Financial Vanguard

JULY 15, 2013

119.35

-3.8

2,196.00

+5.00

16.04

-0.06

108.65 105.60

+0.92 +0.69

CURRENCY BUYING CENTRAL DOLLAR POUNDS EURO FRANC YEN CFA WAUA

154.76 233.5483 201.6213 162.648 1.5543 0.2887 231.6787 RENMINBI 25.2138 RIYA 41.2627 KRONA 27.0215 SDR 232.3257

155.26 234.3029 202.2727 163.1739 1.5593 0.2987 232.4272 25.2957 41.396 27.1088 233.0763

SELLING 155.76 235.0574 202.9241 163.6994 1.5643 0.3087 233.1757 25.3776 41.5294 27.1961 233.8269

CBN Exchange rate as at 12/07/2013

By VICTOR AHIUMA-YOUNG & FRANKLIN ALLI

W

AIVERS granted to a few highly placed individuals by the Federal Government of Nigeria to import refined vegetable oil, Soya bean meal and related products, have put local vegetable oil and other associated manufacturers on the verge of total extinction. Already, all the oil mills in Kano, including Nigeria Oil Mills, Kano Oil Mills and PS Mandrid located in Bompai Industrial Estate, according to Financial Vanguard’s investigation, have closed down with over 20,000 direct and indirect jobs lost.

In Lagos, Jos and Port Harcourt, where there are also oil and related mills, while some are just managing to survive, others are already making arrangement to close down and begin direct importation.

One of the byproducts of vegetable oil mill is used for animal feed by poultry farmers. The irony of this pathetic situation is that while the Federal Government openly and publicly speaks of its resolved to encourage local industry, in secret and under closed door, it gives waivers to political associates and cronies to import and make cheap money, undermining local production.

*PIB Public Hearing: From right, Executive Secretary NEITI, Zainab Ahmed, addressing House Committee while Representative of Venezuela Embassy, Mr Dlforso Rodriglez and Executive Secretary, MOMAN, Mr Obafemi Olawore look on at the Final Public Hearing on PIB held at National Assembly Abuja. Photo by Gbemiga Olamikan.

Import waivers killing vegetable, edible oil industry •Oil mills in Kano close down •Lagos, Jos, Port Harcourt mills on verge of collapse •Labour, LCCI, producers lament According to investigation by Financial Vanguard, two leading vegetable oil producers with mills and farms in Lagos and other parts of the country, have not only scaled down their production, but are finding it extremely difficult to sell their vegetable oil and other associated products despite producing the best health friendly vegetable oil in the market today.

Same problems are being confronted

by mills in Jos, Port Harcourt and the South Eastern part of the country because of cheaper imported product brought into the country due to government’s policy inconsistencies.

Encouragement for local production

For instance, the Federal Government recently, through the Federal Ministry

of Agriculture, while stressing government’s determination to encourage local industry, declared that it remained resolute on the high tariff of 35 per cent import duty imposed on Crude Palm Oil, CPO, to grow the agricultural sector and the economy.

The government spoke through the Minister of Agriculture, Dr AkinwumiAdesina, during a visit by the Coalition

Continues on page 18 C M Y K

18 — Vanguard, MONDAY, JULY 15, 2013

Cover Story

The Basic Guide to Starting your Business Part 1

T SUMMIT: From left - National President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Alhaji Muhammad Abubakar; Chairman, Heirsholdings, Tony Elumelu; President, Manufacturers' Association of Nigeria (MAN), Chief Kola Jamodu and National Vice President of NACCIMA, Alhaji Ahmad Rabiu at the just concluded China-Nigeria Business Forum in Beijing, China.

Import waivers Killing vegetable, edible oil industry of Oil Palm Value Chain Associations, including the National Palm Produce Association of Nigeria, NPPAN, the Oil Palm Growers Association of Nigeria, OPGAN, the Plantation Owners Forum of Nigeria, POFON, and the Vegetable & Edible Oil Producers Association of Nigeria, VEOPAN, who came to advise against lifting or reducing the 35 tariff on CPO. Some socalled stakeholders in the food sector had alleged insufficiency of oil palm produce in the country, calling on government to lower the import duty on the product.

They claimed the tariff was “inhibiting the growth of multiple industries, including biscuits, vegetable oil, margarines, cereals, crisps, sweets and baked products, washing powder and cosmetics,” and that it would create ripple effects on multiple industries and, in the long run, cause higher food retail crisis. However the Coalition accused the faceless stakeholders in the food sector of sabotaging the economy through the proposal by Malaysian Palm Oil Board using some Nigerians as fronts to establish tank farms in three Nigerian ports of Lagos, Port Harcourt and Calabar to import palm oil from Malaysia among other proposals.

According to the Coalition “As we speak, the oil palm industry is in distress because the Nigerian government has not responded to the policy onslaughts of Malaysia and Indonesia. The policies are geared towards Nigeria patronising them rather than attaining self-sufficiency in palm oil production. Since the C M Y K

first quarter of the year, we have witnessed increased importation of crude palm oil and refined products into Nigeria, which has crashed the domestic trade. The critical issues that we like to bring forth on this visit are the two debilitating issues of waiver and CPO imports through ETLS. These have become the two duties to killing our oil palm industry.”

The Coalition urged the government to revoke all existing

,

Continued from page 17

The fact that we are having a discussion on whether we should lower the tariff, so that we could be importing, makes absolutely no sense

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waivers and stop further granting of waivers to import CPO forthwith; apply the exemption clause in the ETLS regulation to levy imports from West Africa on the same tariff as applicable to imports from other regions; assist smallholders with bulk storage facilities, especially in areas with considerable smallholder clusters; and exempt largescale plantation development from income tax to enable.

Responding, Adesina, said: “When the issue of waivers came up for rice, Mr. President was under enormous pressure to grant waivers for importations. He didn’t give the waivers. Today, Nigeria is

on its way to self-sufficiency in rice production. We have to do the same with the palm oil industry.

“The fact that we are having a discussion on whether we should lower the tariff, so that we could be importing, makes absolutely no sense.

Some make a case for those who need palm oil for processing. We are already paying a higher price because we have rising unemployment in our rural areas; we are spending hard-earned foreign exchange in importing. We are paying a higher price and the livelihoods of rural areas producing palm oil are threatened. We are paying a higher price because the naira is weakened anytime we are importing.”

Emphasing that he was against reduction of tariff from 35 per cent, because every country must do what was in its interest, he added “We cannot revive our rural areas if we are opening up our markets for everyone to dump every junk. The issue of ETLS is of great concern. ETLS in the region is to expand trade, but every country must do what is in its interest. We should be producing and exporting into those countries. We should not be using those countries as transit areas.”

Import waivers

Contrary to the above, the government has allegedly continued to grant waivers to few individuals as political patronage to party members and loyalists. One of such waivers was granted to a company (name withheld) with reference number BO/R.10260/107 to import 250.000 metric tons of refined vegetable oil to Continues on page 19

he term business denotes a particular trade or profession designed to provide goods and/or services to consumers. And in like vein, any organization which provides these services is also referred to as a ‘Business’.

Businesses play a vital role in the life and culture of countries with capitalist and free-market economies. In free-market economies, businesses operate without government control in matters such as pricing and wage levels. While in capitalist economies, private individual and business firms carry on the production and exchange of goods and services through a complex network of prices and markets. The earliest known use of “business” is the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work.

It is of utmost importance that in starting a business, you need to be guided in your choice of bringing that lifelong dream of yours into fruition. By following the basic guides or rules, you can write a plan adequately that reflects your goals, your personal skills, needs, knowledge, leadership abilities, available resources, level of risk, and the nature of your business factor into the equation (the nature of your business). One of the most important aspects of starting your own business is that it gives you an opportunity to do what you enjoy.

When starting a business, certain important points must come to mind your business must fit into your personality, passion, vision, strengths and other strong character traits.

Never base your desire to start a business on what a friend has done, this is because the fact that it worked for another doesn’t necessarily mean it will work for you. Bear in mind that entrepreneurship is individualistic, and leadership is indivisible.

Let me explain to you, why I decided to write this book. I am constantly pained by the alarming rate of unemployed youths in the society and the poverty level not only in our country, but also all over the world. The situation pulls at my heartstrings and I know and am convinced that we can

change things for the better, if only people join in the entrepreneurial revolution by becoming their own boss.

Growing up for me wasn’t easy and I knew I didn’t want to end up that way, so the moment I discovered an opportunity, I did not hesitate to take advantage of it. I’m desirous for a transformation, which will catapult your life to that place God has predestined for you.

Every business starts with an idea, so it is important to have the right kind of idea; this is because the wrong idea can lead to the failure of a business. Don’t forget that the first step is always crucial in the start of any journey in life.

It is important that you Brace up for the challenges ahead, and do not let anyone fool you (don’t be deceived) that you won’t encounter obstacles.

Nevertheless, the determination to succeed and go on will guarantee that you remain on top of your game; this is because the very existence of an idea in your mind shows that you have within and around you, the capacity to turn it into reality.

Generally, the size of business you want to embark on has to be thoroughly considered; this is because there is no maximum or minimum length for a business plan.

The determining factor for lengths depends on the level of details and the amount of funding you require to achieve such goals.

I will be taking you through the steps bit by bit, on what to look out for and helping you become your own boss through entrepreneurial revolution.

What is business?

I have come to realize that a lot of people do not understand the term business, the way an entrepreneur sees it. Many actually limit it to just buying and selling, but my dear, business to an entrepreneur is more than just trading to make profit.

I will expatiate more on this in the chapter.

Vanguard, MONDAY, JULY 15, 2013 — 19

T

he Nigerian National Petroleum Corporation's (NNPC) request to the National Assembly for it to be exempted from remitting its operating surplus to the consolidated revenue fund is to say the least, absurd and unthinkable.

The rationale for the request smacks of disrespect to the nation and to say the least, a cover up for the ever increasing level of corruption in the country. If all agencies of government come up with one excuse or the other for them to be exempted, who then will foot the bill of the nation?

NNPC as it stands, is supposed to be the cash cow of government revenue but on the contrary, it is a drain pipe. Nigerians must not forget so early the monumental fraud perpetuated by the NNPC in the subsidy scam as revealed by the forensic audit report of the organisation in which the NNPC was said to lack records to give details and full account of its operation. To grant any agency of government exemption from remitting its operating surplus will be an invitation to anarchy. On several occasions, the Federation Account Allocation Committee has accused the NNPC of short- changing the overall and overriding interest of nation by deducting at source what the nation," he said. Yakubu said it considers as its operating revenue. the Corporation lost N300 billion, More often, the NNPC management N111 billion and N193 billion in appropriates to itself funds not due 2009, 2010 and 2011, respectively to it. to oil thieves.

Mr. Andrew Yakubu, Group He added that the NNPC, like any Managing Director of the other oil corporation, was not only Corporation, in making the call in a managing oil business but also message to an interactive session managing the challenges with House of Representatives confronting oil production. The Committee on Finance in Abuja GMD said that the Corporation had believes he will have his way with been subjected to the pains of the National Assembly. His pipeline vandalism over the years. argument is simply that the NNPC The Coordinator of Corporate relied on internally generated Planning of the NNPC, Mr. revenue to fund its operations Timothy Okon, said the corporation without subvention from government. was operating under challenging “The Corporation wishes to seek circumstances to ensure that the consideration, appreciation and production was not affected. support of the committee to exempt He said that between 2009 and the NNPC from the remittance of 2012, the Corporation lost 11 operating surplus to the consolidated million barrels of crude oil to revenue fund,” he said. pipeline vandals. Okon attributed According to Yakubu, the repairs the Corporation’s inability to remit of pipelines damaged by vandals are any surplus funds to the funded from the Corporation’s cash consolidated fund to operational flows to ensure steady supply of losses suffered between 2009 and petroleum products. “NNPC incurs 2011. Mr. Anthony Ogbuigwe, the huge costs in meeting its statutory Group Executive Director, Refining and other assigned roles in the

No to NNPC’s exemption from remitting operating surplus request To grant any agency of government exemption from remitting its operating surplus will be an invitation to anarchy; on several occasions, the Federation Account Allocation Committee has accused the NNPC of short-changing the nation by deducting at source what it considers as its operating revenue

,

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and Petrochemicals, said NNPC lost 11.7 million barrels of crude oil in four years. The Chairman of the Finance Committee, Rep. Abdulmumin Jibrin (PDP-Kano), explained that the session was aimed at ensuring that government businesses were carried out with seriousness. He enjoined officials of the

Corporation to respond to several questions raised by members of the committee at the next sitting. Mr. Yakubu and his co-travelers did not tell the committee how Shell, Mobil and others affected by oil theft defray their crude losses to theft. If Yakubu were asking for more funding to combat oil theft whose perpetrators are known to them all in the oil industry, it would have been different.

The argument that it uses its internally generated revenue to fund its operation is normal. In budgeting, the cost is deducted as operational expenses before operating surplus. The NNPC would have taken care of its operational cost before declaring any surplus. Mr Yakubu, it is no news that the NNPC you manage is funding its operations with internally generated revenue. The Central Bank of Nigeria does, yet, it remits its operating surplus to government. The NPA, NIMASA and others do the same. Why should NNPC be different?

The Committee must resist every temptation and call the bluff of NNPC. What the NNPC should be telling Nigerians is the need for it to be privatised. In fact, it should help fasttrack the Petroleum Industry Bill that will allow it to operate like any other oil company in the industry. To ask for exemption in the remittances of operating surplus is to say the least, insulting discerning minds in Nigeria.

Nigerians must not forget that the Committee has been locked in a battle with revenue-generating agencies of government over non-remittance of revenue to the consolidated revenue account. As long as they are Federal Government agencies, they must remit their surplus to consolidated revenue fund; that is what the constitution says.

Period.

Cover Continued from page 18 supposedly cushion the effect of climate change and floods.

In another of such waivers, the letter from the Finance Ministry to the Comptroller-General of Customs, with reference number BD/FP/TT/42/G/I/214 read among others, “In order to cushion the present effect of the scarcity and high price of essential raw materials for feed production in the country, His Excellency, Mr. President has granted approval for a concessionary rate of 0 per cent duty and 0 per cent VAT on importation of Soya Bean meal for poultry consumption by poultry farmers with effect from 1st March to 31st December 2013.”

An official of the Nigeria Customs Service, NCS, in Apapa ports, told Financial Vanguard in confidence, that rate of waivers NCS receives monthly is mind bugling and

Import waivers killing vegetable, edible oil industry that mostly the beneficiaries are party faithful and bigwigs.

Creating unfair competition — LCCI

Lamenting the harmful effects of waivers to local industry, Muda Yusuf, Director General, Lagos Chamber of Commerce and Industry, LCCI, noted that one of the major challenges faced in the Nigerian economy was the arbitrariness and impunity that characterised the management of economic policies, saying that import duty waiver was one of such abuses. He said “LCCI is of the view that waivers are detrimental to the economy in a number of ways. It creates a condition of unfair competition,

giving one economic player an edge over others. It leads to huge revenue loss to government.

Even the Customs high command has severally lamented the adverse impact of waivers on revenue.”

“It results in the perpetuation of a rent economy and it weakens the moral authority of the political leadership to curb corruption since waivers is a variant of corruption. It is incredible that this is happening as only about a year ago the Coordinating Minister of the Economy, Dr. Ngozi Okonjo Iweala, assured the nation that government has put a stop to waivers; and that if it becomes inevitable, it would be sector wide, not for a single company.”

Killing vegetable/ edible oil sector — VEOPAN

Similarly, Chief Okey Ikoro, National Chairman Vegetable/ Edible Oil Producer Association of Nigeria, VEOPAN, who expressed the view of the Association, said the issuance of waiver for importation of Vegetable/Edible Oil into Nigeria is gradually destroying the sector. “The Federal Government has in 2011 granted waiver to a few companies to import Vegetable/Edible Oil into the country; these companies has continued to use these waivers up till today, under the guise that the total metric tons granted to them has not been exhausted as the

waivers they claim has been renewed to enable them exhaust same,” he said.

