, 2013 — 19

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illiam Shakespeare in his book, Julius Caesar wrote centuries ago that “There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune; omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat, and we must take the current when it serves, or lose our ventures.”

In this Shakespearean plot, power is seen as a force that ebbs and flows in time, and one must “go with the flow.” Waiting around only allows your power to pass its crest and begins to ebb; if the opportunity is 'omitted' (missed), you’ll find yourself stranded in miserable shallows.

Looking at the Nigerian economy in the last few years from global perspective, foreign investors are now looking to Africa, Nigeria and Kenya in particular. There seems to be a tide, the type Shakespeare spoke about, in the economic affairs of Nigeria if only policymakers can see beyond their noses and stealing culture, to take the tide at its flood to give Nigeria an economic take-off. Investors are seeing what most Nigerians are not seeing. The complaint of lack of infrastructure, epileptic power supply, low industrial base etc., are fast becoming opportunities to foreign investors.

At the Reuters Africa investors’ forum last week in Johannesburg, foreign investors who have their businesses in Nigeria and other African countries were quoted as saying; “If you want to ride Africa’s business boom, choose your country well and be ready for bumps on the road. But the momentum is upward and you will be rewarded if you stay the course." African policymakers and chief executives of companies operating in Africa are spreading this upbeat message, qualified with some caveats, as interest in what was once dubbed the “hopeless continent” blossoms along with growth rates. Few doubt that the Africa rising narrative,

which has grabbed the attention even of traditional skeptics, is based on solid fundamentals: growth outpacing most of the world, a rising

Nigeria, this is your chance, if civil servants and elected officials can stop stealing young population of workers and consumers and global demand for the continent’s commodities.”

Just two weeks ago, Global X Funds listed the first Exchange Traded Fund (ETF) on the New York Stock Exchange to track Nigerian stocks. The head of the Fund said this is a move which will enable U.S. investors to buy high growth Nigerian shares at home. Nigeria in the eyes of funds managers and economists today is growing in popularity as an investment destination, offering the promise of seven percent economic growth and a consumer market of around 170 million people. The Nigerian stock market index rose 35 percent in 2012, making it the second best performer in Africa and one of the best in the world. The index is up 22 percent so far this year and analysts expect gains to continue as strong corporate earnings trickle in. There are a massive amount of U.S. investors looking to get exposure to Nigeria.

“I absolutely believe in a consistent upward trend,” said Diana Layfield, Chief Executive Officer for Africa of Standard Chartered, the London-listed bank which is investing $100 million in Africa to double its business in the next five years. But this bullish pitch for Africa, enthusiastically echoed by most participants at a Reuters Africa Investment Summit, comes accompanied with a caution that the continent

Crowd of Nigerians

remains a volatile, uneven and challenging place. Also last week, Carlyle Group said it is looking at a number of banks in East and West Africa for a potential investment. Carlyle, which last year invested in a pan-African grain trading firm, has recently signed a second deal, Marlon Chigwende said. Investors' interest in the fast-growing continent is growing by bounds, drawn by a commodities boom and an expanding consuming population.

Nigeria’s stock exchange disclosed that it is reviewing

applications from some leading global investment banks to join its trading floor, as reforms aimed at improving liquidity and transparency bear fruit. Mr. Oscar Onyema, Chief Executive Officer of the Nigerian Stock Exchange told the Reuters Africa Investment Summit in Lagos that some foreign investment banks have applied to trade on the floor of the exchange.

“We cannot announce which ones yet but they are in the top ten in the world,” Onyema said of the banks that had filed applications to trade on

the NSE. Rencap and Standard Bank already have traders operating on the floor of the exchange. Before the stock market bubble burst in 2008, wiping nearly two thirds off its value in a year, domestic investors owned 85 percent of shares, with foreigners owning the rest.

The investment tide is afoot; will Nigerian public servants, government functionaries and elected officials stop stealing and ride on the tide of development?

Can President Goodluck Jonathan mobilise the populace to ride on this tide?

The world is watching.

Business & Economy Continued from page 18 recalled that the CBN on July 31, 2002 issued a circular with the above title. This was based on the developments in the economy as at that time as it sought to moderate interest rates in the system. The circular, in reference to a tripartite agreement between the Federal Government, the CBN, and the banks reminded banks to keep faith with their agreement to restrict their lending rates to a maximum of 400 basis points above the Minimum Rediscount Rate (MRR).

Subsequent developments in the economy led to the

Bankers Committee divided over interest rate peg for SMEs adoption of a market based framework for monetary policy management with the Monetary Policy Rate (MPR) replacing the MRR. Although the new regime of monetary policy management had since become operational, this circular is intended to formally confirm to banks that the policy of restriction in banks lending rates to a maximum of 400 basis points above the Minimum Rediscount Rate (MRR) had long ceased to be operational.

Before the MRR plus four policy was SMIEIS, which

requires all banks in Nigeria to set aside ten (10) per cent of their Profit After Tax (PAT) for investment and promotion of small and medium enterprises.

The 10 per cent of the Profit After Tax (PAT) to be set aside annually shall be invested in small and medium enterprises as the banking industry ’s contribution to the Federal Government’s efforts towards stimulating economic growth, developing local technology and generating employment.

The funding to be provided under the scheme shall be in the form of loans or equity

investment or a combination of both in eligible enterprises.

Initially, activities that could be funded with the money were restricted to industrial activities. Though banks indeed set aside the funds, the amount invested was small, and this was attributed to lack of bankable SMI projects and also to the restriction of the kind of business activities that could be funded. Consequently, the guideline was amended to expand the activities that could be funded to “Every legal business activity is

covered with the exception of: Trading/merchandising; Financial Services.

Furthermore, the name was changed to Small and Medium Enterprises Equity Investment Scheme (SMEEIS). This however did not facilitate increased discursement or investment of the fund by the banks till the scheme was subsequently rested in 2009. As at June 2009, out the N42 billion set aside by banks under the scheme, N28 billion, representing 66 per cent was disbursed.

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20 — Vanguard, MONDAY, APRIL 15, 2013

Business & Economy BRIEF Africa urged to drive harder bargains with China

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or more than a decade African governments have rolled out the red carpet for Chinese investors, trading oil, coal, iron ore and other resources for badly needed ports, roads and railways. But policymakers and executives, worried the flood of cheap Chinese imports is sapping Africa’s own manufacturing potential, say the continent must drive harder bargains with China. The time has come, some say, to jettison the view of Beijing as Africa’s benevolent partner, bound by a common resistance to the meddling West.

“The sad reality is that they are not comrades. Their companies are there to make profits like everyone else,” Zimbabwean Finance Minister Tendai Biti told the Reuters Africa Investment Summit this week. The African textile industry has basically collapsed because of cheap Chinese imports ...

Africa needs China but let’s create an equitable relationship.” China’s trade with Africa has surged from about $10 billion in 2000 to $166 billion in 2011, with much of that an exchange of African minerals for Chinese manufactured goods.

Nigerian Central Bank Governor Lamido Sanusi warned last month it was time for Africans to wake up to the realities of their relationship with China. “It is a significant contributor to Africa’s deindustrialization and underdevelopment,” he said in an opinion piece in the Financial Times that ruffled feathers in Beijing. Even in South Africa, the continent’s largest and most developed economy, manufacturing accounts for just 15 percent of GDP. It is even lower elsewhere, under 11 percent in Kenya and 10 percent in Nigeria.

Part of the fault may lie with African policymakers, for not demanding enough from their Chinese counterparts at the bargaining table. If you allow the Chinese to come and rape you and take whatever they do because you’re just looking at the money they bring, and if you’re looking on a short-term basis, the country will suffer, there’s no two ways about it,” said Sipho Nkosi, CEO of South African mining company Exxaro Resources. Africa must demand that China transfer skills and technology to the continent instead of allowing it to simply export raw materials, he said.

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Experts differ on gains of including Nigeria’s bonds in Barclays

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ome financial experts have expressed divergent views on the likely effect of the inclusion of Nigeria’s sovereign bonds in the emerging markets index of Barclays Bank, London.

They expressed their views in separate interviews with the News Agency of Nigeria (NAN) in Lagos on Thursday. While some said the inclusion will boost activities in government securities, others advised the regulators to monitor the quality of capital inflow that would arise from the inclusion in the index.

Mr. Henry Boyo, an economist with Abel & Sell Ltd., said that the government needed to strengthen its investment policies to monitor the quality of investments that enter the country. According to Boyo, Nigeria is searching for investments that smust be of certain quality and not funds that will come in and go out anytime. ”If the investments coming into Nigeria are speculative cash flows that can be off-loaded at will, they will create problems for the economy,” Boyo said. He said that if returns on government bonds were at double digit, they should be reviewed in line with others with single digit.

Boyo said that the spate of insecurity in the country should be addressed ur-

*From left: Mr. JID Dada, Executive Director, UAC of Nigeria Plc; Mr Derrick Van Houten, Managing Director, UAC Restaurants Limited and Mrs Nnenna Azuka-Onwuka, Marketing Manager, UAC Restaurants Limited.

gently to avoid panic decisions by investors. Mr Nicholas Nyamali, the Managing Director of Investment One Financial Services Ltd, disagreed that the returns on the bonds should be single digit.

According to Nyamali, a double-digit yield environment will attract offshore investments into the bonds market.

He said that the inclusion was a vote of confidence on the economy.

”The inclusion is a strong reflection of the improvement in the domestic bonds market over the years and a vote of confidence in Nigeria’s economic fundamentals,” Nyamali said. He, however, said that dominance of foreign investors would make the local market susceptible to volatility of the global financial market. Mr David Adonri, the Chief Executive Offic-

er, Lambeth Trust & Investment Company Ltd., said that the inclusion of Nigeria would facilitate macroeconomic stability. The Barclays Bank on April 1 announced that it had included the Nigeria's sovereign bonds in its emerging market index. JPMorgan of London had also included Nigerian bonds in its emerging-market bond index series since October.

IFC, EDC to promote entrepreneurial development in Nigeria

BY JONAH NWOKPOKU

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nternational Finance Corporation, IFC, has pledged an expansion to serve more entrepreneurs with its SME T o o l k i t s .

The firm, a member of the World Bank Group, made the pledge at a conference marking its 10th anniversary in Lagos.

Speaking at the event, the IFC Country Manager, Nigeria, Mr. Solomon Quaynor said the firm’s resolve is to continue to support and strengthen Small and Medium Enterprises, SMEs, especially in developing countries.

“One of our strategic priorities is supporting Small and Medium Enterprises so they can create jobs and reduce poverty in developing countries. This event further strengthens the SME Toolkit to become the ’go-to’ resource for small businesses to help improve SME productivity, competitiveness and employment creation potential,” he said.

The conference is cosponsored by Enterprise Development Centre, EDC, and sponsored by IBM with the theme; Enabling SME Success: Becoming the Go-To portal for business growth.

Also speaking at the conference, the EDC Director, Peter Bankole said; “building a network of entrepreneurial

leaders is the core focus of EDC and partnering with IFC helps us achieve our goal of promoting and supporting enterprises that contribute to economic development. The SME Toolkit Global Partner Conference provides the platform to strengthen partnerships that grow enterprises.”

Taiwo Otiti, Country General Manager for IBM West Africa, said; “IBM is proud of its partnership with IFC and our support of the SME Toolkit since 2006 has helped to greatly expand the toolkit’s capabilities. This relationship has also enriched the innovation process, providing the opportunity for entrepreneurs around the world to work with open source

platforms like the SME Toolkit so that they can in turn support and add value to their local economies.”

The event brought together representatives of local SME Toolkit projects from around the world to share experiences, train partners on the latest initiatives, and gather ideas for future programme development Launched in 2002, the SME Toolkit which is an innovation of IFC, developed in partnership with IBM, leverages the latest information and communication technologies to help entrepreneurs and Small and Medium Enterprises in emerging markets.

Vanguard, MONDAY, APRIL 15, 2013 — 21

International Business & Economy

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lobal Power leader, Cummins Inc said that it has invested in a joint venture in Nigeria to design, construct, operate as well as maintain gas-fuelled power plants. Cummins is partnering in this new business venture with Gentec, a specialist UK-based power plant constructor and operator that has successfully built turnkey and Independent Power Producer (IPP) plants powered by class leading Cummins gas generators in Asia, Europe and Africa.

According to Mr Dipi Khilnani, Chairman at Gentec; “With over a million hours of operating experience with Cummins Gas Gensets in Nigeria, we are confident that we have the right product and the right capability to meet the needs of Nigerian industry.” He added that gas power delivers significant operational savings in these difficult economic times. The new venture called Cummins Energy Solutions Nigeria Limited (CESN) is set to capitalize on Nigeria’s growing network of natural gas distribution and this fuel source will facilitate the construction of distributed power plants typically in the 2MW to 50 MW range to meet a wide spectrum of industrial and IPP customers in Nigeria.

CESN will also introduce smaller gas-powered solutions from 40Kva to 1MW to enter into the SME segment.

BRIEF RLPC- Nigeria's Dangote Group seeks debut $3.5b syndicated loan

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*Prince Gbolahan Lawal, Commissioner for Agriculture and Cooperatives, Lagos State presenting the Memorandum of Understanding signed between the Ministry and the Franchisee, Chief Emmanuel Ijewere, Chairman, Best Foods Ltd.at the official handing over of newly built Eko Farmers Mart, Ajah on Thursday.

Global power leader, Cummins, to invest in Nigeria “This new venture further illustrates Cummins’ commitment to Nigeria and this business will be an important vehicle to contribute towards reducing Nigeria’s critical power deficit,” says Satish Jayaram, Director of Power Gener-

ation for Cummins Africa.

The new venture will harness the strengths of Cummins’ global expertise and its industry leading efficient gas technologies with Gentec’s proven power plant project implementation expertise in emerg-

ing markets. This strategic investment is testimony of Cummins’ vision and strategy to accelerate our presence and investments in Africa,” says Mr. Jayaram.

