Financial 19 May 2014

MAY 19, 2014

Oil majors fleece Nigeria with inflated project costs Total reviews Ofon 2 from $2.85bn to $6.63bn

BY CLARA NWACHUKWU

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delivered in 2011 is still faced with a number of issues.

standard cubic feet (scf) of gas per day will be sent to the domestic gas market thereby boosting the Government’s aspirations on power.

“The new project will also add approximately 40,000 barrels of oil per day to Nigeria’s production.”

here is no better Ofon 2 demonstration of how The Ofon field is located in the Oil Nigerians suffer unduly on Mining Lease, OML 102, offshore account of the padding of project costs Nigeria, in 40 metres water depth and by the International Oil Companies, is a Joint Venture development of the IOCs, operating in the country than in NNPC (60%) and Total E&P (40%).

Economic viability the sudden request by the Nigerian unit According to Total, “The main Ironically, the National Petroleum of French oil giant, Total for a review objectives of the Ofon Phase 2 project Investment Management Services, of its Ofon 2 project. are to monetize the gas, develop NAPIMS, the investment arm of the Total Exploration & Production additional reserves of oil and gas and NNPC, had in October 2010, declared Nigeria, TEPN, Financial Vanguard drill 24 additional production and the project of “no value to the Federal reliably gathered, is seeking additional water injection wells in 2015.

Government of Nigeria.” $3.78billion to an existing $2.85billion “When completed, 106 million Financial Vanguard also gathered that originally proposed for the project. If approved, this will bring total costs for the project to $6.63billion, representing a whopping 132.6 per cent increase, a development that is giving the Nigerian National Petroleum Corporation, NNPC, a majority partner in the Joint Venture, JV, grave concerns.

While cost padding is not peculiar to Total, as it cuts across all the multinational operators, this particular review stands out as the price of crude per barrel is being estimated above the $77.5per barrel being proposed by the Federal Government in the 2014 national budget; thus making Ofon 2 the most expensive project in Nigeria today.

Since November 2008, when the project was approved, Total has AGM: From left: Mrs Abidemi Ademola, General Counsel and Company secretary, Unireviewed the costs twice, lever; HRM Nnaemeka Achebe, Obi of Onitsha, Chairman and; Mr Yaw Nsarkoh, MD at even as the project which should have been the 89th AGM of Unilever held in Lagos on Thursday.

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NAPIMS had rejected the initial expenditure estimates for the project on the grounds that it was “too expensive” but Total had used its influence at the Presidency and the Ministry of Petroleum Resources “to get it approved at over $1billion above the original estimates.” This is also a common practice among oil majors. Lending credence to this, NAPIMS in its economic analysis of the project in a memo dated August 9, 2010, with reference number; NAP/PL/01.04 exclusively obtained by Vanguard, concluded after its review of the estimates that: “… the economics of the project based on the updated FDP (Field Development Plan) is not robust and adds no value to the Federal Government of Nigeria.”

It added that “On the basis of the above, the updated FDP request should not be granted until a meeting is held between NAPIMS and TEPNG (Total) to review the project with the objective of improving its economic viability.”

NAPIMS apparently based its conclusion against the backdrop of initial capital expenditure (CAPEX) estimates of $2,784MM contained in the FDP of November 2008, but which was reviewed by Total in August 2010, to bring CAPEX costs to $5,476MM. Even two years after, NAPIMS continued to express concern over escalating costs for Ofon 2, as in another memo dated January 24, 2012 with

Continues on page 18

-10.15

184.0

+8.00

2,915.00

17.87

-0.33

109.79

+0.70

102.08 +0.58 CURRENCY BUYING US DOLLAR POUNDS EURO FRANC YEN CFA WAUA YUAN RIYAL

CENTRAL SELLING

154.73 260.0702 211.8873 173.4836 1.525 0.3032 237.8816 24.8206 41.2558

155.23 260.9106 212.572 174.0442 1.53 0.3132 238.6503 24.901 41.3891

155.73 261.751 213.2567 174.6048 1.5349 0.3232 239.419 24.982 41.5225

KRONA

28.382

28.4737

28.5654

SDR

239.0579

239.8304

240.6029

CBN Exchange rate as at 16/05/2014

18 — Vanguard, MONDAY, MAY 19, 2014

Cover Story

Developing Entrepreneurial Spirit in Nigeria P ar Par artt 1

*VISIT - From left: Deputy Director, Cassava Value Chain, Federal Ministry of Agriculture & Rural Development, Mr. Efuntoye Ademola Titus; Managing Director, Honeywell Flour Mills Plc, Mr. Lanre Jaiyeola; Technical Adviser, Cassava Value Chain, Federal Ministry of Agriculture & Rural Development, Mrs. Adetunji Oluwatoyin; and Divisional Managing Director, Honeywell Flour Mills Plc, Dr. Nino Ozara, during a courtesy visit to Honeywell by officials of the Federal Ministry of Agriculture & Rural Development team in Lagos

Oil majors fleece Nigeria with inflated project costs same reference, which acknowledged that “an updated FDP was received in 2011 December for the review with CAPEX of $5,270MM.” However, in its economic analysis of the new estimates for Ofon 2, which included “the three CAPEX scenarios of the approved FDP and the new scenario as proposed in December 2011,” NAPIMS reiterated the unviability of the project.