According to him, this singular act coupled with the massive importation of vegetable/ edible oil through our neighboring countries under ETLS (ECOWAS Trade Liberalization Scheme) at zero duty has completely grounded the vegetable/ edible oil sector of the economy, lamenting that “companies are closing down, while some are retrenching staff as they can no longer sell their products.

This has also resulted in disinvestment on plantations, which is expected to boost the national total output of palm oil.”

Grounding surviving companies — local producer

Dr. Simon Okolo, Chairman,

Continues on page 34 C M Y K

20 — Vanguard, MONDAY, JULY 15, 2013

Business & Economy

*From left: Abiodun Atobatele, MD/CTO, ATB Techsoft Solutions Ltd; Lagos State Governor Babatunde Fashola (middle) flanked by officials of the state government, at a conference on technology held in Dubai.

BRIEF Cashless economy: UBA launches All About U debit card

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OLLOWING the deployment of the exclusive World Mastercard recently, United Bank for Africa (UBA) Plc has introduced a personalised debit card called the UBA “All About U” which allows customers carry around their fond memories while using their Debit Cards.

The UBA “All About U” card is an award winning customized Debit MasterCard, which gives customers the opportunity to create a one-of-a-kind card with their favorite photograph or image – allowing them the privilege of branding their payment card. Alternatively, cardholders can choose from a gallery of contemporary pre-selected images available at the specialised product portal and these designs can be adjusted to their satisfaction.

Using design software which seamlessly integrates with the bank’s card management system, the UBA “All About U” card perfectly blends in the UBA brand with the customer ’s creative imagination, making the customer a ‘partner-indesign’ while creating a sense of loyalty and enhancing affinity.

Divisional Head, eBanking, UBA Plc Dr. Yinka Adedeji said, “With the “All About U” card, UBA aims to introduce a bespoke look and feel to card issuance.”

According to him, UBA is at the forefront of driving the cashless initiative in Nigeria, and is set to raise the bar once again with the UBA “All About U” Debit MasterCard.

C M Y K

13% DERIVATION: Oil communities fault payments into state govt accounts

By EMMANUEL ELEBEKE

O

il and gas producing communities in Akwa Ibom state have joined their voices in calling for payment of 13 per cent derivation direct to the communities, saying that their demands are within the confines of the law of the land. In a memo to the Chairman, Revenue Mobilisation, Allocation and Fiscal Commission, RMAFC, made available to Vanguard in Abuja, the communities affirm that the provisions of the 1999 constitution of the Federal Republic of Nigeria is clear enough on where to pay the 13 per cent fund to.

The letter was signed by 13 leaders of the oil and gas producing communities namely: Awawa Eka-Enang, Mr. Iniobong Willie, Prince Benhur Oduenyie, Chief Unanaowo Akpan, Elder Ufort Udo, Sunday Okon, Mr. Ibanga Asuquo Bassey, Mr. Stanley Etim, Obong Sebastian Okon, Hon. Chris Abasi-Eyo, Chief Ime Jack, Engr. Kevin Ibok and Edet Daniel. ”We insist on the provisions of Section 162 sub section 2, which states that provided that the principle of derivation shall be constantly reflected in any approved revenue formula, as not less than 13 per cent of the revenue accruing to the Federation Account directly from any natural resources.

We do not need an amendment of the constitution for

a d m i n i s t r a t i v e implementation of that provision. From that provision of the constitution, it is clear that 13 per cent derivation fund is theorist line charge of the Federation Account. The fund is prior to any revenue formula, it exists before any revenue formula, the group said, insisting that the amount due to 13 per net derivation fund is constitutionally set aside before any FAAC meeting to share the balance of the total oil revenue of 87 per cent.

According to the statement, the group is of the view that RMAFC has no right to send the 13 per cent derivation fund through any state government account, who is the third

beneficiary of the Federation Account. They alleged that for 13 years, the governors of oil producing communities have received the 13 per cent derivation fund meant for the development of oil and gas producing areas, but have used the funds to develop their state capitals and non oil producing communities, leaving the actual oil and gas producing communities in abject poverty, hunger and penury.

They also noted that before the 1994/95 constitutional conference, the proceedings of derivation fund made available for the oil and gas producing communities was minimal.

“In 1982, it was 1.5 per

cent of the total revenue. It is pertinent to, state that the Revenue Act 1 of 1982 made provision of 1.5 per cent derivation fund for the development of Mineral Producing Areas of a Nigeria.

The derivation fund of 1.5 per cent was administered and managed through administrative committee system by the Federal Government and not the state governments. It is therefore surprising that RMAFC decided to pay the 13 per cent derivation into state government accounts when there is enough evidence from past administrative records and law that derivation fund is a Federal government matter,” they said.

Mark urges banking sector to improve service

By PROVIDENCE OBUH

T

HE Senate President, Mr. David Mark, has urged the banking industry on improved services, while commending the advancements in their products and service offerings.

Mark made the comment during a courtesy visit to his Abuja office by the President Chartered Institute of Bankers of Nigeria (CIBN) Mr. Segun Aina.

He advised the sector to ensure that Nigerians have access to finance, regardless of their class or status, even as he acknowledged the industry’s quick and positive response to the global financial crisis.

He advised further that the institute mandate banks to support the growth and development of the real sector of the economy by making loans available to the small and medium scale entrepreneurs at affordable

interest rates.

He said, “the senate will support to fasttrack all banking and finance bills that would ensure effective, efficient and smooth banking operations thereby engendering the stability and growth of the banking industry.”

In his remark, Aina explained that the visit was part of the efforts to engage major stakeholders in the banking and finance industry, Legislature and Government on various programmes and activities of the Institute.

He stressed the need for National Assembly to collaborate with the Institute on a Seminar on Banking, Finance and Allied Matters for Legislators which would enable both the law makers and bankers to appreciate and understand the peculiarity of each others role and responsibilities. Also he commended the senate for the accelerated handling of bills especially those that affect the industry.

Vanguard, MONDAY, JULY 15, 2013 — 21

Business & Economy

BY FAVOUR NNABUGWU

T

he country ’s dream of assembling and patronising its own cars is still alive, says National Automotive Council, NAC. NAC Director-General, Mr. Aminu Jalal, said the country must not give up on the pursuit of its automotive agenda.

To ensure that the dream is kept alive, Jalal said the Council has set aside the sum of N3.5billion as seed money for a fund to be accessed at single digit interest rate to those who purchase locally assembled vehicles, all in the effort to encourage Nigerians to buy made-in-Nigeria vehicles.

He said the implication of killing the dream of Nigerian made car means that the country will continue to fund jobs projects abroad to the tune of over $3.5billion annually at the expense of its teeming masses of unemployed and the existing huge investment in manufacturing and assembly.

“The Nigerian market, estimated at N600 billion annually is sufficient to sustain a local automotive industry if the investment environment is right. The automotive technology is over a hundred years old and no one needs to reinvent the wheel”

Made-in-Nigeria car dream still alive — NAC boss He lamented that about 50,000 new and 150,000 used vehicles were imported into Nigeria yearly.

Nigerians spend an average of N400 billion on importing passengers’ cars and by the time you add trucks and other vehicles, the amount Nigerians spend on imported vehicles will be running to N600billion annually, adding that the money can be plowed into the country’s automotive industry.

“Apart from the existing

Assembly plants with a combined capacity of nearly 100,000 vehicles per annum, there exist numerous automotive body building facilities with impressive capacities”.

NAC he said remains relevant because the industry is strategic and its activities must be integrated to be meaningful. It is essential that an agency is in place to plan, coordinate and provide common infrastructure just as he adviced government on

appropriate policy intervention. This is the practice in all countries that similarly aspires “Nigerians have mastered the act of vehicle assembly and even the production of a long list of automotive components and parts including all automotive glass, brake pads, all light and reinforced plastic parts, Seats, exhausts systems, fuel, air and oil Filters, some pressed parts, wire harnesses, tyres, batteries, cables, trim etc”.

VISIT: From left: Company Secretary/Legal Adviser, Diamond Bank Plc, Ms. Nkechi Nwosu; Executive Director, Mr. Abdulrahman Yinusa; Head, Corporate Communications, Mrs. Ayona Trimnell; GMD/Chief Executive Officer, Dr. Alex Otti; General Officer Commanding, 81 Division, Nigerian Army, Major General Obi Umahi; Executive Director, Mrs. Caroline Anyanwu; and Director, Operations and IT, Mr. Premier Oiwoh during a courtesy visit by the GOC to Diamond Bank’s corporate head office in Lagos on Thursday.

Pension reserve hits all time high, now N3trn — BPE boss

By EMMANUEL ELEBEKE

T

he Director General of Bureau of Public Enterprises, BPE, Mr. Benjamin Dikki, says the National Pension reserve has reached an all time mark of N3 trillion as at July 10 th, 2013. Dikki disclosed this when the Senate Committee on Bureau of Public Enterprise visited him in Abuja, as part of its c o n s t i t u t i o n a l oversight functions.

The BPE boss said the feat was made possible through the institutional reforms introduced by the agency into the sector and solicited for mutual corporation and understanding by the lawmakers in the passage of its proposed bills for the reform of the Railway, Inland waterways, Postal bills as well as Harbour Reform Bill among others, which are C M Y K

currently pending in the house.

He explained that the Bureau has succeeded by achieving over 50 per cent of its set targets by successfully unbundling of PHCN, saying that the transaction documents which are preparatory to the handover of five power generating companies, GENCO and 10 distribution companies, DISCO to the successful bidders.

With the completion of the proposed hand over of the GENCOs and DISCOs by the second quarter of 2014, he assured that power supply would be stabilised.

Other achievements of BPE, according to him, include: the payment of 25 per cent share price of the unbundled PHCN companies by the successful bidders, as well as the payment of the outstanding 75 per cent of the share purchase price.

The BPE boss also stressed

the need for a clear separation of the regulatory powers in the draft copy of the petroleum industry bill, PIB, and other relevant bills.

This he said would ensure a clearly map out the functions of the various stakeholders in a particular sector, thus, leading to an efficient and effective result.

Dikki , who assured of constant power supply after the formal hand over of the privatised PHCN units in the second quarter of 2014. ‘‘At the completion of the ongoing NIPP projects and subsequent taking over of the power stations by the successful bidders, the power generation will be boosted by 5000 mega watts which will lead to a stable power supply that Nigerians are clamouring for,’’ he said.

The Senate committee led by its chairman, Senator Olugbenga Obadara, though commended the agency for its achievements in privatizing

some moribund government parastatls, knocked federal government for enlisting NITEL as agencies due for sale.

Obadara said the plan to sell NITEL would be counter productive to the economy, in view of the fact that NITEL remains an immeasurable asset to the country and has all it takes to achieve the proposed broadband services needed for an improved information and communication technology in Nigeria ICT. The Senate leader maintained that NITEL is one of the greatest value of Nigeria, as it enjoys high frequency control and right of way, as well as the Sat 3, which is the bedrock that could fast-track broadband service across the country. ‘‘The greatest value of NITEL is the frequency that controls the right of way and Sat3, which can offer the much needed broadband services,’’ he said.

BRIEFS FG releases Nigeria’s version of global adult tobacco survey report

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resident Goodluck Jonathan on Thursday in Abuja released the Nigeria’s version of the Global Adult Tobacco Sur vey (GATS) report.

Jonathan, represented by the Minister of Health, Prof. Onyebuchi Chukwu, said the consumption of tobacco was a major threat to public health, and called on Nigerians to join the fight against it.

The survey was conducted by the Federal Ministry of Health with support from the National Bureau of Statistics and the World Health Organisation (WHO).

“Available data shows that over five million people die each year from health conditions associated with tobacco use. Experts warned that if this trend continues, tobacco use will kill over eight million people each year by 2030. We have made efforts to control tobacco use in Nigeria, as you are aware that between 2004 and 2005, Nigeria assigned and ratified the WHO framework Convention on Tobacco Control,’’ the President said.

First Bank employee arraigned over alleged N39.7m fraud

A

52-year-old employee, Funsho Olaojo, who allegedly stole N39.7 million from First Bank of Nigeria Plc, appeared before an Ikeja Chief Magistrates’ Court.

Olaojo, a resident of Kwambe Area in Suleja, Niger, is standing trial on a threecount charge of conspiracy, forgery and stealing. The Prosecutor, ASP Barth Nwaokaye, said that the accused conspired with others, still at large, to steal the sum between April 2010 and April 2012.

According to the prosecutor, Olaojo used his position as an employee of the bank to falsify the bank’s records to steal the money. He noted that the offences contravened Sections 285, 333 (2a) and 409 of the Criminal Law of Lagos State, 2011.

22 — Vanguard, MONDAY, JULY 15, 2013

Banking & Finance BRIEFS FirstBank, China Bank sign agreement on $100m SME facility

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n its bid to boost lending to small and medium scale enterprises in Nigeria, and also stimulate economic growth in the country, First Bank of Nigeria Limited has signed a $100m facility agreement with China Development Bank (CDB), a major bank in the Peoples’ Republic of China. This is coming on the heels of the FirstBank’s extension of a single digit credit facility to Nigerian entrepreneurs in partnership with the Nigeria Association of Small Scale Industrialists (NASSI).

The signing of the landmark agreement, witnessed by President Goodluck Jonathan, who is on a State visit to China; and his host, President Xi Jinping of China, reinforces the Bank’s leadership position as a National Icon and Global Player.

AfDB’s Open Data Platform achieves continent-wide coverage

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he African Development Bank’s Open Data Platform is now operational for the entire African continent.

This follows the completion in July 2013 of the last phase of the project for the following 14 African countries: Benin, Comoros, Côte d’Ivoire, Djibouti, Equatorial Guinea, Eritrea, The Gambia, GuineaBissau, Liberia, Kenya, São Tomé and Príncipe, Sierra Leone, Swaziland, and Togo.

Statistical data for all 54 African countries are now available to all users at http:// www.afdb.org/statistics. In addition to social and economic statistics, data on key development topics such as climate change, food security, infrastructure, and gender equality can be accessed by researchers, analysts and policymakers worldwide.

The Open Data Platform is part of the AfDB’s Africa Information Highway initiative to scale up the collection, management, analysis, and sharing of quality statistics relating to the continent’s development.

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Global anti-money laundering body probes Nigeria’s compliance Stories by BABJIDE KOMOLAFE

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lobal anti-money laundering body, Financial Action Task Force (FATF) will visit Nigeria in September to investigate the effectiveness of the implementation of the nation’s anti-money laundering laws and regulation.

Presently, Nigeria is on the FATF list of countries that had not made significant progress in their anti-money laundering/counter terrorism financing (AML/CTF) regime. The outcome of the investigation would decide the continued inclusion of the country in the list.

While in the country, FATF would randomly select institutions and organisations in the public and private sector, to ascertain their level of compliance to anti-money laundering laws.

As part of preparations for the visit of the global body and ensure Nigeria gets a favourable result, the Central Bank of Nigeria (CBN) issued a circular to banks and financial institutions last week, on preparatory measures for the investigation. The circular was signed by Acting Director, Financial Policy and Regulation department, Mr. Nwaoha I.T. The circular said, “You will recall that in 2009, the Financial Action Task Force (FATF) placed

Nigeria among the grey list countries that had not made significant progress in their AML/CFT regime and the country has been working assiduously to exit from this unenviable group. It was, however, acknowledged at the Inter-Governmental Action Group against Money Laundry in West Africa (GlABA) Plenary meetings held in Ghana in May, 2013 and FATF Public Statement in June, 2013 that Nigeria had largely addressed its action plan and improved its overall

supervisory AML/CFT framework.

“The International Cooperation Review Group (ICRG) of FATF has, however, scheduled to conduct an on-site visit to Nigeria early September, 2013 to confirm that the processes of implementing the required reforms and actions are underway to address previously identified deficiencies.

“The proposed visit by ICRG is to afford the Group the opportunity to determine the effectiveness of the country’s

SEMINAR: Acting President, Court of Appeal, Hon. Justice Z. A Bulkachuwa delivering her welcome address at the NDIC Sensitization Seminar for Appeal Court Judges on The Challenges to Deposit Insurance Law and Practice in Nigeria, while the MD/CE, Nigeria Deposit Insurance Corporation (NDIC), Alh. Umaru Ibrahim listens.