Top forecasters cut 2013 oil demand growth estimates

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he world’s top oil fore casters this week all cut their 2013 oil demand forecasts due to subdued economic growth, with the figures showing increasing similarity in the views of producers and consumers.

The International Energy Agency (IEA) weekend trimmed its global oil demand growth estimate, which followed similar moves by the U.S. Energy Information Administration (EIA) and the Organisation of Petroleum Exporting Countries (OPEC).

A growing resemblance in the outlook of the IEA, which represents 28 industrialised countries, and producer group, OPEC, contrasts with past disagreements.

Observers said it might reflect efforts to increase transparency in the oil market notoriously murky and hard to forecast - such as the Joint Organisations Data Initiative.

“There is a lot of convergence now on the OPEC and IEA view on the oil market,” said Olivier Jakob, an analyst at Petromatrix. “They are using the same figures more and more and being very polite to each other too.” World oil use C M Y K

will rise by 795,000 barrels per day (bpd) this year, Paris-based IEA said in a monthly report. That is 25,000 bpd less than it estimated last month and a third straight reduction.

The IEA now has virtually the same view on demand as OPEC, which in a report on Wednesday lowered its consumption growth forecast to 800,000 bpd. The EIA on Tuesday lowered its estimate by 50,000 bpd to 960,000 bpd.

OPEC and the IEA clashed in June 2011 when the IEA predicted a steep rise in demand and called on OPEC to help replace lost Libyan output and prevent a jump in oil prices that could hit the global economy. The producer group rejected the pressure and failed to agree on new output targets.

The IEA decided to release oil from emergency reserves held by its member-countries in case of supply breaks, which further angered OPEC. OPEC and the IEA also have a similar view on the amount of oil OPEC needs to pump this year to balance supply and demand. Both see demand for OPEC oil at 29.7 million bpd in 2013. Oil prices are trading just over $105 a barrel, down

from a 2013 high of $119.17 on Feb. 8, partly due to concerns that global economic recovery will be weak.

The IEA warned it was too early to call a bear market, citing supply risks. The agency

lowered its oil supply forecast for countries outside OPEC this year for the first time in several months and said worsening security in Libya and oil theft in Nigeria had contributed to a decline in OPEC output last month.

angote Group, Nigeria’s biggest listed company, has begun talks to raise a debut syndicated loan for $3.5 billion to fund fertiliser and oil refinery projects, two sources with knowledge of the situation said. The seven-year loan for Nigeria’s biggest cement producer is split equally between Nigerian and international lenders via lead banks Guaranty Trust Bank, Standard Bank and Standard Chartered, the sources said.

No one at Dangote was immediately available to comment. International lenders are weighing up the risk associated with a relatively long-term jumbo loan for a debut Nigerian borrower.

Dangote’s position as a leading company in one of Africa’s more economically stable countries is expected to appeal to deal-hungry emerging market lenders who faced a shortage of such sizeable loans in 2012.

“If any international banks want to make a new play for Africa then this is the deal to join,” one of the sources said.

Dangote forecasts a 38 percent rise in net profit to 81.5 billion naira for the first quarter compared with a year earlier, it said in a filing with the Nigerian Stock Exchange in late December

Treasuries gain for second day before U.S retail-sales report

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.S. Treasuries advanced for a second day, with 10year notes paring a weekly decline, before a report that economists said will show retail sales in the world’s largest economy stagnated in March.

U.S. government securities dropped 0.5 percent this week through yesterday, leaving them little changed for the year, Bank of America Merrill Lynch data show. Cyprus’s President Nicos Anastasiades will seek more help in addition to 10 billion euros of aid pledged by the euro area, said a government official speaking in Nicosia who asked not to be identified.

“Renewed jitters about

Cyprus following news they need more for a bailout, plus expectations that U.S. retail sales today will be soft, are clearly giving Treasuries a boost,” said Nick Stamenkovic, a strategist at broker, RIA Capital Markets Ltd. in Edinburgh. “We’re still stuck in this range of the last few weeks from 1.60 to 1.90 percent,” referring to the yield on U.S. 10-year notes.

Benchmark 10-year yields fell three basis points, or 0.03 percentage point, to 1.76 percent as of 6:58 a.m. New York time, according to Bloomberg Bond Trader data.

The price of the 2 percent note maturing February 2023 rose 9/32, or $2.81 per $1,000 face

amount, to 102 6/32.

Euro-area finance ministers are meeting in Dublin to review the state of Cyprus’s rescue package and the easing of bailout- loan terms for Ireland and Portugal.

Anastasiades will ask for a larger loan and more European Union structural funds and expects the request to be approved because of the difficult conditions his country faces, said the official. The president will make the request in letters to European Union President Herman Van Rompuy and European Commission President Jose Barroso. He has already spoken to EU Economic and Monetary Affairs Commissioner, Olli Rehn, the official said.

22 — Vanguard, MONDAY, APRIL 15, 2013

Banking & Finance BRIEF More winners emerge in Fidelity Bank’s 25th anniversary promo

By NKIRUKA NNOROM

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wenty-six additional winners have emerged in the on-going Fidelity Bank’s Cash and Cars Splash promo.

Twenty-one of them won total cash reward of N5 million, while the remaining five customers emerged winners of five brand new Hyundai Accent cars.

The draw, which was the fourth in the series, was witnessed by a team of representatives of Consumer Protection Commission, CPC, and National Lottery Commission, NLC. The draw, Thursday, brought the total cash reward given out so far by Fidelity Bank to N20 million, while 20 cars have also been given out.

According to Mr. Emeka Obiagwu, General Manager, e-Banking, Lagos Branch, who spoke during the draw that took place at the bank’s head office in Lagos, five more cars and N5million would still be given out at the final draw scheduled to take place next month.

He disclosed that all the items won in the previous draws have been given out to the lucky winners at different presentations witnessed by both agents of CPC and NLC He used the opportunity to call on people who are still undecided, including the bank’s customers who have not been topping up their deposits to do so, saying “There is still opportunity to save and win. The more they save, the more they win. The cars are still available and the cash are still available.”

Speaking at the end of the draw, Mr. Nwakauche Durugo, Manager, Regulation and Monitoring Department, National Lottery Commission, attested to the authenticity of the promo, said that the process leaves no one in doubt of the sincerity employed in choosing the winners.

He noted that the promo was transparent, while encouraging the bank to ensure that the items were given out.

Ngozika Obidike, Head, CPC Office in Lagos, said the Commission has been following up on the promo, and its investigations revealed that previous winners have all received their gifts.

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By OMOH GABRIEL

A

n International M a n a g e m e n t Consulting firm, KPMG has named Zenith Bank Plc the Most Customer-Focused Bank in Nigeria. In a declaration in its 2013 Banking Industry Customer Satisfaction Survey (BICSS) KPMG said Zenith Bank is best-in-class service delivery and ranked the top most in both the retail and corporate banking categories on the basis of a Customer Satisfaction Index (CSI), which took into account key factors like convenience, product/service offering, transaction methods and systems, pricing and customer care.

The survey covered more than 14,000 retail customers, 3,000 SMEs and 400 corporate/commercial organisations across Nigeria.

The retail customers surveyed mentioned excellent customer service (35 percent), financial stability (26 percent), image and reputation (11 percent), employer requirements (10percent) and proximity of branches (10 percent) as their top reasons for maintaining banking relationships.

On the other hand, the corporate/commercial organisations mentioned excellent service (29 percent), financial stability (27 percent), image and reputation (eight percent)

L-R: Chief V.E Uloko, Bekool & Associates Ltd; Mr Celestine Cliff, First indigenous Managing Director of Schlumberger; Mrs. Ebi Momoh, Regional Head of SME, Standard Chartered Bank Nigeria and Chief Patrick Osunu, Patos Multilink Limited, during a Business Parley organised

by Standard Chartered Bank for Shell Nigeria Limited vendors in Port Harcourt recently.

ZENITH most customer focused bank in Nigeria — KPMG banking support of business (seven percent) and efficiency of credit processing (eight percent) as the top reasons for maintaining banking relationships.

In the current edition of the survey, KPMG introduced a survey to understand the perception of young professionals on how they intend to interact with their

banks in the future – about 50 percent preferred not to visit a branch. This fits into Zenith Bank’s current disposition as a leading technologically advanced financial services provider in Nigeria.

Just last week, Zenith Bank consolidated its position in Nigeria’s banking industry with an impressive operating result that indicated excellent

Nigeria team leaves for IMF, World Bank Spring meetings on a positive note By OMOH GABRIEL

A

Nigerian delegation to the Spring Meetings of the IMF/World Bank will leave for Washington today (Monday). The delegation made up of Minister of Finance, Dr. Ngozi OkonjoIweala, CBN Governor, Sanusi Lamido Sanusi; and other Ministry of Finance and CBN officials will be engaging with their counterparts at IMF and World Bank meeting on a positive note.

The IMF staff team that visited the country last month had given the country’s economic management team a pass mark. The report, which read in part said “Executive Directors commended the authorities for prudent macroeconomic policies that have underpinned a strong economic performance in recent years. Looking ahead, Directors agreed that

widespread unemployment and poverty remain key challenges for policymakers, and called for renewed efforts to make economic growth more broad-based and inclusive.

“Directors supported the authorities’ strategy of consolidating the fiscal position while opening up policy space for needed investment in infrastructure and human capital. To this end, they underscored the need to improve tax administration, better prioritise public expenditure, strengthen public financial management, and improve the fiscal framework. In particular, they encouraged the authorities to reduce poorly-targeted fuel subsidies, adopt a rule to set the reference oil price in the budget, and fully operationalise the Sovereign Wealth Fund as soon as possible. Efforts to mobilise public support for these reforms should be intensified.

“Directors considered the current tight monetary stance to be consistent with the authorities’ objective of reducing inflation to single digits. They also took note of the staff’s assessment that the exchange rate in real effective terms is broadly in line with fundamentals. Directors commended the authorities’ success in restoring financial stability after the 2009 banking crisis. In light of this achievement, they recommended winding down the operations of the Asset Management Corporation of Nigeria, AMCON, to curb moral hazard and fiscal risks.

Directors welcomed the central bank’s commitment to address supervisory and regulatory gaps identified in the Financial Stability Assessment Update, particularly the need to strengthen cross-border supervision and the regime against money laundering and terrorism financing.

performance in all parameters and gives credence to an increasing market share and acceptance of the brand by the Nigerian and international banking public. The result confirms Zenith’s leadership position in the industry as it became the first to cross the N100 billion Profit After Tax mark in a financial year.

Evidently, Zenith Bank places high premium on exceptional service delivery in its drive to consistently exceed customer expectations and the bank’s well articulated strategy to meet and surpass customer expectations has continued to pay-off hugely. With its clear understanding of its market and environment, the bank is well positioned to continue to create value for its teeming customers.

In 2012, Zenith Bank was named Best Commercial Bank in Africa by Cfi group in view of its sterling work at home over the years and given the excellent progress already made in distant markets within Africa and far further afield.

The bank has built a brand as a reputable, international financial institution recognised for innovation, superior customer service and performance, while creating premium value for all stakeholders. Today, the bank is known for its innovation, solid financial performance, stable and dedicated management, highly-skilled personnel, cutting edge ICT, strategic distribution channels and asset quality.

Vanguard, MONDAY, APRIL 15, 2013 — 23

Banking & Finance

GTBank introduces social banking service G

uaranty Trust Bank Plc has unveiled its ‘Social Banking’ service on Facebook, a pioneering service which allows the public open GTBank accounts and get Customer Service support on Facebook.

Speaking about the innovation, Chief Executive Officer of GTBank, Mr. Segun

Agbaje, said the bank’s objective is to engage the public where they work, live or play and the new service would enable persons on social networks like Facebook commence a banking relationship and perform transactions 24/7, safely and conveniently, without having to leave the platform.

According to Agbaje ‘This novel service presently allows people open GTBank accounts and get customer service support on Facebook and in a couple of weeks we will introduce new service options that include money transfers, airtime purchases and bills payments’. He further affirmed that GTBank was

committed to the convenience of its stakeholders and the bank would continue to introduce value adding alternative channels into the future.

GTBank has been at the forefront of industry innovations within the Nigerian financial service sector over the last 22 years.

The bank prides itself as the

first Nigerian institution to have recognized online/social channels as an emerging service point and says it has over one million followers on Facebook. Additionally, the bank recently introduced GTBank Mobile Money, a secure application that allows customers and non GTBank customers perform transfers and payments from their mobile phones to any mobile phone subscriber within the country.

JP Morgan makes record quarterly profit

J

From left: Mr. Wale Oyedeji, Executive Director; Mrs. Olutola Omotola, Executive Director; Mr. Segun Agbaje, Managing Director, Mr. Ohis Ohiwerei, Executive Director and Mrs. Deola Ogunyemi, Deputy General Manager Retail Division all of GTBank at the launch of the GTBank Social Banking in Lagos

P Morgan has reported record first quarter profits of $6.5bn (£4.2bn) and says there are signs the US economy is “healthy and getting stronger”.

The bank said it had reported a strong performance across all businesses. Retail banking deposits rose 10 percent, new mortgage orders rose 37 percent and the company said it had kept the top spot for earnings from investment banking.

Mortgage lender Wells Fargo also released results, and it also reported record first quarter profits. Wells, the fourth biggest bank in the US, saw net income rise by 22 percent to $5.2bn helped by cost cutting. Wells Fargo

chairman and chief executive, John Stumpf, said: “Loans and deposits demonstrated continued growth in a challenging economic environment.”

JP Morgan said it had cut mortgage loan loss reserves by $650m and property asset reserves by $500m. The bank was also boosted by a big drop in spending on litigation, which was $0.3bn in the first quarter of 2013 compared with $2.7bn a year earlier. It was struck by massive losses last year as a result of the “London Whale” trades, which cost the bank $6bn.

These came in the corporate and private equity division, which recorded a profit of $250m in the quarter.

staying on.