It maintained: “…the economics of the project based on the updated FDP is not robust and adds little value ($48MM) to the Federal Government of Nigeria at the most pessimistic crude of $50/ bbl and could be as high as $2,690MM in a $100/bbl regime.”

NAPIMS therefore, requested that “Specific attention should be given to the possibility of CAPEX over-run, as a 20 per cent overrun could threaten the entire viability of this project which could only be remediated by an upside price regime of about $80 and above.”

New costs estimates No doubt, the fact that it was able to get approvals over and above the NNPC for the first and field plans, may have spurred Total to seek the additional $3.78billion, which is already generating a lot of furore in the industry. Total in a presentation on the Modified Carry Agreement, MCA on Ofon 2 to the NNPC in February 2014 to defend its latest request noted that “NNPC reserves the right to reject any EPC (Engineering Procurement and Construction) contract award cost or firm contract cost that it C M Y K

deems unreasonable over and above the initially used best estimate cost.”

But industry watchers are concerned about the impact of the escalating costs on the common Nigerians, who are deprived of basic social infrastructure such as schools, roads, pipe-borne water, electricity, hospitals, housing to mention just a few.

In fact, under the 2014 budget proposals, the additional $3.78 billion or N604.8billion at an exchange rate of $1 to N160 being requested by Total, could confidently fund entire Health (N493.46billion); Power (N62.45billion); Water (N38.38 billion) budget proposals and even part of the Housing (N18.51billion) estimates.

Contractors are to blame But Total in response to Financial Vanguard’s enquiry blamed contractors handling various arms of the Ofon 2 project for the steep cost escalations.

The explanation came as Total recently reported a 10 per cent

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Continued from page 17

Specific attention should be given to the possibility of CAPEX over-run, as a 20% overrun could threaten the entire viability of this project which could only be remediated by an upside price regime of about $80 and above

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drop in first-quarter net profit and a drop in oil and gas output in its global operations on Wednesday.

It attributed output drop by 1.5 per cent in Libya and Nigeria, to “security issues” even as it expected to deliver the “Ofon Phase 2 in Nigeria in the second half of the year.”

The Ofon Field Development Project Phase 2 was launched in 2007, to enhance production from the mature Ofon field. Under the original agreement, Ofon should have gone into production in 2011, but the oil company did not award most of the contracts until 2011.

According to Total, the financing agreement put in place with the NNPC in 2008, was below $3 billion. A Ministry source revealed that “…the first thing their (Total) new MD did on assumption of office was to ask for additional billions of dollars more, even when they have not yet delivered on the project.”

Financial Vanguard gathered that the development is not only peculiar to Total, as this is a common practice with all the international oil companies, IOCs, who go for approval for additional costs for their s JV projects over and above the NNPC, the majority partner. The source added that this practice has considerably weakened the power of the NNPC to checkmate the excesses of the foreign oil companies, saying, “This is a country where any top manager of an IOC can easily have access to the Presidency to get Continues on page 19

recent collection of essays on entrepreneurial innovation in developing economies, titled ‘Lessons from the Poor’, mentions an aspect of Nigerian clothing design.

Examining the traditional adire dye industry, author Thompson Ayodele informs that the bottom 19% of entrepreneurs polled for the study earned more than state and federal civil servants.

For the purpose of this essay, the story is significant in more ways than one. First, it is a classic instance of entrepreneurial spirit, describing the transformation of an established Yoruba craft into a venture for wealth creation and employment generation.

Second, and perhaps only in between lines, it reflects a measure of the serious imbalances that plague Nigeria’s economy.

Africa’s second largest economy is a bundle of extreme contradictions; with billions of dollars in annual oil revenue on one end and pervasive poverty for most of its 148 million people on the other.

Relative political stability since 1999 has delivered some reform and regulatory initiatives to correct huge and long-standing macroeconomic disparities, yet the country remains overwhelmed by persistently dismal indicators and human development indices. Nigeria’s current per capita GDP of $1,501.72 ranks it below much smaller African economies like Sudan, Congo and Swaziland.

The latest UNDP poverty survey of 108 developing nations placed the country at the 80th position, below Rwanda and Malawi. Achieving the UN Millennium Development Goals and its own, and more ambitious 2020 target require a paradigm shift in mindset and priorities. It also requires the successful engendering of a broad, pan-Nigerian entrepreneurial spirit!