NDIC seeks support of judiciary to tackle legal bottlenecks

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igeria Deposit Insurance Corporation (NDIC) has appealed for the support of the judiciary to tackle the challenge of legal bottlenecks in the performance of its mandate.

The Managing Director and Chief Executive Officer of the Corporation, Alhaji Umaru Ibrahim, made this call in Abuja at the opening ceremony of the NDIC sensitization seminar for Appeal Court Justices. He said excessive litigations and lack of proper understanding of the distinction between the legal status of the Nigeria Deposit Insurance Corporation (NDIC) as a corporate entity and its role

implementation of its laws and regulations as well as compliance with international best practice.

The ICRG will also evaluate both the public and private sector institutions’ implementation frameworks.

A favorable report on the country’s AML/CFT regime will enhance its chances of exiting the FATF grey list. To this end, the CBN implores all relevant stake-holders to adequately prepare for the exercise.

as liquidator are critical challenges confronting the Corporation in discharging its mandate.

He said the Corporation had been experiencing the execution of court judgements against its assets over the liabilities of banks inliquidation, adding that the Corporation had also faced difficulties associated with the recovery of debts owed to failed banks.

Ibrahim therefore appealed to the judiciary to address these legal challenges to enable the Corporation achieve its mandate of depositor protection and stability of the Nigerian banking sector.

“We

recognise that no matter how robust the legal framework operated by the NDIC is, the Corporation cannot achieve much without the cooperation and vital input from the Nigerian Judiciary”, he said.

The NDIC Chief Executive also described the role of the Court of Appeal as a critical arm of the judiciary, given its constitutional appellate jurisdiction over decisions of the State and Federal High Courts where most of the failed banks related cases were being handled. He urged the judiciary and legal practitioners to play their respective roles effectively, which would thereby empower the Corporation to

discharge its mandate in the interest of depositors and the Nigerian banking system.

The seminar for the Court of Appeal Justices with the theme: “The Challenges to Deposit Insurance Law and Practice” was the fourth in the series of the capacity building programme embarked upon by the NDIC to sensitize the judiciary and other stakeholders on their roles in the discharge of the deposit insurance law and practice in the country. The first run of the seminar was jointly organised by the Corporation and National Judicial Institute (NJI) for Judges of the Federal and State High Courts while the second run was organised in collaboration with the Federal High Court for all Judges of the Federal High Courts and the third run was organised for External Solicitors of the Corporation.

Vanguard, MONDAY, JULY 15, 2013 — 23

Banking & Finance

External reserves decline further by $929m •Anxiety mounts over Naira stability

By BABAJIDE KOMOLAFE

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HE nation’s foreign reserves have continued on the downward trend falling by $929 million in the first two weeks of this month.

The Central bank of Nigeria (CBN) reported on its website last week that foreign reserves fell further to $47.115 billion from $48.044 billion as at June 28 th .

This represents the lowest level of foreign reserves since March.

Meanwhile, the naira depreciated by 77.7 kobo at the interbank foreign exchange market last week fuelling anxiety over the continued stability of the naira. From N160.59 per dollar the previous week, the interbank exchange rate rose to N161.59 at the close of business on Friday. This is despite supply of $600 million by the CBN through it’s the bi-weekly foreign exchange auction. In addition to this was $300 million sold the Nigeria National Petroleum Corporation (NNPC).

The decline in foreign reserves was fuelled by decline in crude oil price, and in domestic production. In addition is the huge demand for foreign exchange fuelled by huge sell-off in the fixed income market by foreign investors due to global uncertainty emanating from the timing and reported withdrawal of the United States quantitative easing. To meet the increasing foreign exchange demand, and to sustain the value of the naira, the CBN on a number of occasions to increased foreign exchange sales per auction session to $500 million from $300 million. For example, the month of dollars sold by the CBN increased 31.2 per cent in June to $2.65 billion from $2.018 billion in May. While this development have occasioned anxiety over the future of the naira especially the ability of the CBN to continue to defend the naira in the face of declining reserves, the general believe is that the

apex bank should for now maintain its defence of the naira.

“Despite the temporal pressure on the Naira, it is expected that the NGN will remain relatively stable around N160.00/$1 (+or-200bps) in the medium term despite the downside risk of volatile oil prices and low crude oil output”, predicted the Financial Market Dealers Association (FMDA) in its outlook for foreign exchange market.

M

a n a g i n g Director/Chief Executive, Mr. Bismarck Rewane said, “There are three pressures here.

There are those who have transactions to settle, there are those who are afraid that the dollar would not be available when they need it in the future, and there are speculators, who are speculating against the naira.

In this

circumstance, you will have to keep supporting the naira for some time to reduce the amount of speculative attack. But invariably, at the end of the day, there would be a need for a minor readjustment of the value of the naira to the dollar in the not too distant future because I don’t see how much more you can endure, because before you know it, your reserves will suffer”, he said.

On his part, Mr. Victor Ogiemwonyin, Managing Director/Chief Executive, Partnership Investment Company Plc, said “I think the CBN has defended the naira well, so far. They have also allowed the naira to depreciate slightly against the dollar within the managed band it set for itself. I think it was a good compromise, letting the naira free fall is a bad idea.

Heritage Bank sustains verification of SGBN account holders

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ERITAGE Bank Nigeria Limited has sustained the verification exercise to revalidate account holders of the former Societe Generale Bank, more than six months after the commencements of the exercise.

The Bank which commenced operations in March, acquired the banking license of the defunct SGBN, as well as its deposit liabilities.

Among other things, the bank promised to settle depositors of the former bank and for this purpose conducted an exercise to revalidate its account holders. The exercise was initially designed for three months and to be completed before the bank commenced operations.

Managing Director/ Chief Executive, Heritage Bank, Mr Ifie Sekibo said, “The exercise is on-going.

The aim is to possibly pay all customers of SGBN who came to

participate in exercise through issuance of cheques to them at the validation centres immediately their accounts were successfully validated.

“The exercise is in two parts, namely verification of accounts and instant issuance of payment cheques for those who prefer to collect the balances in their accounts. Owners of successfully validated accounts also have the option of retaining such with the new Heritage Bank. So far we have recorded significant success in the exercise, with most of the SGBN account holders verified, choosing to retain their accounts and bank with us rather than collecting their money ”. Prior to its commencement, Heritage Bank appointed four banks, using some of their branches as centers for the verification exercise.

But now, the exercise is done in the branches of Heritage Bank.

24 — Vanguard, MONDAY, JULY 15, 2013

Corporate Finance BRIEFS US regulator to deal on cross-border rules

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he top U.S. derivatives regulator is within reach of a compromise over how its rules apply to foreign companies dealing with U.S. banks, a source close to the negotiations told Reuters.

Friday is the last day the Commodity Trading Futures Commission (CFTC) can decide on the issue, as a broad temporary relief for foreign companies expires. Having no rule in place would cause regulatory chaos and invoke the wrath of already critical politicians.

The issue has split the commission, pitting Chairman Gary Gensler against a fellow Democrat, Commissioner Mark Wetjen, who wants the agency to rely more on foreign regulators.

But the two were now close to a deal, the source said.

“It looks very positive, there’s agreement in principle on most of the major issues,” the source said.

“To (Gensler’s) credit and to Mark’s credit they were able to get in a room together over several days and we all knocked this out,” the source added.

S&P 500 climbs above record close on Bernanke’s comments

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.S. stocks jumped, sending the Standard & Poor ’s 500 Index above its record closing level, as Federal Reserve Chairman, Ben S. Bernanke, backed sustained monetary stimulus.

All 10 groups in the S&P 500 rallied, with technology and rawmaterial shares posting the biggest gains. FreeportMcMoRan Copper & Gold Inc. and Newmont Mining Corp. led gold producers higher as the precious metal’s price soared.

Advanced Micro Devices Inc. (AMD) rose 10 percent as analysts recommended that investors buy the shares. An S&P gauge of homebuilders added 6.2 percent as all 11 members advanced.

The S&P 500 gained one percent to 1,669.23 at 1:41 p.m. in New York. The benchmark gauge climbed above the all-time closing record of 1,669.16 reached May 21, erasing losses since Bernanke first suggested the Fed might curb stimulus this year.

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World Top 1000 banks: Zenith ranks 6th largest in Africa

By NKIRUKA NNOROM

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ITH a Tier 1 capital of $2.969 billion, Zenith Bank Plc, is now the sixth largets bank in Africa and number one in Nigeria, topping 12 other Nigerian banks in this year’s Top 1000 World Banks’ ranking of The Banker’s Magazine of Financial Times Group, London, United Kingdom.

With this figure, Zenith Bank now ranks 287th in the world, moving from the 322nd position globally in 2012. Trailing behind Zenith Bank as the ninth biggest bank in Africa and 367th in the world was First Bank of Nigeria, FBN, with Tier 1 capital of $2.134 billion.

Guaranty Bank, which emerged the 12 th biggest banks in Africa, moved to 417th from 455th in the world with $1.813 billion Tier 1 capital; Access Bank, 14th bank in Africa, moved to 506th from 541st position with $1.303 billion; UBA, the 16th bank in Africa, moved to 553rd from 563rd with tier 1 capital of $1.120 billion; Ecobank was the next with $951 million while Fidelity Bank ranked 19th in Africa and 635th in the world with $923 million.

FCMB occupied 733 rd position with $702 million; Skye Bank was in the 741st position with $683 million; Diamond Bank claimed 827th position with $555 million; Stanbic IBTC followed with $503 million; UBN emerged the 915th with $422 million, while Standard Chartered

closed as the 13th biggest bank in Nigeria with $374 million.

In terms of the percentage change in the Tier-1 Capital, which underlines the strength of banks, Zenith Bank, again topped other wholly Nigerian banks with an increase of 23.82 percent, while Access Bank and GTB followed with percentage increase of 23.72 per cent and 22.70 per cent respectively. In the capital asset ratio of soundness parametre, Zenith Bank came top at 17.70 percent, trailed by GTB at 16.23 percent. Third was Fidelity Bank at 15.67 percent. Standard Chartered Nigeria was fourth at 13.38

percent, followed by FCMB at 12.00 percent.

According to the report by The Bankers Magazine, Nigerian banks performed particularly well on a profit basis, saying, “In the 2012 ranking, the top 10 biggest lenders from the country made aggregate net profit before tax of $993 million. That figure has climbed to $3.1 billion in this year’s rankings. “Moreover, three banks – Zenith, First Bank and Guaranty Trust Bank – made pre-tax earnings of more than $500 million; which was a first in Nigeria.”

South African banks retained their position as the largest

lenders in Africa in this year’s Top 1000. Standard Bank remained the biggest African bank, having increased its Tier 1 capital from $9.8 billion in the 2012 ranking top $10.9 billion in 2013.

FirstRand and Nedbank ranked second and third this year respectively, occupying the same positions that they did in the third Banker’s Top 1000 in 2012. But most of South Africa’s lenders, as was the case in 2012 ranking, had a subdued year as far as Tier 1 and asset growth were concerned.

NAHCO shareholders approve N25bn capital raise, N369m dividend

By PETER EGWUATU

S

HAREHOLDERS of Nigerian Aviation Handling Company (NAHCO Aviance) Plc have unanimously endorsed the proposed raising of capital of not more than N25 billion and N369.141 million dividend for the financial year ended December 31, 2012.

The endorsement was made at the company’s 32nd Annual General Meeting (AGM) held at the Transcorp Hilton Hotel in Abuja during the weekend.

Notable chairmen of shareholders groups who spoke the minds of their members, such Sir. Sunny Nwosu, Oderinde Taiwo,

Boniface Okezie, Oludewa Thorpe, Dr. Farouk Umar praised the board, management and staff for the remarkable progress made during the financial year under review despite the harsh operating environment.

Also endorsed at the meeting was the authorisation by the board to diversify into power, free trade zone, Africa Expansion needs, and or any other projects in line with the company’s diversification and strategic objectives.

Addressing the shareholders at the AGM, Chairman of the company, Mallam Suleiman Yahyah, said, 2012 was an exceptional and difficult year for the aviation industry. Our company ’s performance

LAUNCH From left: Omasan Ogisi, Head of Media/PR,Ericsson Sub-Saharan Africa; Kamar Abass,MD Ericsson Nigeria, Head of Region Accounts, RSSA;and Fredrik Jejdling,Head of Region Sub-Saharan Africa at a media engagement on the Regional Service Center Opening in Lagos, Nigeria.

reflects 10 months’ full –stream operations, taking into account of the January 2012 fuel subsidy strikes that paralysed economic activities, and aviation movement, which shaved nearly one per cent from our Gross Domestic Product (GDP). The disruptive work- to- rule strike of licensed cargo clearing agents in May and the unfortunate Dana Air crash of June 3, 2012, leading to loss of lives and property also impacted on performance” He explained that following the crash and intensive regulatory scrutiny to improve safety as well as the tail effects of the financial crisis, four major domestic carriers were grounded in 2012, adding that the remaining airlines in operation had their functional fleets depleted due to new certification requirements of the Nigerian Civil Aviation Authority (NCCA). Yahaya, noted that in spite of the these challenges, the company was able to marginally improve on its revenue base by 3.5 per cent from N7.142 billion in 2011 to N7.404 billion in 2012.

According to him, “ Our Profit After Tax (PAT) of N732 million in 2012 was at variance with the N807 million achieved in 2011.

Our Profit was also a reflection of the full implementation of the new International Financial Reporting Standard, IFRS and the necessary adjustments and impairment that ensued. Also we have proposed a dividend payout f 25 kobo per every 50 kobo share held by our shareholders. Also our cash reserve ratios improved to 14 per cent in 2012 from 11 per cent in 2011.”

Vanguard, MONDAY, JULY 15, 2013 — 25

Corporate Finance

*From left: Government Relations & Public Policy Associate Director, P&G Sub-Sahara Africa, Temitope Iluyemi; Vice-President, P&G South Africa, Stanislav Vecera; Director-General, Budget Office, Bright Okogu; Vice-President, P&G Nigeria, Manoj Kumar and General Manager, P&G, George Nassar at the P&G ‘Grow Africa’ investment summit held in Lagos recently.

No need for bond issue if IGR is sufficient — Gov Orji

By PETER EGWUATU

T

he Abia State Governor, Theodore Orji , has ruled out the possibility of the state government accessing the Nigerian capital market via bond issue to raise money for developmental purposes.

The Governor revealed this when he hosted financial journalists at the government house in Umuahia, Abia State during a 3-day seminar organized by the Central Bank of Nigeria, (CBN), titled “Financial Inclusion in Nigeria: Issues, Challenges and Prospects”.

According to him, “There is no need to access the bond market if the state government can be able to get Internally Generated Revenue ( IGR) that can help pay its recurrent expenses.

Most state governments spend much money in servicing recurrent expenses. For use, we get between N3.5 billion and N3.8 billion allocation from the Federal Government and by time we make provision for the recurrent expenditure little is left for us to provide infrastructure. We have been trying to trim down our workforce, especially on those workers that are redundant.

We have huge wage bill to pay as we also have to empower our youths in order to curb crimes.

Continuing, he said, “We are trying to improve on our IGR so that it can be able to pay for some of the recurrent expenditure, while we use our allocation from the Federal Government to provide the needed infrastructure that will attract both local and foreign investment.

For this government, we have constructed many roads in Umuahia, Aba and all the other local government areas to allow free flow of traffic. In addition to this, we have beeb

working with private sector on power to ensure we flow steady supply of power. When there is steady supply of electricity it will help Small and Medium Scale Enterprises (SMEs) in Aba, and Umuahia to produce in large quantities and at less cost. There will be multiplier effects as more job would be created.”