Second, I saw it as part of my purpose to have a policy which extended ownership of capital more widely. It is most people’s ambition to have something to pass on to their children. In doing so, we link the generations and create a deep and abiding interest in the future. I have already outlined how we achieved this goal for those leaving an industry, but we also wanted those remaining in the newly privatised industries to have a greater stake. So we reserved a block of shares for employees which they could purchase at a discount.

Third, those companies which could not be floated on the stock market were sold to companies who were willing to buy them at the best possible price. Fourth, some industries were so thoroughly outdated that they would have cost too much money to modernize. Others such as shipbuilding had lost their markets as business had moved to the Asia Pacific. The subsidies required by our shipyards each year were equal to their entire wage bill, and we were told that we could not stop them because people would lose their jobs.

Clearly we could not go on that way. Some shipyards had to be closed, others were

offered for “sale.”

It was an unusual type of sale, buyers were not asked to pay anything for the land or for the plant. They were even offered substantial capital sums to cover the necessary redundancies and to help build a modern effective industry in the private sector. This recipe, also applied to other industries, offered a way forward in the worst cases.

We faced vociferous opposition, particularly when we came to privatise the public utilities, but the facts show that they too are much more efficient in private hands and that they have become some of our most successful businesses.

Altogether, through our programme, we demonstrated that we could rebuild an enterprise society and we showed that privatisation worked. It was better for the consumer, better for the taxpayer and better for the health of an industrial and commercial country. Many others followed our example.

Indeed as the Economist put it: Nationalisation, once all the rage, is out; privatisation is in.

And the followers of the new fashion are of the left, the right and all hues in between. *Culled from Wall Street Journal

Economy Margaret Thatcher: Rebuilding an enterprise society through privatisation

By MARGARET THATCHER

R

eason Foundation’s Annual Privatization Report published this piece by former British Prime Minister Margaret Thatcher in 2006: All too often the state is tempted into activities to which it is either ill-suited or which are beyond its capabilities. Perhaps the greatest of these temptations is government’s desire to concentrate economic power in its own hands. It begins to believe that it knows how to manage business. But let me tell you, it doesn’t as we discovered in Britain in the 1970s when nationalisation and prices and incomes policy together deprived management of the ability to manage. And when we came to privatise and deregulate in the 1980s it took some time before these skills returned.

A system of state control can’t be made good merely because it is run by “clever” people who make the arrogant assertion that they “know best” and that they are serving the “public interest” interest which of course is determined by them. State control is fundamentally bad because it denies people the

power to choose and the opportunity to bear responsibility for their own actions.

Conversely, privatisation shrinks the power of the state and free enterprise enlarges the power of the people.

The policies we introduced in the 1980s were fiercely opposed. Too many people and industries preferred to rely on easy subsidies rather than apply the financial discipline necessary to cut their costs and become competitive. Others preferred

the captive customers that a monopoly can command or the secure job in an overmanned industry, rather than the strenuous life of liberty and enterprise. But we understood that a system of free enterprise has a universal truth at its heart: to create a genuine market in a state you have to take the state out of the market.

For Britain, the 1970s was a decade of decline: even worse than that, our people seemed to accept it. Our nationalised industries were inefficient, overmanned and weakened by restrictive practices.

Government had no business being in business. We tackled privatisation in the way which best suited us.

First, we had to put the balances of the industries we wanted to sell in good order.

Where redundancies had to be made because of over manning we were determined to ensure that those who lost their jobs would receive a capital sum related to the length of their service. For the first time in their lives this put capital into their hands and each industry helped them to find other jobs or to set up businesses of their own. Thus we made clear our concern to look after those who were losing their livelihoods as well as those who were

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24 — Vanguard, MONDAY, APRIL 15, 2013

Corporate Finance

By NKIRUKA NNOROM

T

he Central Securities Clearing System, CSCS, Plc has announced the appointment of Mrs Ifueko Omoigui Okauru, . Sola Adeeyo, Mr. Abubakar Danlami Sule and Mr. Bayo Olugbemi to its Board of Directors.

Mrs Ifueko Omoigui, who was the first Executive Chairman of the Federal Inland Revenue Service, FIRS, and Sola Adeeyo, a director and owner of Protea Hotel, Oakwood Park were appointed as Independent Directors, while Bayo Olugbemi, Managing Director/CEO, First Registrars Limited and Abubakar Danladi Sule, Executive Director in charge of Corporate Banking, Sterling Bank Plc were appointed as Non-Executive Directors.

Commenting on the appointment, Mr. kyari Bukar, Managing Director, CSCS, said “the appointment was in compliance with enshrined Corporate Governance Code of the Securities and Exchange Commission (SEC). He stated that Messrs. Sule and Olugbemi’s appointment as Non-Executive Directors had received unanimous approval at the company’s last Annual General Meeting (AGM) held in Lagos, while that of Omoigui-Okauru and Adeeyo would be presented to shareholders for ratification at the next Annual General Meeting (AGM).

Speaking further, Kyari said “These appointments demonstrate the company’s commitment to sustaining its leadership position as a significant financial market infrastructure in the Nigerian capital market.

Ifueko Omoigui is the current Managing Partner of Compliance Professionals Plc. and also a part-time member of the United Nations (UN) Committee of Experts on International Cooperation in Tax Matters as well as a member of the Board of Trustees of DAGOMO Foundation Nigeria (Limited

by Guarantee) - a family based Non Governmental Organization geared towards community development.

Adeeyo is also the C M Y K

FirstBank: Strategising to retain retail dominance

By BABAJIDE KOMOLAFE

F

irstBank Plc has commenced implementation of strategies designed to maintain its position as the leading and best retail bank in Nigeria.

It would be recalled that last month and for the second year running, FirstBank emerged the Best Retail Bank in Nigeria in 2012 at the Excellence in Retail Financial Services 2013 Awards organised by the Asian Banker. FirstBank beat other contenders in a three-month evaluation process which was based on a balanced and transparent scorecard that was used to determine the ranking of various retail banks in Nigeria.

Explaining the factors that informed the choice of FirstBank, Chris Kapfer, Director of Research of the Asian Banker, said, “FirstBank was picked based on its performance as market leader in deposits and retail loans with a huge lead compared to its competitor. It is the first financial institution in Nigeria to cross the 5 million mark in issued payment cards, the only bank which is able to issue an ATM card in 15minutes, its wide reach and good financial performance as well as its strong focus on customer service.

“FirstBank has a large customer base of six million to its retail customers, with people and a large market the theme-Customers First. share in retail loans and This prompted the deposits. The Bank grew its development of multiple retail loans by over 44% in services channels via 2012, besides its revenue and electronic payment platforms, operating profit. With its designed to make banking wide reach and good faster and convenient for financial performance, First customers. These include Bank of Nigeria stood strong massive deployment of on our balance scorecard”.

ATMs, Point of Sales (PoS) Mr. Bisi Onasanya, terminals, and Firstmonie, Managing Director/Chief which is a mobile money Executive, FirstBank service. The effectiveness of attributed the Award to the these strategies is reflected in bank’s unrelenting the performance indices of the commitement to deepening bank in terms deposit base its retail dominance with the and transactions across these launch of innovative products channels. and services, tailored to suit For example, FirstBank the changing times and ever commands 16 per cent of all growing customer base. the customers deposit in the “Emerging the ‘Best Retail country, and 26 per cent total Bank in Nigeria’ for 2012 deposit in savings deposit after a stringent three-month products. evaluation process is a clear Furthermore, in electronic indication of the effectiveness payments, FirstBank accounts of our strategy with regards for over 30 per cent of to sustaining business electronic transactions and services and retail financial over 31 per cent of total products which, has helped Verve cards issued on the to positioned our customers InterSwitch network – the as first at all times”, she said dominant switching and Investigations revealed that payment processing platform in addition to its Pan-African in the country. Also, and global vision, FirstBank FirstBank’s Verve cards has been deploying strategies accounts for 28 per cent of to strenghten service delivery the total cash transactions in

•Onasanya, MD/CEO, FirstBank

,

BRIEF Ifueko Omoigui, 3 others join CSCS Board

Last year, FirstBank crossed the 5 million mark of issued payment cards of about 20 million cards issued in Nigeria, while its network of ATMs across the country dispensed over 1.3 trillion naira

,

the industry on a monthly basis in terms of volume and value.

Last year, FirstBank crossed the 5 million mark of issued payment cards of about 20 million cards issued in Nigeria, while its network of ATMs across the country dispensed over 1.3 trillion naira.

Over 90% of the Bank’s issued card base is active, which is significantly above the average industry active card rate of 75%. The Bank also leads the market in the number of ATMs and of Pointof-Sale (POS) terminals deployed. With over 2,100 ATMs of about 10,500 deployed by all the banks and over 18,500 POS, of about 114,500 in Nigeria. To sustain these feats, FirstBank intends to aggressively promote Firstmonie, its mobile payment service platform, to tap into the over 90 million mobile phone lines in the country to further expand its customer base.

Also, the bank intends to leverage on the services of credit bureaus in Nigeria, to drive its Naira Credit card product to increase its loan generation to retil customers.

The Bank has also commenced a project for revamping its Internet banking solution to meet the increasing demands from users for a more responsive, easy to use online banking portal while it deployed and marketted new services on the platform through the use of more recent and agile technologies. The project will add significant impetus to the Bank’s drive for improved service delivery.

In retail payments, the FirstBank has commenced implementation of contactless payments to drive the use of electronic means for low value payments, which will further deepen the adoption of electronic transactions in the country.

According to Onasanya, the Chief Executive of the Bank, “Cash is still largely the dominant means for retail payments as it is the fastest means at the moment for such exchange of value. We are convinced that the speed and convenience of contactless payments will be important in the fight against cash in the retail space.”

In addition to the abive, the Bank is implementing a more robust Card Management System, with direct connectivity to major Card Associations to further improve turn-around-time for issuance of cards and resolution of issues as well as to drive down the cost on customer transactions.

Consequently, FirstBank will then be able to benefit from economies of scale, having achieved such a significant critical mass of card holders.”

Vanguard, MONDAY, APRIL 15, 2013 — 25

Corporate Finance

NSE Index falls by 2.3%

…as Total declares N4.7bn PAT

By CHINEDU IBEABUCHI

T

rading activities on the Nigerian Stock Exchange, NSE, recorded a downward trend last week resulting to a.2.29 percent decline in the All Share Index.

Specifically, the All Share Index declined by 787.16 basis points to close at 33,514.14 points from 34,301.30 points.

Another market indicator, the market capitalisation also depreciated by 2.46 percent or N270 billion to close at N10.71 trillion from N10.98 trillion.

The depreciation in the Index last week was as a result of the losses recorded in the share prices of U A C N Plc, Guinness Nigeria Plc, Lafarge Wapco Plc, Mobil Oil Nigeria Plc, among other share price losers.

Meanwhile, Total Nigeria Plc has declared a N4.7 billion profit after tax for its operating year ended 2012, representing an increase of 22.5 percent, when compared to N3.8 billion recorded in the same period of 2011.

A review of its full year audited financial report submitted to the Nigerian Stock Exchange, showed that

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the company grew its revenue by 25.2 percent to N217.8 billion from N173.9 billion in 2011.

Its gross profit appreciated by 16.9 percent, rising to N26.21 billion from N22.42 billion in 2011.

The company’s profitability was eroded by administrative expenses of N14.31 billion, which went down by 17.7 percent from N12.16 billion in 2011 and finance costs of N1.57 billion.

Total’s profit before tax rose by 21.2 per cent to N4.67 billion as against N3.81 billion in 2011.

Its balance sheet information showed that its total assets stood at N76.07 billion, increasing by 29.5 per cent, from N58.72 billion in 2011; while its net assets rose by 12.7 percent to N11.30 billion in 2012 from N10.03 billion in corresponding period of 2011.

McNichols targets 300% production expansion

BY WILLIAM JIMOH

M

c N i c h o l s Consolidated Plc said it plans to leverage the new Nigerian sugar master-

plan to expand its sugar production with a view to boosting shareholders value.

Chimaraoke Ekpe, the company’s Chief Executive Officer disclosed this, Friday,

while ringing the closing bell on floor of the Nigerian Stock Exchange.

He said that the company will inject fresh capital for the expansion project through the banks, internally generated revenues and through vendor financing.

“We are expanding our capacity to about 300 percent. The key purpose of this is to take advantage of the new Nigerian sugar master-plan which was launched January 1st this year which places a restriction on the importation of sugar.

“We are building a sugar mill to meet the critical raw materials which we lack, that is the brown sugar. For the other raw materials, they are very much available in the market” he said.

Mr. Ekpe maintained that the company will at the end of its expansion expect a very huge market demand, a reasonable market growth above an average of what it has currently and which will impact positively on the company’s bottom line.

Commenting on the inability of the company to declare dividend over the past few years, Ekpe said, “We have not been performing below expectation because we are

listed in the market in December 2009 and our first financial result after the listing was in 2010. That was the only year we made a loss “In 2011 and 2012, we made profit. After 2010, it has been over a 100 percent growth because we moved from a negative margin position to zero position and then, to a profit position. So, we have done pretty well looking at where we are coming from.”

“For every business, especially every manufacturing company, you have to experience such decline sometimes. You have to grow from zero and get to break even. We started our business in 2009. We are into manufacturing. We are not traders that buy and sell.

Rather, we deploy equipment and resources and it will take a little while to grow the demand to the point where you break even and that is the level we attained in 2010.

“The challenges for our company are the same with all SME companies in Nigeria and that is the problem of accessing finance. It has been a challenge and that is why we want to raise capital. We are sure that through our listing, we will be able to overcome the hurdles,” Ekpe said.

