Financial Vanguard

DECEMBER 16, 2013

114.0

3.3

2,802.00

+37.00

16.28

-0.02

108.35

-0.32

96.43

-1.07

CURRENCY BUYING CENTRAL DOLLAR POUNDS EURO FRANC YEN CFA WAUA

154.73 251.8231 212.3979 173.6198 1.4932 0.306 237.9988 RENMINBI 25.4837 RIYA 41.2525 KRONA 28.4613 SDR 238.7639

155.23 252.6368 213.0842 174.1809 1.4981 0.316 238.7679 25.5665 41.3858 28.5533 239.5354

SELLING 155.73 253.4506 213.7706 174.7419 1.5029 0.326 239.537 25.6493 41.5191 28.6453 240.307

CBN Exchange rate as at 13/12/2013

*From left: President, Institute of Strategic Management, Nigeria (ISMN), Dr. Otive Igbuzor; awardee, Mr. Dele Agekameh; and Chairman, Board of Fellows, ISMN, Prof. Oluwayemisi Obashoro-John, during the investiture of Agekameh as a fellow in Lagos... recently.

Boko Haram: Nigeria imports tomatoes from Benin

By GODWIN ORITSE

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mportation of tomatoes from Benin Republic and other neighbouring countries by Nigerians particularly across the Seme border is on the increase following the Boko Haram insurgence in the NorthEast of the country famous for tomato

farming. As a result, the Nigeria Customs Service (NCS) has collected over N5million baggage fees from such imports in just two months.

A trip to Benin Republic by Financial Vanguard reporter, where tomato farms are rapidly springing up showed that the import of the vegetable has become a big business for both the producers in Benin Repub-

lic and buyers of the produce in Nigeria.

During the visits to these farms in Benin Republic, it was discovered that tomatoes produced in Benin are fleshier and do not decay easily but stay longer than those produced in Nigeria. Confirming this to Vanguard, Madam Comfort Akeke, Iya-Oja General of the Badagry Central market

said that the fleshy species of tomatoes has less fertilizer as against the watery one that is planted with more fertilizer. A tomato seller, Mrs Sarah Shanu who corroborated Madam Akeke’s claim said that the issue of tomato production is seasonal adding that sometimes traders from Cotonou do come to Nigeria to buy tomatoes.

She, however, added that the patronage is more from the Nigerian side. A tomato dealer, Mr Fatai Adeyemi aka Tanto olorun told Financial Vanguard Continues on page 18

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18 — Vanguard, MONDAY, DECEMBER 16, 2013

Cover Story

The Entrepreneurial Revolution: A New Order for Nigeria PT 2

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*Hon. Minister of Culture & Tourism, High Chief Edem Duke (left), presenting a publication of his Ministry to the National President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Alhaji Badaru Abubakar during the visit of NACCIMA president to the Minister in his office in Abuja.

Boko Haram: Nigeria imports tomatoes from Benin that Nigerians rush to Cotonou to buy tomatoes because of the price difference. For instance, a basket of tomato in Benin cost about N2,850 as against N5,000.00 – N8,000.00 at the Mile 12 market in Lagos.

The reason for the price difference is the fact that it is becoming difficult to access tomatoes from the North and the risk and cost of moving the product from the North to Lagos has become very high since the Boko Haram insurgency started about three years ago.

Besides the issue of price, another issue that has attracted Nigerians to Songhai Farm, Financial Vanguard learnt, is the quality of tomatoes produced there. Speaking to Vanguard on the quality of tomatoes produced in Songhai, Malam Shehu Abubakar from Kano said that tomatoes produced in Nigeria can be used as raw material by tomato paste companies because it is watery.

He also explained that increase in the patronage of tomatoes from Cotonou can be attributed to the menace of Boko Haram whose activities in Bornu and Yobe states have disrupted farming activities in those areas. He disclosed that the governments of these states have also enacted laws that bar farmers from planting tall crops like maize so that the insurgents do not take advantage of these crops to create havoc.

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bubakar stated that most of the affected states now look elsewhere for the supply of tomatoes adding that even the Kadawa irrigation project in Shiromawa in Kano where tomatoes are produced in large quantity, has fallen short of production because everybody is turning to it. Another tomato farmer in Badagry, Alhaji Mikky Okunola told Financial Vanguard that it is a shame

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something the government should look into and see how it has failed in that area,” Okunola said.

According to an officer of the Nigeria Customs Service in charge of Baggage at the Seme border post, Mr. Ben Modun, because the season of tomato is gradually coming to an end, the number of trucks passing through the border has reduced.

Modun told Financial Van-

His words “ during the season, an average of six trucks and some few baskets pass through the border on daily basis but for now, you can see trickles of baskets coming from Cotonou

that Nigerians now import tomatoes from neighbouring countries.

“The development goes to show how unserious the country is about agriculture. I think the government should make deliberate effort to encourage people to go into farming.

“We have the land, we have the human resources, the government can use agriculture to resolve the issue of youth unemployment and even make money in the process.

“For a small country like Benin Republic to be exporting tomatoes to Nigeria, it is

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guard that before now, about six trucks of tomatoes pass through the border every day adding that only few baskets are brought by traders.

His words: “During the season, an average of six trucks and some few baskets pass through the border on daily basis but for now, you can see trickles of baskets coming from Cotonou.” He said that a total of N5.643 million was realised as baggage fee within two months of the movement of tomatoes across the border.

Besides the production of toContinues on page 19

ignificant lessons could also be learnt from Margaret Thatcher’s economic policies that propelled Britain to an economic boom in the ‘80s through extensive promotion of entrepreneurial initiative and share-ownership.

Thatcherism’s thrust on substituting debt with equity spawned colossal economic development in the UK, which was soon adapted and replicated across Southeast Asia.

In the 20th century the USA traded their entrepreneurial revolution which they enjoyed in the previous 200years and began a 50 years stint of dependence on the modern day corporation.

The myth of job security prevailed in the past 50 years. This is now gone. Renowned historians like Will Durant wrote about this in 1944 leaders like Mahatma Gandhi, Franklin Roosevelt and Stephen Covey had written and spoken about it.

For sure, Africa represents uniquely different realities and challenges, and there is no effective model than can be entirely transplanted here. Policy makers must prioritise institutional efforts to compensate for reigning socio-economic realities. Nigerian initiatives to pursue financial restructuring, for instance, have been largely hamstrung due to civil and political unrest. Likewise, Abuja’s insistence on microenterprises, instead of smallscale ventures, has done little to help its burgeoning urban unemployed work force.

A viable economic agenda for Nigeria that allows rapid entrepreneurial progress has to focus on fundamental adjustments: *Creating a pro-active socioeconomic environment that encourages creative and viable entrepreneurship from the grassroots level up. Indentifying and correcting infrastructure deficits and systemic imbalance inimical to small business. *Developing a credit regime – through relevant financial and industrial policy changes – that is sympathetic to small business realities. Promotion of lending through equity, and not debt, is of critical importance. *Removing administrative and trade barriers while simultaneously enhancing technical support and capacity building assistance for both existing and emerging

entrepreneurs. *Mobilising the country’s significant human resources pool by revamping the education sector to provide vocational, administrative and skill development training to rural and urban youths. *Creating efficient and effective mechanisms for regulation and oversight of enterprise-development initiatives in general, and microfinance institutions in particular. *Maintaining political stability and authority of democratic institutions; fighting corruption and building social consensus on important issues to ensure broad-based success of macroeconomic policies.

Another important consideration to this discourse is the difference between policy and implementation, which can at least partly be viewed as the difference between developed and developing nations worldwide.

The best policies come to naught unless adequately executed, and the African continent provides a long list of such examples. Obasanjo’s edict on entrepreneurial studies could very well end up being the next one unless successive governments follow it through in both letter and spirit. To accomplish durable prosperity, Nigeria needs to exploit its tremendous economic potential with innovative governance, together with an ironclad shift against endemic corruption.

Interventionist policies and institutional mismanagement are potentially far more damaging in the long-term than, for example, the current economic crisis. A twofold agenda of reform and regulation, with effective implementation, is crucial to achieving the entrepreneurial revolution that will help the Nigerian economy overcome its trouble legacy.

The world looks with envy at the unprecedented growth of China and India.

These two Asian giants were still in the landscape of preindustrial agricultural economy when Nigeria was already setting up factories. Today they are enjoying the blessing of a borderless interconnected world economic order.

Vanguard, MONDAY, DECEMBER 16, 2013 — 19

The Nigerian class war budget is not about the Nigerian people; it is about these clannish politicians, who are looking for avenues to exploit whatever is available. The members of the National Assembly are looking for their cut from the annual budget preparatory to 2015.

The presidency is seeking more savings in the excess crude account so it can have unhindered access to free money. Whichever way, it is not for the benefit of the common man. The capital budget that would ordinarily bring dividends of democracy to Nigerians has never been fully implemented but these politicians use the people as smokescreen to push their position of greed.

Whenever they are cut off from the source of the looting, they shout as if the roof is about to come down. Call it PDP or APC, they are all the same self-centered politicians pretending as if the welfare of the people is what they are after. Is it surprising that seven governors elected under the platform of PDP can easily defect to APC without blinking an eyelid? Everyday, stories of billions rent the air and nothing is done about it. It did not start today; corruption has been around, past and present governments have not taken the needed steps to deal with the monster so it keeps growing by the day as new leaders emerge from the mentoring of their successors.

It is not a surprise to students of Nigeria’s recent history that Obasanjo came out with a damning letter to

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he ruling class in Nigeria has never failed to amuse me.

Sometimes, they sound genuine. At other times, they just find it difficult to hide their true identity. They are self-centered and selfseeking. Whatever does not benefit them in the main is anti-Nigeria. They portray themselves while in office as lovers of Nigeria more than anyone else.

Making sacrifice is not in their dictionary. They must get the best while in office and out of office at the expense of the ordinary Nigerian. They treat the resource of the country as their farm from which they must get maximum benefit. It is this fundamental flaw in the thinking of the average Nigerian leader that has impoverished the country and the ordinary Nigerian.

Every government functionary is an emperor in his domain that everyone working with him must pander to.

When Nelson Mandela died, the entire human race extolled his virtues of forgiveness and ability to bring opponents together to discuss and negotiate. Mandela has thought the world that anger and bitterness cannot foster unity. But as the world celebrates Mandela, Nigerian leaders joined the bandwagon. Funny enough, a group of governors took a full page advertorial to identify with the Mandela idea. What an irony in a country where leaders bask in the euphoria of selfish interest!

The non-passage of the 2014

Mr. Jonathan should name and shame oil thieves ...past and present corrupt public office holders and be courageous enough to deal with any member of cabinet involved in the NNPC shameful looting of the federation account

the president. Obasanjo in his letter admitted that Jonathan sees him as his mentor. If he did his job of grooming successors well, he would not have foisted Yar ’ Adua/ Jonathan on Nigerians. If he had dealt with corruption the way it should, the Jonathan administration would not have had any hiding place.

Jonathan’s failings are that of Obasanjo. So he should not play the ostrich in this case.

Obasanjo’s cavalier dismissal of President Goodluck Jonathan is not his first time of assailing an occupant of the Presidential Villa.

It was at the peak of the struggle for the actualisation of the June 12, 1993 elections that General Olusegun Obasanjo told the world that the acclaimed winner of that election, Chief Moshood Abiola, was not the messiah that Nigeria needed.

The comment by the former military head of state was in the perspective of many, a reflection of his perspective of

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himself as the country ’s ultimate saviour.

That perception was a near fact about five years later in 1999 when Obasanjo was again heralded to national leadership almost as a messiah, no thanks to the precipitous adventures of the Sani Abacha dictatorship.

At the mid-point of his second term in office, President Obasanjo’s messianic attitude was again brought to the fore when associates of the president made desperate efforts to extend his tenure with a third term in office that was seriously opposed by even his vice-president at that time, Atiku Abubakar. His vices nonetheless, even his most vicious foes agree that Obasanjo is an unrepentant nationalist dedicated to the best interest of the country.

That nationalistic streak is perhaps one factor that has motivated Obasanjo in his selfassumed crusade against his successors since his first exit

as Military Head of State in 1979. President Shehu Shagari who Obasanjo handed over the mantles of office to on October 1, 1979 was to receive the tongue lash of the former Head of State.

When General Muhammadu Buhari took over the affairs of the leadership of the country with a seemingly messianic campaign to rid the country of corruption and other vices that threatened its economic progress, he lashed out at him.

He wrote General Babangida the same form of letter he entitled: SAP with a human face. That letter also caused a stir in the Babangida military regime.

This president is sleeping on duty; he has sleep-walked the towns and villages of Nigeria for too long. It is time for him to wake up from sleep and do what presidents like him do.

He should honour his agreement of one term in office and use the remaining one and half years of his term to deal decisively with issues raised on corruption, economy, sectionalisation of the country and most importantly, fix the economy by ensuring he delivers on power. It is not how long one stays in office that matters but what legacy one is leaving behind. Mr. Jonathan should name and shame oil thieves, name and shame past and present corrupt public office holders and be courageous enough to deal with any member of cabinet involved in the NNPC shameful looting of the federation account.