Commenting on security situation in Abia State, Governor Orji said the security network in the state has created a conducive business environment. Expectedly, we have cashed in on it to woo investors. I have been meeting with investors who have shown interest in doing business in the state either alone or in partnership with our government. So, security issues have been tacked long before now and Abia is the most peaceful state in our country today. One of the ways we tackled security problem was by empowering our youths with skills, buying them tricycles, vehicles for transportation and brought in Soldiers to add to other security officers to chase away hoodlums that refused to be rehabilitated. We pay N15,000 to youth that are ready to acquire skills.”

He further noted that the policy of Abia State government is to encourage the development of industrial activities. “We are reach in agriculture.

We have embarked on aggressive agricultural revolution. We produce palm oil, cocoa, cassava and other cash crops.

We are just creating enabling environment to attract investors in food processing that will generate income to the people and state,” the Governor added.

GTB share price rises by 2.83% on interim dividend announcement

By NKIRUKA NNOROM

I

nvestors swooped on the shares of Guaranty Trust Bank, GTB, last week after the bank said that its Board of Directors will be meeting this week to consider the possibility of paying an interim dividend.

GTB had in a notice midweek to the Nigerian Stock Exchange, NSE, said that the Board would meet to consider among others, the audited financial statement for the half year ended 30th June, 2013, as well as issues relating to interim dividend.

Though the amount likely to be paid was not disclosed,

investors’ increased patronage for the shares of the bank resulted in 2.83 percent rise within two days. Following the announcement, the share price rose by 1.53 percent or N0.39 from N25.45 to N25.84 on Wednesday, a day after.

On Thursday, the share price again rose by 1.22 percent or N0.33 from N25.84 to N26.17, thereby bringing the total percentage gains to 2.63 percent, also making the stock the highest priced in the banking sector.

Operators said that increase seen in the bank was as a result of excitement by investors over the intended dividend. They added there is also the expectation that the

dividend for 2013 will surpass that of the previous year as income rises from expansion.

GTB had in 2012 paid gross dividend of N45.62 billion, which amounted to N1.30 per share. This, along with N0.25 paid in the first half of the year brought the total dividend to N1.55 per share.

“We have declared the best results in the industry in the last few years and provided shareholders the best return on equity for any financial institution in Africa.

“We intend to continuously reward our shareholders for the confidence they have in us and remain committed to teamwork, integrity and customer satisfaction as a bank,

assured Mr. Segun Agbaje, Managing Director, GTB, at the last yearly meeting in Lagos” Agbaje further stated that the bank intends to consolidate its position in 2013 by pioneering service innovations, developing alternate banking channels, promoting excellence and creating role models for society.

The Group’s financials for the 2012 financial year showed gross earnings of N221.9 billion and a profit before tax of N103 billion.

Total assets and contingents increased by six percent to N2.26 trillion in December 31, 2012 from N2.14 trillion in the previous year, while it closed the year with an On-balance sheet of N1.73 trillion.

BRIEFS Fidson expands ABR project to S/East

By PRINCEWILL EKWUJURU

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idson Healthcare Plc has expanded the scope of its Astymin Brilliance Reward, (ABR) to schools in the South Eastern States of the country.

The General Manager, Marketing of the company, Mr. Ola Ijimakin, who disclosed this at a press briefing to herald the third edition of the project aimed at rewarding academic performance among schools, said they have expanded the scope beyond schools in the South West in order to include primary schools pupils in the South Eastern States.

He disclosed that the best pupils from 200 schools across the South West and South East will be rewarded with educational materials.

“The ABR event has grown in number of schools, content and quality. The inaugural edition took place in july 2011 with 110 schools in attendance, mostly from Lagos. The second edition had 170 schools in attendance, covering more states including ogun, Oyo and Oun,” Ijimakin said.

Big banks face tougher lending rules than global rivals (Reuters) - The eight biggest U.S. banks will need to hold twice as much equity capital as required globally under a new rule launched by U.S. regulators on Tuesday, intended to protect taxpayers from any future costly bailouts.

The rule, launched by the country’s three main banking regulators, would impose a so-called leverage ratio, a hard cap on how much banks can borrow to fund their business, requiring them to hold equity capital equal to 6 percent of total assets.

The global capital accord known as Basel III, named after the Swiss city that is home to overseer Bank of International Settlements, sets a leverage ratio of 3 percent, which critics say is unambitious.

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26 —Vanguard, MONDAY, JULY 15, 2013

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Vanguard, MONDAY, JULY 15, 2013 — 27

Commodity Index

Micro-Finance

UP MfB disburses N406m in 6 months Stories by PROVIDENCE OBUH

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MUCHINEMERE Pro-credit Micro Finance Bank (UPMFB) has disbursed a total of N405, 656,100 million micro credit funds in its half year financial result, January to June, 2013.

Meanwhile, the bank posted 205 percent growth in profit in the period under review, while about 1,961 poor persons benefited from the fund owned by the Roman Catholic diocese of Enugu State, in line with its resolve to sustain the church efforts to eradicate poverty in the society through what it call “economic evangelism.”

Statement from the bank, signed by head of Public/Media Relations, Mr. Abuchi Anueyiagu, revealed that seven, out of about 17 local government areas in the state got the fund.

Managing Director of the bank, Mrs. Nnenna Ekete, said that the profit before tax of N58.2

million or a 204.6 percent cumulative growth recorded with the period is comparatively lower than the N75 million profits the bank recorded within a similar period of 2012.

“We have not done well comparatively as we did last year in terms of profit making in similar period of measurement. Between January and June 2012, we recorded a profit of almost N75 million, but this year it is N58 million within the same period.”

She adduced the lower profitability to increase in the bank’s administrative cost and most of the other indices of measurement.

She lamented that the bank spent more of its resources on purchase of diesel to power its private electricity generating set, unlike the power supply situation of the

June 05 - July 11, 2013

previous year.

According to her, “the bank has been operating on the average of N32, 000 every two days on purchase of diesel.

Electricity supply from the Power Holding Company of Nigeria (PHCN) has been very poor since the beginning of the year.”

She cited governments multiple taxation, as well as the UPMFB’s new investments that are yet to start yielding profits as another indices that accounted for the lower profit of the bank in the first six months of the year.

She said, “Despite these odds, the bank’s client level has been on the increase, and is projected to hit a 15 percent increase by the end of the year, as it is fast extending its operations to the rural areas to economically empower the grassroots out of poverty and meet g o v e r n m e n t ’ s m i l l e n n i u m development goal of poverty eradication.”

LASG explores e-governance with ATB Techsoft, Microsoft

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HE Lagos State Government has entered into talks with ATB Techsoft Solutions and Microsoft to aid egovernance, restating its commitment to transform the state into a 21st century mega city.

Speaking at a two-day briefing session on technology, organised by ATB Techsoft Solutions Ltd, in collaboration with Microsoft, the State Governor Babatunde Fashola said that the key to sustaining a mega city is the deliberate automation of government processes with current IT solutions Explaining egovernance solutions for mega cities, Education Solutions Specialist, Middle East and Africa, Ammar Al-Attiyat said that the solutions can be utilized to create a ‘paperless office’ and automate information

flow which will invariably reduce manual processes.

Al-Attiyat cited examples of security solutions that can monitor physical security in the state and how the citizens can benefit from online service portals that connect different ministries.

Head, Sales and Business Development for ATB Techsoft Solutions, Abideen Yusuf gave practical details on how Microsoft technologies can improve service delivery in the education and health sectors using Windows 8 Applications and cloud solutions through Office 365.

He said that cloud computing will create a cost effective and efficient environment conducive for innovation in teaching and learning, adding,

“These solutions will also enable seamless h e a l t h c a r e administration with faster access to patient records.” Dignitaries at the conference includes; stakeholders of the Executive Cabinet including the commissioners for Education and Health, Director of Financial Software and Permanent Secretary, Ministry of Science and Technology.

ATB Techsoft Solutions Limited is an IT solutions delivery company that undertakes and provides various IT as well as advisory services, offering specialized clientspecific services to government ministries, departments and agencies as well as educational institutions, banks and manufacturing companies.

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28 — Vanguard, MONDAY, JULY 15, 2013

Interview access to China. Regardless, Fisher worked tirelessly to develop relationships with Chinese state-owned enterprises, provincial governments, city governments, ministries, commissions, and banks, and even played tennis with Zhu Rongji, who became Chinese Prime Minster in 1998.

Eventually the doors opened.

In 1998, the company committed to invest $1.2 billion in two joint ventures to manufacture and distribute film, paper, and photochemical products in the country. Fisher wisely established the ventures in a way that gave local partners minority stakes in exchange for business assets, ensuring that Kodak would have operational control. Despite the political risk, it seemed that Kodak was making a breakthrough, and investors approved.

Nigeria must shrink targets to get economy stable —American business mogul, Ram Charan

BY PRINCE OSUAGWU

D

ifferent people have different ideas about how Nigeria’s economy could get to the desired spot in the year 2020. So when IndianAmerican business consultant, speaker and writer, Ram Charan visited Nigeria to attend the MTN leadership forum recently, a few journalists seized the opportunity to sound him out on way forward for the country’s economic revival campaign. Charan has consulted for companies such as GE, KLM, Bank of America, Praxair and Jaypee Associates. He is the author of various books on business, including Talent Masters, Leaders At All Levels’, Leadership in the Era of Economic Uncertainty: The New Rules for Getting the Right Things Done in Difficult Times, Boards That Deliver, What The CEO Wants You To Know, Boards At Work, Every Business Is A Growth Business among others. The man truly has ideas on his head and to say the least, his ideas on way forward for the Nigerian economy were entertaining.

,

What is your impression of Nigeria so far?

I’m very positive about the Finance Minister I met. You have a tremendous talent in the nation. You have lots of resources. You are making progress. You need to accelerate the progress. Focus on a few things and get them done.

How do we do that?

It’s as simple as it sounds. Just focus on a few things. Get them done. Build the image - this is a country where things get done. People will knock on your doors. You need to fill the skills gap, first. Second, look into agriculture. Get a few companies, say 10 companies, to come here and invest. Then, get power right. Not 10,000 things. The greatest mistake you can make is to attempt to do everything. No. Select a few things. Build the image of this country. In terms of potential, you have the right resources, and by that I mean the human resources. Train the people. And put well trained people in the right jobs.

A major problem here is that the well trained people do not get put in the right jobs where we can profit from their expertise as a nation. Do you have any idea how we can solve this problem?

This is not peculiar to Nigeria.

Probably all the problems you have can be solved. But you cannot solve them all at once.

You have to take them one at a time. First fix the private sector.

Fix the shortage of skills there.

You can create a training programme on how to get things done, project management. I talked to the Finance Minister yesterday.

She understands it. And there seems to be concrete steps being taken as they have already sent people to Malaysia to learn it.

•Ram Charan

In terms of potential, you have the right resources, and by that I mean the human resources. Train the people. and put well trained people in the right jobs

So don’t make the problem too big. Focus on a few things. Get them done.

What is the role of management in achieving the economic goals we have set?

G

etting things done is management. It is not a new role. It is all there is to management. The MTN management get things done.

That is why they are where they are today. They won’t be here without knowing how to get things done. So you train people on how to get things done. It’s not the ideas. Ideas are available on Google today.

Your people are as bright as any other nation. It’s not an issue here. It’s the issue of skills and training. That’s what makes the difference. So, that is going to be done largely by existing people who know how to get things done. Keep it very simple. Don’t make it too complicated. Don’t copy other’s style. Don’t go for ‘big thinking’. It is not about big thinking, because, big thinking is available today on Google.

It was not so five years ago.

McKinsey Institute publishes big thinking. It takes you ten minutes to go look into the website and you pick up all the ideas you want. So I don’t want to do any training on big thinking, because you can do

,

it on your own.

In training our people, do we have to rely on foreign expertise?

That is a very good question.

First of all, ascertain what skill gaps you have and how many people you need to train to fill those gaps. 5,000, 10,000?

Don’t put the wrong people in training. Second is that you need to find very good trainers wherever they may be in the world. They may not be in America. They may be in Sweden. They may be in India.

They may be in Canada. They may be retired people who have done it. They come for a limited period. They train the people.

They observe them. And they go back.

How can Nigeria and other emerging countries benefit optimally from the global tilt?

That is simple. As I said, you have 160 million people in Nigeria; 300 million in West Africa. So the market growth is here. Pick your six industries, six companies; bring them here. Create your joint ventures. Get the relevant licences for them. Use the tilt to build the nation. MTN in Africa and outside the continent; they have the technology. They have to buy and borrow and get licence.

They’ve got to get the expertise from outside. Today, they are a

very good example of a worldclass company. They have 50 million customers. One day, I hope they have 500 million people. Why not? The total population of Africa is about a billion. Why not?

So how would you advise executives to lead their businesses through the Great Economic Power Shift you talked about in your book?

The fundamental thing here is how to make sure the core competence of your company stays relevant in a tilted world.

Let’s begin by looking at what happens when a company’s core competence is not shed or replaced as it becomes less relevant. We can learn from the sad breakup of Kodak. It is a warning to business leaders that: It’s not just your technology that may be growing obsolete but your whole approach to creating strategy. In today ’s fastchanging world, the central mental skill of leadership is the ability to identify long-term, large-scale opportunities. Once you spot those opportunities, you may have to build new capabilities to pursue them.

The problem for many executives is that this line of thinking is the opposite of lessons you have learned for much of your career, which is: Stick to your knitting; stay with your core competencies. For several decades, leaders have grown their businesses by finding new ways to apply their existing core competencies.

But that approach tends to prevent leaders from seeing that their company’s wonderful unique strength is becoming less relevant in today’s fastchanging world.

Look again at Kodak. In the late 1990s it expanded its film business into China, an untapped market that thenCEO George Fisher saw as an enticing opportunity for growth. At that time, it was impossible to get nationwide

B

ut while the Chinese deals expanded Kodak’s core business and leveraged its tremendous capabilities in film, they did nothing to solve its bigger problem: the shift to digital photography. Kodak had been pioneering digital technology since the 1970s. It had a crude prototype of a digital camera as early as 1975 and in the mid-1990s helped Apple develop its QuickTake 100 digital camera. Competing in digital technology was a different game altogether and one that threatened Kodak’s core business. The company didn’t dominate the field the way it did in film but was one of many players. The market was also less predictable, and margins were lower. Despite the growing importance of digital imaging, the old business commanded the resources and management attention for too long. Later efforts to speed the transition to digital were unable to stem Kodak’s decline.

There is an important lesson in this example for you – don’t rely on core competencies that are becoming less relevant; instead, build the competencies you need to keep your business vibrant.

It would seem the quality you are advocating in corporate leaders is fortunetelling. How easy is it to read the future?

That is what I call the FutureBack approach. This requires you to extend your time horizon as you assess the world and imagine what the competitive landscape will be some 20 years out. This longer time frame will help you see what trends are enduring, or unstoppable.

The point is to see what’s coming— soon or many years away— in time to adjust. This kind of broad, forward-looking view informed GE’s decision to sell its plastics division in 2007.

Vanguard, MONDAY, JULY 15, 2013 — 29

International Business

Intra-Africa trade hits $130.1bn in 2011 — UNCTAD report

faster than those in the developing and developed worlds.

When only volume growth rates are considered, African export performance remained strong over the period from 2007 to 2011.4 African exports rose in real terms at an annual rate of 5.2 per cent compared to 4.8 per cent for the world, 2.4 per cent for developed economies and 2.9 per cent for the developing Americas, albeit lower than that of developing Asia (8.8 per cent) and developing economies in general (7.8 per cent). However on the import side, Africa still scored the highest real growth rate of all the above-mentioned categories of countries.

By PROVIDENCE OBUH

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Findings

L-R: Toki Mabogunje,Principal Consultant, Toki Mabogunje & Co, Eniibukun Adebayo, both panelists at the 2nd Annual Women in Africa Conference, Tolulope Agiri, Human Resource Director, Unilever Nigeria , Nneka Okekearu, Deputy Director, Enterprise Development Center and Patricia Obozuwa, Communications Director, General Electric (GE)Africa at the 2nd Women in Africa Conference which held at Lagos Business School, Ajah on Thursday 11th July 2013.

“The increase in the level of intra-African trade over the past decade has been accompanied by a decrease in its share of total African trade.