A slew of relevant policy redirections have already been initiated in this regard: The government has deregulated oil prices, disinvested public sector undertakings, created special economic zones and passed assorted legislation to encourage enterprise development. While some of these measures are starting to show positive results, many have been largely ineffective while yet others have completely collapsed. For instance, a massive privatisation drive launched after 1999 managed to rake up private sector investment.

However, Abuja’s simultaneous inclination for microenterprises, instead of small-

scale ventures, did little to curb unemployment. The failure or even inadequate success of these measures is attributed primarily to disregard or ignorance of ground realities, and lack of a coherent, consistent, macrolevel vision.

Nigeria’s unique set of problems calls for broad-based policy intervention from the bottom up, and any individual law or policy that is not part of a unified effort is unlikely to make much difference. The ‘bottom up’ analogy is pertinent, as one of the first things Nigeria ought to be doing is improving the condition of its roads.

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Africa’s second largest economy is a bundle of extreme contradictions; with billions of dollars in annual oil revenue on one end and pervasive poverty for most of its 148 million people on the other

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The business environment in the whole of Africa is crippled with massive infrastructure shortfalls that result in the continent’s high enterprise mortality rate.

Significantly, the rate of failure affects older and new entrants alike. A leading cause is almost always infrastructure deficits that critically hamper genuine economic growth and productivity.

Since 2008 the government has began to show the political will to implement the market-oriented reforms urged by the IMF such as modernizing the banking system, curbing inflation by blocking excessive wage demands, and resolving regional dispute over the distribution of earnings from the oil industry. GOP rose strongly in 2007-10 because of increased in oil exports and high global crude oil prices.

Nigeria likewise suffers from endemic infrastructural woes with regards to roads, communication and especially power (small and large businesses alike across the country rely heavily, and at times exclusively, on backup electricity).

Vanguard, MONDAY, MAY 19, 2014 — 19

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igeria has successfully hosted the World Economic Forum for Africa.

The event has come and gone and the organisers and the Nigerian authorities are counting their gains and losses. Many Nigerians were apprehensive of the hosting of the event,believing that with the current insecurity, it was not expedient to host the event in Abuja. The Federal Government was bent on making the point that Nigeria was safe for all. Now that the event has held, what were the issues it threw up?

With the benefit of hindsight, both sides have a point.

The Federal Government without thinking of the economic and social cost of the event granted a three-day holiday to Abuja residents.

The city was practically shut down. Businesses and government establishments were closed for the period of the event. Some parts of Abuja city where delegates were lodged were not accessible to motorists. Stern-looking soldiers were posted in the metropolis as if the country was at war. The security checkpoints were something else. These made the city of Abuja a ghost town. It deprived the visitors the opportunity of seeing the real Nigerians who reside in Abuja.

It made it look as if the government was not capable time as business and pleasure projects that would foster the of protecting it citizens and the as visitors would out of agriculture sector, improve visitors if activities were in full curiosity visit neighbouring infrastructure such as roads gear in Abuja. When I had the towns, and in some cases, the and railways, hospitals, opportunity to attend a countryside as tourists. education, skills development conference in Japan, US, Nigeria lost the opportunity and ICT. “What this means is Singapore, Turkey etc, I and for the visitors to see the Abuja that it is not just money, but my colleague went to town to environs. Instead of putting opportunities for Africa and feel and see what was the nation through this the reason why we are here is happening in those parts of unwholesome experience in to unlock the opportunities for the world. We went by metro, the eyes of the international the improvement in the states tasted their food and went to community, the event should of Africa,” he said. see their shopping malls. But have held either in Lagos or These are commitments this was not the case with the Port Harcourt, where the which have not translated into World Economic Forum for needed security check would real time investments for now.

Africa in Abuja. not have been so tight.

How much of these The tight security presented The Forum has attracted over investments will Nigeria be a picture of a nation under $68 billion (about N12.9 able to actualise to help it siege. The government made trillion) in investment to the reduce the rising it impossible for prospective African continent, Dr. Philipp unemployment in the country investors to seek for relevant Rosler, the Managing Director depends on how friendly the information on their own from of the Forum, said. He said business environment is and government offices as well as the funds were in the form of how those who made these business outfits. The action of Foreign Direct Investments as commitments see Nigeria. For government instead of well as private and public the first timers, if they have encouraging investment flow investments across African wrong impression about the created a picture that may be countries, which would country, they may not want to difficult to erase from the continue to yield results in the return to fulfill their promises. minds of discerning investors. next years. Rosler said the This is where first impression International event of this funds were targeted at is so important in an event of magnitude serves most of the investments in beautiful this nature.

Gains, losses of WEFA

If the Federal Government had taken this into consideration, it may not have out of panic, declared public holiday in Abuja. African countries are competing for investment with the rest of the world. Investors go to where they feel safe and are sure of the safety of their investment.