Business & Economy matoes, birds of different types are also cultivated in the farm as a rice meal served with quail bird was served to Vanguard Correspondent. Financial Vanguard also gathered that about 250 crates of eggs are produced everyday at the farm.

Investigation by Financial Vanguard showed that because of the boom in the business, the Songhai Farm in Port Novo, Benin Republic, has researched into the production of tomatoes and came up with various methods of tomato farming that give good yields.

Speaking to Vanguard in Port Novo, Head of Commercial and Marketing, Ms Belvue Akpacho said Songhai Farm does not export tomatoes directly to Nigeria, but that they have Nigerian customers who buy tomatoes in large quantities from the farms.

Nigeria imports tomatoes from Benin Some of these Nigerians buy as much as eleven tonnes of tomatoes from the farm.

Akpacho explained that sometimes Nigerian traders place order for the vegetable ahead of production and take delivery during harvest.

She further explained that the demand for the vegetable from Nigeria has encouraged them to conduct researches on tomato production and the results of some of these studies have been amazing.

According to Akpacho, five varieties of tomatoes that such research has been conducted on showed that some of these varieties such as Nirvana are best grown in Nigeria because of the kind of soil in the country. Other varieties of tomatoes are Makis, Padma, PlatinumRani Jelani and Samrudhi. She said that besides the

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Continues from page 18

She said that besides the purchase of tomatoes

by Nigerians, tomato seedlings are also sold to Nigerian farmers who want to grow their own tomatoes

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purchase of tomatoes by Nigerians, tomato seedlings are also sold to Nigerian farmers who want to grow their own tomatoes.

Financial Vanguard also discovered that a lot of Nigerians are currently understudying different aspects of farming including the production of tomatoes. She stated that the farm has stopped

researching into the Nirvana type because it is better grown in Nigeria. The Songhai Farm has also opened up other branches of its farms in Nigeria. Akpacho disclosed to Financial Vanguard that there is now Songhai Badagry, Narasawa and one in Delta State.

“We have the technology to produce good quality tomatoes and one of the best technologies we have used in growing tomatoes is the plastic mesh technology. We grow tomatoes three or four times a year because of the high demand for the product and this has kept our workers busy all year round. Besides the plastic mesh technology used for the production of tomatoes, the Remial Cheap Wood (RCW) and drip technologies

are also used to grow the vegetable.

Although the RCW could not be explained by the guide, Kofi Kuessi, who took Financial Vanguard round the farm, however said that the drip technology is a system whereby the tomato ridge is irrigated by underground pipe water. This is done very slowly and stops automatically when the entire farm is fully irrigated and the water is shut down.

For plastic mesh technology, the ridge is covered with plastic with a view to creating heat not above 700C because according to him, the seedling needs a lot of heat to grow well.

Besides the Songahi Farm which is built on a 32-acre land, other places in Parakou and Savalou also have large tomato farms which produce are destined for the Nigerian market.

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20 — Vanguard, MONDAY, DECEMBER 16, 2013

Business & Economy BRIEFS Kaduna Refinery resumes operation with 2m barrels daily production

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fter 15 years of redundancy, the K aduna Petrochmical Company, KPC has resumed production at the capacity of two million barrels per day.

The Group Managing Director of NNPC, Mr. Andrew Yakubu disclosed this when the National Good Governance Tour Team visited the company in Kaduna.

He said that the company is gearing up for another turn around maintenance by the original builders, Chiyota of Japan in the third quarter of 2014 after the last maintenance in 2005 and is targeting to jack the annual turn over of the company to N1tr.

The maintenance he said had already been approved by the federal government to ensure that the company operate at the installation capacity.

He however, added that the petrochemical company has fully commenced operation after 15 years of stagnation and that the present leadership of the company had sustained operation of fuel supply to the designated states in the North with 1,403 staff personnel.

Dat aGroupIT DataGroupIT aGroupIT,, SafeNet offer data protection solution for banks, others

BY EMEKA AGINAM

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t the just concluded Payment Card Industry Data Security Standard (PCI DSS) customer seminar held in Lagos recently, Data protection company, SafeNet in collaboration with DataGroupIT have assured both banks and organizations on protection of sensitive data.

PCI DSS is a proprietary information security standard for organizations that handle cardholder information for the major debit, credit, prepaid, e-purse, ATM, and POS cards.

Speaking at the seminar tagged Compliance Checkbox for Data Security and Encryption, the Director, Middle East and Africa, MEA Sales at the SafeNet, Sebastien Pavie told the participants that in a complex and evolving climate of advanced threats, organizations should take a data centric approach to protect and control their sensitive information.

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Why Nigeria was sanctioned on stance against financial crimes —Egmont STORIES BY EMMANUEL ELEBEKE

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acts have emerged on why the inter national watchdog and standard bearer on Financial Intelligence Units' compliance with anti-money laundering and terrorism, the Egmont Group of FIUs withdrew Nigeria's FIU access to the Egmont Secured Web. It said it is due to its lack of commitment to fight money laundering and terrorism.

According to the group, “Nigeria shall remain excommunicated until its commitments to the international community on the fight against money laundering and terrorism financing are met, including the specific issues related to the autonomy of the Nigerian Financial Intelligence Unit.”

It blamed the country for deceiving the international community by claiming that the Nigerian Financial Intelligence Unit was independent only to betray itself a month after being delisted from the Financial Action Task Force list of high risk countries.

Commenting on the development, a top official of the NFIU who spoke on condition of anonymity explains: “The Egmont Secured Web (ESW) is a portal built for exchange of information and to enhance international cooperation on money laundering and terrorism financing between the 139 registered member-countries that meet their standard. Barely one month after the Financial Action Task Force delisted Nigeria from its list of high risk countries following the commitment of the Federal Government to strengthening the legal framework against money laundering and terrorism, as well as assurances of a truly independent FIU, the group was shocked to read reports of a clamp down on the NFIU. While the international community was trying to investigate the report, they read reports from the EFCC denying that there was no such siege, but claiming that the NFIU is a Unit under it and that it was merely restructuring and redeployed the Acting Director to another Unit.

This is a clear lack of un-

*From left: Chairman, Anti-Counterfeiting Collaboration (ACC)of Nigeria and Brand Protection Manager, Unilever Nigeria, Mr. Desmond Adeola, Area Head, Regulatory Affairs, British American Tobacco West Africa Area, Mr.Sola Dosunmu and Brand Protection Advisor, Nigeria Guinness, Diageo Plc, Mr. Tony Oghohorie at the 5th Anti-Counterfeiting Collaboration (ACC) Committee Roundtable at Four Points, Victoria Island, Lagos. derstanding of EGMONT and FATF principles on independence of FIUs globally. They also do not understand the international standard on the operations of FIUs. I am afraid; more sanctions may be underway.

Those of us that understand the implications of this development are really disturbed, but we cannot help the situation.”

The release from the EFCC made available to our Correspondent reads thus:

“The EFCC does not need mobile policemen to occupy its own premises nor does it require a riot squad to redeploy its own staff,” Mr. Uwujaren, EFCC spokesman said. “The redeployment is therefore, part of the re-tooling and re -alignment process by the management of the Commiss i o n … ” Adding his voice, a financial expert, Kingsley Babalola described the situation as sad, even as he

questioned the rational behind the recent interference with the operations of the NFIU. According to him, “ withdrawal of NFIU’s access to the Egmont Secured Web simply means blindfolding Nigeria from all developments and situations in the international scene, as long as terrorism financing, money laundering and other high profile international crimes are concerned.

FG ttoo com plete N5 4b Gur ar a Dam bbyy 20 14 complete N54b Gurar ara 201

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he Federal G o v e r n m e n t says it is determined to complete the N54.3 billion Gurara Dam project in Kaduna State by December, 2014.

The Director of the Gurara Water Management Authority, Federal Ministry of Water Resources, Engr. I. Babbaji told the NGGT team that the project could not be delivered on schedule due to a review that was carried out on it following additional components that were added to it over the years, among which are a hydro-power plant and pilot irrigation project.

This, he said, necessitated an upward review of the initial contract sum of N15.1billion to the present N54.3 billion following the approval of the additional

sum of N38.5billion by the Federal Executive Council in 2007.

According to him, it was foreseen that a 132kv high voltage transmission line of 140 kilometres to Kaduna would be erected to fully utilise the 30 Mega Watts Hydro-power plant, hence the need for the review, while additional roads on right bank to Katari and left bank to Kenyi direction would be constructed.

He assured that the project when completed, would meet the high demand of water by FCT residents.

“The Multipurpose Gurara project will satisfy the FCT water demand, produce electricity for Kaduna city, allow development of modern irrigation areas for intensive agriculture in the Gurara valley

and will boost the tourism potential of the surrounding communities,’’ said Babbaji.

Babbaji further explained that the project would allow for the development of modern irrigated agriculture, adding that on the basis of the pilot project experience, the final Irrigation Master Plan has foreseen the possibility of realising 12,000 hectares of irrigated surface in the Gurara Valley.

The site engineer, Lainer Denllonze, noted that the lake is about 50 meters deep and 6km downstream with ongoing pilot irrigation project, adding that the system consists of water supply from the dam through feeder pipes.

Vanguard, MONDAY, DECEMBER 16, 2013 — 21

Business & Economy

From left: Executive Director Support Services, Infrastructure Concession Regulatory Commission (ICRC), Dr. Ghaji Bello; Chief Servicom Officer, Nnenna Akajemeli; Nodal Head of Servicom, Office of the Secretary to the Government of the Federation, Amom Shimwen; Nodal Head of Servicom, ICRC, Mr. Michael Ohiani at the inauguration of the ICRC Servicom Unit at ICRC Head Office, Abuja, on Wednesday 11th December 2013.

FG releases fresh import guidelines

… moves to curb importation of fake products

BY GODFREY BIVBERE

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a bid to curb importation of fake products into the country, the Federal Government has issued fresh guidelines for cargo clearance at the ports and borders post nationwide.

A memo dated December 3, the Minister of Finance and Coordinating Minister for the Economy, Dr Ngozi OkonjoIweala direwcted the Comptroller-General of Customs, Alhaji Dikko Abdullahi, that the guidelines takes effect from December 1.

Under the new regime, all documents must bear the product name, country of origin, specifications, manufacturer, date and batch number, standards of production (e.g. Network Information Services (NIS), British Standards PD. International Organisation for Standardisation (ISO), International Energy Standards (IES), and Documentation Identification Number (DIN).

All goods, according to the guidelines, must be labelled in English, in addition to any other language of transaction; otherwise such goods should be confiscated by Customs.

According to the letter, all imports shall be accompanied by the following documents: -Combined Certificate of Value and Origin (CCVO) contain the following information.

-e-Form ‘M’ No: -Adequate description of goods; -Port of destination. (The C M Y

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actual port shall be specified e.g Tin-Can, Apapa, Kano, Onne, etc); -Shipment identification, date of shipment, Country of Origin, Country of Supply.

-Packing List.

-Shipped/Clean on Board Bill of Lading/Airway Bill/ Railway Bill/Road Waybill.

-Manufacturer’s Certificate of production, the Phytosanitary Certificate or Chemical Analysis Report, which must state the standards.

- Laboratory test certificates for chemicals, foods, beverages, pharmaceuticals, electrical appliances, and other regulated products are also required from importers.

The letter, signed by the Director, Home Finance, K Zaji, said any intending importer should in the first instance, process e-Form ‘M’ through any authorised dealer bank irrespective of the value and whether or not payment is involved.

The first validity period of the e-Form ‘M’ for general merchandise, Zaji said, would be six months, which he said, may be extended for another six months by the dealer.

The government, according to the memo, has granted an initial validity period of 365 days to capital goods with approved e-Form ‘M’, and the maximum extension of

another 365 days is allowed.

But any subsequent request for revalidation and consideration of e-Form ‘M’ after the maximum 365 days extension period can only be granted by the Director, Trade and Exchange Department, Central Bank of Nigeria (CBN).

Supporting documents shall be clearly marked “Valid for Forex” or “Not Valid for Forex” as appropriate i.e. whether or not foreign exchange remittance would be involved.

Also, all applications for goods subject to Destination Inspection (DI), Zaji said, must carry the “BA” code, while those exempted shall include “CB” in the prefix of the numbering system of the e-Form ‘M’.

Importers intending to make payments for goods exempted under the D I scheme, the government said, would not be allowed to do so in the Foreign Exchange Market, except there is a prior approval from the CBN. Importers are also advised to ensure that the e-Form ‘M’ and the relevant proforma invoice carry a proper description of goods to be imported to facilitate price verification as follows: -Generic product name i.e. product type, category: -Mark or brand name of the product, where applicable; -Model name and/or model or reference number, where applicable; -Description of the quality, grade, specification, capacity, size, performance, etc; -Quantity and packaging and/or packing.

The letter said the e-Form ‘M’ would be valid for importation if it is acceptable to the Nigeria Customs Service (NCS).

CAC ac hie 1:2008 recer tification achie hievves ISO 900 9001:2008 recertification for operations standards international standards, adding, “We shall also

By FAVOUR NNABUGWU

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orporate Affairs Commission, CAC yesterday achieved the ISO 9001:2008 certification by the Standard Organisation of Nigeria, SON as an evidence of the commission’s commitment to continually improving its operational performance and underscores its ability to meet customer needs.