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54.49 10.07

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

50.00

9.10 8.49 78.05 2.99 9.00 0.77

35.00 972.00

32.27 3.55 2.60

35.50 52.04

8.77 6.14 14.90 2.96 4.98 23.79 5.87 2.85 6.60 10.00 0.70 1.40 21.80

0.50 0.75 1.03 0.50 0.50 1.87 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 2.35 0.50 0.72 0.50 0.50 0.56 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.39

0.90

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

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

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

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

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

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

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

Other Financial Institutions Africa Prudential Plc Crusader (Nigeria) Plc Deap Capital Management & Trust Plc FBN Holdings Plc Nigeria Energy Sector Fund Royal Exchange Assurance Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

1.55 0.50 2.02 18.52 552.20 0.68 103.50 13.10 1.10

0.50 0.50

4.78 262.00 21.25 164.05 0.77

Mortgage Carrier, Broker and Sector Abbey Building SOC Aso Savings and Loans Plc Resort Savings & Loans Plc Union Homes Savings Plc

0.50

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

100.00

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

15.22

1.18 5.43 1.71 5.42 1.13 55.00

Real Estate Development UACN Property Development

2.82

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

0.50 106.00 23.45

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

Livestock/Animal Specialities Livestock Feeds Plc

0.50

Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc

Company

Opening Price (N)

Capital Market

1.55 0.50 2.02 18.83 552.20 0.71 103.50 13.10 1.20

0.50 0.50 0.50

0.90

0.50 0.82 1.02 0.50 0.50 1.82 0.50 0.54 0.50 0.50 0.50 0.50 0.50 0.50 0.50 2.58 0.50 0.75 0.50 0.50 0.60 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.26

8.84 6.34 14.90 2.96 4.99 24.49 5.87 2.95 6.60 10.00 0.70 1.39 21.66

35.50 52.79

32.27 3.55 2.60

35.00 970.00

9.11 8.55 78.00 2.90 9.15 0.78

50.00

4.78 261.00 21.25 162.00 0.75

0.50

100.00

15.22

54.49 10.07

1.07 5.43 1.86 5.42 1.20 55.00

2.82

0.50 104.00 23.45

0.50

Closing Price (N)

80,285 1,603,217

106,741

3,635,039 22,000 900 11,161,407

200,000 2,000

179,690

328,000 2,155,721 269,000 1,655,560 665,000 867,100 50,000 62,500 10,000 1,725 27,223 1,670,890 50,000 15,000 10,000 659,021 173,916 979,983 104,870 120,000 1,085,238 15,000 850,000 550 3,000 744 34,400 226,200 7,045,174

32,445,354 25,243,189 55,313,098 16,031,354 2,725,258 13,242,543 4,611,080 21,565,886 21,198,451 1,410,788 18,977,894 3,917,517 38,299,089

449,205 1,900,957

79,200 146,540 11,923

1,805,660 11,530

229,408 1,118,759 927,541 1,959,309 505,636 1,210,090

8,944

4,000 1,533,899 1,095,800 2,528,029 20,000

10,000

2,860

35,200

35,657 36,752

214,923 3,459 561,060 500 16,268,213 300,157

278,069

71,400 959,066 242,718

2,000

Quantity Traded

0.75 0.50 2.02 20.00 552.20 0.78 103.50 15.69 1.41

1.57 0.50 0.50 0.50

6.00 1.18

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

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

41.02 47.39

36.19 5.54 2.88

37.27 840.10

19.90 16.20 95.00 6.60 6.70 0.88

51.49

4.63

255.00 7.10 100.00 1.01

0.50

100.00

20.15

62.26 8.28

2.54 7.60 8.82 8.28 1.82 42.50

0.66

0.50 24.58 8.30

0.50

Year High

0.00 0.50 2.02 8.57 552.20 0.50 103.50 10.64 0.03

1.37 0.50 0.50 0.50

0.00 0.92

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

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

21.02 27.60

33.96 2.91 2.88

8.33 400.00

4.31 4.02 57.00 2.31 3.80 0.50

,39.00

2.23

186.00 5.23 72.50 0.93

0.50

97.00

11.59

32.96 3.01

1.45 6.43 5.89 5.52 0.50 28.70

0.48

0.50 14.53 6.40

0.50

Year Low

0.19 0.00 0.00 2.03 12.68 0.13 10.56 0.87 0.21

0.19 0.02 0.00 0.00

0.04 0.92

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

0.16

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

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

0.82 1.44

13.89 0.61 0.00

1.35 25.43

0.00 0.91 4.09 0.39 1.01 1.13

2.69

9.95 0.41 5.08 0.00

0.00

0.00

11.75

1.69

4.11 4.73

0.16 0.31 0.00 0.35 0.24 6.89

0.11

0.10 7.33 2.75

0.09

E.P.S.

9.16 0.00 0.00 9.85 43.55 6.00 9.71 18.03 6.71

47.6 7 25.00 0.00 0.00

150.00 10.56

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

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

4.39 32.91

2.44 7.07 0.00

27.61 32.84

16.91 14.38 16.89 16.92 5.75 8.83

13.92

0.00

19.98 16.29 22.22 0.00

0.00

8.51

7.33

10.11 2.26

5.18 20.74 0.00 15.77 3.64 4.14

15.00

50.00 2.77 4.37

P.E. Ratio

1.70 0.50

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

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

0.50

3.87 5.58

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

0.78

Road Transportation Associated Bus Company Plc

4.90

1.85 1.90 2.52 4.95

Speciality Interlinked Technologies Plc

0.50 Printing & Publishing.

Academy Press Plc Learn Africa Plc Studio Press Nig. Plc University Press

6.27 0.72

0.53

3.95

1.92

Media/Entertainment Daar Communications Plc

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

Employment Solutions C & I LEASING PLC

Courier/Freight/Delivery Red Star Express Plc Trans-National

Automobile/Auto Part Retailers RT Briscoe Plc

Afromedia Plc

SERVICES

0.50

20.50 0.50 26.33 3.16 13.65 123.00 22.40 180.00

Intergrated Oil and Gas Services Oando Plc

Hospitality Tantalisers Plc

0.65 16.00

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

3.98 10.43 12.68 4.30 1.05 2.92 0.66

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

1.44 0.50

1.32

Paper/Forest Products Thomas Wyatt Nig. Plc

Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans

0.50

Non-Metalic Mineral Mining Multiverse Plc

7.94 10.55

Metals Aluminium Extrusion Ind Plc

7.85

1.99 2.74

25.97 10.00 40.00 9.34 156.22 0.50 1.70 83.90 5.70 1.54 10.93

NATURAL RESOURCES Chemicals BOC Gases Plc

Tools and Machinery Nigerian Ropes Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

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

17.00 2.29

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

0.50

0.50

4.08 1.70 1.60 48.00 2.21 0.81 8.17 2.07

0.50

2.23

Computers and Peripherals Omatek Ventures Plc

ICT Computer Based Systems108 Courteville Investment 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

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

Opening Price N

3.90 6.13

4.90

0.71

1.85 1.71 2.52 4.95

0.50

6.27 0.75

0.53

3.95 2.78

1.87

0.50

0.50

20.50 0.50 26.33 2.85 14.14 121.50 22.40 180.00

16.00

0.70

3.98 10.43 12.68 4.30 1.05 2.78 0.66

1.44 0.50

1.80 0.50

1.32

0.50

10.55

7.94

7.85

1.99 2.70

25.97 10.00 40.00 9.34 156.00 0.50 1.70 83.00 5.70 1.45 10.93

0.50

17.00 2.29

0.50

0.50

4.80 1.70 1.62 48.00 2.21 0.73 8.17 2.07

0.50

2.23

Closing Price N

168,990 1,197,527

20

250,815

20,840 400,000 625 31,511

3,700

10,000 1,186,296

622,061

155,890

660,061

11,000

400

82,191 500 46,739 252,903 216,299 509,834 20,007 104,526

1,600,419

3,591,920

6,888 100 1,100 29,198 200 84,311 2,749,340

2,000 1,000

19,000 2,000

38

300,000

100

32,376

40

2,000 2,717,101

180,295 30.787 112,030 104,032 561,286 500 102,162 407,093 10,000 888,481 1,000

2,307,692

8,000 1,146

200,500

363,778

1,366 15,862 518,768 152,000 26,625 176,951 5,234 25,000

3,500

3,057

Quantity Traded 9.52

2.78 11.75

5.15

0.80

0.00 6.82

3.68

0.50

400 2.07

1.64

3.67 3.45

3.65

0.72

1.57 6.50

4.90

0.50

3.17 0.30 0.00 3.60

0.48

3.00 1.33

0.90

2.65 2.78

1.30

0.51

141.00 63.86 195.50

163.50 2,100 240.00 200

0.50 0.50 5.71 3.89

27.99

0.87

3.98 12.71 13.97 3.60 1.05 2.92 0.63

1.33 0.50

1.62 2.58

1.38

0.50

10.70

6.80

8.26

5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

0.50

3.25 3.25

0.50

0.50

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

0.50

37.10 0.70 32.60 5.59

78.97

0.97

3.98 15.58 15.03 4.30 1.86 2.92 0.63

1.51 0.99

2.50 2.58

1.38

0.50

12.39

9.20

8.69

6.91 3.60

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

1.47

9.31 3.59

0.50

0.52

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

0.50

10.54

Year Low

0.60 12.53

0.00

0.00

0.54

0.25

0.00

0.34 0.92

0.04

0.60 0.25

0.21

0.00

0.01

6.11 2.98 14.63

4.93 0.00 4.25 0.61

1.73

0.19

0.00 3.90 0.90 1.22 0.30 0.07 0.00

0.03 0.00

0.11 0.00

0.00

0.01

0.13

0.78

0.00

0.5 0.25

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00

0.00

0.00 0.01

0.00

0.10

0.19 0.44 2.62 0.20 0.09 0.00 0.00

0.00

0.00

E.P.S

4.22 8.75

0.00

0.00

27.69

12.19

0.00

34.09 2.12

11.25

4.91 11.12

8.19

12.75

11.11 19.23 17.07

6.99

7.40 0.00

4.17

6.06

0.00 3.26 0.00 3.52 6.18 41.71 0.00

28.80 0.00

13.15 0.00

0.00

0.00

85.77

7.37

0.00

39.60 9.16

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

0.00

1.43 0.00

12.50

10.00

9.05 14.13 0.00 0.00

88.50 0.00 3.07

0.00

0.00

P.E Ratio

as at Friday, April 12, 2013

Year High

Daily Stock Market Report

26 —Vanguard, MONDAY, APRIL 15, 2013

Vanguard, MONDAY, APRIL 15, 2013 — 27

C M Y K

28 — Vanguard, MONDAY, APRIL 15, 2013

Interview

Global policy actions needed to stay N

ext week, the IMF holds its Spring Meetings, when we welcome economic policymakers from 188 countries—our global membership—to Washington.

We will release our latest economic forecasts at that time. I will not provide those numbers today; but I will provide some sense of the major issues, here in New York. The big question, of course, is: where does the global economy stand? Five years after Lehman, is the world finally getting back on a positive path?

I wish I could give you a simple answer but, unfortunately, the truth is a bit more complicated than that, and looks more like a mosaic.

The good news is that after a particularly volatile period, financial conditions are showing signs of improvement. Thanks to the actions of policymakers, the economic world no longer looks quite as dangerous as it did six months ago. Yet, we do not expect global growth to be much higher this year than last. We are seeing new risks as well as old risks.

In far too many countries, improvements in financial markets have not translated into improvements in the real economy—and in the lives of people. The differences between regions are also starker than ever. We are now seeing the emergence of a “three-speed” global economy— those countries that are doing well, those that are on the mend, and those that still have some distance to travel.

These three groups face different challenges, largely interconnected, but they share the need to put in place policies that will repair the consequences of the crisis and prevent its recurrence. Walt Whitman put it so well when he said; “Keep your face always toward the sunshine, and shadows will fall behind you.” So I would like to talk about two things today: *First, the policy requirements in the three groups of countries needed to stay ahead of the crisis. *Second, the overarching issues that transcend these different groups, and what they need to do together to stay ahead of the crisis.

Let me begin with the priorities for the three different groups.

The first “speed” group includes the countries that are doing well.

This group includes, essentially, the emerging markets and developing countries. Because many had grappled with crises in the past, they were well prepared, and entered the crisis from positions of strength— with sound policies under their belts. Think East Asia, for example.

In fact, for the past half decade, the emerging markets and developing economies have led the world’s recovery—accounting for remarkable three-quarters of global growth. After a slight slowdown last year, they are bouncing back again.

Today, developing Asia and SubSaharan Africa are the two fastestgrowing regions of the world. These C M Y K

Many emerging markets are looking at the advanced countries with some serious concern. Many are worrying about the potential fallout from exceptionally loose monetary policy, especially from unconventional easing

,

countries will legitimately want to consolidate their success.

At the same time, many emerging markets are looking at the advanced countries with some serious concern.

Many are worrying about the potential fallout from exceptionally loose monetary policy, especially from unconventional easing. Let me emphasize that, in present circumstances, it makes sense for monetary policy to do the heavy lifting in this recovery by remaining accommodative.

We know that inflation expectations are well anchored today, giving central banks greater leeway to support growth. But experience also tells us that this can have unintended consequences. Low interest rates push people to take on more risk—some of which justified, some of which not.

Across the emerging economies, policymakers worry that exceptionally loose monetary policy will affect exchange rates and capital flows, and threaten financial stability through high asset prices and rapid credit growth. The greatest worry is that just like “ what goes up comes down”, “ what comes in goes out”— a sudden reversal of large and volatile capital flows that can bring down the economy with it.

Right now, these risks appear under control. Capital is flowing to emerging markets mainly because of good policies and good prospects in these markets. But we must be alert to any warning signs. Corporations in emerging markets, for example, are taking on more debt and foreign exchange exposure. Over the past five years, foreign currency borrowing by firms in emerging markets has risen by about 50 percent. Over the past year, bank credit has increased by 13 percent in Latin America and 11 percent in Asia.

When the tide turns, and interest rates pick up again, these hidden dangers will be exposed to the cold light of day. So emerging markets will need to boost their defenses.

This includes reconstituting fiscal policy space that eroded during the crisis as well as stepping up banking regulation and supervision. The

Christine Lagarde right macroprudential policies obviously depend on different circumstances. They will include limiting credit growth in rapidly-expanding areas, imposing capital requirements that move with the cycle, reinforcing financial markets, and closely monitoring foreign exchange exposures.