The share of intra-African trade in total trade rose from 19.3 per cent in 1995, reached a peak of 22.4 per cent in 1997 and fell to 11.3 per cent in 2011. This decline was due to the fact that African trade with the rest of the world grew much faster than intraAfrican trade.”

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he report further stated that in volume terms, five intra-African exports grew at an annual average rate of 2.6 per cent in the period from 2001 to 2006 and 3.2 per cent in the period from 2007 to 2011, while for intra-African imports, the real growth rates were 9.4 and 4.2 per cent respectively, in nominal terms, the level of intra-African trade was $32 billion in 2000 and $130 billion in 2011.

According to the report, “Most of the increase in the value of intra-African trade in the last decade was driven by price increases, while the value of intra-African trade rose by a factor of 4.1 from 2000 to 2011, in volume terms, it rose by only a factor of 1.7.

“As a share of the value of African world trade, intraAfrican trade rose steadily

,

report released by the United Nations Conference on Trade and Development (UNCTAD) has shown that Trade within Africa reached $130.1 billion in 2011, representing 11.3 per cent with the world, just as share of intra-Africa trade in total trade remains low compared to other developing regions.

The report: Economic Development in Africa Report 2013 is subtitled “Intra-Africa Trade: Unlocking Private Sector Dynamism,” was presented at a press conference by Head of Department of Economics, University of Lagos, Mr. Ndubisi Nwokoma, and it focuses on how to strengthen the private sector to boost intra-African trade.

The report argues that for African countries to reap developmental gains from intra-African trade and regional integration, they will need to place the building of productive capacities and domestic entrepreneurship at the heart of the policy agenda for boosting intra-regional trade.

“The share of intra-Africa trade in total fell from 22.4 per cent in 1997 to 11.3 per cent in 2011. Intra-Africa trade ( both exports and imports) totalled $130.1 billion in 2011. these statistics may be underestimates, given the prevalence of informal crossborder trade on the continent, but they are nevertheless low when compared to other parts of the world,” UNCTAD said.

The report shows that shortterm unexploited opportunities for regional trade in Africa are to be found particularly in agriculture, also Africa has about 27 per cent of world’s arable land and that can be used to expand agricultural production, yet many countries on the continent import food and agricultural products from countries outside Africa.

“For the period from 2007 to 2011, 37 African countries were net food importers and 22 were net importers of agricultural raw materials, but only about 17 per cent of the continent’s world trade in food and live animals took place within Africa.

Most of the increase in the value of intra-African trade in the last decade was driven by price increases, while the value of intra-African trade rose by a factor of 4.1 from 2000 to 2011, in volume terms, it rose by only a factor of 1.7

from 19.3 per cent in 1995, to a peak of 22.4 per cent in 1997 but thereafter fell to 11.3 per cent in 2011.6 These declining numbers can be attributed to a faster rate of growth in African trade with the rest of the world rather than to a slowdown in intraAfrican trade per se. From 1996 to 2011, intra-African trade rose at a robust rate of 8.2 per cent on average per year but African trade with the rest of the world grew faster at 12 per cent on average per year.”

However, In developing Africa, the share of intra regional exports amounted to 10.9 per cent of world African exports in the period from 2007 to 2011, while the share of intra regional imports to world African imports was 12.7 per cent. These shares are lower than those in other

,

developing regions, namely developing America and developing Asia.

Also, the level of African merchandise trade (exports and imports) with the world rose from $251 billion in 1996 to $1,151 billion in 2011. In 2011, exports and imports for Africa totalled $582 billion and $569 billion respectively while exports and imports among developing economies totalled $18,211 billion and $7,321 billion respectively.

Similarly in the period from 2007 to 2011, African exports grew annually on average faster than those in the developing and developed worlds (12.2 per cent as against 9.9 per cent and 7.4 per cent respectively). African imports from the world are characterized by the same scenario, growing nominally

The report suggested that; Promoting entrepreneurship and building supply capacity are vital to enhancing the capacity of African enterprises to produce and export goods to both regional and global markets in addition to the establishment of a credible mechanism for effective relations between the State and business.

I

t suggested further that there is a to unlock private sector potential, build productive capacity and enhance prospects for boosting intra-African trade, development of regional production networks or value chains is essential to improving competitiveness and quality standards and to broadening the manufacturing base of African economies.

The report advised African Governments to enhance the implementation of existing regional trade agreements, particularly those related to the removal of tariff and nontariff barriers and to promote intra-African trad, stating, “boosting intra-African trade to create employment, stimulate investment, foster growth and enhance the integration of African countries into the global economy is one of the main objectives of regional integration in Africa.”

The Economic Development in Africa Report 2013 was prepared by a research team consisting of Patrick Osakwe (team leader), Janvier Nkurunziza and Bineswaree Bolaky. The work was completed under the overall supervision of Taffere Tesfachew, Director, Division for Africa, Least Developed Countries and Special Programmes, UNCTAD.

30 — Vanguard, MONDAY, JULY 15, 2013

Homes & Housing Finance BRIEFS Lagos Assembly proposes 3-year jail term for land grabbers

By EBUN SESSOU

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bill to sentence any person or group of persons who engage in forcible entry and occupation of landed properties in the State has been proposed by the Lagos State House of Assembly.

The State Properties Protection Bill 2013, which has scaled through second reading, seeks to regulate the use of forceful or unreasonable force to take over any landed property in the State. The bill will also take care of land agents who parade themselves as Omo-oniles and use the opportunity to seize landed properties forcefully. If passed, the bill will ensure that a special offence court try any person found contravening it, while any one found guilty will be liable to three (3) years imprisonment or N300,000 only.

Chairman Committee on Lands and Housing, Hon. Bayo Osinowo, said if the bill is eventually passed into law, it will address the many atrocities committed by land grabbers in the State.

Mortgage applications continue sliding run

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ortgage applications in the US fell for the fourth straight week as interest rates continued to tick up.

According to the Mortgage Bankers Association (MBA), mortgage applications fell 4 percent last week after plummeting 11.7 percent the week before. The Market Composite Index, a measure of mortgage loan application volume, decreased 4.0 percent on a seasonally adjusted basis from one week earlier.

Mortgage applications are now about a third below their level from a year ago. The decline in mortgage activity is fueled by the rise in interest rates which have reached their highest level since July 2011.

The average rate for the 30year fixed rate-mortgage increased to 4.68 percent from 4.58 percent last week.

•A private bungalow

PenCom plans investment in housing finance *Initiates mortgage part- financing scheme Stories by YINKA KOLAWOLE

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ational Pension Commission (PenCom) has initiated moves that will ensure that part of the N3.4 trillion contributory pension funds in the kitty of pension funds administrators (PFAs) are invested in the housing sector.

To this end, the Commission has proposed the review of the Pension Reform Act 2004 to enable investment of the pension funds in infrastructure development. It is also considering a scheme that will allow usage of pension contributions to partfinance acquisition of lowcost housing.

Acting Director General of PenCom, Mrs. Chinelo Anohu-Amazu, speaking recently at the official opening of the Commission’s zonal office in Ilorin, Kwara State capital, said PenCom is currently exploring the possibility of allowing contributors to utilise part of their Retirement Savings Accounts balances to partfinance the acquisition of lowcost houses. She however said that the mortgage partfinancing scheme would only be available to states that have fully implemented the scheme.

Anohu-Amazu noted that only Niger State has fully complied with the contributory pension scheme in the North Central zone, and appealed to other states in the zone to adopt the scheme in order to avail their employees of its many benefits. “It is our

expectation that when they eventually come on stream, these facilities would be availed to states that have fully implemented the scheme” she said.

In a related development, PenCom recently submitted a memorandum seeking to amend the Pension Reform Act (PRA) 2004 at a joint public hearing of the Senate Committee on Establishment and Public Service and the House Committee on Pensions, to allow investment of the pension funds towards national development. Also, PenCom is considering a scheme that will allow contributors utilise part of their Retirement Savings Account (RSA) balances to part-finance acquisition of low-cost housing.

The Ag PenCom DG recalled that stakeholders have been clamouring for the funds to be utilised for national development. “There is a consensus among stakeholders that the PRA should facilitate the optimal utilisation of pool of funds generated by the Contributory Pension Scheme towards national development,” the memorandum noted. PenCom however insisted on safety measures for the pension fund assets.

Speaking in the same vein, a financial expert and Chief Executive Officer, MHOA Consulting firm, Mustapha Hussain, said that the N3.4 trillion pension assets remain integral part of the Nigerian financial markets which if put to judicious use could bridge

the infrastructure gap in the system. “Pension funds can go into infrastructure through a dedicated infrastructure bond that is tied to a specific project,” he stated.

Hussein cited Chile as an example of a country that used pension funds to finance the national housing deficit, through mortgage bonds that were issued and guaranteed by the government. According to him, Chile’s pension authority sets aside part of pension funds in a pool and people borrow the money to build houses, particularly those who are contributors to the scheme. He added that the government guarantees that the money would not be lost, suggesting that Nigeria can borrow a leaf from Chile and invest pension fund in those kinds of projects.

FG targets bottlenecks removal in Land Use Act review

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he Federal Government has no plans to repeal the Land Use Act, but rather working to review the law with a view to removing bottlenecks on land registration and titling in the country.

Chairman, Presidential Technical Committee on Land Reform (PTCLR), Prof. Peter Adeniyi, revealed this while speaking with journalists recently. According to him, “it is important at this point to state categorically that the land reform programme of the Federal Government is not intended to repeal the Land Use Act or usurp the powers of the state governors and

local government chairmen in land administration or deny individuals or communities the right to their lands.”

Adeniyi noted that while land reform is critical to the transformation agenda of the Jonathan administration, the government’s focus is on identifying and removing bottlenecks hindering land titling and registration process within the current land administration system in Nigeria. He said the presidential committee initiated pilot schemes on identification and registration of title rights in Kano and Ondo states to usher in a new land administration system in

the country.

Recall that stakeholders in the housing sector including property developers, estate surveyors and valuers, have made several presentations to the National Assembly calling for the repeal of the Land Use Act. They contend that the Act confers so much power on state governors on land transactions and led to the politicisation of land administration in the states, making it cumbersome, expensive and timeconsuming to obtain land and title rights for housing development. They argue that a repeal of the Act would enhance development of affordable housing in the country.

Vanguard, MONDAY, JULY 15, 2013 — 31

32 — Vanguard, MONDAY, JULY 15, 2013

Insurance BRIEFS STI to embark on press campaign

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OVEREIGN Trust Insurance Plc is set to embark on a pan- Nigeria press campaign highlighting the different products under the stable of the organisation.

In a statement, the company said the initiative is to further compliment the implementation of the company ’s new business model which was adopted earlier in the year. The new business model is hinged on harnessing the enormous opportunities that are inherent in the Nigerian economy visa-vis the insurance industry in the country.

The campaign will amongst other elements, educate the insuring public on the features, benefits and value on all of the different products on offer and the unique customer service experience that await prospective customers in any of the company ’s offices nationwide. The campaign is also intended to give more vent to the STI Brand and expound on the awareness drive for insurance patronage in the country. Head of Corporate Communications and Brand Management, Mr. Segun Bankole pointed out that the major militating factor against optimal patronage can be pigeon holed to lack of adequate information which he explained can be effectively addressed through proper enlightenment.

CIIN holds maiden Ramadan lecture

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HE Chartered Insurance Institute of Nigeria, CIIN, said it has initiated an annual Ramadan Tasfir to capture the mood of Islamic faithful in the insurance industry during this fasting period.

A statement by Head, Corporate Affairs, Joseph Obah, said the event is slated for Thursday, July 18 at the Lagos Chamber of Commerce and Industry (LCCI) Conference and Exhibition Center at Alausa, Ikeja in Lagos.

CIIN’S Activities Committee Chairman, Shakiru Oyefeso, said the Tafsir was long overdue, stating that the members of the Institute, even the non Muslims will have a lot to gain from the lectures to be delivered by notable Islamic clerics. He noted that speakers include Dr. Saheed Timehin of the Lagos State University and Dr. Junaid Sirajudeen of the University of Lagos, adding that the lecture topic, Tolerance and Inter – relationship in a multi – religion society is quite apt.

From Left: HRM Oba Abdul Rafiu Ajiboye, Oloro of Oroland; Mr Isiaka Gold, Sec. to Kwara State Govt; Mr. Fatai Kayode Lawal, CIIN President; Mr. Akintola Williams, Doyen of the Accounting Profession and Mrs. Lawal, during the Investiture of Mr. F.K. Lawal as the 45th President of Chartered Insurance Institute of Nigeria, CIIN.

Five insurers get NAICOM approval on financial accounts Stories by ROSEMARY ONUOHA

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NLY five insurance companies doing business in Nigeria have been able to successfully get the approval of the National Insurance Commission, NAICOM, on their 2012 International Financial Reporting Standard, IFRS, compliant financial accounts, Financial Vanguard has learnt.

Although only 22 insurance companies out of 58 operating in the country have submitted their accounts to NAICOM thus far, only five have been approved while others are in various stages of reviews, one month into the second half of the year.

The five companies are Mansard Insurance Plc; ADIC Insurance Plc; Wapic Insurance Plc; Consolidated Hallmark Insurance Plc and Oasis Insurance Plc. Consequently, these companies can go ahead and have their annual general meetings.

FBN Life Assurance Ltd and Aiico Insurance Plc results were queried by NAICOM. The companies responded to the queries which are currently being reviewed by the regulator.

For Law Union & Rock Insurance Plc, the account was queried and NAICOM is awaiting the company ’s response.

The regulator however is

reviewing the accounts of UBA Metropolitan Life; Custodian & Allied Insurance; NEM Insurance; Crusader General Insurance Ltd; Crusader Life Insurance Ltd; Zenith General Insurance Ltd; as well as Zenith Life Insurance Ltd. Other companies which accounts are also currently being reviewed by the regulator are

FIN Insurance Ltd; Standard Allied Life Assurance; Crystal Life Insurance; Sterling Assurance Nigeria Ltd; Leadway Assurance Company Ltd; Wapic Life Assurance Ltd; as well as Industrial & General Insurance Plc. It will be recalled that sanction for operators that failed to meet the deadline for

submission of results is daily payment of N5000 fines stipulated in the Insurance Act, 2003.

At a time when banks and Pension Fund Administrations (PFAs) have put the issue of complying with the IFRS behind them, underwriters said they are still making efforts to master the new reporting system and plead for more time to enable them understand the system.

The Managing Director of one of the firms that is yet to submit its account, said the firm and others are working hard to align their accounts with IFRS, adding that as a new reporting system they are faced with new challenges.

He noted that the three firms that have scaled the hurdles have long been experimenting on the new reporting system.

Director-General Nigerian Insurers Association, NIA, Mr. Sunday Thomas, said the Association is worried over the inability of members to produce the required account.

He said, “Anything that is not going well should be a concern to us. The issue is not that the operators do not have the capacity to comply, but anything that is new requires some time. Our members have gone through a lot of capacity building in this area and efforts are being made to comply. I think we need to give them some time.

“I am aware that all our members are making efforts to comply. Note that the issue is not just having an account, but a case of ensuring that the account complies with the standard,” Thomas said.

Anchor Insurance to construct high-rise building in Uyo T

HE Board of Directors of Anchor Insurance Company Limited has approved the construction of a new commercial high-rise building in Uyo, the Akwa Ibom State capital.

In a statement, the company said that the project will involve a multipurpose six floors complex to boast of all modern facilities including banking hall at its ground floor and restaurant at its pent house situate in a land of about 1500sqm. It is expected that the built area will be about 700sqm thus given substantial part of the area for car park.

The company said that the Board retains the services of Design Project Nigeria, a firm of Architects with offices in Abuja, Calabar and Lagos. It is estimated that the project will be completed within one year and probably will be commissioned to mark the

25th Anniversary of the Company event which is scheduled to be hosted at the last quarter of 2014.

Meanwhile all designs and approvals had been obtained from relevant government agencies in Uyo. Managing Director of Anchor Insurance, Mr. Adeduro Mayowa refused to disclose cost of the project but said that it is going to be a landmark project in the heartland of Akwa Ibom capital. He commended the efforts of the government of Chief Godswill Akpabio in transforming the state. He stated that Anchor Insurance management was just responding to the positive investment atmosphere in the state just like any other informed investor.