Established by the International Organization for Standardization and the SON, ISO 9001:2008 is a set of standards related to quality management systems designed to enable

organizations to ensure they meet the needs of customers and other stakeholders, while complying with statutory and regulatory requirements.

As the world’s most recognizable quality management standard, the ISO 9001:2008 standard helps organizations increase the efficiency of their operations, realize cost savings and continually improve the quality of their products and services.

CAC Registrar-General, Alhaji Bello Mahmud reassured SON and its teeming customers on the commission’s commitment to continue to improve its processes, procedures and systems in line with

continue to strive for higher versions of QMS certificates” “We have been able to reduce the period of registration of companies from 5 days to 24 hours since the adoption of the ISO standards. We intend to reduce it further by bringing it down to a maximum of 3hours by the time we deploy the new registration software in the first quarter of 2014” In achieving ISO 9001:2008 certification, CAC is able to highlight its commitment to providing clients with the highest level of quality assurance for its global, industry-leading screening and identity solutions.

BRIEFS Waterways control: Go to cour t, NIW A tells court, NIWA Fashola

BY GODFREY BIVBERE

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ollowing the reaction of the Lagos State Governor, Babatunde Fashola, over the control of the nation’s waterways, the National Inland Waterways Authority (NIWA) has asked governor, to go to court to challenge the law if he is not comfortable with it.

Reacting to the governor’s comments that the state would not obey aspects of the NIWA Act over a month ago, NIWA said the state should recourse to the law court rather than take the law into its hands.

Recall that the law requires that the states should obtain permit from the Federal Government agency before building bridges or providing ferry services on waters within their territories.

A statement issued by the General Manager, Public Affairs of NIWA, Tayo Fadile, noted that “While we concede the right of the Governor to express his opinion as it relates to Inland Waterways in Lagos, we wish to draw the attention of His Excellency to the fact that where he is dissatisfied with the valid Federal law establishing the National Inland Waterways Authority especially as it concerns the Authority ’s functions and regulatory control over Rivers, Creeks, Lagoons, Lakes and other bodies of internal waters of Nigeria, the only alternative is the court of law and not otherwise.

C.S.R : MTN empowers Nigerian youths on development programmes

By PETER EGWUATU

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s part of its Corporate Social Responsibility initiative in advancing the vision and knowledge of Nigerian youths, leading MTN, has partnered with, RISE Networks, a private sector funded youth-interest organisation, to engage youths across the country in a National Developmental Forum.

The forum is focused on advancing the aspirations and knowledge of youths, all over the nation, by providing them with the opportunity to interact with renowned and successful Nigerian Business Icons and professionals, who will share with them knowledge and experience on their success.

22 — Vanguard, MONDAY, DECEMBER 16, 2013

Banking & Finance

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ccion Microfinance Bank has again for the 3rd year running taken its pride of place as winner of the 2013 Lagos State Enterprise Award (LEAD) for Best Microfinance Bank of the year. Accion Microfinance Bank was declared winner based on a survey conducted by an industry research group for LEAD Awards.

The Managing Director/Chief Executive Officer of AMfB, Ms. Bunmi Lawson said “this 3 rd consecutive win as a pointer to AMfB’s commitment to financial inclusion, its high standards of corporate governance and staff devotion to our mission.

Going forward, AMfB will continue to expand its services aided by technology as we are driven by the passion of ensuring a brighter future for our customers.”

Also speaking, Jide Peters the Executive Director of LEAD Africa Award said AMfB is being selected for the 3rd year running “as a result of its uncompromising standard in promoting microenterprises and delivering first class services resulting in poverty alleviation in Nigeria.”

New Zealand cenbank cautions on bitcoin

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ew Zealand’s central bank is wading into the debate about bitcoin, urging the country’s banks and businesses to exercise caution with the virtual currency.

“Tread very carefully,” Reserve Bank of New Zealand Assistant Gov. John McDermott said Thursday when asked if local banks and businesses should embrace bitcoin’s potential.

“You have to worry about where’s the supply, how it’s controlled, how it’s monitored,” Mr. McDermott said. “Who knows at this point? There is still a lot for the world to learn on this issue.”

Bitcoin is a virtual currency that isn’t backed by any central bank or reserves, but exists only online.

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Financial inclusion: Hopes and challenges of 34 million Nigerians

By BABAJIDE KOMOLAFE

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t was a representation of all the major actors in the quest to extend financial services to the 34 million adult Nigerians, who has no access to any form of such services The Central Bank of Nigeria was there, represented by the Governor, Mallam Lamido Sanusi, the banks were represented by Sterling Bank, Enhancing Financial Innovation and Access (EFInA) was also there, as well as various civil society groups. The gathering took place in a market dominated by women and illiterate traders, which constitute majority of Nigerians with no access to financial services.

The purpose of the gathering was the audacious goal of reducing the number of this group of people, referred to as 'financially excluded', to 20 per cent of the adult population by 2020 from 20 per cent in 2010.

The financially excluded are those who do not use any financial service or product to manage their finances. They transact using cash. Most of them according to a 2012 study by EFInA, are women, rural dwellers, farmers and illiterates. 52.3 per cent of the financially excluded adult population are female, according to a study on Access to Financial Services in Nigeria, by EFInA. The implication is that efforts to reduce the population of the financially excluded should be concentrated on women.

Hence the choice of Asejere fish market, located in Makoko, Yaba, Lagos State, to launch the first Agent banking scheme in the country.

“What we are trying to do in the central bank now is to tell you that whether you are poor or rich, whether you speak English or not, whether you have car or not, whether you live in a town or a village, you have a right to banking services”, Sanusi told the crowd of fish sellers.

But having a right to financial services is one thing, deciding to exercise that right is another issue. Most of the people who are financially excluded in Nigeria, actually chose not to exercise that right for sundry reasons. These reasons were revealed in a 2011 study on, Understanding the Low income population in Nigeria by EFInA.

*Asejere market women welcoming the CBN Governor, Mallam Sanusi Lamido Sanusi and Mr Yemi Adeola, Managing Director/Chief Executive Officer, Sterling Bank Plc..at the launch of Financial Inclusion Scheme by Sterling Bank Plc held at Asejere Market, Makoko Yaba Lagos. PHOTO: AKEEM SALAU

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BRIEFS ACCION retains LEED’s best MFB Award

By the time you see how this machine works, the only thing you need to open account is your finger that God has given you

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The reasons include: Intimidating and stressful account opening process, long distance and associated cost of visiting banks; unexplained deductions; low interest rate on savings; increased fraud rate, etc.

Some of the low income people surveyed in the study list the challenges of experienced patronising banks. These include: slow paced services and long queues; unreasonable bank charges and hidden charges; unfriendly staff; ATM fraud; unreliable network; and required opening and minimum balance.

In an effort to address some of these factors, the CBN introduced the tiered Know Your Customer regulations, which introduces different account requirement for three categories of bank customers.

The Low-level KYC, which aims at making it easy for low

income people to have bank accounts, requires only passport photograph and personal information for account opening. Also the CBN had directed banks to allow people to open accounts with zero balance. To complement this, the CBN introduced the agent banking model, which is designed to bring financial services closer to where people live or work. Furthermore is the introduction of biometric electronic payment devices such as ATM and PoS, which allow use of fingerprint for access.

“By the time you see how this machine works, the only thing you need to open account is your finger that God has given you.” Sanusi boasted. “It is a finger nobody can take from you. God, who created us, gave each of us a finger nobody on earth has. Not your sister or your brother or your parents or your children.

So when you put this finger on that machine anywhere in the world, they will open account for you. You put your finger and you collect your money. Very soon, you will be able to combine your finger with your telephone.”

Like many of the 34 million financially excluded people in Nigeria, the Asejere market women are not entirely new to financial services. At one point in time, they have patronised one bank or the other, but with unpalatable experiences.

Speaking the minds of the market women, Baale of Asejere said”, the fear of our people is Nigerian policy, the policy keeps changing from time to time, and we are always the loser. The microfinance bank is a typical example; these market women were always contributing money into these banks. I have a case whereby over N100 million was stolen away by one Almond Micro Finance Bank. It took their money away, over N100 million. I wrote the central bank, they all claimed ignorance of that bank. How the bank was registered in the first instance only God knows.

That is why I said they should not allow these women to put their money into this financial inclusion project, only for them to tell them that their money is stalked somewhere.”

This fear is a major barrier to financial inclusion in Nigeria. While low income people usually express excitement at the safety, convenience and comfort of banking services especially electronic payment channels, the fear of losing their money constrains them from patronising these services.

According to the EFInA study, the fear of losing money to fraudsters was the first concern expressed by respondents to the concept of using mobile phones to make payment.

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Banking & Finance

Experts predict higher inflation, exchange rate in 2014

By BABAJIDE KOMOLAFE

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conomic experts have predicted higher inflation rate and exchange rate for the country in 2014. These predictions contrast the stable exchange rate and inflation band of four to seven per cent objectives of the Central Bank of Nigeria (CBN) for next year.

Regional Head of Research, Africa, Standard Chartered Bank, Razia Khan of Standard Chartered Bank predicted that inflation will rise to 12 per cent in 2014 from 7.2 per cent this year. On his part, Managing Director/Chief Executive, Financial Derivative Company, Mr. Bismarck Rewane predicted that inflation will rise to 11 per cent in the second quarter of 2014.

On Exchange, Rewane predicted that Naira official trading band will be N155-165 with midpoint at N160. He made these predictions at the Lagos Business School yearend review. He also predicted that the CBN will further increase banks’ cash reserve ratio (CRR) on public sector deposit to 75 per cent from the present level of 50 per cent, and on private sector deposit to 20 per cent from the present level of 12 per cent. He said this increase would severely impact banks’ profitability by about 30 per cent.

Khan similarly predicted that the middle point of the official exchange rate would

rise to N160 per dollar, and further tightening of money supply by the CBN. She said: “The CBN is likely to defend the current foreign exchange peg (around a mid-point of 155) up to a point, and to tighten policy to achieve this. Should the naira trade consistently outside this band even after tightening, we believe the authorities will accommodate this, with the mid-point of USD-NGN implicitly shifting to 160 in 2014.

“We change our view on interest rates. While inflation slowed to single digits in

2013, this could be put at risk by higher pre-election spending, foreign exchange volatility (exacerbated by Quantitative Easing (QE) tapering), and investor concerns about CBN succession. We previously expected the CBN to raise the monetary policy rate (MPR) by 200bps to 14 per cent in 2014 to influence the foreign exchange rate.

However, the CBN made clear after its most recent meeting that it would prefer to hike the public-sector cash reserve ratio (CRR) further in order to deal more decisively

with excess liquidity should it arise. “We expect a further hike in the public-sector CRR to 100 per cent (from 50 per cent) in first half of 2014, especially if spending pressures emerge. We now expect only 50bps of MPR hikes, most likely at the September 2014 policy meeting, in order to keep the rate positive with respect to inflation. While CBN officials have spoken of adopting an informal 4-7 per cent inflation target by 2015, we expect inflation to end 2014 just above 12 per cent.

*The first regional and zonal draws of the 30th anniversary promo of First City Monument Bank (FCMB) Limited took place on Wednesday, December 11, 2013 across the country. Picture shows the Executive Director, Lagos and South-West of the bank, Mr. Olufemi Bakre, presenting a prize to one of the winners, Corporal Paul Ejoga at the regional draw held at Akute in Ogun State. With them are the Divisional Head, Retail Banking of FCMB, Mr. Olu Akanmu and the Divisional Head, Human Resources and Change Management, Felicia Obozuwa, at the event.

Ecobank Capital raises $500m facility for Orion Oil

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cobank Capital, the investment banking arm of Ecobank Group, has raised, on behalf of Orion Oil Ltd $500 million to be utilised for the prepayment of crude oil cargoes to be supplied by Société Nationale des Pétroles du Congo (The National Oil Company of the Republic of Congo, SNPC).

The facility comprises a US dollar denominated $342 million tranche and a XAF denominated USD 158 million tranche. Ecobank Capital acted as the Mandated Lead Arranger, working with United Bank for Africa (UBA) Plc as coarranging bank. Participating lenders were Afreximbank, BGFIBank Group, UBA Group, Banque Atlantique Group and the Ecobank Group. The closing ceremony was held in Paris, France on October 26th, 2013.

Orion is a privately held company whose principal activities include the physical trading of crude oil and refined products. The company focuses on the value chain of the oil & gas industry,

supplying approximately 100,000 metric tons of refined products each month along the West African Coast and holding interests in oil & gas fields in Congo. Orion entered into a 24-month crude oil allocation program with SNPC, the largest oil & gas company in Central Africa. The proceeds of the debt facility will be used to fund the prepayment of the aforementioned crude oil cargos (amounting to circa USD 100 million per cargo) on a Free on Board basis.

This transaction is the largest loan syndication completed to date in Central Africa solely funded by regional African banks and for an indigenous company.

It clearly showcases the increasing interest of regional banks in financing capital intensive oil & gas deals in Sub-Saharan Africa, channelled through the diligent syndication expertise of Ecobank Capital.