It would be difficult for the Federal Government to convince Nigerians that the impression that was created during the forum was assuring to foreign investors.

The organisers saw the event as one of the best in recent years. The forum, they argued, had achieved the mission of the organisers, which is “commitment to the growth of the world in three steps.” The steps, according to Rosler are: “To create community of interest, to create community of purpose and lastly to have community of exchange. The WEFA, Abuja, has been able to achieve these. For instance, in creating the community of

interest, the articles during the event were more than 48,000 articles, which is three times more than that of last year.

Millions of people have now realised that Africa is important in global economy. Secondly, we created the community of purpose.

The event won the nation some mileage in the war against terror as the world stood behind the country in denouncing Boko Haram and calling for the return of the girls they abducted. The event had more than 1,000 participants and they were here not withstanding all the reports about security. They were here because of all the discussions and they send their voices of solidarity with the people of Nigeria. They came up with a common voice that they will never allow the terrorists and violence dictate global agenda and the people’s agenda for the African continent.

Elzie Kanza, the Director and Head of Africa WEF, said since May 2, there were about 50,000 social media items that mentioned WEF (A), Abuja.

Kanza said the coverage had a total reach of over 2.1 billion, which is about 30 per cent of world population. This is huge, this has raised global focus on Nigeria and for many years to come those who have not been paying attention to the country will begin to inquire and desire to know more about Nigeria and its people.

The big question now is: Can government tap into these great openings to make the difference?

Can this government, following the global goodwill against terror in Nigeria, deliver the crushing blow on Boko Haram?

This is the final test for this government’s capacity to act decisively.

Cover Story

Oil majors fleece Nigeria with inflated project costs Continued from page 18 whatever they want. So even if the NNPC refuses, it’s only a matter of time before they get what they want.”

Cost is still under review However, a spokesman for TENP, Mr. Charles Ogan, in an email response to Vanguard’s enquiry, dismissed the allegations, saying, “All these numbers are totally incorrect.”

The numbers he referred to were deliberately inflated in order to get prompt response,

as it is a common practice by the IOCs not to respond to issues relating to production and costs.

According to Ogan, “Neither NNPC nor Total has any commercial or pecuniary interest in having higher costs as such expenses decreases the revenues of the joint venture.”

But he could not give further details on the cost because, “NNPC and Total are still reviewing the final costs and we are therefore unable to comment further on this matter until the necessary agreements and

approvals are given by the joint venture partners.”

The NNPC could also not comment officially on the issue, but Ogan noted that Total as the operator of the JV usually presented “all cost proposals, projects and other JV expenditure to NNPC for approval and are monitored audited and expenditure finally approved by NNPC and/or other partners.”

He added that “the joint venture accounts are also audited by NEITI and other

stakeholders," while pointing out that “royalties and taxes payable on joint venture production is over 85 per cent and that NNPC receives its 60 per cent share of any profits paid after payment of royalties and taxes.”

Nigerians pay 60% of costs But what Ogan failed to note in his explanations is that Nigerians bear 60 per cent of the burden of whatever costs are incurred by the JV, and as such, the impact of the costs is more

on Government than the IOCs. Furthermore, the 60 per cent profit the NNPC gets is net after costs, as such, the 85 per cent royalties and taxes would have been removed before profit sharing. As such, NNPC, as the 60 per cent equity partner, also pays 60 per cent of the 85 per cent costs, which government pays from taxes paid by Nigerians. Recall that rising costs was one of the reasons that the Federal Government, during

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20 — Vanguard, MONDAY, MAY 19, 2014

Business & Economy

More winners emerge in FirstBank promo

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HE third quarterly draw of the on-going FirstBank ‘Big Splash Promo has produced three more winners of brand new Toyota Corolla cars. The three winners emerge at the draw which took place last week at the Constantial Hotel, Benin City the Edo State capital. The winners were Eseduo Francis of Makurdi Branch, Ezeanum Chinedu Maureen of Onitsha-Owerri branch and Dairo Adeola Olugbenga of Ikeja Industrial Estate branch.

Meanwhile the savings promo which kicked off in July 2013 has been extended to December 2014 to create ample opportunity for more customers to participate in the promo and stand a chance of winning the grand prize of a Terrace Duplex .

The draws supervised by representatives from the National Lottery Regulatory Commission, Consumer Protection Council and KPMG Advisory Services also produced 120 winners of standing gas cookers, 120 winners of refrigerators as well as 120 winners of N50, 000 cash.

Fowler, LIRS boss, honoured with taxation book

BY FRANKLIN ALLI

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Babatunde Fowler, the chairman of Lagos Internal Revenue Service (LIRS) has been honoured with a book titled: ‘The Rudiments of Nigerian Taxation’ written by Olugbenga Obatala.