The advanced economies also bear some responsibility here, in terms of delivering a better fiscal policy and more financial repair—and thus relieving some of the burden on monetary policy. With the right set of policies on both sides of the capital flow equation, the risks can be managed—and the emerging markets and developing countries can expect to continue their forward momentum in the “first speed” group of economies.

L

et us turn to the second group of the three “speeds”—countries on the mend.

This group of countries consists of those that have come to grips with some fundamental policy issues. This includes the United States, but also other countries like Sweden and Switzerland,

,

Introduction: Status of the global economy

,

By CHRISTINE LAGARDE

The advanced economies also bear some responsibility here, in terms of delivering a better fiscal policy and more financial repair—and thus relieving some of the burden on monetary policy

,

Vanguard, MONDAY, APRIL 15, 2013 — 29

Interview

y ahead of economic crisis for example. Let me dwell on the United States for a moment: the crisis began here, a result of financial excess. Since then, the United States has made rapid and substantial progress in repairing its financial system, as well as the household debt situation. This is paying off: credit conditions, housing markets, and employment have begun to tilt up. We are seeing steady growth underpinned by solid private demand. This does not mean that everything is settled. Far from it.

An outstanding issue is that public finances appear unbalanced. Adjustment is too aggressive in the short term, and too timid in the medium term. This adds to uncertainty and casts a shadow on the recovery.

Yes, the fiscal cliff has been avoided. But this year, fisChristine Lagarde cal adjustment is still outsized, at 1¾ percent of GDP. Sequestration alone—if not reversed—could cut a half percent of GDP from growth. This risks throwing away needed growth, especially at a time when too many people are still out of work. It is also an extremely blunt instrument, imposing deep cuts in many vital programs— including those that help the most vulnerable—while leaving untouched the key drivers of long-term spending.

,

T

urning to these longer-term issues: yes, progress has been made, with the def icit falling over 5 percentage points of GDP since 2009. Despite this reduction, it is still among the highest of the advanced economies. In fact, government debt is expected to hit 108 percent of GDP this year. Without policy action, the trajectory is unsustainable. At this point in the recovery, it is more important than ever to put in place a credible, mediumterm roadmap to bring down the debt—a balanced plan made up of savings in entitlement spending plus additional revenues.

Such a plan would support the recovery in private demand. This is the major policy challenge facing the United States today and it must be met. Otherwise, the substantial gains that have been made can be too easily lost.

Let us now turn to the “third speed” group of the global economy—the countries that still have some distance to travel. These include the Euro Area and Japan.

Starting with the Euro Area, European policymakers have accomplished a lot over the past year or so—including the European Stability Mechanism, the ECB’s Outright Monetary Transactions, the single supervisory mechanism, and the agreement to help relieve the debt burden of Greece. We should applaud this—it is not easy for 17 countries to agree to and implement such major policy initiatives in such a relatively short time.

At the same time there is still a lot to do.

Especially in the periphery, many banks are still in an early stage of repair—not enough capital and too many bad loans on their books.

Even outside the periphery, there is a need to shrink balance sheets, reduce reliance on wholesale funding, and improve business models. Because of insufficient financial repair, monetary policy is “spinning its wheels”— meaning that low interest rates are not translating into affordable credit for people who need it. The plumbing is clogged up, and we are seeing more financial fragmentation.

Across the European periphery, credit has contracted by 5 percent since the onset of the cri-

Global policymakers have certainly made significant progress on more stringent capital and liquidity requirements and capital surcharges for global megabanks, as well as clear standards for supervision and resolution

,

sis, hitting small and medium-sized enterprises particularly hard. So the priority must be to continue to clean up the banking system by recapitalizing, restructuring, or—where necessary—shutting down banks.

In an economic and monetary union, financial problems are common problems. So the Euro Area needs more collective policy solutions. One option is direct recapitalization by the European Stability Mechanism of troubled banks that have systemic implications.

Beyond this, the Euro Area needs a real banking union to strengthen the foundations of monetary union. This means complementing the single supervisory mechanism with a single resolution authority, and deposit insurance backed by a common fiscal backstop. Only then can the poisoned chord between weak banks and weak sovereigns be forcefully cut.

Only then can monetary policy be fully effective.

Only then can financial stability be fully assured.

The Euro Area countries are prominent among those that still have some distance to travel. So is Japan.

The priority here, however, is to finally break free of the deflation trap and restore economic vitality.

In this vein, the recently-announced framework of ambitious monetary easing—geared toward achieving a higher inflation target—is a positive step. Japan needs to rely more on monetary policy to kickstart growth. For this to succeed, however, Japan must also move ahead in other areas— including in fiscal policy, which looks increasingly unsustainable.

Japan’s public debt is now approaching 245 percent of GDP. As an urgent priority, therefore, Japan needs a clear and credible plan to lower public debt over the medium term. It also needs comprehensive structural reforms to shift the economy into higher gear.

So these are the major policy challenges that need to be met to stay ahead of the crisis, for each group of countries in the “three-speed global economy”.

Global priorities to stay ahead of the crisis There is another set of overarching issues that affects

Christine Lagarde

them all. These issues have been with us since the beginning of the crisis, they are familiar, but have not yet been fully resolved. There are three of them as well: financial sector reform; more balanced global demand; and more emphasis on growth, jobs, and equity.

Let me turn to these issues, to these “old risks”.

Financial sector reform The bottom line is that we need a global financial system that supports stability and growth. Until now, this has been lacking. In too many cases—from the United States in 2008 to Cyprus today—we have seen what happens when a banking sector chooses the quick buck over the lasting benefit, backing a business model that ultimately destabilizes the economy.

We simply cannot have pre-crisis banking in a post-crisis world. We need reform, even in the face of intense pushback from an industry sometimes reluctant to abandon lucrative lines of business.

Global policymakers have certainly made significant progress on more stringent capital and liquidity requirements and capital surcharges for global megabanks, as well as clear standards for supervision and resolution. To stay ahead of the crisis, we need to see more progress in other important dimensions. What do I mean? For a start, the “oversize banking” model of too-big-to-fail is more dangerous than ever. We must get to the root of the problem with comprehensive and clear regulation, more intensive and intrusive supervision, as well as frameworks for orderly failure and resolution—including across borders, and with authorities empowered to oversee the process. In terms of other issues: derivatives are still the dark matter of the financial system—as of last September, only one in ten credit default swaps were cleared through central counterparties. Shadow banking is still a shady corner toward which risk appears to be gravitating.

This is true in advanced as well as in emerging economies.

Financial sector reform efforts must also be coordinated internationally. We are already seeing countries pulling in different directions in some areas, such as in calculating the riskiness of assets and curbing banking excesses.

We need more focus on consistent global regulation and implementation, including in key areas such as bank resolution.

So: completing financial sector reform is the first overarching issue to be faced.

M

ore balanced global demand

The second issue: more balanced global demand. For too long, the pattern of global growth has been a high-wire act between regions with large current account surpluses and those with large current account deficits. The good news is that a sense of balance is returning. However, too much of it is one-sided, and comes from lower demand in deficit countries. So there is a need for higher demand in surplus regions.

This means different things for different countries. For countries in Northern Europe, like Germany, it means doing more to boost investment. For China, it means doing more to boost consumption and moving further toward a services-oriented consumer-based economy—a path upon which it has already embarked.

C M Y K

30 — Vanguard, MONDAY, APRIL 15, 2013

Homes & Housing Finance BRIEF Fashola names housing estate after Anyaoku

G

overnor Babatunde Fashola of Lagos State has named a housing estate in Ikeja after Chief Emeka Anyaoku, a former Commonwealth SecretaryGeneral.

At the inauguration of the estate, which comprises 76 units of four bedroom apartments, Fashola said the estate was named after Anyaoku in recognition of his commitment to public service and nation building.

“After we completed the project, a new challenge arose and it was whom the estate should be named after. And I think that events made that decision very easy.

“We resolved that if we had to dedicate any public service building after anyone, whether living or dead, it should be those who have contributed to the development of our nation, especially Lagos State. So, we simply, in this case, decided to honour someone who has contributed immensely to public service in the country and has played a role in the birth of a very modest democracy. It was for me, therefore, not difficult to single out Chief Emeka Anyaoku, who recently celebrated his 80th birthday,” he said.

Fashola said that the site on which the estate was sitting used to be a refuse dump, adding that the state government would continue to seek creative ways to improve access to qualitative housing.

Responding, Anyaoku said he was humbled by the honour done to him by the state government.

According to him, the naming of the estate after him was yet another milestone in his sojourn in the state. “My connection with Lagos is deep and long standing. I started my career in Lagos and I have been married for over 50 years to a native of Lagos.

This is a great honour to my family across the Niger and also in this part of the country. Thank you Lagos,” he said.

The former envoy commended the state government’s investment in the housing sector, saying it would go a long way to solve the housing deficiency in the country.

C M Y K

Highbrow housing development

ASO housing confab: Jonathan pledges reduction in property transaction fees Stories by YINKA KOLAWOLE

P

resident Goodluck Jonathan said the F e d e r a l Government and State governments are working on how to reduce the current high cost of property transactions by lowering fees charged for consent and registration.

Jonathan disclosed this while declaring open the 3 rd ASO National Exhibition & Conference last week at the International Conference Centre in Abuja. He also promised to ensure the reduction of stamp duties and other charges by the governments that prevent property transactions from contributing to the nation's gross domestic product. The conference is hosted annually by ASO Savings and Loans Plc, one of the leading primary mortgage banks in Nigeria.

The President, who was represented by Minister of Lands, Housing and Urban Development, Ms. Ama Pepple, said he was confident that the reduction in property transaction fees and several other viable housing and urban renewal initiatives would move the government "closer towards realising the vision of facilitating the development of one million new homes, every year, for the next 10 years". He declared that the federal government was towards a

rapid growth in the nation's housing stock through the regeneration of a durable mortgage industry.

"The government is committed to recapitalising the Federal Mortgage Bank of Nigeria (FMBN) and strengthening the Federal Ministry of Lands, Housing and Urban Development as well as the Federal Housing Authority.

All other institutions of government in the building environment will be similarly reviewed," he stated.

Jonathan said government is ready to collaborate with operators in the private sector, such as ASO Savings and Loans and other stakeholders to meet a target of delivering a minimum of 500,000 affordable housing units for the nation's lower and middle income earners by 2016. "With the national housing deficit

presently estimated at 12 to 16 million units, our administration recognises the significant role the private sector can play in bridging the requirement gap."

He said the theme of the conference, "Achieving Affordable Housing Delivery

by Creating 500,000 Housing Units by 2016," was timely, explaining that the provision of affordable mass housing was a priority of his administration. According to him, government has already approved both the National Housing Policy and the National Urban Development Policy as the coordinating frameworks for an appropriate response to the challenges in the sector.

"The private sector is well placed to meet the needs of the zero-income, low income, lower-medium income and the informal sector workers,

and by so doing, also facilitate job creation. I would like to emphasise that we will continue our policy of engaging the private sector to play a more dominant role in this sector."

In his welcoming address, Managing Director of ASO Savings & Loans, Mr. Hassan Musa Usman, said the housing exhibition had become one of the biggest and most important events in the nation's housing industry. He said it is the company•fs contribution to efforts aimed at reducing the nation•fs current housing deficit and to also assist Nigerians own homes. "The conference provides a platform to discuss housing and proffer solutions to issues and challenges bordering provision of housing in the country."

NLC, developer partner on N960bn housing projects

N

igeria Labour Congress (NLC) is partnering with a private property developer, Kriston Lally, to develop housing projects worth N960 billion for workers in some parts of the country.

The plan was unveiled by Deputy President of NLC, Comrade Promise Adewusi, and Group Executive Vice Chairman of Kriston Lally EPC, Mr. Mustapha Madawaki, after an agreement for the project was

signed between the NLC and Kriston Lally at Labour House in Abuja. According to Adewusi, the plan is to build affordable houses for any willing member of the 8 million strong Congress. "We, as a labour movement, are worried about the 14 million housing deficit that exists in the country as revealed by a United Nations study. This collaboration with Kriston Lally Nigeria Limited is to ensure a good number of our

members have decent roofs over their heads. "The project is expected to cost about $6 billion or N960billion. We consider the two per cent interest rate of the total amount of the property spread over 15 years, as very attractive and well below what is obtainable in the mortgage environment."

He said the step would prove wrong the erroneous belief that trade unionists were only known for trouble making and strikes.

Vanguard, MONDAY, APRIL 15, 2013 — 31

C M Y K

32 — Vanguard, MONDAY, APRIL 15, 2013

Insurance BRIEFS Crusader Nigeria changes to Custodian & Allied Plc

C

onsequent upon the merger between Custodian & Allied Insurance Plc and Crusader Nigeria Plc, the Board and Management of Crusader Insurance Plc have communicated that the new company will now be known as Custodian & Allied Plc. According to a statement signed by Chukwudum Ofomata, Brand & Communications Manager, Custodian and Allied Plc, the merger has created the integration of skills, information technology (IT) and back office processes, which will be to the advantage to the customers of the company.

“Our merger has created invaluable integration of skills, information technology and back office processes.

Now customers can take advantage of our increased spread, improved operational efficiencies and expanded product portfolio.

NAICOM issues guidelines on Takaful insurance

T

he National Insurance Commission, NAICOM, has released the guidelines on Takaful insurance, which it said is in line with the provisions of the 1997 Insurance Act, and the need to complement the current drive for financial inclusion to increase insurance penetration in Nigeria.

A circular signed by Deputy Commissioner for Insurance (Technical), NAICOM, Ibrahim Hassan, noted that with the guidelines, all intending applicants seeking license from the Commission to transact Takaful insurance business in Nigeria must possess the followings: certificate of registration as a full-fledge Takaful insurance company in accordance with international best practice, adding that such a company must have, as part of its name, words or terminologies that connote Takaful operations.