M r. Ikenna Onyejiaka, Acting Managing Director of Ecobank Capital said: “This landmark transaction underscores

Ecobank Capital’s capabilities as a Lead Arranger of syndicated loans, working with Africa’s key financial institutions to provide vital support to Congo’s economic growth, especially at a time when the Eurozone crisis is threatening African businesses’ access to international markets.” Ms. Foluke Aboderin, Executive Director of Ecobank Nigeria added: “Ecobank is proud to be associated with Orion Oil Limited, a truly international oil company with a reputable track record.

We are indeed excited to have participated in the USD 500 Million Pre-Export Financing with SNPC, Congo. For us at Ecobank, this transaction is undeniably strategic and represents what we are about - leveraging on our large footprint across middle Africa to support viable business for the development of our continent. Our expectations are that we would continue this strategic alliance/ partnership with Orion in a manner that is mutually beneficial to both institutions.”

BRIEFS FirstBank attains ISO22301 certification on business continuity management

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irst Bank of Nigeria Ltd has once again achieved yet another milestone by being the first banking institution in Nigeria to achieve the new international certification on Business Continuity Management, ISO22301 (Societal Security: Business Continuity Management System).

ISO 22301, the world’s first international standard for Business Continuity Management (BCM), has been developed to help organizations minimize the risk of disruptions. It specifies requirements from organizations to plan, establish, implement, operate, monitor, review, maintain and continually improve a documented management system to prepare for, respond to and recover from disruptive events when they arise. According to FirstBank’s Group Managing Director/ Chief Executive Officer, Bisi Onasanya the Bank’s attainment of this feat is a demonstration of our commitment to delivering sustained, consistent and exceptional services to our customers and meeting the expectations of all stakeholders even in the event of any disruptions.

Sterling Bank partners Audax on computer education

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terling Bank, in partner ship with Audax, a software development company, at the weekend organized the Computer Science Education (CSE) Hour of Code in Nigeria. The programme held simultaneously worldwide; with the CSE Week starting worldwide last Monday, November 09, 2013.

The Hour of Code, according to a statement from the bank, is aimed at deepening awareness of Computer Science Education among children and youth. It comprises free onehour sessions on the building blocks of computer codes writing, open to registered attendees between the ages of 6 and 16. The programme had three blocks of one-hour sessions with over 50 participants per session and was essentially, a one-hour Introduction to Computer Science; designed to demystify “computer codes” and show that anyone can learn the basics to be a maker, creator and an innovator of any computer code.

24 — Vanguard, MONDAY, DECEMBER 16, 2013

Corporate Finance BRIEFS Enterprise Bank risk management efforts recognised, rewarded

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he effort of the manage ment of Bank Limited of building a sound financial institution was at the weekend recognised and rewarded as second best in the country at the maiden edition of the Nigerian Risk Awards (NRA).

The award was organised by Conrad Clark Nigeria Limited in collaboration with newspapers and United Kingdom (UK) Institute of Risk Management.

In the same vein, the Head of Operational Risk Management of Bank was also nominated in the “Risk Manager of the Year ” category, which was eventually won by the head of Operational Risk Management at Access Bank.

The NRA is dedicated to recognising and rewarding organisations and individuals who have achieved measurable results through the effective implementation of enterprise risk management principles among other parameters. The panel of judges was co-chaired by Dr. Divid Hillson, known globally celebrated scholar from the United Kingdom, and Mr. Victor Odozi, former Deputy Governor of the Central Bank of Nigeria (CBN).

U.S. stocks fall with gold, silver as dollar gains on Fed .S. stocks fell, sending the U Standard & Poor’s 500 Index to a one-month low, treas-

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uries declined and the dollar gained versus most major peers as growth in retail sales added to speculation that the Federal Reserve will slow stimulus. Gold and silver led commodities lower.

The Standard & Poor’s 500 Index lost 0.3 percent to 1,776.41 after sliding by 1.1 percent Thursday. Treasury 10-year yields added one basis point to 2.87 percent. The Bloomberg U.S. Dollar Index, a gauge of the currency against 10 counterparts, climbed 0.4 percent. The Stoxx Europe 600 Index declined 1 percent to the lowest since October and the MSCI Asia Pacific Index slid by 1.2 percent. Gold lost more than two percent and silver sank more than four percent.

More economists predict the Fed will taper bond buying as soon as next week and data Thursday showed U.S. retail sales increased more than economists estimated.

Chinese policy makers meet this week to set growth targets while central banks in Indonesia, New Zealand, South Korea and Switzerland maintained their benchmark interest rates today.

By NKIRUKA NNOROM

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hareholders in the Nigerian capital market have said that the planned exclusion of company directors and majority shareholders from exercising voting right in any take-over bid is illegal as the Exchange lacks the power to take such action.

Though a cross section of shareholders, who spoke with Financial Vanguard in separate interviews, observed that it is a good idea, they said that it would be unachievable unless the Companies and Allied Matters Act, CAMA, is amended to reflect the new position.

The NSE had recently said it would ban directors and controlling shareholders from voting in transactions such as takeovers to protect minority investors.

The proposal, according to Tinuade Awe, Head, Legal and Regulation Division, NSE, is part of measures to strengthen corporate governance and would be introduced “as soon as possible.” She explained that the recommendation has already been released for public comment and is subject to the approval of the Securities and Exchange Commission, SEC. Reacting, Ambassador Olufemi Timothy of Renaissance Shareholders Association, said that going ahead with the proposal would be unfair to the directors and majority shareholders involved as it is against the investment law (CAMA).

According to him, “There are other legal means to achieve the aim. They may be asked not to own block shares individually. All of them put together must not control more than 60 percent of the company.”

“There could also be volun-

*From left: CEO, Brittania-U Nigeria Limited, Mrs. Uju Ifejika; Guest Lecturer and GMD/ CEO Diamond Bank Plc, Dr. Alex Otti; Founder/CEO, Emzor Pharmaceutical Industries Limited, Dr. Stella Okoli; and Deputy Governor, Corporate Services, CBN, Mallam Suleiman Barau at the Hallmark Public Policy Forum in Lagos.

Ban of coy directors, majority shareholders from voting, illegal —Shareholders tary disqualification of themselves (the directors and majority shareholders) in voting on such transactions in order to show fairness,” he added.

Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria, PSAN, observed that stripping these groups of shareholders of voting right in the instance would be a good idea only if the Nigerian Stock Exchange

has the power to do so.

“Under what law will they execute the programme. Will a tenant have the power to evict his landlord from his house,” he queried, adding “For me, if the answer is no, then they cannot enforce it because they lack the power to do so. The NSE cannot operate outside the CAMA. In as much as the companies are still operating under CAMA,

the NSE lacks power to do so.

You cannot suddenly say that the minority shareholders should become the majority, while the majority becomes the minority.”

However, if the law is amended, it will be good for shareholders so that the majority shareholder will not continue to oppress the minority, he affirmed.

ITMB targets national mortgage bank status by 2014

By NKIRUKA NNOROM

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nfinity Mortgage Bank Plc has disclosed that one of its cardinal objectives in the next two years (2014) is to attain a national mortgage bank status, and to be a lead participant in the proposed Nigerian Mortgage Refinance company.

Speaking at the fact behind the listing on the Nigerian Stock Exchange, NSE, the Managing Director, Mr. Obaleye Olabanjo, said the company also plans to float capital market securities such as Mortgage Backed Securities (MBS) and Real Estate Investment Trust (REIT).

The company had listed a total of 4.17 billion ordinary shares of 50 kobo each at N1.50 per share on the NSE’s official list last week.

“We will continue to be a leader in provision of affordable housing to Nigerians and we will continue to dominate the mortgage banking industry, increasing our market share from the current size,” he said, adding that it is set to pursue organic and strategic branch expansion in order to create and enhance shareholders’ value.

He noted that Infinity Trust hoped to tap into the huge gap in the housing sector to bolster its revenue, even as it hopes to achieve 30 percent growth in profit after tax in 2014.

“We intend to achieve a 30 percent growth in profit after

tax in the coming year and we expect it to continue in that trend. Earning per share will equally rise; when you have more business to do, definitely, the earning will rise,” he stressed.

According to him, “Our mission is to be a reference point in all spheres of mortgage business through the usage of time tested professionals, the best in technology and adequate capital in creating wealth for all stakeholders - customer, staff, shareholders and the community at large,” he said.

He disclosed that the company had shareholders’ funds in excess of N4.5 billion as at the end of 2012, making it one of the most capitalised PMIs in the country.

Olabanjo noted that the firm was profitably run with very substantial, impactful value addition and great potential, saying that for eight years running, it has been consistent in increasing returns on investment and paying dividends to the shareholders.

Speaking on the performance, he said the bank recorded a profit before tax of N565.6 million and profit after taxation (PAT) of N517million.

He explained that the approach was to reinforce the company’s position by growing significantly across the key metrics, including scale, profitability and market share.

The results, he said, reflected a robust improvement upon the previous performance and the indicators were well above those posted by the company’s peers.

“The bank has continued to be ahead of our competitors despite the challenging economic environment in Nigeria,” Olabanjo said.

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Vanguard, MONDAY, DECEMBER 16, 2013 — 27

E-Commerce

Commodity Index Dec 06 - Dec 12, 2013

Experts decry lack of IT patency law in Nigeria Stories By JONAH NWOKPOKU

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nformation and Communication Technology, ICT experts in the country have called for a law for patenting ICT-related intellectual properties to drive monetisation in Nigeria.

The experts, Peter Akporume and Henry Afekuana both from Mobile Enterprise Nigeria, made the call in an exclusive interview with Vanguard on the challenges of IT startups in the country.

They said that apart from the challenge of obtaining Value Added Service licence as startups, patenting intellectual property as far as IT products are concerned, especially software, has remained a huge challenge as it is obvious that there are no statutory provisions to make that possible at the

*From left: Mr. Chidi Okoro, Managing Director of GlaxoSmithKline, receiving the Anabel Leadership Academy Transformational agenda DVD from Mr. Nicholas Okoye, President, Anabel Group and Convener, Nigeria Leadership Summit at the 2nd Nigeria Leadership Summit in Lagos. moment.

According to them, “Patency in Nigeria is a huge challenge. From our recent finding, it does not hold water. The only thing we have in Nigeria is copyright, you can have a situation where you can have your app that you developed from the scratch, that is your personal idea and you

What e-commerce operators can expect in 2014

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s we wrap up an other year, looking back at the retail and technology trends that shaped 2013 can help us gauge what retailers can expect for 2014. Heated competition from online retailers and the lack of traction for mobile wallets show we’re still in the early stages of digital and merchant convergence.

The industry will continue to evolve in 2014 as mobile commerce continues to grow and retailers put more focus on creating targeted, personalized and seamless shopping experience for consumers. What can we expect from commerce and mobile marketing in 2014?

Experts believe that part of the prominent feature of 2014 mobile marketing would be the drive for mto deliver the best consumer experience.

Consumers would shift loyalty to merchants that focus on delivering the most engaging, rich and useful customer experience. If retailers want to stay competitive, they will need to focus on making it as easy as possible for customers to find – and

pay for – exactly what they want. As is becoming the trend in the later part of 2013, in an effort to provide a better experience, convert more sales and build loyalty, more and more merchants are releasing personalization apps that aren’t just focused on commerce, but make the entire shopping and purchase process more seamless for their customers.

can’t patent it and then you see another person coming up with the same idea. But in an organised society, even without money, you can patent a good intellectual property. But the problem is that at the moment, Nigeria only patents tangibles like drugs. There is no provision yet for intangibles, like technological applications and I think the government needs to address that.”

They argued that, “for the patent, government can put structures in place so that startups can have the opportunity to patent intellectual property. That would go a long way to solve the problem and help the local IT scene to grow.

“We want to appeal to government to come up with legislation to address that patency challenge so that when you are creating something, at least you will be confident that you are going to benefit from it.

Kaymu advocates strategic product positioning to maximize profit

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anaging Direct o r , Kaymu.com.ng, an online market place, Massimiliano Spalazzi, has said that strategic product positioning and delivering top class customer service would drive profit especially during this Christmas period.

According to him, “the way and manner items are listed will greatly determine how much profit a seller makes on the Kaymu website. Researching bestselling products and introducing it during Christmas is a

key factor in maximizing profit during Christmas.

Products that look set to repeat their profitable performance of past years should be given topmost priorities during the Christmas period.”

He explained that, “The online marketplace is highly competitive and whether shopping online or in-store, the experience the shopper receives impacts how likely it is that they will be return shoppers, hence delivering a top-notch experience is very vital to maximize profit.”

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30 — Vanguard, MONDAY, DECEMBER 16, 2013

Homes & Housing Finance BRIEFS Kebbi partners FHA to build 2,500 houses

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ebbi Government is working in partnership with the Federal Housing Authority (FHA) to construct 2,500 houses in the state.

Commissioner for Lands and Housing, Alhaji Hussaini Raha, told the News Agency of Nigeria (NAN) in Birnin Kebbi that the houses would be constructed in four Local Government Areas namely Argungu, Birnin Kebbi, Yauri and Zuru LGAs. He said that 1,000 houses would be built in Birnin Kebbi, while 500 each would be sited in Argungu, Z u r u a n d Ya u r i l o c a l governments, adding that the houses would be allocated to civil servants and individuals in the state.

Raha, who did not reveal the contract sum, said work would commence as soon as compensation was paid to owners of the land acquired for the project.