The Managing Director equally mentioned that the Board also approved

renovation of the old Anchor Insurance House at Aka Road, Uyo, Akwa Ibom State. The seven floors building which used to be the tallest building in the capital currently house United Bank for Africa Plc and the Corporate Affairs Commission, Akwa Ibom State zonal office. Mr. Adeduro said the Company is set to let out more floors to boost its income from investment properties.

Mr. Adeduro who joined the company in 2008 on a turn around mission following a recruitment search by a leading human capital consulting firm in Lagos said that the company has been in consistent profitability since 2009 and had paid dividends consecutively for three years.

He said the turn around mission in the company had been accomplished and now the company is on the trajectory of geometric growth.

Vanguard, MONDAY, JULY 15, 2013 — 33

People in Business

Manufacturing business is fulfilling — Ifeanyi Okoye r Ifeanyi Eric Okoye, a D Pharmacist, is the Founder/Chief Executive Officer of Juhel Nigeria Ltd., a 100 per cent indigenous company incorporated in 1987 as a business organisation. In this chat with Vanguard in Enugu, Okoye,Fellow of the Pharmaceutical Society of Nigeria and an alumnus of Harvard Business School, tells the story of Juhel and the challenges faced by businesses in Nigeria.

Excerpts:

After his one year mandatory service to fatherland in Port Harcourt, Rivers State in 1982, Dr Okoye joined Upjohn Nigeria Ltd, a USbased multinational pharmaceutical company and worked for five years before venturing out on his own.

Motivation: Okoye who has a master ’s degree and a Phd in Pharmaceutical Technology, said he went into pharmaceutical production with the establishment of Juhel Nigeria Ltd "in answer to calls for local provision of cost-effective generic products to fill the gap left by multinational companies operating in the country.

"We started production of pharmaceuticals in one room with one tabletting machine at Trans-Ekulu Layout, Enugu. We later expanded into a duplex of about six rooms and two sitting rooms and attached it to the very room where we started.

"Colonel Robert Akonobi, then governor of old Anambra State, commissioned the factory in December 1989 as the first tablet manufacturing company in the state."

Today, the little seed has grown into a big oak tree with presence in the 36 states of the federation and the FCT. Said Okoye; "In 2001,we moved to our permanent site at Emene and expanded our product lines to other products like syrups and capsules and in 2010, we built a parentheral plant ie a factory where you make only drugs that you don’t take through the mouth (intravenous, ear/eye drops) and it was commissioned by President Goodluck Jonathan on October 15, 2010."

Speaking on his initial capital, Okoye said; "It was like nothing. I know I bought the machine for N37,000 and that was it. We never went to bank to borrow money. We started growing with less

than N100,000 and gradually, we are where we are today."

Juhel, which started with two staff and the chairman, now has a staff strength of about 3,015 spread all over the country.

Challenges: "Number one is the unavailability of funds and where available, the high interest rate. Then there is the issue of infrastructure (electricity, roads, security), instability in government policies etc. Recently, we were made to start paying five per cent tax which they call five per cent penalty for importing polyethelenes. They claim that polyethylenes are made in Eleme Petrochemical Company but the ones we use are specific for making medicines and they are not made anywhere in Africa, not even in Asia. For now, we import from Europe but because these Indians and Koreans who work in Eleme may have done some business with someone around the Presidency, they started charging five per cent tax for those importing polyethylene.

I have written to the Presidency, CBN, Ministry of Finance and at a stage, I had to write through Manufacturers

,

By EBELE ORAKPO

*Dr. Ifeanyi Eric Okoye

We are charged five per cent tax/penalty for importing polyethylene but the polyethylene they produce in Eleme is not what we use in medicine

Association of Nigeria to let them understand that the polyethylene they produce in Eleme is not what we use in medicine. So a lot of issues have been bugging us, we are only hopeful that the current government will do something about the issue of electricity. We hope it works."

He praised Gov. Sullivan Chime of Enugu State for repairing the road to the factory.

"The road was so bad that even the workers were finding it very difficult to come to work.

The governor did it specifically to get this factory working just because of the number of employees here. He gave them two weeks to do the job and he used to come late in the evenings to inspect the job. He did same to most strategic places."

On imported drugs from Asia, Okoye said the importation is affecting their sales. "The unfortunate thing is that most of them are fake,

,

they don’t have the active ingredients, but they come out looking so beautiful in appearance and our people patronize them because they are cheap."

Asked how they got NAFDAC number if they are fake, Okoye said; “They come in with NAFDAC numbers but is it not only when you go to check whether the number is genuine that you

B-R-I-E-F

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UTDOOR Advertising Association of Nigeria (OAAN) has admitted five new associate member-agencies on probation for a period of two years. The agencies were admitted after satisfying technical and professional qualifications requirements for OAAN membership as well as payment of financial dues.

They were inducted at the association’s Annual General Meeting (AGM) in Ijebu Ode,

confirm that it is or it is not?”

Although he noted that the journey has not been very easy, but "at least, most hospitals in Nigeria can tell you that before Juhel came on stream, they used to have a lot of problems of availability of infusions (drips) but since we started, the problem has been solved. Hospitals can now ask for infusions and get them immediately. You know the importance of drip to a dying patient. So in that aspect, we have done very well."

Upcoming SMEs: "There is a saying in Igboland that “You cannot because of the killings in war stop going to war.” Once in a while, there will be fights and

people will die so you will not because of the problems manufacturers are facing, refuse to come up with something. It is fulfilling and it assists the government in job creation. The heart of the economy is the SMEs. After the federal and state governments, the SMEs are the next highest employers of labour. " Juhel is ranked as one of the fastest growing p h a r m a c e u t i c a l manufacturing companies in Nigeria and this, Okoye attributed to the grace of God, due diligence, dedication, commitment to excellence of staff and management, and support from numerous customers nationwide.

OAAN admits 5 new members … upgrades 3 others

Ogun State, recently. They include: Sign Plus Global Services Limited, Silverline Limited, Ex-Summit Ltd, Boards and Contacts Ltd as well as Spread Out Limited.

In his welcome address, President of OAAN, Mr. Charles Chijide disclosed that the association was able to achieve tremendous successes in the past 12 months despite intimidating challenges, adding that

“notwithstanding barrages of economic challenges that confronted member-agencies in the course of business, they continue to wax stronger and are attaining higher heights.”

He noted that the association successfully addressed the problem of low morale among members by regularly providing members with adequate information on issue relevant to the practice in the industry.

34 — Vanguard, MONDAY, JULY 15, 2013

Economy

'Nigeria’s total dependence on oil suicidal'

By EBELE ORAKPO

I

MAGINE waking up one day to discover that Nigeria’s oil wells have dried up or that all her customers now produce oil or that fossil fuel is no longer to be used in order to save our planet! What does Nigeria’s future look like when this happens? How can Nigeria transition from fossil fuel to clean energy? These and more were the questions the Green Deal Nigeria (GDN) team, an initiative of the Heinrich Boll Foundation, sought to answer at a recent Press conference in Lagos to intimate the Press on what GDN is all about.

The event featured three presenters - Bloggers Japheth Omojuwa, Mercy Banku Abang-Asu and Azeenarh Mohammed who spoke on different aspects of the economy and the way forward.

Japheth Omojuwa who spoke on Nigeria’s oil sector decried a situation where Nigeria spends whatever accrues from oil instead of using it as a seed to grow the economy. “We should use whatever we get from oil as a form of seed to develop our agriculture, renewable energy, etc.”

Oil sector losses: He said that in 2009, Nigeria got $25b from oil instead of about $86b, because “we sold crude worth about $86b but we were only able to access $25b because of certain factors which include a defective tax process, middlemen, swop etc.

Said Omojuwa; “The Federal Inland Revenue Service (FIRS) does not have the capacity to tax these multinational compa-

*Azeenarh Mohammed

*Japheth Omojuwa

nies. They go to them to ask them what their production is, and based on that, they are taxed.

“NNPC is supposed to make as much as $5b - $7b from sale of crude in Nigeria, but it loses money instead. Algeria's Sonatrac made about $2.5b while NNPC lost about $2.5b.

Thirdly, we deal with marketers in the sale of crude which means that some of the money they are making, we as a people should have been making.

“There is also the swop issue.

Conventionally, it is not bad if what we swop is very low quality crude for refined products like some countries do. But we swop the best crude in the world for refined products so we are losing money. There is also corruption and inefficiency in the process. Again, we don’t have the platforms. For over 50 years of oil production, we are unable to supply the major technical know-how and the platforms so they are left for the multinationals.”

When the oil wells dry up: Omojuwa maintained that

even if Nigeria’s oil wells don’t dry up, certain realities will occur. “Right now, China, our potential biggest customer, has abundance of shale gas. US, our biggest customer, is decreasing its import and it has been shown that US will surpass Saudi Arabia in oil production by 2020. If other countries have options and oil is being discovered in other parts of Africa, it will no longer be as politically powerful as it is today. There is also the issue of climate change. The argument for the planet to be responsible for its climate has been increasing for obvious reasons. Last year, Nigeria experienced one of its worst flooding in over 50 years and this year, there are expectations that it will be more, so it means that as a planet, whether we like it or not, our need to survive means we have to look for alternatives.”

PIB and gas flaring: He said that gas flaring is costing Nigeria about $2.5b “so if we are able to tap it, we will be getting as much as $2.5b.”

Cover

He regretted that the current PIB is not taking care of this problem.

The Director, Nigeria & West Africa Office of Heinrich Boell Foundation, Christine K harped on the need for the gas issue to be resolved or else “the National Gas Company which has no interest in regulating the sector, will be run like the NNPC.” Omojuwa advised that market forces should be allowed to determine what happens in the oil sector like in telecom sector, noting that the only thing the telecom sector did wrong was the the non-production of phones in Nigeria.

"We propose that there should be a federal energy commission to take care of all our energy needs which will be linked with the Ministry of Environment because everything that happens in this industry affects the environment so you have one holistic approach to energy development."

Agriculture/Climate change: Mercy Abang-Asu dwelt on Agriculture and Climate change and what must be done to enable Nigeria feed her estimated 255 million population by 2030 despite ravages of climate change. “Farmers and fishermen have experienced challenges they have never faced before.

With 60% of Nigerians in the agric sector, this is a threat, yet most of them still rely on yesterday’s knowledge.

She said Nigeria has about 40 million hectares of uncultivated arable land and all she needs is to provide the farmers with better information through research, training and improved seeds.

"A situation where we have

challenges of climate change, having only 5% of farmers having access to improved seeds is a threat," she stated.

Renewable Energy: Azeenarh Mohammed on her part, focused on renewables.

“According to scientists, if the seven billion people in the world today all live the life of the global north, we will have the carbon footprint of 18 billion people so the challenge is to find a responsible way of living without destroying the planet.”

She wondered why despite Nigeria’s abundant fossil and renewable energy options, majority are still suffering from energy poverty which undermines their aspirations and lowers their quality of life.

"Instead of flaring our gas, we can turn it into electricity. Unfortunately, as at today, nobody knows who owns the associated gas that comes with oil. The new PIB is also silent on that.

“Figures from the Energy Commission (EC) shows that it costs about N200m to build a small hydro dam for a community that has a stream and a local government can afford to do that and give the people electricity 24/7 so why don’t they do it? Some of these local governments receive as much as N300m monthly,” she said.

"We have about 4,500 mw of electricity today but in 2030, we will need 192,000mw according to EC and Nigeria hopes to generate that from coal, the biggest polluter of them all.

Why do we insist on working with technologies of yesterday instead of technologies of tomorrow?” she asked, wondering why the FG intends to spend millions of naira on generators for agencies like National Sports Institute (N15m) and SSS (N70m), noting that instead of that, it would make more economic sense to spend that on renewable energy.”

Import waivers killing vegetable, edible oil industry Continued from page 19 New Era Group, whom one of his companies is operating in the local vegetable oil industry, described waiver as “gravely devastating to the economy.” According to him, import waiver on vegetable oil is a tacit move to ground the few companies in the country that are still into vegetable oil production. “Waiver is not only injurious to the economy, it’s a mockery of government’s agricultural revolution , diversification of the economy from sole dependence on crude oil export to export of agricultural goods and finished manufactured goods,” he said.

Also, PZ Wilmar, a new entrant into the sector with its

brand of edible oils, Devon King’s Vegetable Oil, which is already in the market, said apart from waiver, there is also threat of smuggling.

“Influx of non-registered oils (with NAFDAC) from the porous ECOWAS borders with exorbitant cost of production in Nigeria are the major challenges we face.” The company said its entry into the palm oil and vegetable oil production sector was as a result of research carried out by the company, saying “Our research tells us that Nigeria women feel very let down by the quality of cooking ingredients available to them.

Cooking oil is often unhygienic, contaminated and

unhealthy. We believe Nigerian mothers deserve more.

The oil that is produced from our world class refinery will always be 100 percent pure.

We will be launching a wide range of consumer packs to suit all budgets. “Over the next few years, the company will be investing over a N100 billion in the project. We will develop 50,000 hectares of plantations creating 12,000 direct and over 33,000 indirect jobs to various skill levels.”

Two years ago, PZ Cussons and Wilmar International, Asia’s leading agric based firm, entered into a joint venture and created PZ Wilmar Limited to revive the palm oil industry in

Nigeria by investing in new plantation and refining facilities.

Vanguard gathered that the N10 billion palm oil refinery is capable of processing 1,000 tons per day.

Labour demands abolition of waivers

Reacting, President of the National Union of Food Beverage and Tobacco Employees, NUFBTE, Lateef Oyelekan, called for a total end to import waivers, warning that such waivers in the Food Beverage sector, undermines both the national economy and the health of citizens. He appealed to the Federal Government to cancel such waivers

immediately as they were not only killing local industry, compounding the unemployment and insecurity crises in the country, but also putting the health of citizens at risk.

According to him, “these import waivers, we have discovered, are mostly given to political associates and cronies to make quick money for political activities to the detriment of national economy. The waivers do not create jobs, but kill jobs because importer no matter how big cannot employ a maximum of 10 workers nationwide to flood his or her imported good in the market and can destroy the entire local industry and throw thousands into the jobless market

Continues on page 40

Vanguard, MONDAY, JULY 15, 2013 — 35

Appointment and Promotions vicahiyoung@yahoo.com 08033348923

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RNST & Young, EY, an international accounting firm, has appointed the former United States Assistant Secretary of Treasury, Mark Weinberger, as its new global Chairman and Chief Executive Officer.

The appointment is said to be part of its rebranding leading to the adoption of ‘EY’ as its new global brand name.

The rebranding is in tandem with its global vision 2020 strategy to be the most distinctive professional services firm with the best brand, even in the face of the competitive business environment in which it operates in.

Besides the new brand name, the rebranding process entails, among others, new logo (which has been redesigned to reflect the new brand name) just as the firm has adopted a new tagline ‘Building a better working world’ as its purpose statement in addition having a new Beam (which is now simpler and more consistent and easily recognized).

On his appointment, the

Ernst & Young names Weinberger new Chairman, CEO

*Mark Weinberger new Chairman and CEO, said: “ It is a privilege to lead this great organization in these dynamic times and I am looking forward to tackling

the challenges ahead.”

Weinberger, 51, replaces outgoing Chairman and CEO, Jim Turley, who has been in that position for the last 12 years.

Speaking on the rebranding, EY Regional Managing Partner for West Africa, Henry Egbiki, says: “We are living in a fast-paced world that is constantly changing and we as a global firm cannot be left behind.

Our brand identity is an important indicator of who we are and what we stand for. It is a combined effect of everything we do and say. In 2008, we unveiled our visual identity, which gave us consistency and visibility, but it needs to continue to evolve by driving the right brand at the right time.”