It said the company must maintain a minimum deposit in a non-interest financial institution at all times and that the provision for the establishment of an Advisory Council of Experts (ACE) must be made in the articles of the company and there should be establishment of investment policy for the participants’ risk fund.

C M Y K

By ROSEMARY ONUOHA Majority of Nigerians can only embrace the compulsory insurance products as enshrined in Insurance Act of 2003, if government can compel organisations and individuals bidding for government contracts to show proof of compliance.

President of the Chartered Insurance Institute of Nigeria, CIIN, Mr. Wole Adetimehin, who made this assertion, said that if the required enforcement is lacking, the laudable goals and underlining objectives of the compulsory insurances cannot come to materiality.

According to Adetimehin, the National Insurance Commission, NAICOM should liaise with various government agencies and parastatals to ensure that they don’t give out government contracts to companies and individuals who are not complying with the compulsory insurance.

He said “In pursuing enforcement of the compulsory insurance, we still have to partner with government. For example, the Bureau of Public Procurement, BPP, have their way and styles of doing things. As such, if you are bidding for any government job and you are not showing proof of Group Life Assurance, the BPP should not accept such bids, despite the length of time such bidder has been in operation.

“It is just like what is obtainable in NAPIMS, where you have to be registered before you can bid for anything in the oil and gas sector and you must have met some criteria.

“So enforcement is crucial.

When we sit with our regulator, we can help because nobody knows it all.

Moreover, everybody has one influence or the other, so it is high time we start harnessing all this resources to our own advantage and that is the only way out.”

Adetimehin however, stated that the late passage of the budget into law shattered all hopes and high spirits of witnessing a good first quarter in the year.

According to him, the late budget delayed any appropriation that could be done as no government arm or department was seen spending, because there was no law to that effect and no appropriation was done.

“The late passage of the budget constituted some form of frustration within the economy because our peculiar experience in this part of the world had always

L-R: Adegboyega Adepegba, Director General, Chartered Insurance Institute of Nigeria (CIIN); Wale Yekini, Resource person; Wole Adetimehin, President, CIIN and Omotunde Omoshola, Resource person and Vice Chairman, Oyo Chapter, CIIN during a media retreat organised for insurance journalists in Ibadan.

Govt contractors should show proof of compulsory insurance – CIIN been that great majority of business people trade with the government. So, when the government was not setting the expected pace, it resulted into a very dull first quarter.

“All the states did not pay salaries in the first quarter because there was no budget to operate at the centre and all this affected businesses generally and our insurance sector couldn’t have been an exception. So, in terms of production, new businesses as well as consolidating on existing clientele of

businesses, all have not been rosy in the industry.”

Adetimehin said that the enforcement of ‘no premium no cover’ policy of NAICOM is long overdue, if only to enhance the robustness of the industry as well as equip all operators better such that they can meet there obligations to the buying public.

“The second quarter can only be a little better because going by the bureaucracy in government no meaningful appropriation will happen until towards the tail-end of the second half, so all of this

will continue to affect the performance of all the sectors and our insurance industry cannot be an exception.”

Adetimehin said that insurance awareness creation can never be enough, adding “If we are to tap into the expected result which is meant to grow our industry in terms of premium income while providing safety and protection for the general public or citizenry of this country, we need to go a lot further in awareness creation.

In whatever form, I think we should be pursuing enforcement.”

FUG assures of better service delivery for clients

BY RITA OBODOECHINA

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uture Unity Glanvil Pensions Limited, FUG, has assured prompt and better service delivery for its existing and potential clients in 2013 and beyond.

Speaking at the customers’ forum organised by the company in Oshogbo, Ilesha and other locations around Osun State recently, the Head, Business Development, South West, Mr. Kayode Oyebisi-Oba, said for the company to achieve this, its Information Communication Technology (ICT) platform has been upgraded and deployed to drive the processes.

He said, “The company would continue to strive to serve you better, our information technology has been upgraded with the aim of serving you faster and more efficiently. This

therefore means speed in our service delivery. Likewise, our investment management function has been strengthened to ensure optimal returns on the investment of pension fund under our management.”

He added that the boost in capital has also enhanced the company’s financial capacity in meeting up with its information technology needs to meet and surpass customers’ expectation.

According to him, the company has acquired a three storey edifice along Commercial Avenue in Yaba, Lagos, which would serve as the company’s corporate head office when it is finally ready for use He disclosed that FUG, in the post consolidation pension industry, prides itself with N1.5 billion capital base, a quantum leap from the statutorily required minimum

capital base of N1 billion, while FUG Pensions is one of the licensed pension fund administrators (PFAs) that crossed the statutory induced recapitalisation hurdle which ended June 2012.

Continuing, he said that the board in its pro-active nature made good the opportunity to raise the company’s paid up capital to N1.5 billion, making FUG Pensions one of the most capitalised PFAs in the industry.

Oyebisi-Oba said the company’s customer forum is an annual event, which provides an avenue for interaction between retirement savings accounts (RSA) holders across various operating locations nationwide and the management where customers’ complaints (if any) are addressed during the interactive session, among other businesses.

Vanguard, MONDAY, APRIL 15, 2013 — 33

People in Business be solution-oriented.“ MoU: “We have an agreement with Texas A&M University National Spill Control School in Corpus Christi, Texas, the best oil spill control school in the world, to help Nigeria restore its environment that has been severely degraded. We want to leave a better environment behind. We want to start a special training for Nigerian oil workers twice a year (May and September). So I think we have a very broad programme for mitigating the effect of oil spill in Nigeria. As you know, nearly 80 per cent of all oil spills are attributed to human error, so we are sure

“

By EBELE ORAKPO

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ngr. Sylvester Egwu is the Managing Director/Chief Executive Officer of Kaku Professional Engineers Limited, an energy and oil spill management and control company. The company which was the first in Nigeria to be registered by the International Spill Organisation, was accredited by the DPR to provide training and manpower development in the oil and gas industry.

In this chat with Vanguard, Egwu, a mechanical engineering graduate from the *Engr. Sylvester Egwu... Nearly 80 per cent of all oil spills are attributed to Howard University School of Engineering human error in Washington DC, USA speaks on what led him to the oil spill cleaning business.

Excerpts: not aware of the impact of associated with oil spill in this to go back to the US.“ On completion of his oil spill. Our first conference country and that is why to Breakthrough: secondary school education, was in Calabar in 2012 and further make sure that we do “When I came back to Egwu left for Lagos where he Nigeria, it was very difficult the next one will be in Ghana this, we have organised several joined the Police Force. After penetrating the oil and gas from June 12 to 14, 2013. seminars, workshops and three years, he tried industry, but one way or the Several expatriates have conferences to create unsuccessfully to get a US other, I started with NNPC / indicated interest in awareness in this area visa so he went to Sierra NAPIMS,” he said. His participating. It is going to because most Nigerians are Leone where he eventually perseverance paid off as he got the visa but could not did not only penetrate the oil travel because he had no and gas industry but was able money. “I had to come back to carve a niche for himself.

The way other countries are to Nigeria by road and people “We made a presentation of looking at oil spill is not the way began to call me Mungo Park. a product called Petroleum In 1973, I was able to travel Remediation Product (PRP), Nigerians look at it. We to the US where I worked full- and another presentation to understand the impact but we time at two jobs and after nine DPR and in the process, we months, I went to school. It applied to start training oil don’t have the willpower and was full-time schooling and and gas workers and DPR commitment full-time job,” he said. After gave us the permit. Today, we his first degree, the US are problem-solvers. We want Government granted him to solve most of the problems scholarship for a master’s degree. “So I always say that the US made me what I am today,” he stated.

Motivation: “While I was in Howard University School of Engineering, we were exposed to some research in oil and gas, and I became aware of the impact of oil on the environment so I picked up that interest.”

On his return in the early 80s, he worked with Nigeria Ports Authority as workshop manager before going back to the US. He shuttled between Nigeria and the US until 2004 when he went back to the US for a fellowship programme.

Said he; “I had a fellowship programme in UNILAG but I could not get information on oil spill after going to various oil companies to look for research papers and *Paying the terrible price for oil spill information and data, so I had

,

that with all the training, we will be able to reduce oil spill and its risks in the next few years.“ Effect on health: “Every spill is toxic and disastrous so when a spill occurs, we expect it to impact the land, water and aquatic life. The Niger-Delta is like a sponge, it soaks oil during the rainy season, and in the dry season, the oil dries up.

First of all, when oil spills into the water, the environment, water and land are polluted, aquatic life is destroyed and humans suffer from rashes, the skin and liver are affected and it can cause cancer of different forms. That is the most dangerous aspect of oil and that is why we have been sensitizing people that oil is only good when it comes to money but you cannot just take the money and destroy our environment. We have to ensure that when you get the money from a particular environment, you must restore it. That is where we come in.

"As far as I am concerned, much still needs to be done.

The way other countries are looking at oil spill is not the way Nigerians look at it. We understand the impact but we don’t have the willpower and commitment; we don’t really care about what is happening because if we care, we will not allow oil companies to destroy the environment with spill. A spill is a spill whether it is caused by sabotage or by carelessness or negligence or whatever, government and oil companies should clean up the oil. Like it happened in the US, nobody wanted to know how it happened until they first of all tackled the problem of cleaning the spill; that is a very important thing which we don’t do here. When a spill occurs, clean it up first and in the process, you assess the damage, compensate the victims, all these are not done and that is why we are organising this conference that whenever a spill occurs, please ensure the spill is brought under control, mitigate the effects of that spill, and compensate the people affected,” he said.

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34 — Vanguard, MONDAY, APRIL 15, 2013 vicahiyoung@yahoo.com 08033348923

Appointment&Promotions

AANI elects Aremu Secretary General M

EMBERS of Alumini Association of the National Institute, AANI, of the Institute for Policy and Strategic Studies, NIPPS, Kuru in Jos, have elected Comrade Issa Aremu, their Secretary.

Aremu’s election with eight other officers including Major General Lawrence Onoja, as President, rd took place during at 33 Annual General Meeting, AGM, of AANI, recently.

Aremu brings his over two decades of activist experience in organising, collective bargaining, grievance handling, representation and policy advocacy to NIPSS. 1985 second class Upper graduate of Economics from University of Port Harcourt, Comrade Aremu started his graduate’s studies at School of Basic Studies of ABU Zaria in 1977/78.

He attended international Institute of Social Studies (ISS) the Hague Netherlands in 1990-1991 where he had distinction in Master degree in Labour and Development studies.

Aremu is a member of National Institute (Mni) and attended the National Institute for Policy and Strategic Studies (NIPPS) Kuru Jos (mni) course 27 in 2005.

Aremu has held varying positions in scores of labour market institutions that include, National Administrative Council (NAC), Central Working Committee (CWC) and National Executive Council (NEC) of Nigeria Labour Congress (NLC), Boards of National Social Insurance Trust Fund (NSITF), Michael

Imoudu National Institute of Labour Studies (MINILS) Ilorin, Labour Transport Corporation and First Guarantee Pension Fund.

He served in Various Tripartite Committees set up by the Federal government namely; Petroleum Products Pricing Regulatory Committee (PPPRC),Member of Governing Council, Michael Imoudu National Institute of Labour Studies (MINILS), Ilorin, Kwara State, 20012004,NLC Member of Governing Council, Nigeria Social Insurance Trust Fund (NSITF), 2004 till 2007,National Labour Advisory Committee (NLAC),Presidential Committee on the Revival of Textile and Garment Industry, 2002,Member of Tripartite Committee on National Minimum Wage, 2000 and 2009-2010,Member, Kaduna State Government Special Committee on the Revival of Textiles and Cotton industries, July 2007 – 2008 and Chairman, Interim Management Committee First Guarantee Trust Fund.

•Aremu

Comrade Peter Esele, President of Trade Union Congress, NLC, Representative of Comrade Governor Adams Oshiomhole of Edo State, Hon. Patrick Obayangbon, Chief of Staff to Governor Oshiomhole and Representative of Minister of Labour and Productivity, Chief Emeka Wogu, Alhaja Nofisat Arogundade, Controller, Federal Minister of Labour, Lagos, at the Maiden Merit Award organized by Labour Writers Association of Nigeria, LAWAN, in Lagos.

LCCI admits 79 new members L

agos Chamber of Commerce and Industry, LCCI, has admitted 79 new members into its fold.

Speaking during the award of certificates to the new members, President of the Chamber, Mr. Goodie Ibru, urged them to consistently uphold high ethical standards, integrity and good corporate governance in business practice.

He reiterated LCCI’s commitment to such values, noting that since inception, no member of the Chamber had been involved in any unscrupulous business.

According to him, members should pay adequate attention to the integrity of their business transactions and practices, adding that “as

Olejeme wins champion of workers’ welfare award

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HAIRMAN of the Board of Directors of Nigeria Social Insurance Trust Fund, NSITF, and Trustfund Pensions Plc, Dr. (Mrs) Ngozi Olejeme, has been honoured with the Champion of Workers Welfare award.

The award was given to her by the Labour Writers Association of Nigeria, LAWAN, at its maiden merit award held in Lagos, to honour individuals and organisations in the labour sector for outstanding achievements Dr Olejeme received the award for her role in the emergence of the Employee Compensation Scheme, ECS, and overseeing the first disbursement of fund to beneficiaries among others.

She has also played a significant role in the growth of Trusffund Pension Plc. Speaking at the event, Olejeme said the award was the best and most cherished

of all the awards she had received, saying the award was very dear to her.

Commending LAWAN for organising the award, President of Nigeria Labour Congress, NLC,

Abdulwaheed Omar, congratulated individuals and organisations that were singled out for the award and called on others to work harder in their various capacities.

Executive Director, Human Resources, 7 UP Bottling Company, Plc, presenting the award to Dr Mrs Ngozi Olejeme.

businessmen and women, we have obligations which transcend profit making.”

He emphasised the code of business ethics to which all members were to subscribe and warned that a breach of the tradition of integrity would be viewed seriously and be visited with appropriate sanctions.