He called on developers to invest in the state’s housing sector, “especially considering that a new federal university, new state polytechnic and new Central Bank of Nigeria office will attract more workers requiring accommodation’’.

UK house prices continue rapid rise

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ouse prices rose by 1.1 percent in November compared with the previous month and up 7.7 percent annually, the Halifax has said.

The lender, now part of Lloyds Banking Group, said strong demand for homes combined with low levels of property on the market had pushed up prices. It said that the average home in the UK was now valued at £174,910.

However, the Halifax said that the rate of house price growth would be “constrained” by squeezed household finances. “We are also seeing signs of a revival in housebuilding, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms,” said Martin Ellis, chief economist at the Halifax.

The month-on-month rise was the 10th successive monthly increase in prices, according to the Halifax’s measure.

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•House-Real-Estate

Ogun unveils plan to help homeowners secure properties O

gun State government has unveiled a scheme that will enable homeowners in the state regularise and properly document their properties, known as Ogun State Homeowners’ Charter Programme. A statement from the state Ministry of Urban and Physical Planning, said that apart from forming an integral part of the government’s mission to rebuild the state, the scheme will provide data for the medium-term planning for provision of roads, schools, hospitals and other essential services.

The statement noted that GIS Satellite mapping of the state revealed significant numbers of unrecorded properties, while thousands of houses in the state have no building plan approval, certificate of occupancy and other title documents. It added that the scheme will enable owners of properties built without government approval regularise their title documents through a window of opportunity to obtain building plan approval and certificates of occupancy. It is expected to pave way to clear ownership lands, unlock the potential of property owners to create wealth and enhance the development of Ogun State’s housing market.

Under the scheme, owners of properties without the required building approvals, or houses built on land belonging to the state government will be given a window of opportunity to obtain building plan approvals, Certificates of Occupancy and other documents that will

establish their ownership to the properties. The scheme will ensure that all penalties and fines that are normally levied against those who build houses without approvals and Certificates of Occupancy will be waived. It also relaxes the documentation requirements and fees are discounted so that many residents, especially those who would otherwise not be able to afford it, can benefit from the programme.

Also under the scheme, interested property owner will make an initial deposit of N5, 000, and then submit documents that can be used to establish ownership of the property. These would include land purchase agreements, deed of gift or sublease, receipts, and survey plan.

According to the statement, “it

is quite evident that without these documents, it would be extremely difficult to establish claims to ownership of properties”.

The statement added that designated officials will undertake an initial visit to the site to confirm that the property is indeed eligible for the programme, and that the information that was provided on the form is accurate.

Properties that are not eligible are those that are built under Power Holding Company of Nigeria (PHCN) high tension cables, those occupying Rightof-way of the Nigerian National Petroleum Corporation (NNPC) pipeline, those on the ‘set-back’ of roads, water bodies and gullies, as well as those built on flood plans or areas that are committed acquisitions, or

that are substandard or defective.

The statement said: “It is expected that properties with regularised documents will benefit from Ogun State Governments’ urban renewal policy through effective planning of facilities in the areas of education, health and other essential infrastructure. It will also minimise disputes of ownership of properties while property related fraud and problems of land speculators are reduced to the barest minimum. The Homeowners’ Charter Programme will also enhance the value of the property market in the state.”

Communities expected to benefit from the new initiative include Sango, Sango-Ota, Magboro, Ifo, Ogijo, Ojodu, Alagbole, Ado Odo Ota, Oke Odan, Akute, Agbado, Agbara, and Ijoko as well as other inhabitants, mostly entrepreneurial as many of them will find it easier to use their houses to secure bank loans. Some partner banks already picked for the scheme are First Bank, FCMB, GTB, Keystone Bank, Skye Bank, Sterling Bank, Wema Bank, Lavendar Microfinance, Trust Microfinance and, Gateway Savings & Loans.

“The government understands that it might be difficult for some property owners to make the full payment at once. It has therefore made it possible for those who cannot do so to pay in instalment – as long as the final payment is made by the final deadline of August 31, 2014. The government has also been able to secure the cooperation of a number of the partner banks in offering loans with two-year tenure. The programme can be considered as a reprieve for those who have built on government lands, or those who have built on private lands without obtaining building plan permits.

Smaller US mortgage banks control 60% market share

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ig banks have been retrenching from the mortgage business recently, leaving smaller players to pick up larger chunks of business.

As of the third quarter, smaller mortgage players held a 60 percent market share of the U.S. origination market, up from 39 percent in 2009, according to industry publication Inside Mortgage Finance.

In the third quarter alone, the smaller lenders, defined as those outside the top five, gained about six percentage points of market share, according to data compiled

by Paul Miller, an analyst with FBR Capital Markets. The trend is opening up opportunities for small companies such as loanDepot.com LLC, regional banks such as M&T Bank Corp. MTB -0.60 percent and larger mortgage players like Quicken Loans.

The competition is benefiting consumers in some places, while helping find jobs for

displaced workers. Some smaller lenders, looking to take advantage of the trend, have sold shares in initial public offerings.

The midsize and smaller players have grown despite tightening their underwriting standards, much like larger banks have since the financial crisis. But the smaller banks’ capital rules aren’t as stringent as those that make mortgages a costly enterprise for the biggest firms.

The behemoths have pulled back by tightening credit standards and taking longer to process certain loans, as smaller lenders, whose loan officers can know their customers better, have shown a willingness to be more flexible and close loans quickly, analysts say. One significant driver in big banks’ declining market share has been their decisions to stop buying loans from other lenders or mortgage brokers, due to costly capital rules.

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Insurance BRIEFS Wapic appoints new managing director

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he Board of Directors of Wapic Insurance Plc has appointed Mr. Ashish Desai as the new Managing Director/ Chief Executive Officer who will oversee the next phase of Wapic’s growth and evolution.

In a statement, Desai is a qualified actuary with over two decades experience in the insurance industry in South Africa, India and the United Kingdom.

Desai is a Fellow of the Institute of Actuaries (UK) as well as the Actuarial Society of South Africa and Institute of Actuaries India. He holds a First Class Degree in Economics and Econometrics from Manchester University and is an alumnus of the Wharton School, University of Pennsylvania. Prior to joining Wapic Insurance Plc. He was an Executive and Managing Director of Hollard Life & Investments, a subsidiary of Hollard Insurance Group a South African privately owned insurance group.

This appointment follows the resignation of Mr. Segun Balogun who resigned as Managing Director of Wapic Insurance Plc. effective November 30, 2013.

Law union claims rose by 22% in 2012 — Ogunseye

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aw Union & Rock Insurance Plc has said that the claims it paid to its policyholders rose by 22.8% from N1.27 billion in 2011 to N1.558 billion in 2012 financial period.

Managing Director of the firm, Mrs. Toyin Ogunseye, said that the company was committed to claims payment because that is its purpose of being in business.

A breakdown of the claims paid revealed that fire insurance was the highest with a figure of N581m, followed by motor insurance at N529.99m. The firm paid N161m on claims that emanated from general accident, N130.3m on marine & aviation insurance, N101.14m on engineering policy while N77m was paid on oil & gas insurance policy.

The firm also revealed that it paid N1.2m to claims which emanated from bonds, the portfolio that recorded the least claims. All claims paid were to Law Union & Rock Insurance’s policyholders from different parts of the country.

From left: front row; Lady Isioma Chukwuma, Treasurer CIIN; Pastor Adeyemo Adejumo, CIIN past president; and Mr. GUS Wiggle, Nigerian Insurers Association, NIA, Deputy Chairman at the recently held 2013 Chartered Insurance Institute of Nigeria, CIIN, Christmas carol service in Lagos.

African reinsurers steer business competition, integration

By FAVOUR NNABUGWU

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ctivities in the reinsurance sub-sector have noticeably increased with enhanced public awareness of the sector and their operations, rapid expansion and strategic business acquisitions, improved visibility and strict supervisory regulation.

Howbeit, one of the major challenges facing the African Reinsurance market specifically is competition, particularly from the international market where reinsurers seek to continue to diversify their portfolios with business from relatively noncatastrophic territories in Africa.

The Associate Director, Market Development and Communications at A.M. Best, Dr. Edem Kuenyehia said the demand for insurance in Africa has continued to increase in tandem with economic growth.

The six largest insurance markets in the continent generated a premium income which stood at $60.7 billion representing 7.8 per cent at the end of 2011 with Nigeria and Morocco experiencing double-digit percentage growth though the market, he said, is growing at a low base but expanding at a faster rate more than developed markets.

Egypt, Kuenyehia said, has been exceptional with 0.4% contraction in total premium owing to the political situation

in that country while Kenya and morocco have the next levels of insurance penetration on the continent with 3.2% and 2.9% respectively which can be compared to insurance market in Brazil and China.

He said Nigeria and China that have population advantage of over 165 million and 82million respectively are still largely underinsured.

The insurance markets across Africa, he admitted, are diverse, reflecting disparities in economic conditions and

the approaches of policymakers in individual countries and regional blocs.

Countries with stronger economies often driven by the energy sector and mining have enjoyed greater demand for insurance while affordability remains an issue in poorer African countries “Nigeria has the biggest insurance market in West Africa, as the oil and gas industry has fuelled economic development and demand for energy infrastructure projects, The insurance market has seen

consolidation driven primarily by higher capital requirements, although A.M. Best believes there is room for further mergers and acquisitions”.

“Insurers are attempting to make insurance more accessible through micro insurance and, to a lesser extent in certain countries, through Takaful product offerings that comply with Islamic Sharia law. Insurers arc exploring new distribution methods for personal lines, driven by expanding use of mobile telephones” Nigeria’s Commissioner for Insurance, Mr. Fola who concurred to Kuenyehia, said insurance is a key driver in the economies of countries and the West Africa sub-region was not expected to be an exception.

Daniel said, “Let me also quickly restate the wellknown fact that insurance is not very popular in our subregion for various reasons amongst which are; low level of financial literacy, lack of adequate awareness of insurance mechanism and poor perception of the industry.

“However, there is an increasing cross-border insurance practice in the subregion in tandem with our collective quest for integration. The insurance regulatory bodies in the subregion are therefore poised to engage in cross-border collaboration and exchange of information and data.

This is to ensure that insurance practice engenders trust and acceptance in our sub-region through enforcement of rules and regulations,” Daniel said.

Microinsurance activities to commence as steering committee comes on stream

By ROSEMARY ONUOHA

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he microinsurance market in the country will begin to witness activities soon following the inauguration of the Microinsurance Steering Committee by the National Insurance Commission, NAICOM last week.

Commissioner for Insurance, Mr. Fola Daniel, who inaugurated the committee, said that the terms of reference is to develop the action plan for microinsurance implementation in Nigeria; identify and make recommendations to NAICOM on issues that affect microinsurance implementation in Nigeria; make recommendations on possible improvements that can be made on the regulatory and operational framework; as well as any other assignment as may be directed by the Commission.

It will be recalled that NAICOM recently released the guidelines for microinsurance operation in the country and the registration

requirements for specialised microinsurance operators are that applicant must be a Limited Liability Company registered under the Companies and Allied Matters Act (CAMA Act 2004); the applicant shall choose to underwrite the following businesses: life microinsurance or general microinsurance.

The minimum paid-up share capital requirements for life microinsurance business is N150,000,000 while general microinsurance business is N200,000,000.

According to the guideline, the applicant shall submit its 5-year business plan and feasibility study of microinsurance to be transacted, which shall contain the minimum of: background of the company; organisational structure of the company; details and list of shareholders of the company; vision statement; mission statement; targeted low income groups and service providers; expected volume of business; IT tools and its relevance to the business; investment, accounting, MIS reporting etc; corporate governance; etc.

Vanguard, MONDAY, DECEMBER 16, 2013 — 33

“A truth that’s told with bad intent beats all the lies you can invent.” William Blake, 17571827.

(VANGUARD BOOK OF QUOTATIONS p 254). or two weeks, the Rivers State Governor, Rotimi Amaechi, had been carrying on a one-governor crusade with respect to what he calls, “Missing $5b from the Excess Crude Account, ECA”. He was quoted in The NATION, on Sunday, November 24, 2013, as saying that the ECA was being managed “like a piggy bank.” As it turned out, Amaechi was both original, right and wrong. But, more wrong than right. What was right was not original. What was not original was wrong.

It requires no great intelligence to notice that Amaechi’s newfound position is informed by his new position as an outsider to the inner caucus of the ruling party, the PDP. When he was a solid party insider, he never questioned the ECA; neither did he ever dispute the disbursements made from it by the Federal Government. That is why the “truth” he now dispenses is tainted with malice and beats all the lies which can be invented. And Amaechi, in his indictment of the Federal Government, on this matter, had been very, very economical with the truth. Let me quickly explain.

The ECA is an illegal ac-

F

Needless controversy over $5b eca withdrawal count, for which there is no provision in our constitution. To the best of my knowledge, there has been no amendment to the constitution which allowed for any revenue to be diverted from the Federation Account, which must be shared according to agreed formula among the three tiers of government. It was President Olusegun Obasanjo, this same Minister of Finance, Dr Okonjo-Iweala and the PDPdominated National Assembly who created ECA, in order to manage it “like a piggy bank” – as Amaechi rightly called it.