Speaking during the public presentation of the book in Lagos which attracted more than 140 dignitaries from the public and private sector, Fowler, commended the author and said, “I am extremely marveled; I didn’t know he was going to honour me with the book; this is the official book for LIRS and I am going to buy a copy for all LIRS staff and another 100 copies to members of tax club.”

“There is no book on taxation like this book; the author has put together all the taxes that need to be understood by all the tiers of government.

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Nigeria, world’s 2nd largest market for Unilever

BY PRINCEWILL EKWUJURU

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NILEVER Nigeria Plc has said that Nigeria is its second largest market in the world.

This, Unilever said, makes it impossible to be ignored as at least 28 million Nigerians use its Close-Up brand alone.

Category Manager, Oral Care, Unilever Nigeria, Oiza Gyang, at the launch of the new Close-Up variant, ‘CloseUp Naija Herbal Gel’, noted that Nigeria is the largest market for its products in the world, after Brazil. “It is imperative that the company is doing everything possible to deliver the best to the Nigerian market,” she said.

Gyang said “Nigeria is important to all our products, that is why we are developing brands that suit the Nigerian market.” According to her, over 28 million Nigerians use the company’s Close-Up brand, that is why, “if we win in Nigeria, we actually win globally, so that is why if Unilever Nigeria sneezes, the whole Unilever quivers.”

Also speaking, Brand Building Director, Unilever Nigeria, Mr. David Okeme, said that the essence of the Naija Herbal gel toothpaste is to encourage young Nigerians get close naturally, the Naija way. He stated that Nigerians are known to be energetic, resilient, creative, and

differentiated in their style.

“So Close-Up creates a mix that is not only unique to Nigeria but is an embodiment of the Nigerian spirit.”

Also speaking at the event, Close-Up Brand Manager, Tolu Dima–Okojie, said Close Up has been brightening up

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he Nigerian British Chamber of Commerce, NBCC,has said that it expects trade between Nigeria and Britain to hit £20 billion within the next five years.

In a parley with pressmen at the NBCC secretariat in Lagos, the President of NBCC, Prince Adeyemi Adefulu, disclosed that in 2010, President GoodLuck Jonathan and Prime Minister David Cameron resolved that the trade between the two countries must double from £4b to £8b within five years, adding that, he believes authoritatively, that the figure will be achieved and that potential of trade between the two countries within the next five years may well be in £20 billion.

brand is a blend of Aloe Vera, which serves as an antibacterial agent, Mint leaf extract which gives fresh breath and Lemon extract for white teeth,” he said.

AGM: From left: Company Secretary, Consolidated Breweries Plc, Mrs Temidayo Olaofe; Chairman, Prof. Oyin Odutola-Olurin and Managing Director, Mr. Boudewijn Haarsma during the company’s 34th Annual General Meeting, in Lagos.

Capital importation peaks at N3.42 trn in 2013, says NBS

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he National Bureau of Statistics (NBS) has said that Nigeria’s capital importation stood at 21.3 billion dollar (N3.42

NBCC sees £20bn trade between Nigeria, Britain

BY NAOMI UZOR

Nigerians since its launch in 1975 and quickly rose to be the market leader in Nigeria.

“Close Up is committed to improving the oral health hygiene of Nigerians and the new Close-Up Naija Herbal Gel toothpaste, is another way of showing this. The new

“This however will not be achieved by wishful thinking but by strategy and hard work.

The NBCC trade mission and other activities are a major vanguard for achieving growth of trade between our two countries. The key to attracting foreign investment into the country, is peace, good government, transparency and an enabling environment.

Foreign investment has a way of flowing to where it is most welcome,” he said.

According to him, there is great need for the Nigerian government to work for tolerance at home, and to continue to improve on the security and critical infrastructure in order to reduce the various costs of doing business in the country.

trillion) in 2013. The figure is higher compared to the 11.2 billion dollar (N1.80 trillion) and 5.7 billion dollar (N917.70 trillion) recorded in 2008 and 2009, respectively.

The data was, however, silent on the import rates for 2010, 2011 and 2012, respectively.

The Statistician-General of the Federation, Dr Yemi Kale, said this in a statement issued in Abuja. The statement explained that the data on capital importation was obtained from the Central Bank of Nigeria (CBN).

“The data is being compiled using information on banking transactions, gathered through Electronic Financial Audit Sub-System (e-FASS) software, which enables automatic reporting of all banking transactions to CBN,” the statement said.

It stated that the financial crisis largely shaped capital importation between 2007 and 2013 period.

“From 11.2 billion dollar in 2008, it dipped to a low of 5.7 billion dollar in 2009.

“Yet Nigeria’s rapid recovery attracted higher levels of investment, allowing capital

importation to soar to 21.3 billion dollar in 2013, a record high to date.

“The main driver of this growth has been the shares business, which saw a six-fold increase in capital value between the 2007 and 2013, ” the statement said.