“The Lagos Chamber has gone a long way to build its present image and credibility through the vision, selfless services and integrity of its illustrious Founding Fathers and their worthy successors.

It therefore behooves on us as inheritors of this glorious

and enduring legacy, to keep the flag flying at all times,” Ibru enjoined.

He also appealed to the new members to assist in sustaining the Chamber ’s high-level services through prompt payment of their subscription and levies.

Speaking earlier, Vice President of the Chamber and chairman of the Membership and Welfare Committee, Dr. Wole Ogunpehin disclosed that since its inception in 1888, the Chamber had been very selective and careful in its membership admission process, in order to preserve its enviable image.

ERA/FoEN names Ojo Executive Director

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N V I R O N M E N TA L Rights Action/Friends of the Earth Nigeria, ERA/FoEN, has named Dr. Godwin Uyi Ojo, as its new Executive Director.

Dr. Ojo succeeds Nnimmo Bassey who stepped down on March 31, 2013.

Ojo, who holds a PhD covering environment, politics and development from the King’s College, London, cofounded ERA/FoEN with Bassey, Oronto Douglas, and Nicholas Ashton-Jones in 1993.

He is experienced in environmental activism spanning nearly two decades within which he campaigned relentlessly for environmental justice and in the Niger Delta impacted by oil extraction activities.

In his handover speech at an

•Dr. Ojo event to mark ERA/FoEN 20 th anniversary in Abuja, Bassey said with Dr. Ojo at the helm of affairs in ERA/ FoEN, the environmental justice group was set to move to higher heights.

ERA/FoEN Director, Corporate Accountability & Administration, Akinbode Oluwafemi said: “The entire ERA/FoEN staff welcomes him for having demonstrated unwavering commitment to the cause of the environment and human rights in Nigeria and beyond.

His wealth of experience now comes to bear on the organisation”

Vanguard, MONDAY, APRIL 15, 2013 — 35

“Tell the truth; and let the devil be ashamed”.

Anonymous.

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any Nigerians over the age of 60 would recollect that statement.

Right from our homes to our primary schools and, if we were lucky, our secondary schools, that moral admonition was drummed into our heads. Tell the truth.

Because the Federal Minister for Agriculture, Dr Adesina, is “my brother ”, it might be easier for him to understand what I am trying to say to him by using a Yoruba adage, “Eni to gbin ogorun isu to ni oun gbin igba; to ba je ogorun isu tan, a bere si je ogorun iro” [translation: a farmer who planted one hundred yam tubers and claims to have planted two hundred, will harvest and eat hundred yams and hundred lies”].

Perhaps no other Minister had deceived us, in the last two years, more than this ebullient, academically brilliant and enthusiastic appointee of Jonathan’s than Dr Adewunmi. And, if indeed, wishes were Mercedes Benzes, all Nigerian beggars would be cruising around in Mercedes 500s –latest model. Almost since he assumed office, Dr Adewunmi had been assaulting us with projections about food security and superlative agricultural productivity and 3.5 million jobs to be created by 2015.

To my brother Agric Minister Given our self-defeating dependence on food imports, it is easy to fall prey for someone who, like the operators of “Wonder Banks”, promise mouth-watering returns on investment which the depositors never receive.

Officers like Adewunmi know Nigerians very well.

They readily fall into the same trap, because as David Oglivy, one of the greatest advertising practitioners of the last century said about repeated advert campaigns, “We are addressing our-selves to a moving parade; not a standing army”. That was Oglivy’s way of making the same observation as P.T. Barnum, the American circus master, who at the beginning of the last century told the world that, “There’s a sucker born every minute”. The fact that a fool is born every minute explains why any government official in Nigeria today is guaranteed standing ovation if he can boldly announce that he will create so many million jobs without providing the details of how he would do it – state by state; job category by job category.

I challenged Dr Adewunmi to provide these details in this paper months ago; failing which he would be branded a liar. Till today, there has been no answer. Nigerians deserve better than these purveyors of falsehood as Ministers. If they

have no solution to our problems, the least they can do is to stop deceiving us.

Jonathan does not “give a damn” whether his Ministers dispense truth or falsehood, as long as it sounds good.

But, we care. We want to know the truth about achievements.

NATIONAL BUREAU OF STATISTICS OR PROPAGANDA UNIT OF PDP? There are three types of lies; lies, damn lies and statistics, Mark Twain, 1835-1910.

Once upon a time the National Bureau of Statistics, NBS, provided professional data – without an eye on the political calendar. It also confined itself to what its professional studies can reveal to us about various subjects. Under the current Director-General, Dr Yemi Kale, it actually started out that way. But, in the last two weeks, NBS has turned into a home for voodoo economics and an organization laying the foundations for release of monumentally fraudulent statistics just in time for the 2015 elections.

First, Dr Kale announced to a startled global audience, as if he were talking to dimwitted kindergarten pupils that Nigeria would reduce the percentage of people living below the poverty line to 27.5% by 2015 from the generally accepted figure of

70%. So, in a mere two years, instead of 102 million, only about 44 million our Fellow Countrymen will be classified as poor. In short, 58 million Nigerians, without receiving any additionally income from government or from jobs provided, will miraculously be transformed and enriched.

It is not clear whether Dr Kale dropped this joke in an address delivered at a function, after too many drinks had gone under the belt; and the newspaper reports also failed to report whether the audience clapped or rolled on the floor. But, I could smell a rat.

Just as we were still digesting the import of that first jest, Kale was again at his humorous best. On Tuesday, April 9, 2013, the DG-NBS, presented another hilarious one. According to the reports, Nigeria’s GDP may be recalculated in 2014 – conveniently a few weeks before President Jonathan declares his intention to seek re-election. Non-economists might be wondering, “what is the palaver all about?” It is easy to explain.

At the moment, Nigeria’s economy is the third largest in Africa – with a GDP of approximately $250 billion; South Africa stands at $385 billion. By rebasing, meaning another set of metrics, we will magically pump our GDP up

to $350 billion in order for the Federal Government to be able to claim that our GDP had grown by double digit in the last five years under President Jonathan.

Whatever else statisticians call that sleight of hands, economists call it cheating. In order to make a useful comparison, once you rebase your economy and pump it up by a factor, you must adjust all the other nations’ GDP by the same factor. For instance, everybody realizes that it is sheer folly to measure one person’s weight in pounds, say 80 pounds; and another’s in kilos, say 75 kilos and conclude that the former is heavier.

Dr Kale was also reported to have made some statements about economic projections. Well, a “little learning is a dangerous thing”. It is difficult for an economist to determine the quality of a statistician but the DG’s economics is all wet.

We know we can’t catch South Africa, which is ranked 30 in terms of GDP by 2020.

So we dope up our GDP before the 2015 elections to make VISION 20:2020 happen by cheating. There is a name for that nonsense. It is called intellectual dishonesty.

Dr Kale will be welladvised to focus on providing honest data and leave the propaganda work to the spin doctors in Aso Rock. He runs the grave risk of becoming the first DG to politicize NBS. V i s i t : www.delesobowale.com

Micro-Finance loan officials to always lend Low level economic activities hinder MfB performance money to people of good *As UPMfB disburses N121.4m to 778 in Q1

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Microfinance Bank has attributed its unimpressive financial performance to the low level of economic activities in the first quarter of the year.

Enugu based Umuchinemere Pro-credit Micro finance Bank (UPMFB) said that it disbursed a total of N121.4 million as micro credit to about 778 beneficiaries in the first quarter in its poverty eradication effort.

In a statement signed by Head of Public/Media Relations unit of the bank, Mr. Abuchi Anueyiagu said that the funds were meant to assist the beneficiaries in a bid to reduce their poverty level and improve their quality of life. He further said that of the 778 beneficiaries of the micro credit, a total of 444 were females, while the rest, 334, were males.

Meanwhile, Head, Credit department, Mr. Ikechukwu Ngene also said that the bank would have met its earlier benchmark of providing a total of N200 million micro

Stories by PROVIDENCE OBUH credit facility to the needy, those classified as abjectly poor persons in the first quarter of 2013, but for the

“low level of economic activities in the first quarter of every year and this year was not an exception.”

Ngene however assured that the difference would be covered by the end of the second quarter of the year.

He urged beneficiaries of the micro credit to make proper use of the facilities and to repay promptly, so as to continue to receive more from the bank.

He added that the fund was aimed at creating maximum wealth for the beneficiaries, advising

ICAN’s LMDS launches 50m building project

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he Institute of Chartered Accountant of Nigeria’s (ICAN) Lagos Mainland District Society, has launched its N50 million building project to march the uniform building plan of the institute.

In his welcome address during a Presidential Dinner, Investiture of Patrons and Launching of N50m building fund in Lagos, Chairman LMDS Mr. Raphael Anyama said that the project has become imperative, as a result of the increase in its membership strengthen which has grown to 36 per cent, from 700 to about 1000 membership.

Institute President, Mr.

Adedoyin Owolabi pledged support on the project while

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commending the District’s effort over the project.

character and conscience.

According to him, “the bank disbursed a total of N734, 594,500 credit facilities in 2012.”

Also, Mrs. Bibbian Ofoje, Head of Finance and Accounts, hinted that the bank’s unaudited income for the year ended 2012 showed an increase by N149 million, attributable to increase in its various activities, which indicated a growth of the bank, comparative to 2011.

Trader wins N3m in DStv promo

building materials trader, Mr. Patrick Nwogwu has won N3, 000, 000 in the ongoing Digital Satellite Television Service (DSTV) “Rewards scheme” promotion in Lagos.

Meanwhile, Nwogwu, who leaves in Port Harcourt, is the seventh winner in the series. Mr. Mayo Okunola, General Manager DStv in company of Mrs Dolapo Oni, 53 Extra presenter, presented the cheaque to him during a presentation ceremony held at the MultiChoice Nigeria Head Office.

Asked how it happened, he said, , “I I was in my Port-Harcourt house at about 6:00 pm, penultimate week

when I received a call from a lady who introduced herself as a staff of Multichoice, telling me I have won myself N3 million in the DStv promo.

“The surprising thing is that I do not know anything about the promo, all I do is to subscribe. It is a good development and I like it, some people think it is not real but from what I have seen, is not a fake, I don’t know anything about the promo but I won, so it is real.” To DStv, he prayed that their business will continue to thrive in Nigeria, while calling on Nigerians to pay for subscription to enhance their chances of winning in the promo.

36 — Vanguard, MONDAY, APRIL 15, 2013

Agric

GM crops have role to play in feeding the world — Prof Leaver

BY JIMOH BABATUNDE

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n Emeritus Professor of Plant Science, University of Oxford , Prof.

Christopher Leaver, has said that Genetically Modified (GM) crops will have a role to play in order to beat the growing population demand.

Leaver said people are dying because of hunger, “ we need to

give them the capacity and an opportunity to let them grow their own food to feed themselves and their families but also let them improve their income as well.”

Speaking in Abuja at the recently concluded training workshop on Plant Breeding, Genetics and Biosciences for Farming in Africa , he said there are challenges about population growth and we are

completely dependent on crops to feed the people. ”The major challenge for the future is to feed a predicted world population of 9 billion by 2050, 80% of whom will live in developing and transition countries with the majority living in an urban environment in mega-cities.

Each hectare of land in 2050 will need to feed 5 people compared to just 2 people in 1960. “

There are challenges about population growth and we are completely dependent on crops to feed us. In Africa the yield have been flat for a long time while the population continues to grow, GM crops will have a role to play in order to beat the growing population demand.”

He disclosed that during the last 25 years there has been a revolution in plant

science and the skills of the plant breeders have been enhanced by two new technologies, marker assisted plant breeding and genetic modification (GM).

While acknowledging the fact that there is lack of knowledge with regards to GM crops, he said pests resistant crops can be developed through GM technology as well as improve efficiency of specific metabolism.

“So we need to give the people an opportunity to look at the technology and see if they can adopt it.” Speaking on the misconception on GM food, he said as with many new technologies, people are keen to embrace the benefits but are concerned about the potential risks . “I know about GM crops and I know where they grow and if I know any problem of health risk I would be the first to point it out.”

He added that there are a lot of NGO’s who don’t like globalization and dislike multinational corporations. “They have thus denied people the opportunity to increase their income. There is also lack of education and understanding about GM crops but if we can raise the quality of lives of people let us try it, people have the choice.” He added that Americans have been eating GM food for the past 16 years and they haven’t had any unhealthy challenges.

Leaver quickly added that GM crops are not a ‘silver bullet’ and alone cannot solve the global challenges, “ We must evaluate all available technologies and, subject to appropriate and realistic evidencebased,biosafety regulations and in combination with c o n v e n t i o n a l approaches, deploy those which are most effective and sustainable.

“This will include sustainable farming practices and appropriate use of agrochemical inputs, wherever possible moving from chemical to biological solutions.”

These technologies must not only be applied to improving food production in major world crops but also adapted to improving orphan crops which can address food security and nutrition as well as providing economic benefits to farmers in the developing world.

However we must invest now as time is not on our side. Science and its application is not a quick fix and cannot be switched on and off like a tap.

Vanguard, MONDAY, APRIL 15, 2013 — 37

Aviation

SAHCOL invests over N20bn on ground handling equipment

Lufthansa partners Arik on hanger reconstruction

By LAWANI MIKAIRU & DANIEL ETEGHE

By LAWANI MIKAIRU & DANIEL ETEGHE

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anaging Director of the Sky Way Aviation Handling Company Limited, SAHCOL, Mr. Olu Owolabi has revealed that the company has invested over N20billion in the acquisition of ground handling equipment since it took over SAHCOL in 1999 .

Speaking at the SAHCOL Engineering and Maintenance Base at the Murtala Muhammed Airport, Lagos, Mr. Owolabi said that the company has just taken delivery of about eight equipment adding that amongst them were, Commander 15i loader, Commander 30i loader, and Commander 40i loader.

According to him, more equipment are still been expected within the next one month as this will give SAHCOL the edge over its competitor in offering the best ground handling services in Africa.