The ECA predated Amaechi as governor and he admitted that he was aware of its existence and he even admitted that the governors were privy to the sharing of $1 billion from this “piggy bank”.

Therein lies the insincerity associated with the governor’s position. It is a fact, absolutely indisputable, that the 36 governors and the President of Nigeria, dishohourably aided by the National Assembly, do not constitute a constitution review commission known to our laws. They are not empowered, individually, or collectively, to create an account which the constitution forbids.

MONTHLY PROJECTED REVENUE AND ACTUALS – 2013 (JANUARY – JULY) PROJECTIONS:

863 702

621 571

595

621

590 498

JAN

FEB

MAR APR

But, Nigeria is a lawless country and the worst outlaws are those who swore to uphold our constitution only to reach office and proceed to violate those parts of it which they find inconvenient. Without any respect to Amaechi and the other 35 governors, what they have accomplished was to connive with the Federal Government to rob the Nigerian people and Amaechi’s objections now appear like the outcries of one member of a robbery gang who feels he had been shortchanged. He is not an honest

MAY

JUN

JUL

defender of probity or even the due process he claims had been violated.

Governors like Amaechi had contributed to the weakening of the principles of a federal republic, when it served their purpose, and are now drawing attention to violations which had taken place since 2004 – because it now serves their political purpose of wanting to paint the Jonathan administration black. Unfortunately, for those like me, who had been campaigning against the creation of this rogue account, Amaechi’s participation in

sharing from the account paints him just as black. What one expects him to do now is to move to close down the account permanently. The Federal Government cannot be trusted, and at any rate is not required to help states and local governments to save their money against the rainy day.

Who, for instance decides when the “ rainy day” had arrived for any state, is it the Federal Government or the other 35 governors? The entire position is not only unconstitutional, it is absurd.

Furthermore, Amaechi’s obvious denial of knowledge of withdrawal from the ECA must come as surprise to Nigerians who read newspapers everyday and who can recollect accounts of meeting of the Finance Commissioners of the states and the Federal Minister of State for Finance. Reproduced below is a graph which accompanied my article on this page in October this year, titled: For Public Servants; the Party is over.

From the graph, it was obvious that only in one month, June, had crude oil revenue reached or exceeded projected revenue. September results were also below expectations.

Thus, for seven months, the Federal Government had been dipping into the Excess Crude Account to augment the shortfall.

Micro-Finance

MSMEs decry inability to participate 2013 ECOWAS trade fair Stories by PROVIDENCE OBUH

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he Micro, Small and Medium Enterprises, under the auspices of Association of Micro Entrepreneurs of Nigeria (AMEN), has decried its inability to participate at 2013 Economic Community of West African States, ECOWAS trade fair, held in Togo, blaming it on finance. Recall that the association was selected by the Nigeria Export Promotion Council, NEPC to represent the country. Speaking at a business forum/ inauguration of AMEN Cooperative, President AMEN, Prince Saviour Iche, described the ongoing submission of business proposals to the Bank of Industry (BOI) through

SMEDAN as a welcome development, saying, “ but our members may not be able to access the fund due to stringent requirements and conditions attached to it. We are proposing to meet the management for the way forward.

“The ECOWAS Trade Fair in Togo, which the association was selected by NEPC to represent Nigeria was canceled due to lack of fund to finance members. The issue of finance to meet the association needs must be critically looked into and ways to solve the problem must be mapped out.

Highlighting further challenge, he bemoaned the levies collected by government agencies from its members, noting that it is affecting turnover and if not checked

could hamper expansion.

He added that the cost of obtaining documents needed for product registration is very high in Nigeria, “the relevant government agencies should consider the beginners when making policies.”

A three year over view of the year under review, show that from 2011 to 2013, the number of police cases involving members reduced from 15 to three, trademark registration increased from 10 to 40, NAFDAC registration from five

to 30, meeting with agencies improved from one to 18, among others. “Since the inception of AMEN, we have awaken the consciousness of Nigerians to own a business aimed at generating employment for the youths.

Our slogan and vision of one family, one product and service is impacting positively on the young Nigerians as we can see the number of fresh graduates joining the association on daily basis,” he said.

Foundation commissions facilities for Delta school

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Non Governmental Organisation (NGO), Lights on Foundation, has donated a block of seven toilet rooms and water system to Aviara Secondary Commercial School, Aviara, Isoko-South Local Government Area of Delta State. The facilities donated by the foundation to the community was aimed at developing the educational environment that will further boost learning conditions.

Speaking at the commissioning ceremony, Founder of the foundation, Mr. Austin Epadi Igbuku said that the foundation aim at promoting education, urging students of the

twelve participating communities to study hard as the foundation gives scholarship award to any student who secures admission into the university during the year. Commissioning the facilities, Chief Inspector of Education (CIE) of the state’s local government, Mrs Useh, stated that it is good to give back to society to enhance development, commending the founder and promoter of the foundation for supporting education. Useh called on the indigent of the community to emulate the good works of the foundation and come up with schemes aim at developing their communities.

34 — Vanguard, MONDAY, DECEMBER 16, 2013

Business Unusual

*Eco-bricks house under construction.

*The completed eco-bricks house equipped with modern facilities step further. He put up an impressive self-contained apartment using eco-bricks and other waste materials.

Speaking with Financial Vanguard, Adamu said the project cost him about N380,000 which covered "the cost of toilet fittings, cement used in plastering and chicken net used to partition the wall, labour for masons, painters and eco-builders. I paid the eco-builders just feeding allowance since it is a program I designed to train youths," said Adamu.

Asked why he used thatch for roofing, Adamu said: "I used thatch for three reasons: It is affordable and can be sourced free; the weather in Yola is hot and thatch has the ability to make the rooms cool and since it is my private property, I am creating a village setting for my family."

“Most of the eco-bricks are filled with sand, so they are opaque. However, one can fill them with something clear such as ground glass and they will be translucent. The translucent bricks will let light pass through, which will give the room a more airy feeling than if no extra light were to be getting in,” noted Reith.

*Structure being put up with eco-bricks at the Sustainability Unit of AUN. Inset is Professor Charles Reith, Director of Sustainability.

T

he goal of the Sustainability Initiative, according to Professor Margee Ensign, President of AUN, "is to spur local economic development by providing hands-on training for local people while at the same time protecting and enhancing the natural environment, thus preserving it for future generations. So Professor Charles Reith, Director of Sustainability, came up with the idea of making bricks using empty plastic bottles.

“This is actually something that I put together to build an eco-bench so I sought permission to have the students build the bench. My overall budget was N4,000," said the Professor of Environmental Science.

Under normal circumstances, a plastic bottle has a very short service life but when it is reused, as in the case of ecoC M Y K

Uncommon housing material for all

Impact on environment: “The essence of recycling is that you are creating jobs to replace activities that otherwise rely basically on natural resources,” said Reith.

For Prof. Ensign,"It is not just cleaning our environment, but creating income for those without jobs. That is Social Entrepreneurship in practice.”

T

o many Nigerians, the dream of owning their own houses is a pipe dream given the harsh economic realities of our time. But the Office of Sustainability of the American University of Nigeria (AUN) in Yola, Adamawa State seems to have found a way to make the dream real with their unusual, cheap and environment-friendly building materials.

In this chat with Financial Vanguard in Yola, Professor Charles Reith, Interim Provost & Director of Sustainability Initiatives and Mr Dahiru Adamu, Head of Water Resources Unit, Works & Maintenance Department spoke on the project and its impact on the environment. Today, we feature AUN’s eco-bricks, said to be more durable than normal bricks.

Reith noted that the University is saving about N600,000 monthly in waste disposal. Excerpts:

bricks, it lasts much longer.

Making eco-bricks: “The process involves filling

empty plastic bottles with sand.

You really have to pack the sand in and once you do, it is much more durable than a brick; it will last a really, really long

time because it is plastic and non-biodegradable (cannot be

decomposed by microorganisms), it has better tensile

strength, it is more durable and longer lived. A bottle can be filled with sand in 45 seconds," said Reith, adding that eco-

,

By EBELE ORAKPO

bricks can be used to make much more cost-effective houses, walls, benches etc., which can last a very long time.

From constructing benches, the students went on to costruct walls using eco-bricks.

Mr Dahiru Adamu went a

The goal of the Sustainability Initiative is to spur local economic development... while at the same time protecting and enhancing the natural environment

,

Vanguard, MONDAY, DECEMBER 16, 2013 — 35

Appointment & Promotion

UBA appoints Keshi, Okwechime Board Chairman, Vice-Chairman U

nited Bank for Africa (UBA) Plc, the panAfrican financial services group , has announced the appointment new Chairman and Vice Chairman of its Board of Directors.

They are Ambassador Joe Keshi and Rose Ada Okwechime.

A statement by Mr. Charles Aigbe, Divisional Head, Marketing & Corporate Relations Directorate, said “Ambassador Keshi was appointed to the Board of UBA in 2010 and was made Vice Chairman on January 1, 2011.

He has over 35 years working experience at the highest levels of government as a career diplomat, serving as Permanent Secretary, Ministry of Foreign Affairs, Permanent Secretary, Cabinet Secretariat, The Presidency, Charge d’Affaires, Embassy of Nigeria, The Hague, Netherlands and ConsulGeneral of Nigeria, Atlanta, Georgia.

According to the statement, Ambassador Keshi’s appointment followed the retirement of Chief Israel Ogbue, a member of the UBA Board since 2005 and Chairman since January 1, 2011.

“It has been a pleasure serving the Bank. I have worked with a group of men

and women who have been responsible for forging an extraordinary transformation in Nigerian and African banking. Ambassador Keshi is an admirable choice to lead the Bank in its next growth phase” said Chief Ogbue.

Similarly, Mrs Okwechime is the Managing Director of the Abbey Building Society Plc and has played a leading role in financial services for over 20 years, including time spent with the Bank of E n g l a n d .

Both appointments took effect from November 21, 2013.

Speaking on his appointment, Ambassador Keshi said “I am touched that my fellow board members have asked me to chair the Board. Chief Ogbue has raised the bar on governance, transparency and business growth. We will sustain the strong governance and risk management structures in place and maintain the momentum of our pan-African growth strategy ”.

Phillips Oduoza, UBA’s Chief Executive, speaking on behalf of the executive management said,

NIM elects president, other officers

T

he Nigerian Institute of M a n a g e m e n t (Chartered), has elected new officers to run its affairs for the next two years.

Dr. Nelson Uwaga, a consultant Pharmacist and an alumnus of National Institute for Policy and Strategic Studies, Kuru, emerged as the 19thPresident and Chairman of Council of the Institute.

Until his election, he was the Deputy President of the institute.

Also elected were Prof.

Munzali Jubril, a former Executive Secretary of the National Universities Commission and a university don, and Mr. Grant Orugbani, a seasoned Management Consultant as Deputy President and National Treasurer respectively.

Uwaga, who has been serving the Institute in various capacities since 2003 holds a Bachelor of Pharmacy Degree (B.Pharm) University of Nigeria (UNN), Doctor of Pharmacy degree (Pharm. D) from the University of Benin, and a Master of Business Administration (MBA) from the University of PortHarcourt, with over 30 years of professional and managerial experiences.

A holder of the Fellowships of the Pharmaceutical Society

of Nigeria (FPSN) and the West African Post-graduate College of Pharmacists (FPCPharm), he is a former National President of the Pharmaceutical Society of Nigeria (PSN) and one time 3rd World Representative (Community Pharmacy) at the International Pharmaceutical Federation (FIP)at The Hague, Netherlands.

At other times he has been the National Chairman, Nigerian Association of General Practice Pharmacists (NAGPP) also a former Vice President of Association of Professional Bodies of Nigeria (APBN).

Apart from being the current Chairman, Faculty of Community Pharmacy of the West African Post-graduate College of Pharmacists and a member of the Court of Examiners, Dr. Uwaga is also a Senior Lecturer (Adjunct) at the Faculty of Pharmacy, University of Port Harcourt.

CPC DG gets peace award

D

irector-General of the Consumer Protection Council, CPC, Mrs Catherine Atoki, has received the award of Gusi Peace Prize International Foundation, the Asian counterpart of the Nobel Peace Prize.

The CPC Director General was given the award at 13th edition in Manila, Philippines.

Atoki who got the Award of the Human Rights Advocacy category, by virtue of her advocacy on human rights in the African Union, AU, alongside 14 others, spent the last two years as the Chairperson of the Commission, making her the first Nigerian to head an AU organ.

The 14 others who were conferred with the award were the President of Mauritus, Rajkeswur Purryag, former Romanian President, Professor Emil Constantinescu, former President of Estonia, Arnold Ruutel, former Sudanese Prime Minister, Imam Al-Saddiq Abdel Rahman Al-Mahdi and the Chairman of Arab Thought Foundation and Governor of Mecca, Prince Banda Khalid bin Faisal Al Saud of Saudi Arabia.

Others included Professor Raoul Weiler from Belgium, who clinched the Award for Science & Technology (Engineering), Mr. Jerome Binde of France (literature), Professor Abdelmadjid Amrani of Algeria (Philosophy) and Architect Yolanda David Reyes of Philippines, who got the Award in the architecture category.