On Vision 2020 strategy, Egbiki said “it provides an exciting new direction for EY

brand and signals a total change for the firm. The Vision will help EY to achieve its ambition to be the most distinctive professional services firm with the best brand. We need to express our brand consistently across our global organization. We want to be the best brand; most favoured employer and to grow faster than our competitors. We want to have the best people as well as invest in a strong relationship with our stakeholders. Above all, exceptional client service is a must for us.”

Similarly, Ajen Sita, EY Africa CEO, added that “The rebranding coincides with the firm’s global Vision 2020 strategy is about repositioning EY, It reflects our desire to focus on qualities that differentiate us from our competitors. We have a strong desire, a responsibility even to build a better working world.”

Trustfund Pensions confirms Da-Souza MD T

HE Board of Trustfund Pensions Plc, has confirmed the appointment of Mrs. Helen Da-Souza as substantive Managing Director of Trustfund Pensions Plc, a leading Pension Fund Administrator, PFA, in the country.

The confirmation was made at the company’s Annual General Meeting, AGM, held in Abuja.

Speaking on the appointment, Chairman of Board of Trustfund Pension, Dr. Ngozi Olejeme Olejeme, paid glowing tributes to Da-Souza for her tenacity, dedication to details, intelligence and high level of productivity that have led to increased performances of the company.

This, she stated influenced the fundamentals of her confirmation.

According to her: “She ran the affairs of Trustfund Pensions very well in these few years. The board was convinced that she has done enough and she merits this appointment. As revealed by the annual financial report, the PFA has brought smiles to the faces of the stakeholders that include labour unions, employer association, NSITF, insurance company and banks.

We know how critical the labour movement is and its employers’ association. For these critical bodies to agree to the confirmation of Da-Souza tells the merit of the appointment.”

Speaking also, Director General of Nigeria Employers Consultative Association, NECA, Dr. Segun Oshinowo, said the board could not have taken a better decision than to confirm Da-Souza as the substantive managing director noting that she has turned the company around since she took over the leadership of the company in acting capacity.

“Her confirmation has shown that Trustfund is on the upward swing since she came on board.

She is competent, experience and the performance of the company in two years are evidence of the quality she has brought to the organisation,” Oshinowo said.

AGM: Left, Managing Director of Trustfund Pensions Plc, Mrs. Helen Da-Souza and the chairman of the board, Mrs. Ngozi Olejeme, at the fund’s Annual General Meeting in Abuja.

Okonmah becomes chairman as Lagos NIPR elects officers

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AGOS State Chapter of the Nigerian Institute of Public Relations, NIPR, has elected new executive council members to run the affairs of the chapter for the next two years.

In the election at the end of its 24 th Annual General Meeting/ Public Relations, AGM/PR Week, Joseph Okonmah was elected Chairman.

He defeated two other candidates; Ken Egbas and Kunle Ogedengbe, the outgoing vice-chairman.

There was no election for other positions as the contestants were unopposed.

They are Comfort Nwankwo, Vice Chairman; Sheriff Akinpelu, Secretary; Silas Udoh, Treasurer; Abiodun Olatunbosun, Auditor; Prudence Onyejiaka, Assistant Secretary; Fortune Mbamalu, Financial Secretary and Kalu Olekauwa, Public Relations Executive.

The position of Ex Officios are still vacant.

The election which was supervised by a

*Mr. Joseph Okonmah representative of the President of the Institute, Alhaji Mohammed Adbullahi, Chairman, Body of Fellows,

BRIEFS Senate sets up ad-hoc committee to oversee SURE-P

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igerian Senate has inaugurated a 13member Ad-hoc committee that will oversight the activities of Subsidy Reinvestment and Empowerment Programme, SURE-P. The committee is said to be a response to reported public outcry over the alleged misapplication of public funds.

The resolution was reached during Thursday plenary session where the lawmakers expressed displeasure over the waning popularity and lack of confidence in the scheme.

While inaugurating the Adhoc Committee, Senate President, David Mark urged Abdul Ningi, chairman and members of the Committee to thoroughly oversight the investment of the funds accrued from subsidy removal since 2012.

Mark who emphasised the need for public confidence, noted that the success or failure of the Committee would impact directly on the lives of millions of Nigerians, especially in the areas of youth empowerment, infrastructure development.

Belgium ends discrimination between white, bluecollar workers

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HE Constitutional Court in Belgium has decreed that the status of blue and white-collar workers need to be harmonized, urging the government to eliminate the discrimination between the two types of workers.

The discrimination had been going on for a century and an attempt to stop it had been blocked for 27 years, when the government finally managed to find a compromise in June.

It was the solidarity between the two types of workers that made the agreement possible.

It means that the classification of blue or white-collar, or manual and non-manual, worker, will disappear. Simply the term “worker” will remain.

36 — Vanguard, MONDAY, JULY 15, 2013

Agric BRIEFS Causes of low rice production,

by NCR

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r Mark Ukwungwu, the Acting Executive Director of the National Cereals Research Institute (NCRI), has identified poor agronomic practices, pests and diseases as some major factors inhibiting rice production.

Ukwungwu disclosed this during the visit of the Fellows of the Biosciences for Farming in Africa (B4FA) to the institute.

He said that pests and diseases were part of the natural factors limiting the production of rice in Nigeria, adding that for the country to attain self-sufficiency in rice production, efforts must be made to fight pests and diseases.

Ukwungwu, however, said that the institute was striving to address problems relating to the poor agronomic practices of rice farmers.

He also said that as part of efforts to tackle the menace of pests, the institute had developed the gall midgetolerant variety of rice.

Bayelsa moves to revive abandoned rice farms

By SAMUEL OYADONGHA

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s the 2015 Federal Government ban on the importation of rice approaches, Bayelsa State government says plan are afoot to revive its ailing rice industry.

The Director General, Bayelsa State Investment Promotion Agency, BIPA, Freda Ruth Murray-Bruce, who disclosed this in Yenagoa said the state is ready for investment and that the government business-friendly policies are putting Bayelsa on the international investment map.

“The state government is ready to partner with investors for projects of high socioeconomic value (employment creation and industry development),” she said adding “Bayelsa has the potential to produce rice for the entire West Africa sub-region.”

The 2015 proposed date for ban on importation by the Federal Government, she noted, would increase demand for locally grown rice by five million tons per year.

By OKEY NDIRIBE

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he Nigeria Agricultural Insurance Corporation (NAIC) has revealed that N182 million has so far been paid as insurance claims to farmers whose crops were damaged by last year’s flood which affected many parts of the country.

This was disclosed by the Managing Director of NAIC, Dr. Tijani Garba, when members of the House of Representatives Committee on Agriculture and Rural Development paid an oversight visit to the corporation.

Dr. Garba stated that claims were only paid to farmers who insured their crops with the Corporation, emphasising that NAIC’s role differed from that of National Emergency Management Agency (NEMA).

Giving a deeper insight into the challenges presently faced by the Corporation, Dr. Garba said some of those who were backed by NAIC to collect loans from banks have not been repaying their debts, adding that some of them were powerful people in the country.

Throwing more light on the type of insurance premium charged by NAIC, the Corporation’s MD said interested farmers normally paid 50 percent of the premium, while the relevant states and Federal Government were responsible for payment of the remaining 50 percent.

However, he expressed regret that many state governments have not been paying their own part of the farmers’ premium.

Commenting on budgetary allocation to the Corporation, he lamented that only N32 million of the N258 appropriated for NAIC in 2013 has been released.

He asserted that one of the

*Nigeria’s Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, discussing with Professor Yuan Long Pin on how to obtain rice varieties that yield as much as 7.5 metric tons per hectare in Beijing, China last week.

NAIC pays N182m claims to farmers Corporation’s major challenges is how to get the states to pay their own part of the farmers insurance premium as NAIC now heavily depend on this source of revenue in the face of irregular release of funds by the Federal Government.

In his own submission, a Director in the Federal Ministry of Agriculture, Mr. M. O. Azeez, stated that the approved constituency projects in the 2013 budget could not be executed by Rural Access Mobility Project (RAMP) due to a directive from the Minister of Agriculture, Hon. Adewunmi Adesina, indicating that only the Minister of Special Duties, Hon. Turaki Ibrahim, has been authorised to carry out the assignment.

He further stated that farmers across the country now have access to agricultural inputs since most of them were registered during the nation-

wide registration exercise carried out by the ministry, adding that many Chinese experts were already in different parts of the country training Nigerians in different aspects of agriculture.

Throwing more light on the activities of RAMP, the National Coordinator, RAMP, Engr. Ubandoma Ularamu, said the agency was set up to identify and execute rural projects that would touch the lives of rural dwellers. He cited as example, a project executed by RAMP in Kaduna State with a total of $72 million.

He said that the state government contributed $12 million towards the completion of project, while the Federal Government and the World Bank provided $60 million.

Engr. Ubandoma further stated that another project that was executed in Cross River State was the rehabilitation of 474

kilometers of rural roads with the sum of N21.6 billion, adding that the state and Federal Government executed the project together with the African Development Bank, AfDB. The tempo of commercial agriculture in Kwara State is set to receive a boost through a proposed N2billion funding window to be actualised by the Bank of Agriculture and the State Government.

Presenting the proposal to the Governor of Kwara State, Dr Abdulfatah Ahmed, the Managing Director of the bank, Dr Muhammed Santuraki, said if the Kwara State Government accepts the proposal, the bank would provide its N1bn counterpart fund to jumpstart the scheme.

Dr Santuraki explained that the collaborative fund would provide lending support to commercial farmers, youth and women in agriculture and other value chain outlets.

Nigeria, Egypt, Indonesia to import more cereal — FAO

By JIMOH BABATUNDE

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igeria, Egypt and Indonesia have been predicted as countries that will import large volumes of cereal this year as world total cereal production is forecast to increase by about seven percent compared to last year.

According to the latest issue of Food and Agriculture Organisation (FAO)’s quarterly Crop Prospects and

Food Situation report, the rise in cereal production will help to replenish global inventories and raise expectations for more stable markets in 2013/14.

The increase, according to the report, would bring world cereal production to 2 479 million tonnes, a new record level.

FAO now puts world wheat output in 2013 at 704 million tonnes, an increase of 6.8 percent, which more than recoups the previous year ’s

reduction and represents the highest level in history.

World production of coarse grains in 2013 is now forecast

by FAO at about 1 275 million tonnes, up sharply (9.7 percent) from 2012.

World rice production in 2013 is forecast to expand by 1.9 percent to 500 million tonnes (milled equivalent) although prospects are still very provisional.

Import forecasts, cereal prices Cereal imports of Low-

Income Food-Deficit Countries for 2013/14 are estimated to rise by some 5 percent, compared to 2012/ 13, to meet growing demand.

Egypt, Indonesia and Nigeria, in particular, are forecast to import larger volumes.

International prices of wheat declined slightly in June with the onset of the 2013 harvests in the Northern Hemisphere.

By contrast, maize prices increased, supported by continued tight supplies.

Export prices of rice were generally stable.

Vanguard, MONDAY, JULY 15, 2013 — 37

Aviation BRIEFS

Stories by LAWANI MIKAIRU

Trivest introduces surveillance cameras

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HE Aviation Ministry has called on Chinese Investors to buy into the Aerotropolis project of the ministry in order to position aviation in a pivotal position to contribute to the growth of Nigeria’s economy. This call is coming on the the heel of the successful signing of the $500 million Loan Agreement to finance the construction of four new International Airport terminals in Nigeria.

According to Mr Joe Obi, Special Assistant,Media, to the .Minister of Aviation, the Managing Director of the Federal Airports Authority of Nigeria ,FAAN, Mr George Uriese while addressing the Nigeria-China Investment Forum in Beijing , expressed the desire of the Ministry to partner with the Chinese Investment Community for the development of Aerotropoli in the Nigerian cities of Abuja, Lagos, Port Harcourt and Kano.

Uriesi said the Aerotropoli hold tremendous promise of good return on investment for any investor, and called on the Chinese investors to take advantage of the huge opportunities which the initiative presents to boost the expansion of their business interest on the African continent.

“We want to partner with you as we develop our Aerotropoli

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From left: Mr Onyekachi Idu, Head, Human Capital and Administration, TrustBond Mortgage Bank Plc; Adeniyi Akinlusi, MD/CEO; Efigwe Uwa SAN, Chairman and Mark Okoye, Company Secretary during the unveiling of the new identity and logo of the former Intercontinental Homes Savings and Loans Plc, held in Lagos on Thursday.

Aviation Ministry seeks to partner Chinese investors in Lagos, Abuja, Port Harcourt and Kano. There is so much more that Chinese companies can do to leverage our drive to position aviation as pivotal to the growth of the Nigerian economy through the airport cities concept, otherwise known as Aerotropolis”, the FAAN MD said.

Uriesi added that the Ministry

wants to establish Nigeria as an aircraft maintenance hub on the African continent and called on Chinese investors to take the opportunity and establish Maintenance, Repair and Overhaul (MRO) facilities in the country.

“With a population of over 167 million people and a projected passenger growth of

Airport car hire operators battle FAAN over levy A

IRPORT Car Hire Operators in Nigeria have vowed to take legal action against the Federal Airports Authority of Nigeria ,FAAN, if it should go ahead with its alleged plan to impose extra charges on them.

This was made known by Alhaji M. A. Yinusa, the Chairman Board of Trustees of the operators association at the Murtala Muhammed Airport,Ikeja while speaking with newsmen weekend.

According to him, there is an alleged plan by the FAAN to charge each car hire operator 500 naira for each trip made from the airports to passengers destinations while they will also be made to pay toll fee into and out of the airports on every trip.

This is in addition to the 25000 naira annual renewable registration fee currently charged the operators.

“We are already talking to them on this matter through our lawyers who have written to the management twice without any response and we

know that the people are very crafty because it is in their character to ignore all entreaties in a matter like this and later come out to say a decision has been jointly taken by affected organization and it would not be reversible.’’ ’’But in this case, we are kicking against an additional levy coming from FAAN because we are not ready to pay anything outside what we are now paying as dues to them. We are also calling on the Federal Ministry of Aviation to prevail on FAAN to shelve such plan before it generates crisis,” he added.

Alhaji Yinusa who also spoke of alleged plans to commence the imposition of extra levies on car hire operators at the Port Harcourt Airport, noted that all its operators at the airport had been charged not to accept the execution of the FAAN plan.

“They said we are not recognized yet they are planning to impose charges on us but we are registered with the National Union of Air Transport Employees (NUATE)

and we deliberately refused to take the matter up with NUATE because it is still an allegation which FAAN has declined to respond to in spite of our attempt to confirm it,” He also disclosed that FAAN had concluded plans to compel car hire operators to replace their vehicles with new one if they were to continue their operations at the airports.

50 million by 2026, Nigeria is a huge, untapped market waiting to be harnessed by investors with an eye for guaranteed return on investment.”

He further spoke of the huge potential which the perishable cargo/fresh produce initiative holds for any investor, stressing that to grow this segment of aviation in Nigeria, about 13 perishable cargo terminals are being constructed across the country.

The Investment Forum, which was attended by President Goodluck Ebele Jonathan, GCFR also had a large investment community which expressed readiness to expand its business interests in Nigeria. The Forum climaxed a Three-Day State Visit of President Jonathan to China, which witnessed the signing of over 15 Agreements and MoU’s, including the $500 million Loan Agreement to finance the construction of four airport terminals.

RIVEST Technologies Limited, a leading Integrated Security Technologies Solutions Company, has announced the debut of VIVOTEK fixed dome network (IP) surveillance FD8163 and FD8363 Cameras in Nigeria.

According to Mr. Sam Fadiora, the Managing Director of the company and exclusive Distributor of Vivotek cameras in Nigeria, “We are offering Nigerians the latest technology in network surveillance camera systems. Both FD8163 and FD8363 IP cameras are 2Megapixel, easy-to-use network cameras with features such as 1080p Full HD (High Definition) resolution with superb image quality, Smart IR technology for avoiding overexposure under low light condition, builtin IR lighting effective up to 15 meters, WDR Enhancement for unparalleled visibility in high contrast environments, securing high video quality and providing accurate identification around the clock.”