According to the statement, this has been countered by a decline in the banking business sector, which in converse declined to just 1/ 5th of its 2007 size.

It noted that in spite of these developments, lower levels of capital importation for both the stock and banking businesses had been observed in the first quarter of 2014, with total importation of 40.8 per cent lower than quarter one of 2013.

“Prior to the global financial crisis, Nigerian capital importation was high and rising; it grew 16.7 per cent from 9.5 billion dollar recorded in 2007 to reach 11.2 billion dollar in 2008.

“The onset of the crisis brought a sharp decline in capital imported to half its value at 5.7 billion dollar in 2009,” the statement quoted him as saying.

Vanguard, MONDAY, MAY 19, 2014 — 21

22 — Vanguard, MONDAY, MAY 19, 2014

Banking & Finance

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ew customers of First City Monument Bank (FCMB) can now open savings accounts with ease in the comfort of their homes, offices, or on the go via their computers or mobile devices following the recent introduction of the bank’s online account opening platform. The launch of the platform coincides with the introduction of a new product called, ‘the e-savings account’. The new account is an online based savings account which enables prospective customers to complete their account opening process with FCMB without the need to fill out physical form(s) or visit a branch.

The Bank explained that this new innovation was designed with the aim of utilising technology to reduce the time it takes to open an account whilst also improving customer service and customer experience. The platform effectively extends the bank’s e-business offering by enabling new customers to open accounts. Existing customers already have access to various electronic banking services, including online banking, mobile banking and a range of international cards.

AfDB moves to re-engage with Libya

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he African Development Bank Group (AFDB) is moving to re-engage with Libya after its Country ReEngagement Note 2014-2016 was approved by the Bank Group’s Board last week.

According to the note, Libya’s new political landscape gives the Bank the opportunity to renew and expand its engagement with the country, a key shareholder with a subscribed capital of 4.057 percent as of December 31, 2013. Libya also pledged $37 million in contribution to the 13th replenishment of the African Development Fund, the concessionary window of the Bank Group, a clear signal of the country’s interest in reengaging with AfDB. The Note proposes that the Bank explore opportunities to work with Libyan authorities and international partners in areas that are in line with creating the basis for promotion of stability and inclusive growth in the country.

BY BABAJIDE KOMOLAFE

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ore than 50 m i l l i o n Nigerians do not have access to financial services. They are the financially excluded. Most of them according to a 2012 study by EFInA are women, rural dwellers, farmers and illiterates.

They do not use any financial service or product to manage their finances.

They transact using cash.

This is because most of them do not have one of the critical requirements to access financial services, which is ownership of a bank account.

Prior to 18th of January last year, the requirement for owning a bank account was heavily skewed against most of the people classified as financially excluded. You need a valid identification, which must be driver ’s licence or international passport or National Identity card. You must bring utility bill as proof of residential address, then you must be literate enough to complete the account opening documentations and be able to speak English that the bank staff can understand.

Thus, a gateman, or fisherman that spends most of his time on the waters, who is not literate and who most likely do not have a valid identity card, would find it herculean to own a bank account. In fact most of these people are even scared to approach banks to own a bank account. Some believe it is only for the educated and the elite, and some are intimidated by the posh ambiance and surroundings of a banking hall. “It is not for people like me”, they conclude in their minds.

In an effort to correct this impression and change this trend, the Central Bank of Nigeria (CBN), on 18th of January last year, introduced what is called the Tiered Know Your Customer (Tiered KYC).

It created three types of bank accounts with different requirements for ownership, and limit of transactions that can be carried out with each account.

“The main objective of the approach is to promote and deepen financial inclusion, by making account opening and operation more attractive

Dr. Sarah Alade, Acting CBN Governor and appealing to the masses”, said Barrister, Obot Udofia, Deputy Director, CBN. To achieve this, the apex bank created the Low Value Account, Medium Value Account, and the High Value Account.

Low Level Accounts The Low Value Account (LVA) is a savings account, targeted at those who do not

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FCMB launches account opening on Facebook

Simplifying ownership of bank accounts for financial inclusion

and the bank does not need to verify the information.

Furthermore no amount is required to open this type of account.

But the customer cannot deposit more than N20, 000 at a time, and the balance in the account must not be more than N200, 000 at anytime.

Furthermore, where the account is linked to mobile

The requirement for opening this account is very simple and thus accessible to anybody irrespective of level of literacy and socio-economic status

have valid means of identification.

The requirement for opening this account is very simple and thus accessible to anybody irrespective of level of literacy and socio-economic status.

This account can be opened at branches of financial institutions (banks, microfinance banks, mortgage bank) by the prospective customer or through banking agents. This means, the prospective customer does not need to visit the bank to open the account. The account can be opened by providing: Passport photograph; Name, place and date of birth; and Gender, address, telephone number, etc. The customer however, does not need to provide documentary evidence of the information

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phone, and thus used for mobile money purposes, the maximum transaction limit allowed is N3, 000 with a daily limit of N30, 000 This is to ensure that the account is not abused or used for money laundering. More so, the Low Value Account is designed for people who are usually low income and are also daily income earners.