“We have about eight

Head, post Training and Peace building Department, OSAPND, Joel Bisina (left), Head, Media and Communications, Dan Alabra (middle), and Head of Administrations, Ajibade Omuya, during the handing over of Business set-up tools to beneficiaries of the Presidential Amnesty programme, in Lagos on Thursday. equipment at the moment, we are expecting a lot of dollies, we are expecting about 20 tow-tugs and pushbacks, we are expecting conveyor belts and so on, whatever it takes to facilitate the handling of

aircraft to make those airlines happy, those are the things that we are having.”

He further noted that in terms of expanding its operations, SAHCOL is making plans to build

additional warehouses in Abuja, Port-Harcourt and Kano as soon as the one in Lagos was fully completed within the third quarter of 2013.

hairman of Arik Airlines, Mr. Joseph Arumemi-Ikhide recently revealed that Lufthansa Airlines has indicated its readiness to sign an agreement with Arik Airlines to rebuild Arik airline’s maintenance hangar. This would enable Arik to carry out C checks in the country.

Speaking during the visit of the President and Chief Executive of Bombardier Company to Arik Airlines in Lagos, Mr. Pierre Beaudoin, Mr. Arumemi said that the maintenance facility would enable Arik to carry out comprehensive C check on all its modern aircraft and for other airlines that want to do their checks.

According to him, “Everything has to go step by step. You can’t get four aircraft and put a maintenance facility. When we get more aircraft we talk about maintenance hangar.

ICT

Good corporate governance can sustain rebranding Nigeria, Ezeigbo, Slot ED

BY PRINCE OSUAGWU

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xecutive Director Slot systems Ltd, Mrs Nkechi Ezeigbo, last week, charged businesses in the country to sustain the rebranding Nigeria project with sound customer service culture and warranty services that match international standards.

Ezeigbo added that this is even more important as the Nigerian consumers do not only appreciate quality but have over the years become increasingly better informed about good customer service and their rights.

Ezeigbo said this as her company held the fourth edition of customer reward promotion to appreciate teeming Nigerian customers who patronise the outlets.

Slot System Ltd is a major mobile devices distributor with over 25 retail outlets across Nigeria.

This editionof the promo, produced an HND 2 student

of Moshood Abiola Polytechnic, Abeokuta, Miss Tijani Oriyomi Hadijat as the star prize winner.

Tijani drove home a brand new Kia Rio car in the process.

Just before the raffle draws to the promo kicked off, Ezeigbo explained why the promo was necessary. “Today

we have 25 retail stores and will also open many more .

This is possible because of your support for our brand.

"Slot was established in 1998 and over the years we have been the first to announce new products and had provided good retail experience. At slot, shopping

is an experience not just an activity.

Our warranty services and engineering support are of international standard.

We believe in good corporate governance and business ethics which is a function of transparency, honesty and integrity. Also, it is our culture and tradition to ensure that

customers buy benefits and values. We do not just sell phones, laptops and other devices; we provide valuable services. As Nigerians, we should always ensure that we redeem our images because our corporate and individual contributions matter a lot in the rebranding Nigeria initiative".

She charged other business managers to "remember that the Nigerian consumers like quality and over the years had become increasingly better informed about good customers service and their rights”.

Prize, divine gift

From right: Head, Hand Held Products, Samsung Mr Emmanouil Revmatas; popular music artiste, Sasha; Executive Director, SLOT systems, Mrs Nkechi Ezeigbo and Chairman Managing Director, Slot systems, Mr Nnamdi Ezeigbo at the 4th SLOT customer promo draws held in Lagos. recently

Meanwhile moments after she was handed over the key to the brand new Kia Rio car she won, twenty-four year old Tijani said it was a divine gift from God particularly as it happened on her father’s birthday.

Before her name was announced, the draw had first picked on another customer who was not available to present her ticket and according to the rules of the draw was disqualified.

C M Y K

38 — Vanguard, MONDAY,APRIL 15, 2013

Vanguard, MONDAY, APRIL 15, 2013 — 39

Advertising, Media & Marketing

Corporate Nigeria spends over N23bn on CSR ...As SERA calls for entry

By PRINCEWILL EKWUJURU & ESTHER ONYEGBULA

C

orporations in Nigeria have spent over N23 billion on Corporate Social Responsibility, CSR, drive in the country ranking second behind South Africa.

TruContact Limited, organisers of the SERA

Awards disclosed this at the media briefing prelude to the 2013 Awards tagged: “Shaping the future through innovative value creation, making a world of difference.”

Mr. Ken Egbas, Managing Partner of TruContact Limited, who said the award is in its seventh edition was only initiated to encourage business and Government agencies in

Nigeria to realize the gains in positively engaging the communities where they do business.

He noted that with just over a billion Naira in 2007, CSR spent by businesses in Nigeria now hovers over the 23billion Naira mark According to him, the 2013 SERA will continue to identifying and showcasing how business is creating

shared value in a manner that benefits the business enterprise as well as its various stakeholders. This year, the stakes has been

increased through promoting innovative thinking and strategies that explore the less trodden paths, businesses that are creating and adding value while differentiating their brands because they are bold, deliberate and not afraid to stand apart in a bid to rewrite history;

in an endeavour to create shared value.

“Last year, over sixty organizations participated at award and according to Mr Egbas, The SERAs verification team visited over twenty States in Nigeria to ascertain the projects cited by p a r t i c i p a t i n g organizations.”

Samsung announces entrance of ‘floating TV’

BY PRINCEWILL EKWUJURU

B

y this month end S a m s u n g

Electronics West Africa will be bringing to Nigeria the first Ultra High Definition, UHD, TV, with a ‘floating’

design which will change home cinema viewing globally.

The TV, housed within an easel-like frame that allows it to rotate freely and appear to float in mid-air, is a 85-inch TV which offers four times the pixels available on other Smart TVs in the market. The product was unveiled earlier this year by Samsung at the CES 2013 in Las Vegas, USA. Making the announcement at a press briefing in Lagos, Managing Director, Samsung Electronics West Africa, Mr. Brovo Kim, reiterated Samsung’s goal of creating new experiences for its consumers through its deep understanding of consumers’ lives and its relentless pursuit of discovery and innovation.

GSK unveils Ribena in Cans

R

ibena, the Nutritional fruit drink from the stables of GlaxoSmithKline Consumer Nigeria Plc, which is now in cans was welcomed to the market with music and dance performances.

The usher in the new can was an exclusive “purple party” held in Lagos According to the Managing Director, GSK Consumer Nigeria Plc, Mr. Olawale Akanbi, Brand manager, Ribena, said the company is launching the drink in CAN format for the convenience of its consumers.

“We are committed to satisfying our consumers. We know that people are more mobile and because we want all to have access to their refreshing Ribena anytime and anywhere, we launched Ribena in Cans Akanbi said.

C M Y K

40 — Vanguard, MONDAY, APRIL 15, 2013

Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com

Tel:0817 002 3569

willfully placed as deposits in the bank accounts of MDAs in the first place. In other words, in spite of the usual CBN lamentation of its inability to force down interest rates to industrially friendly levels, the reality is that CBN, with its aggressive probably reckless competition for loanable funds in the hands of the banks is actually the enemy of the real sector and not the banks!

Indeed, CBN had, on behalf of the Bankers Committee, often defended as inevitable, the high cost of funds and the unusually wide divergence between deposit (about 5%) and lending rates (above 20%), as it claimed that banks incur peculiarly high operational costs, because of the hostile infrastructural environment, which presumably the real sector, including MSMEs are immune to!

Paradoxically, after the sinking of over N500bn of public funds by AMCON into banks, services remain unsatisfactory, cost of funds remain above 20%, industries remain prostrate, while poverty has deepened nationwide, but the banks are back to winning ways with stupendous profit figures being posted for 2012.

So, in the light of the foregoing, can we really trust the Banking Committee to deliver on their promise to improve banking services and reduce cost of borrowing or is the present resolution of the committee the usual window dressing, akin to the exotic but failed promises of Soludo’s banking consolidation?

On hindsight, it may be fatal for anyone to hold their breath on the latest promises!

SAVE THE NAIRA, SAVE NIGERIANS!!

CAN THE BANKS BE TRUSTED? he Bankers Committee, which comprises the Central Bank of Nigeria and Chief Executive Officers of the Money Deposit banks resolved at the end of their meeting last week, to remove ATM charges, and investigate alleged excessive charges imposed on customers and also agreed to increase lending, and reduce interest rates to Micro, Small and Medium Scale Enterprises (MSMEs).

Although the erstwhile horror of unending queues and rowdy scenes in banking halls may have been largely eliminated, the current dispensation has evolved its own challenges.

For example, the Automatic Teller Machine (ATM) payment system is fraught with unsavoury challenges ranging from constant break in connectivity to card seizure by machines and the embarrassment of unexpectedly empty ATMs in times of need. Furthermore, there are constant media reports of the irritating hassles encountered when resolving errors generated by the ATM system in customer accounts.

Other areas of dissatisfaction include covert, arbitrary monthly maintenance fees on ATM cards, after CBN abolished the N100 charge on thirdparty withdrawals. Governor Lamido Sanusi last week also corroborated these claims when he confirmed that the apex bank had recovered over N6bn for customers that were cheated by banks in the last one year, since the establishment of a Consumer

Protection Department!

Incidentally, while the issue of ATM and spurious bank charges generally place a higher burden of frustration on salary income earners, the issue of credit and interest rates impacts more heavily on corporate organizations, particularly the MSMEs, which form the traditional engine of growth in all economies.

Incidentally, the Lagos Chamber of Commerce and Industries (LCCI) also noted at its recent quarterly press conference on the economy that “the credit situation is still a major problem for investors in the economy. As with the previous quarters, lending rate was well above 20%. Many MSMEs still have serious challenge in accessing credit even at this high rate”. T h e L a g o s Chamber also called on government to give due consideration to economic diversification, so as to protect our economy from the impact of the volatility of crude oil prices.

I

t is trite to remind ourselves that no country has ever successfully grown and/or diversified its industrial base and gross domestic output with cost of funds at over 20%. Worse still, Micro and Small Enterprises, in spite of relatively more severe deprivations, are institutionally encouraged to patronize micro-finance banks, where they may pay up to 6% (72% per annum) for funds!

The obvious question that evolves from the above

,

T

Paradoxically, the same CBN, which constantly instigates the systemic cash flush, subsequently ‘altruistically’ steps in to stem the threat of inflation, and prevent liberal access to the cash surplus by potential borrowers.

discussion is whether or not the banks can be trusted to work in tandem with the expectation and aspirations of our people and willfully improve quality of banking services and reduce cost of borrowing and stimulate growth.

The reality, of course, is that banks, like other businesses are profit oriented and would consequently pursue those strategies that yield maximum returns; any attempt to reduce interest rates by fiat would lead to distortions that are characteristic of any market where scarcity or centralized price control prevails.

Consequently, in successful economies, interest rate levels are not independently determined by fiat, but they are rather induced, by the monetary policy and strategy of each respective Central Bank; in other words, the Central Bank rather than commercial banks must bear the blame for prevailing oppressive lending costs. A payment system in which the CBN unilaterally substitutes

,

hundreds of billions of naira allocations for numerically relatively much smaller quantum of distributable dollar revenue, will continue to unleash the ever-present burden of excess cash in our system and consequently, predicate high CBN Monetary Policy Control Rates, which ultimately induce higher cost of funds in the economy!

Paradoxically, the same CBN, which constantly instigates the systemic cash flush, subsequently ‘altruistically’ steps in to stem the threat of inflation, and prevent liberal access to the cash surplus by potential borrowers. To this end, the CBN would offer to pay mouth-watering double-digit interest rates to borrow back from the banks, part of the huge cash flood it selfinflicted on the system.

Indeed, it would be commercially inexcusable for any bank CEO to shun CBN’s offer to pay between 10 and 15% to borrow back and then keep idle, money that government, itself,

Business & Economy

FSDH projects drop in Nigeria’s March inflation to 8.9%

By NKIRUKA NNOROM

R

esearchers at FSDH Merchant Bank have forecasted a drop in the country’s March inflation figure to 8.9 percent.

The projected figure represents 60 basis points drop from February 2013 inflation rate, which stood at 9.5 percent and 9.0 percent in January.

“FSDH Research is of the opinion that the price movements in the consumer goods in March will increase the Consumer Price Index (CPI) to 144.46 points, an increase of 1.03 percent month-on month. The March CPI will have to increase by at least 1.6 percent from February to produce an inflation rate that is higher than 9.5 percent reported in C M Y K

the month of February 2013.

In our opinion, this is unlikely. Looking into April 2013, our estimate points to an increase in inflation rate in excess of 9.5 percent,” the report said.

To arrive at the projection, FSDH Research considered that the Food and Agriculture Organisation (FAO)’s Food Price Index (FPI) for the month of March 2013 showed that the Index averaged 212 points, up one percent from February. The FAO Food Price Index measures the monthly changes in international prices of a basket of food commodities.

According to the FAO, the rise in the Index was driven mainly by 11 percent increase in dairy, which accounts for 17 percent of the various commodity prices included in the calculation of the FPI. The rise in dairy prices is the

largest recorded and was as a result of unfavourable weather conditions in Oceania which disrupted milk production and resulted in a reduction in the processing of dairy products in the region.

However, cereal prices and global rice prices remained unchanged from February, while maize prices increased on account of a fall in exportable supplies from the United States. Wheat prices fell on the prospects of good world harvest which offset the increase in maize prices.

Meat prices fell by two percent, while sugar rose by one percent from February.

Oils/fats increased by 2.5 percent, mostly due to a drop in soy oil prices.

“Our analysis of the foreign exchange rate shows that the value of the Naira remained stable against the US Dollar in the month of March 2013

2013 reduced the impact of the rise in the prices of some imported consumer goods in Nigeria between the two months under review,” the researchers said.

compared with the depreciation of 0.01 percent recorded in the month of February. The stability in the value of the Naira in March

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