Ramadan Fasting: Indomie targets 2.5m Muslims

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N commemoration of the Muslim fasting month of Ramadan, Dufil Prima Foods Plc makers of Indomie noodles has announced its plan to feed 2.5 million Muslims across the nation.

According to the Public Relations Manage, Dufil Prima Foods Plc, Mr. Tope Ashiwaju, the company is identifying with Muslims during the 30 days fasting period as part of it Corporate Social Responsibility initiative by serving Indomie meals during ‘Iftar’(Evening Break) at various popular central Mosques across the country.

Etihad Airways achieves 80% increase in passenger revenues

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TIHAD Airways has achieved an eight per cent increase in passenger revenues, generating US $921 million (2012: US $855 million in the second quarter and first half of 2013.This revelation was made by Tony Harrington, Head, Etihad Airways Corporate Communications According to him The President and Chief Executive Officer of Etihad Airways, James Hogan, said “The national carrier of the United Arab Emirates achieved an eight per cent increase in Q2 2013 passenger revenues, generating US $921 million (2012: US $855 million), while passenger revenues for the first half of 2013 reached US $1.8 billion (2012: $1.6

billion), up by 13 per cent.”

Mr Hogan, said the company’s Q2 and half year results were achieved despite the continuation of unsteady economic and geopolitical factors, with air fare yields slightly lower for the quarter, compressed by strong competitive capacity growth and resultant price competition.

This growth, according to him, was achieved through the delivery of two new Boeing 777300 passenger aircraft – a three-class version seating 328 passengers and a two-class model seating 380 - and a corresponding increase in flights, including new services to Amsterdam, Sao Paulo and Belgrade.

38 — Vanguard, MONDAY, JULY 15, 2013

Vanguard, MONDAY, JULY 15, 2013 — 39

Advertising, Media & Marketing

Strengthening record keeping via Bruynzeel system Stories by PRINCE WILL EKWUJURU

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ECORD keeping ac cording to dictionary definition is the systematic procedure by which the records of an organisation are created, captured, maintained, and disposed of.

This system also ensures preservation for evidential purposes, accurate and efficient updating, timely availability, and control of access to them. This brings to fore why the document unit of any organisation is important.

Recently, Bruynzeel Archive Storage & Shelving in partnership with Havilah Shelving system entered the Nigerian record keeping scene to ensure save keeping of important and evidential documents.

Their entry was occasioned by noticeable upsurge in theft and destruction of evidential and confidential documents, antiquities etc.

This was also largely dueto the porosity of Nigeria’s border posts and poor shelving system.

In the last decade todate antiquities and cultural materials had disappeared, this menace had continued with advancement in the traffickers packaging systems.

Thanks to Bruynzeel Archive Storage & Shelving which has just entered the Nigerian market and more thanks to Havilah. The compa-

ny’s arrival is timely as adjudged by experts in the field library and documentation .

“It is a crime to disconnect the generation yet unborn from the past.

They will need to learn and live the nation’s culture. They will long for protection by raiding the past of wisdom to cope

with the challenges of their own days, says Prof Wisdom Uleke. Recently, the Nigeria social media space and the traditional prints were awash with news of a student protest in the University of Uyo. Subsequently reports had it that the university’s Vice-Chancellor’s office was razed down in

From Left: President, Outdoor Advertising Association of Nigeria (OAAN), Mr. Charles Chijide and Chairman, Advertising Practitioners Council of Nigeria (APCON), Mr. Lolu Akinwunmi at the association’s 28th Annual General Meeting held at Ijebu –Ode recently.

Brand building is propelled by originality, creativity — SURE-P member

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committee member of SURE-P (Subsidy Reinvestment and Empowerment Programme) Mr. Audu Maikori has said that a great brand is propelled by originality, creativity, and a unique value proposition in other to survive in a crowded market.

Maikori, whose Chocolate City Group has promoted musical artists such as MI, Brymo,

Jesse Jagz, Ice Prince Zamani and a host of others to assume a top mindshare within the entertainment industry, said this while mentoring budding entrepreneurs at the July edition of The Sunday Brunch, TSB, a private club for intense intellectual exchange, open to young thinkers, corporate executives, and entrepreneurs in Nigeria.

JSP realigns CSR strategy, adopts ABF

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the process consequent to the youth’s hostilities.

In August 2003, the Nigerian National Petroleum Corporation’s (NNPC) office in Lagos was gutted by fire. Apart from the lives that were lost, lots of national data were lost as well. Till date, many of those data have not been retrieved.

SP Communications, a public re lations agency in Nigeria and Africa has realigned its corporate social responsibility strategy around education and helping the blind with the adoption of the African Blind Foundation (ABF).

Jsp has formed the partnership with ABF, whose mission is to “educate, support and encourage the visually impaired members of the society in Nigeria and Africa and give them hope. “ Winning through Customer RetentionAt presentation ceremony, the Global Strategist of Jsp Communications, Dr Phil Osagie stated that, “ we identify ourselves fully with the vision of the African Blind Foundation not only

in providing support for the blind but also in paying particular attention to preventive strategies. In Nigeria as well as the entire African continent, blindness and poverty as a whole is worsened by three main forces of scarcity- the scarcity of resources, scarcity of expertise and scarcity of will. Contrary to popular opinion, our main problem is not the scarcity of resources, it is more the insufficient level of will in the society at large.

A Sight Savers survey revealed that in Nigeria, over 1,000,000 adults are blind and another 3,000,000 are visually impaired. 42 out of every 1000 adults aged 40 and above are blind.

While sharing his experience on how he built Chocolate City by leveraging on social media and other marketing strategies despite lack of a bank loan, he said businessmen should avoid recreating what is already offered by other brands in the marketplace.

He said great brands such as Nokia, Samsung, Nigerian musical artist Asa and a host of others have created a brand today because of their passion for originality, niche creation and filling a need for the consumer.

The Co-founder, Guild of Artistes and Poets, GAP, said Chocolate City, which now has a presence in Kenya after its success in Nigeria, became the number one entertainment outfit by building a brand from the scratch in spite of big names like Kennis Music already which had already created threatening top of mind brand awareness in the industry.

Winning through Customer Retention EONARD Berry and like a barrel with holes L A. Parasuraman, in everywhere. To be able to their classic Marketing maintain a certain water Services, point out that the three ways for any service business to grow market share are: To attract more new customers; Get current customers to buy more; Reduce customer attrition. Studies upon studies have clearly shown that out of the three strategies, the first one is the most difficult and the most expensive.

Attracting new customers takes time, money, effort and even patience. The cost of attracting new customers has been estimated to be five or more times the cost of retaining current customers. But the studies that yielded this estimate were conducted in the West where things generally work much better. In our country, the cost of attracting a new customer might just be more than five times that of retaining a current one.

Interestingly, a lot of organisations have no information on the exact cost of acquiring new customers and getting the first deal from them. But whatever the actual cost, first time purchases may not be so profitable. In deed, in some industries, they are outright losses considering all the cost of getting that first deal in terms of advertising/promotion expenses, sales calls, initial documentation, etc. On the other hand, real profit begins when a customer buys again and again. Simply because we need less advertising money, fewer sales calls and less effort to get an existing customer to buy it is easier, cheaper and, of course, more profitable to sell to current customers. For this reason, it also makes a lot of business sense to try to keep existing customers happy.

Traditional business wisdom has always been in favour of getting new customers. And this is not surprising. It is estimated that the average company loses up to 50 percent of its customers in four years. Therefore, organisations have a perpetual need to replace lost customers.

This is what has been referred to as the “leaking barrel” school of marketing. The business is

level, you must continuously pour more water into the barrel. This definitely takes time, effort and money.

Some studies have, however, shown that reducing customer churn by as little as five percent could lead to a growth in profit of between 25 and 85 percent depending on the industry. What’s more? A satisfied customer is a company’s best salesman. She will be positively disposed to telling friends and family about the company’s excellent service culture, thus helping the company reduce its marketing expenditure. Sometimes, satisfied customers are less inclined to haggle over pricing issues. In fact, they are usually willing to pay a premium on the service they receive if they perceive it to be of high value. It is therefore not surprising that the longer a customer stays with an organisation, the more profitable she becomes in real terms.

T

he CEO of Lagosbased large-format printing company once confessed that he was hooked on shopping in a particular supermarket even though he knew he could get lower prices elsewhere. His reason?

He was satisfied with the way the attendants recognized, received and served him each time he came shopping. Customers are no fools. They know good service when they see it. And they’re usually willing to pay for it. There is a Nigerian bank – GT Bank – that has earned a reputation for attracting a lot of customers who were referred to the bank by satisfied customers.

At a customer service seminar I facilitated, the name of this bank cropped up instinctively.

Participants unanimously nominated it as an exemplar of service excellence in the banking industry.

Some of them claimed they had become the bank’s customers because of the positive word of mouth they heard from others. In addition, they were also busy telling everybody around them to follow suit.

40 — Vanguard, MONDAY, JULY 15, 2013

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

Euro and China loans: A nation’s folly Paris debt club exit, which siphoned over $12bn from our tattered pockets in 2006, NASS appears to have shown only passing interest in the succeeding oppressive debt accumulation. Evidently, the current cost of about 7% for external debts is considered more benign and tolerable than the 12 - 17%, which our government currently pays on its extensive domestic borrowings!

Consequently, the Economic Management Team has assured Nigerians that the current level of external debt, which is about 12% of total debts, will be increased to 40% within 3 – 5 years. igerians may wonder why domestic cost of borrowing over which we have control is persistently much higher than the cost of external loans, over which our government has no control!! Indeed, we have constantly drawn the attention of NASS to the galloping pace of domestic debts in several articles; see for example, “$34b Debt, $20b Reserves, Debt Forgiveness & Slavery” _ February 2005, “National Assembly Fiddles as Debt Burden Cripples” _ May 2008, “Media Disinformation on Government Debt Accumulation” – May 2012. Regrettably, NASS’ taciturn response is akin to the popular slogan of “wetin concern agbero with overload?”

Incidentally, last week, President Goodluck Jonathan signed the MOU for a $1.29bn

N

loan for the construction of four airport terminals and a 700MW hydropower station with the Export-Import Bank of China during his state visit. Refreshingly, as constantly demanded by well-meaning critics of government’s development policies, the $1.29bn Chinese loan appears to be tied up, ab initio, to specific infrastructural projects; nonetheless, the choice of airport

,

T

HE recent $1bn Euro loan is reported to be part of the federal government’s $8bn medium term external borrowing plan, which has already received the approval of the National Assembly (NASS) and the Federal Executive Council according to the DMO’s DG, Abraham Nwankwo. Incidentally, the interest payable on the $1bn Eurobond is within the same range of 6.75% as the initial $500m Eurobond issued in 2011, and similar to rates, which distressed economies like Portugal and Greece currently pay.

The Euro loan is primarily also targeted at consolidating a market for long-term external loans for Nigeria’s public and private sector borrowings.

Curiously, in the past decade, Nigeria’s domestic and external debt has exploded from below N1tn ($6bn) and $4bn to over N6tn ($36bn) and $6bn respectively. Unfortunately, in spite of such rapid debt accumulation, Nigeria’s critical infrastructure has been impacted just minimally; it is also inexplicable, that these debts ballooned in spite of federal revenue regularly exceeding annual expenditure budgets, such that it became possible to share surplus revenue from the so-called excess crude account annually, while CBN also maintained relatively healthy double-digit reserve surplus.

It is undeniably reckless fiscal strategy to consume or classify any revenue as surplus without first addressing any inherent revenue shortfalls in annual budgets.

Curiously, in spite of the fact that our current debt burden is well above the $35bn mark that was regarded as crisis level before the controversial London/

The Chinese have failed to impress with the quality of their infrastructural interventions in several African countries

,

terminals for the huge expenditure may be seen as inappropriate in comparison to the greater social impact of peopleoriented projects in sectors such as education, health, water and mass transportation.

Besides, the Chinese have failed to impress with the quality of their infrastructural interventions in several African countries, and they do not also have much affinity for adoption of significant local content (human/material) in such ven-

as a farcical and distressful turn of events, our Central Bank would in effect lend to China, so that Nigeria can borrow from China for our infrastructural enhancement!! The ubiquitous, but business conscious Nigerian market woman would be quick to advise Dr. Okonjo-Iweala that a wiser strategy would be to borrow directly from our own CBN, for our infrastructural development rather than the inexplicable convoluting trajectory being contemplated. Curiously, this peculiar strategy is also discernible in government’s domestic borrowings, where the CBN consciously creates and floods the money market with excess naira, whenever it substitutes naira allocations for dollar revenue. Inevitably, soon after, the CBN timidly returns to the banks cap in hand, to borrow with treasury bills at double digit interest rates, just to reduce the ‘surplus’ cash holdings in the hands of the banks and thereby restrain the abiding threat of inflation.

Regrettably, this strategy has failed over the last 20 years, as year on year inflation rates have continuously averaged an obviously oppressive rate of about 10% when compared, for example, with the more socially supportive inflation rate of less than 3% in China.

Worse still, the high yields instigated by government’s bloated domestic borrowings inadvertently attract international speculative hot money flows, which could ultimately adversely affect our exchange rate and economic stability, whenever there is the slightest storm in the international capital market.

tures.

In reality, there is everything to be said in favour of cheap or concessionary loans, which are dedicated to specific infrastructural improvement, but it is certainly worrisome to incur burdensome loans, as the DMO has regularly done, primarily just to establish and sustain a benchmark for long-term domestic and external borrowings. It is however, patently ridiculous and reckless to borrow at even 1% interest, when simultaneously, we also have savings deposits, which earn less than 1% yield annually!

It would be worse still, if such loans are applied to liquidate existing debts, as suggested by Dr. Yerima Ngama, Minister of State for Finance. Consequently, the frenzied drive to expand our external debt must be worrisome to Nigerians, when national reserves currently canvassed as over $50bn, earn returns below the cost Nigeria pays for its external and domestic borrowings! Curiously, the Central Bank of Nigeria, is also exploring the possibility of investing part of its over $40bn reserves in China’s Inter-Bank bond market through the People’s Bank of China. The projected yield on CBN’s proposed investment in China is uncertain; however, the Chinese, as business savvy entrepreneurs, are unlikely to pay interest above 3% (the cost of its own loans to Nigeria) for such funds.

Thus, in what may be seen

SAVE THE NAIRA, SAVE NIGERIANS!

Cover

Import waivers killing vegetable, edible oil industry Continued from page 34 and the booming crime industry. The food and beverage sector, especially in the vegetable oil sub-sector is a very delicate and critical sector.

Vegetable oil has a very short life span and can become dangerous to human consumption in a matter of months after production, meaning they could be nearing expiration by the time they arrive here with almost 99 percent contamination rate and pose a very high health risk to consumers.”

“Not long ago, several containers of imported processed tomato were discovered to be contaminated on arrival at the Nigerian ports, but also, had only three months left before expiration. Only God knows what would have happened if the product had entered the

market undetected. We have consistently continued to argue that our local producers have the capacity to meet our need and also the West African sub-region. The government must encourage the local producers who are adding value to the economy and should not be suffocated out of business because the more they produce, the more they create jobs and keep many more idle hands out of the streets and crimes.”

Importation of food not defendableOshiomhole

Throwing his weight behind local manufacturers last month, Edo State Governor, Adams Oshiomhole, reiterated what he had persistently preached against as a labour leader, that no country desirous of making

economic progress relies on importation. Comrade Oshiomole who spoke in Benin City, while hosting representatives of the Stallion Group, who visited to him, said “Nigeria’s importation of food cannot be defended.I am not particularly excited about the importation of rice. For me, Nigeria has no business importing rice. If1 have the powers, I will prohibit rice importation. A nation’s consumption should reflect its ability and Nigeria importing food cannot be defended. We have the capacity to produce enough rice not only for our own consumption but also for export. The appropriate policy should be one that induces people like your group to produce here rather than import rice. It does not require much effort to import and in terms of our long term devel-

opment strategy; we must move away from import-based to production-based economy and create jobs for our people.

So, I will be more excited discussing further how you can

be involved in the production rather than providing incentives for you to import more rice. We must review these policies as they apply to importation.”

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

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