The ceremony was presided over by the Chairman of the Gusi Peace Prize International Foundation, Ambassador Barry Gusi and witnessed by several other dignitaries including the Nigerian embassy staff in the Philippines and the Nigerian community in the Philippines led by Ambassador Yemi Farounbi.

Adamu elected 1st CYC Chairperson

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Nigerian youth, Mr. Ahmad Adamu has been elected First Chairperson of the newly created Commonwealth Youth Council, CYC, the largest and most diverse youth organization in the world.

Adamu who contested the position against three other contestants from United Kingdom, Botswana, and Cameroon would be the first youth to hold such position among the Commonwealth Nations.

Representing more than 1.2 billion young people of the Commonwealth, Adamu-led council will provide a framework for youth-led development initiatives.

Adamu, a graduate of Bayero University Kano is from Kastina State and will serve a two-year term until the next Council General Assembly in Malta in 2015.

Nigerian firm unveils FOL, GOL

T

ime Tell Nigeria Limited has launched two of its products; Fruit of the Loom (FOL) United States of America and Grant of London (GOL) wristwatches in Nigeria.

The two brands were unveiled in Ibadan, Oyo, by Oyo State Governor, Abiola Ajimobi, at a ceremony that included performances by dancing groups from Oyo State.

Both brands were said to have endured through years of creative

craftsmanship unique to the UK and the American market.

Abdulkadir, said her “company holds the franchise for both brands in West Africa”, while saying that the “Fruit of the Loom clothing is one of the world’s most recognised clothing brands loved and trusted by people all over the world”, she noted that it had over 160 years’ experience and a long history of manufacturing of quality textiles.

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36 — Vanguard, MONDAY,DECEMBER 16, 2013

Tax Matters

General Manager/ Human Resources Bristow Helicopter Mr. Femi Collins, Principal ii Wesley primary school, Mr. Solomon Adeoye, Principal 1 Wesley primary school and, Mr. Alimi Kehinde at the commissioning of 14 computers & internet powered solar system donated by Bristow Helicopters.

Tax implication of mergers and acquisitions erger is defined as “any amalgamation of the undertakings or any part of the undertakings or interest of two or more companies or the undertakings or part of the undertakings of one or more companies and one or more bodies corporate”. Simply put, a merger is a combination or integration of existing companies to form a single company.

Acquisition on the other hand, is known as take-over.

It is the take-over of by one company of sufficient share in another company to give the acquiring company control over that other company.

Statutory Requirement under Companies Income Tax Act (CITA) The CITA in Section 29(12) Cap (21, LFN, 2004) provides that “no merger, take-over, transfer or restructuring of the trade or business carried on by a company shall take place without having obtained the Service’s direction under subsection 9 of this section and clearance with respect to any tax that may be due and payable under the Capital Gains Tax Act”. The implication of this provision is that the approval of the Federal Inland Revenue Service is a necessary condition for the completion of the process in a merger or acquisition bid. Therefore, no merger or acquisition bids would be fully consummated without the companies involved having obtained consent from the FIRS. Procedure for Obtaining the Service’s Approval From the start, the merging

companies are required to submit to the FIRS, copies of the scheme of merger and scheme of arrangement on the consolidation request for its study and proper evaluation

of the merging parties, in its name or under a new name.

Cessation of business by the other merging parties.

In acquisition, there is only an acquiring company (ies)

,

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The surviving company must file its returns in line with the provisions of section 55(3)(a) of CITA, commencement rules under section 29(3) of CITA will not apply to the surviving company, as it will be regarded as an existing company

in order to ensure that taxes which may result from the companies’ transactions are correctly assessed and collected. Herein lies the relevance of the Service’s powers under section 29(9) (i) to require either of the companies directly affected by any direction which is under the consideration of the Service to guarantee or give security to its satisfaction for payment in full of all tax due or to become due by the company which is selling or transferring such asset or business.

Tax Issues in Mergers and Acquisitions

A merger may result in any of the following situations: Formation of a new company.

Continuation of the consolidated business by one

,

and the company being acquired.

Emergence of a New Company, Rendition of Annual Returns Where a new company emerges from a merger process, then, the new company is expected to file its returns, in line with the provisions of Section 55(3)(b) of CITA. The section provides that “every new company shall file with the Service, its audited accounts and returns within eighteen (18) months from the date of its incorporation or not later than six (6) months after the end of its first accounting period as defined in section 29(3) of this Act, whichever is earlier”.

It should however be understood that a mere change of name does not make an existing business entity a new company. Such companies will continue to be

treated as old businesses on an on-going concern basis.

Basis of Assessment Commencement rule as provided under Section 29(3) will apply to the new company, except where any of the under-listed circumstances arise: Where the merging parties are connected parties, the Service may direct that commencement rule be set aside, in which case, the new company will file its returns as an on-going concern and its assessment will be determined on preceding year basis.

Where the new business is a reconstituted company, taking over the trade or business formerly run by its foreign parent company.

Claim of Allowances Companies Income Tax Act (CITA) did not categorically address the value at which assets may be transferred for the purpose of capital allowances claims. However, International Accounting Standard 22 prescribes that in merger accounting, the assets, liabilities and reserves must be recorded at their carrying balances, implying that merger process does not permit the recording of assets at their fair value in the event of consolidation. The new company will therefore not be entitled to any investment allowance claim or initial allowance on the transferred assets; it will only be entitled to claim annual allowance on the Tax Written Down Values (TWDV) of the transferred assets.

Unabsorbed Losses and UnUtilized Capital Allowances Brought Forward The new company may also not be permitted to inherit the unabsorbed losses and capital allowances of the absorbed companies, except under the following circumstance: where a reconstituted company is carrying on the same business previously carried on by this company and it is proved that the losses have not been allowed against any assessable profits or income of that company for any such year; in that case the amount of unabsorbed losses shall be deemed to be a loss incurred by the re-constituted company in its trade or business during the year of assessment in which the business commenced.

Taxes and Deductibility of Related Expenses Stamp Duties

Duty payment will arise on the share capital of the new company, subject to the provisions of Section 104 of the Stamp Duties Act, in

relation to capital and duty relief.

Consolidated Expenses Fees paid to statutory bodies such as SEC, NSE, CBN, Land Authorities etc, including professionals like accountants, stockbrokers, issuing houses, and solicitors are regarded as capital in nature and will therefore not be allowed as deductible expenses by virtue of Section 27(a) of CITA. Taxation of Consolidation Fees: Fees paid to professionals for services rendered in connection with consolidation will be subject to VAT and WHT at the rates of 5% and 10% respectively.

Tax Indemnification Section 29(9)(i) of CITA provides that the Service may require the new company to guarantee or give security for payment in full, for any tax due or that may become due by any of the ceased companies.

Approval for Pension Scheme The new company will need to obtain a Joint Tax Board (JTB) approval for its staff pension scheme.

Status of a Surviving Company in Relation to Taxation It is a possibility that one of the merging companies survives and its old name or a new name to inherit the assets, liabilities, reserves and entire operations of the merging parties. Where this happens, the following points must be noted: The surviving company must file its returns in line with the provisions of section 55(3)(a) of CITA. Commencement rules under section 29(3) of CITA will not apply to the surviving company, as it will be regarded as an existing company.

The surviving company will not be allowed to claim investment allowance on the assets which were transferred to it and will also not claim initial allowance on such assets.

The surviving company may however claim annual allowance only on the tax Written down Values (TWDV) of the assets transferred to it.

The surviving company may not inherit the unabsorbed losses and capital allowances of the merging companies, except it is proved that the new business is a reconstituted company.

All fees payable on merger bids or consolidation will be liable to VAT and WHT just like it is applicable on the emergence of a new company.

Stamp duties will be paid on the increase in share capital and the company will have to obtain its own staff pension scheme approval from the JTB.

Vanguard, MONDAY,DECEMBER 16, 2013 — 37

C M Y K

38 — Vanguard, MONDAY, DECEMBER 16, 2013

Agric

Smallholder farmers need institutional support — Ademokun T

omi Mercy Ademokun is an expert in public health, international development, and campaigns and advocacy, with over 10 years of experience, including six years working internationally.

Cur rently, Tomi is the Associate Country Director/ GROW Campaign Manager for OXFAM GB in Nigeria.

The GROW campaign is dedicated to overcoming poverty and injustice and works with partners in Nigeria in order to achieve impact and improvement in the lives of people, especially women family farmers, on the issues relating to agriculture, food security, trade and climate change.

In this interview with JIMOH BABATUNDE in Lagos during the Oxfam Grow Campaign, she talks about the role of small holder farmers in agriculture and why they need access to information as well as the need to advocate for the realisation of the 10% budgetary allocation to agriculture in Nigeria.

Here is an excerpt: On Oxfam and agriculture We work with small scale farmers in Nigeria and our mission in Nigeria and across the world is to eliminate poverty and injustice and to ensure we have a good food system where everybody has enough food to eat.

On smallholder farmers feeding the nation The smallholder farmers have the capacity to feed the nation, because if you look at all the sectors in Nigeria, agriculture is still the second leading sector after oil and gas in GDP. However, there is a lot of gap in the system.

Over 80 per cent of Nigeria’s food is produced by small-scale farmers, of whom

60-79 per cent are women.

These farmers work on small plots of land and rely on rainfall for irrigation. Despite several policies being designed to improve the chances of small farmers, there is a fundamental gap between policy intentions and their implementation. This gap affects many areas of agricultural life including access to credit, markets and land security.

We really need to campaign to government to keep their promise to transform the sector. Right now, we have the Agriculture Transformation Agenda (ATA) by the ministry which is really good.

We also have the Maputo pledge, where the government promised to dedicate 10 per cent of the national budget to agriculture, but the current budget to agriculture is about two per cent, so we need to ensure that 2014 budget is increased not just in quantity but the quality of those investments.

We also need to ensure that those investments get down to the state and local government levels, where the small-scale farmers need them.

If you look at our farmers today, a lot of them are ageing so we need a new generation of farmers and that is why we need to transform agriculture management and look at it as a thriving business where the youth can come in.

There are lots of equipment and technology for the youth in the business and this is one of the reasons we are getting celebrities as ambassadors to try to change the myth and stereotype of old fashioned ways of doing things.

On whether the youth will take up farming as it is not yet practised as business The system is broken, if you

*Tomi Ademokun flanked by Tuface, one of the three current GROW Nigeria Ambassadors and Safiya Akau during the Press briefing on the Oxfam Grow Campaign in Lagos recently.

want to practise it as a business, how will you get access to loans to start the business as a lot of the banking institutions do not give loans to farmers because they believe it is high risk business, so we need to make sure that we work with the government and partner with the Central Bank of Nigeria.

The CBN actually has an agric loan scheme, however, there is a lot of gaps as lots of the small holder farmers still don’t have access to it, it is the medium and large scale farmers that are accessing those loans and other schemes.

What do we mean by the gap between the intention and implementation? A good example is the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), which was introduced in 2012 in order to improve small farmers’ access to credit. The concept sounded good on paper, but in practice, small holder farmers could not meet the stringent loan conditions whose prevailing interest rate of 20 per cent made them no more accessible than commercial loans.

We need to advocate to the government to ensure that they make those schemes available to young entrepreneurs that want to come into agriculture.

On whether the smallholder farmers have information on how to access loan A lot of that is lack of information as most of our farmers are not literate, so it is hard for them to really have access to information that they need, information on how to link up across the value chain, how to link up to the market and how to transport their produce to the market.

So, access to information is key, so that is where we come in at Oxfam and other local civil society organisations as well as the media so as to make our smallholder farmers and female food heroes champions of change. Where they can say I am a farmer, I need to improve my livelihood, I need to make my business thrive and improve it.

Tomi Mercy Ademokun

On the success story of getting women into farming Women are already in farming for years as 70 per cent of our smallholder farmers are women, but a lot of them don’t have access to resources. A lot of women farmers don’t own the land, they farm on family owned land or rented land from government, but they don’t have land ownership, they don’t understand how to market, if they sell they don’t know to do so at marketable rate.

So, we are teaching them those skills where they can learn, so access to information is key to the women farmers especially those that don’t have access to information.

We are breaking the information down to the level they will understand.

Most of the lobby we do, we partner with radio stations, we make sure our our materials are broken down into pidgin and lot of the local languages they can understand.

On aggregating the smallholder farmers into a body We are actually working with Association of Small scale Agric Producers in Nigeria. It is a coalition. They have a coalition called The Voices of Food Security Coalition that has about 17 other farmer group. They have registered over 800 farmers across 17 states in Nigeria.

They are trying to scale up as they are working with the ministries of agriculture to ensure that all farmers are registered in the ministries’ data base. So we work with coalitions of different partners as we believe the power of the people is the power of people uniting by coming together to make the change.

On getting Nigeria to honour the Maputo declaration It comes to partnership. We need to spread the word, we need to advocate and prove that increased investment in agriculture can actually make the economy of Nigeria better and eliminate poverty. It can actually help the country to be food secured as a hungry man is an angry man.

So when you don’t have access to food, there is lot of violence, a lot of things happen, so we can make sure that we lobby and partner with various media outlets to ensure that in the 2014 budget formation, we ensure to remind them of the promise and say look, 10 years ago you made a pledge in Maputo, we need to honour the pledge.