Thus, while the account can be used for ATM transactions, it can only be operated in Nigeria, and cannot be used for international funds transfer.

Also, third parties can only make deposits into the account but cannot withdraw from it. Withdrawal is limited to the owner of the account.

Medium Value Accounts Like the LVA, the Medium Value Account (MVA) is a

strictly savings account. Also the physical presence of the prospective customer is not compulsory for account opening. The major difference is that, the information supplied by the prospective customer must be supported with valid means of identification and must be verified by the CBN. According to the Tiered KYC guidelines, “The MVA accounts can be opened at any branch of a bank by agents on behalf of enterprises for mass payroll purposes or by the account holder; It can be contracted by phone or at the banking institution website; Account opening can be conducted face-to-face (directly) at bank branches and by banking agents; No amount is required for opening of the accounts.

“Basic customer information required are, passport photograph, name, place and date of birth, gender, address, etc. These may be uploaded offsite or submitted on-site in banks’ branches or agents’ offices. Customer information obtained (name, place and date of birth, gender, address) are to be verified against similar information contained in the official data-bases [e.g.

National Identity Management Commission (NIMC), Independent National Electoral Commission (INEC) Voters Register, Federal Road Safety Commission (FSRC)]. It is subject to further ID verification and monitoring by financial institutions.

“Where the account is linked to a mobile phone, the maximum transaction limit is N10, 000 per time, while the daily limit is N100, 000. They can be used for funds transfers within Nigeria only.

Maximum single deposit is N50, 000 while the maximum cumulative balance of N400, 000 is allowed at any time.

Where cross-checking of client’s ID information is not completed at the point of account opening, withdrawal should be denied.

High Value Account High Value Account (HVA) is for people who can meet all the documentation required to open a normal bank account. Unlike the Low and Medium Value Accounts, the account cannot be opened at a bank agent or by a bank agent on behalf of the customer. The account can only be opened by the prospective customer, and he must be physically present to do so. These accounts could be both savings and current.

No amount is required for opening of accounts.

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Banking & Finance Heritage Bank's Transparent MasterCard offers innovative e-payment services

BY BABAJIDE KOMOLAFE

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ERITAGE Bank introduced the first transparent MasterCard in Nigeria to demonstrate its commitment to offer innovative e-payment services to its customers.

Managing Director/ Chief Executive, Herit-

age Bank Limited, Mr. Ifie Sekibo stated this, adding that the Heritage Bank Transparent MasterCard is born out of the bank’s commitment to offer innovative banking services in a more convenient and efficient way to customers.

Sekibo said, “This is the philosophy behind our e-payment services.

There is more to e-payment than Nigerians are

currently enjoying. We are determined to take Nigerians to new heights of e-payment services that deliver unparalleled convenience and security. That is why we introduced the first transparent MasterCard in Nigeria.”

Group Head, e-Bank, Heritage Bank, Mr. Tobe Nnadozie said that the Heritage Bank Transparent MasterCard is avail-

able to new and existing customers of the bank.

“To own a Heritage Bank Transparent MasterCard is easy,” he said, adding that the card comes with no additional cost beyond the cost of applying for the average MasterCard.

Nnadozie further said, “The Heritage Bank Transparent MasterCard distinguishes our customers. It gives them the prestige and excitement of being part of innovation which is what the card represents. “The youths as well as adults will find it very attractive. Definitely you will like something that you will see through and something very presentable. It is for everybody.

There are millions of people out there yearning for something different, something that would make them stand

out from others. They will definitely find the Heritage Bank Transparent MasterCard attractive and embrace it.”

Speaking further, he said, the Transparent MasterCard is another reason to bank with Heritage Bank. “Heritage Bank is the bank for the future, our style is quite different and we cater for all, we are not just looking at some segments. So we want everybody to come, whether old, high class, young, the middle class, we cater for everyone. “Most banks practice what we call traditional banking and that is what our parents are used to.

We cannot leave these people behind; we need to cater for them. We look at the high network customers whom we refer to as the Ivory banking, we also cater for them. There is

the new generation which are particularly the youths of these days, the likes of us who like to do banking on the move, people who don’t see reasons to enter the bank before carrying out transactions. Nigerians want to sit on the Facebook or internet and do their banking services.

That is the reasoning of the youths of these days.

We try to cater for them.

That’s what’s behind our e-banking offerings. We call it innovation, doing something differently and catering for all these people.“In addition to these, we are saying to our customers, we are offering the Transparent MasterCard to show that we offer transparent services, transparent charges and all that, and it is to show you that in Heritage Bank, nothing is hidden.”