On post-harvest loss We are working with local institutions and with the government to address that, and also not just on postharvest loss but storage and when you talk of climate change like the flooding that happened last year, there was no storage system where there was food, instead the

Vanguard, MONDAY, DECEMBER 16, 2013 — 39

Advertising, Media & Marketing

Osun refocuses for service delivery, increases IGR Stories by PRINCEWILL EKWUJURU

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ll over the world, organisations in both private and public sectors draw budget to attain specific goals and objectives.

While budgeting in the private sector is market driven, and profit oriented, the contrary is the case in the public sector.

The public sector is resource constrained as it is funded mostly by taxation.

Hence government at various levels often ensure that budget is well prepared in advance in order to render service to the people particularly in a democratic dispensation where citizens expect so much from elected leaders.

“Budget” as the name implies, “is a plan, quantified in monetary terms, prepared and approved prior to a defined period of time, usually showing planned income to be generated and/or expenditure to be incurred during that period and the capital to be employed to attain a given objective.”

In Osun State, which is a forward looking brand, the art of budget making has been taken to greater heights.

Osun State under the leadership of Ogbeni Rauf Aregbesola has not only touched lives, but with the execution and implementation of its six point agenda, it has also turned the economy of the state around.

The Internally Generated Revenue (IGR) under the Aregbesola regime increased

by 100 percent. Yet this was achieved without necessarily foisting a higher tax regime on the people.

According to Dr. Wale Bolorunduro, Commissioner for Finance, Economic Planning and Budget, who spoke at a workshop held for civil servants in the state, “The approach we adopted was to plug loopholes and stop the losses incurred through manual collection and manual processing.

Reckitt Benckiser deepens market presence with Dettol Re-energize

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eckitt Benckiser Nigeria Limited, a health and homecare products manufacturer has added a new variant, Dettol Reenergize to the Dettol soap brand range. The new soap combines a citrus fragrance with the Dettol germ protection function.

Speaking at the trade launch in Lagos, the Marketing Manager, Personal Care, Mr. Ahmed Shah, disclosed that the Dettol brand has recorded tremendous growth since its introduction to the Nigerian market 50 years ago.

He said, “In the last five years, the brand has achieved 216 percent growth in its

market share and is now present in 63 million households in Nigeria, which means one out of every three households in Nigeria uses Dettol”.

On the philosophy behind the new variant, he explained that Dettol Reenergize was a product of innovation and intensive research into consumers’ want and preference, saying “Our research has shown that consumers want a soap that has pleasant fragrance and ability to refresh them. This is why we have introduced a Dettol soap variant with a pleasant long lasting orange fragrance that refreshes and also gives them protection against germs.”

He further revealed that Dettol was able to triple its market share because it has adopted the right market strategy of building consumers’ trust and confidence in the brand.

From left: AbdulKarim Chukkol, Head, Advance Fee Fraud Section, Economic & Financial Crime Commission, EFCC; Mr. Goddie Ofose, Chairman, Brand Journalists Association of Nigeria, BJAN; Mrs. Bunmi Oke, President AAAN, and Mr. Yemisi Fadairo, Special Assistant to Ogun State governor on Information, at the 2013 Annual Conference and Award of BJAN in Ogun State. PHOTO BY AKEEM SALAU.

Sympli products will earn Nigeria huge revenue opportunity

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he Group Managing Director of Primlaks Group, parent company of Venus Processing and Packaging Limited, VPPL, producers of Sympli range of Individually Quick Frozen, IQF, Mr. Anil Hemnani, has said the products will offer Nigeria a huge revenue earning opportunity.

Hemnani made this disclosure at the launch of the products in Lagos, where he said: “Apart from encouraging more people to embrace Nigerian foods, we believe that our efforts, in the long run will help to create more direct and indirect employment opportunities in the agricultural sector in line

with the objectives of the Federal Government’s Agricultural Transformation Agenda.

Speaking further, he stated that the company introduced the Sympli brand of products to meet the demands of customers for convenience because, “ we observed that the business of living in today’s fast-paced world make people to place a premium on their time.”

Wanted: Customerfriendly Rules

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o much of what we call management consists in making it difficult for people to work.” You know who said so. Peter Drucker. But if you think he didn’t know what he was talking about, you only need to experience the helplessness of some frontline employees before customers.

Frontline employees are, sometimes, unable to deliver excellent service because their managers claim to know how best to serve customers. And to prove their knowledge, they come up with brilliant rules that emasculate their frontline people. Let’s consider an example.

A prospect wanted to open a savings account in a Nigerian bank (let’s withhold the name of the bank for now). After completing the account opening forms, she was told her company identity card was not adequate to identify her and that she should produce a PHCN bill to authenticate her address. She was also told that only a national ID card, an international passport or a driver’s licence was an acceptable means of identification. All for a mere savings account! In annoyance, the prospect left.

Less than a kilometre away, she stepped into the branch of another bank. The difference was clear, as they say. The customer service executive on duty not only completed the account opening form for the customer, but also accepted the corporate ID card as a means of identification. In addition, she didn’t ask for any utility bill – after all, even children (who pay no utility bills) can open savings accounts. The only seeming downside was that the opening balance was twice that of the other bank. But the customer was happy to make the extra deposit.

This story illustrates what happens when managers of a business decide to operate by thick unfriendly rule books that make no room for the discretion of the intelligent beings on the frontline. In an article titled “Zombies in Civilian Dress” which was published in The Guardian of 24 September, 2009, Kola Akomolede, narrated his ordeal in the hands of frontline employees of an embassy and an internet service provider – both of whom insisted that, to be served, the customer must produce documents that were either unavailable or obviously irrelevant.

How could anyone produce a PHCN bill if he was on the pre-paid platform? Akomolede blamed managers for the actions of their subordinates. And I think he is right.

Managers have a responsibility to ensure that policies that relate to serving customers are applied with discretion. Such policies must be relevant and necessary. For instance, it doesn’t make sense to insist that a self-employed person bring a letter from his employers in order to obtain a visa, or that a customer get the approval of his account officer before moving funds between his two accounts within the bank. After all, he is not asking for a loan.

Have you noticed that if you have to do a simple replacement of your SIM card at any of the service centres run by the telecom companies, you need to provide an acceptable form of identification, no matter how long you have been a customer? Although the networks have our biometric data and pictures, they still treat everyone like a stranger. Recently, I challenged a telecom customer service rep to use the data on her system. Her tame response: “We haven’t started using the data yet to process customer issues.”

You wonder, when will they ever start?

If you manage a business or a section of it, I suggest you urgently review your policies to make sure they still serve the needs of customers. Some rules that were useful in the past may no longer be relevant today. Why apply anachronistic rules to your service?

40 — Vanguard, MONDAY, DECEMBER 16, 2013

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

Senate’s ill-advised $76.5 crude oil benchmark Indeed, the Federal Executive, in suggesting a benchmark of $75/barrel, may appear altruistic, as their argument is based on the fear that eventual political stability in the Middle East and increasing patronage of shale oil in the United States and Canada would ultimately reduce demand for crude and consequently induce lower prices in the international market.

This argument for a conservative benchmark may appear sensible and cautious on the surface, but the proposal may not clearly stand up to closer scrutiny, as a realistic and progressive option! The Lower House maintains for example, that the fear of a drastic drop in crude prices is inconsistent with actual historical evidence; indeed, except for a brief spell in 2008, the international crude oil price hardly fell below the usually clearly contrived low budget benchmarks below $74, as prices steadily remained buoyant above $90/barrel.

Besides, industry experts have suggested that shale oil may not become such a strong competitor to crude for at least another decade, while industrial growth in China, India and other emerging economies should continue to push demand for crude oil.

Consequently, the House of Reps maintains that it makes no sense to set a conservative benchmark, which would technically reduce projected revenue, and also constrict funds available for urgent infrastructural enhancement.

Curiously, the Senate’s proposed $76.5/barrel would expectedly lead to revenue shortfall of about N1tn that will inevitably require to be funded by borrowing at double-digit interest rates in the 2014 budget. Furthermore, the Lower House observes, however, that such a huge budget deficit and the need to commit to such costly debts would become totally unnecessary, if the crude benchmark was conversely set much higher at $79/barrel.

Indeed, the CBN’s and DMO’s total component of national debt currently

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e have regrettably remained loyal, as a country, to a culture of late budget approval and partial implementation annually.

Indeed, since the beginning of our civil dispensation, no fiscal plan received legislative approval and presidential assent before December 31.

Curiously, despite the proxy assurances of the Finance Minister, Dr. Okonjo-Iweala, over two years ago, President Goodluck Jonathan, in contrast, has invariably failed to lay annual budgets before the Legislature well before the end of each year, so as to accommodate exhaustive parliamentary debate and consensus before legislative approval and presidential assent to the fiscal bill.

Inevitably, therefore, late passage of the appropriation bill has often made full implementation of the capital budget impossible, while the usually bloated recurrent expenditure is conversely always fully consumed.

Sadly, President Goodluck Jonathan has yet to lay the 2014 budget before the National Assembly as at December 14, 2013.

The main bone of contention in this instant is the Federal Executive’s proposed $75/ barrel crude oil budget price; while the Senate has endorsed a slightly higher benchmark of $76.5, the House of Representatives, in contrast, has insisted that the budget benchmark should not fall below $79/barrel.

In view of this apparent stalemate, it is pertinent to evaluate the basis for the disparate crude oil price benchmarks proposed by the Executive and Legislature respectively, particularly since crude oil accounts for over 70% of budgeted annual revenue.

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held during the West African Insurance Association’s meeting held in Lagos recently.

According to the statement, at the governing council level, investigations conducted proved that there has been no evidence to show that Ikupolati had at any point in time harassed his female staffers and student of sex as nobody had come out to testify against him. He was also found not to have misappropriated the institute’s fund throughout his twelve year tenure in office, according to financial records

survival of the regional insurance institution to step aside recently.

His exit, according to report

is also having a negative effect on the institute as the academic activities back in Gambia have scuttled.

contractors and other creditors; the amount does not also include the over N5.7tn ($34bn) incurred by AMCON in its takeover of toxic debts in the banking sector.

In recent years, despite the contrived ghost deficits, which necessitated borrowing at double-digit interest rates, inexplicably, over the years, we simultaneously consolidated an average revenue surplus of over $10bn annually from crude oil sold at prices well-above government’s conservative benchmarks. So, in the light of the above, the big question

This argument for a conservative benchmark may appear sensible and cautious on the surface, but the proposal may not clearly stand up to closer scrutiny, as a realistic and progressive option

exceeds $50bn, according to the Finance Minister; most of the debt burden attracts double-digit interest rates, and service charges alone would gulp over N700bn, about 15 per cent of budgeted revenue, in 2014.

Curiously, most of these debts were incurred to fund the huge deficits, which became necessary as a result of the clearly inappropriately low crude price budget benchmarks (note that the above debt value does not include the fresh debt of about N400bn (about $2.5bn) owed by the erstwhile PHCN to

Business & Economy WAII governing council refutes allegations against Ikupolati alicious allegation of sexual intimidation of teachers, students, financial impropriety leveled against the out going Director General, of West African Insurance Institute (WAII) based in Banjul, The Gambia, Professor Mike Ikupolati is said to have been orchestrated by some elements in the Banjul based regional institute who want him out by all means. According to a statement, there is no iota of truth in the allegations.

The revelation came on the heels of the just concluded governing council’s meeting

is why would the Federal Executive and the Senate knowingly commit Nigerians to an increasing debt burden despite the available surplus idle cash.

It definitely also smacks of deceit and reckless misappropriation to also consume the funds borrowed to fund the inappropriately projected ghost deficits annually, and thereafter also consume the eventual surplus funds in the so-called Excess Crude Account with nothing to show for it.

The honourable members of the House of Representatives

rightly consider such wasteful and antisocial spending as fiscal irresponsibility.

In this event, the Senate would need to urgently salvage their image by quickly proffering a more solid argument on why, despite the above reality, they continue to support a much lower and certainly inappropriate crude oil benchmark with its attendant debt-inducing collateral, which would compound and add over N2tn ($12bn) in three years to the current total debt level of about N14tn (about $85bn).

The above discussion does not suggest that the $79/barrel recommended by the Lower House is the most appropriate or realistic crude price benchmark; indeed, in view of the heavy debt level, the appropriate budget benchmark for a responsible administration should be that price, at which budgets will become balanced for the duration of the 2014/16 MTEF. In other words, the guiding factor of the budget must be the urgent need to ensure that, in view of the high cost of servicing the existing oppressive debts, it will be socially insensitive to further increase our debt burden by even one kobo in the next three years. This means that, we may only commit to additional debt, if against the odds, crude prices fall below approved benchmarks. It makes no sense to borrow to fund a deficit that is ultimately nonexistent.

Consequently, the absence of government’s erstwhile humongous borrowings will reduce the crowding out effect of the real sector in the capital market and thereby facilitate the real sector ’s access to cheaper funds for industrial consolidation and increasing employment opportunities.

available.

The malicious allegations were said to have been borne out of boardroom intrigues, petty jealousy and malign orchestrated by few unscrupulous elements targeting at an innocent official in the chambers of 35 years old West Africa Insurance Institute (WAII).

This unfortunate incident may lead to the demise of the Banjul based institute, the development that has forced the dogged head of mission, Professor Mike Ikupolati who has put in so much for the

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