Oil majors fleece Nigeria with inflated project costs Continues from Page 19 the President Olusegun Obasanjo’s regime sought to review the sharing formula, saying that operators could no longer take 100 per cent of costs before sharing profit, as there was very little left afterwards.

Rising costs and sharing formula is also behind the industry reforms, which started during the Obasanjo regime, culminating in the Petroleum Industry Bill, PIB, still before the National Assembly more than 10 years after.

While awaiting the passage of the PIB, the NNPC has become stricter in its budget approvals in order to cut down costs, even in the face of delayed project cycles to get the IOCs to be more prudent in their proposals. Indeed, Total’s Chief Executive Officer, Mr. Christophe de Margerie, in an interview with Bloomberg TV in January, had also complained that “Costs are becoming too high.”

He had noted that “Our industry is facing a huge amount of cost pressure.

More is being spent to produce less. Our clients are seeing the rate of return on capital dropping and they ’re being challenged by investors who want them to be more disciplined.”

Delivery delay With regard to the delay in delivery, Ogan said this was as a result of a protracted court case. He said that “as a result of a court injunction put in place by an aggrieved party, no work took place for four years, which meant that the project that should have gone into production in 2011, did not award most of the contracts till 2011.

“This delay and the upswing in contractor pricing meant that the cost of the project has increased.”

He insisted that the project had advanced substantially, as the following had been completed: The living quarters platform, substantially built in Nigeria was installed in December 2013, the new production topside platform (OFP 2) with a weight of 16,000 tons was installed on January 07, 2014. The two bridges linking the existing production platform (OFP1) to the new production platform (OFP2) and the new OFP2 to the living quarters platform, were installed on April 07, 2014. All new pipelines, including the new 70km gas export line, were laid by April 25, 2014.

Contractors for the project

Total, which blamed contractors for the escalating costs, did not identify them. However, Offshore-technology.com listed some of the contractors for the Ofon 2 project to include: Technip - a turnkey contract for supplying topsides of the Ofon 2 fixed platform (OFP2), in May 2007. The scope of works will include loadout and transportation of the 16,000t topsides from South Korea to the field, engineering, supply and installation of the equipment through Unideck floatover method.

Nigerdock, an engineering and construction firm in Nigeria, started construction of the Ofon 2 platforms in March 2012.

In October 2011, Saipem was awarded the contract to provide EPC, fabrication and installation of the OFP2 jacket and living quarter platform for phase 2.

Fabrication of the 900m, 1,970t jacket and 4,500t piles will take place in Rumuolumeni Yard in Port Harcourt, Nigeria. The vessel, Saipem 3000, will provide offshore activities when the project comes on line.

The EPC and commissioning contract for the phase 2 was Continues on Page 33

24 — Vanguard, MONDAY, MAY 19, 2014

Corporate Finance

BY FAVOUR NNABUGWU

Caverton to list N31.83bn shares on NSE NKIRUKA NNOROM with Agency Report

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averton, an oil services firm, said it plans to list N31.83 billion shares on the Nigerian Stock Exchange, NSE, tomorrow The company also plans to commence the process of raising fresh capital by fourth quarter of the year from the Nigerian capital market after the listing.

The Chief Executive Officer of the company, Mr. Olabode Makanjuola, said in an interview that the capital raising exercise will help the company to diversify its capital structure from debt, which is currently around 75 percent of the capital base by broadening the ownership base of the company.

Makanjuola said the company’s debt was secured by contracts with multinational oil companies from where it generated cash flows.

“Most of our financing has been done via debt. In listing, we want to diversify our pipeline of capital.

Emzor talks wellness through ‘Maxwell’

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he Group Managing Director/CEO of Emzor Pharmaceuticals Limited, Dr. Stella Okoli, said the company plans to deliver good health to Nigerians through its newly unveiled brand ambassador, ‘Maxwell’.

She said that the brand ambassador, an animation, is a new development in the life of the company.

According to her, “with ‘Maxwell’ Nigerians, henceforth, are "wellocrats," because they share in the belief of the company for a world where wellness is available to all and affordable by all. That is what we call in the world of Emzor, "Wellocracy" and that is why all of us are Wellocrats.”

She went on to say that the vision that drives the company is to see a world where unlimited wellness is made available to all and is affordable by all. “For this reason, we have remained consistently true to providing high quality healthcare products made available at prices which create value for all stakeholders. By so doing, we believe that one day, we will see that ideal world of Wellness for everybody.

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he Nigerian capital market has been identified as an institution that contributes to the socio-economic growth and development of emerging and developed economies, more so with the rebased GDP of $510 billion and its attendant impact on the market.

This was a major deliberation at the 2nd Edition of Securities and Exchange Commission, SEC’s Learning Series themed: Rebased GDP- It’s Impact on the Nigeria Capital Market, in Abuja.

The Director-General of SEC, Ms. Arunma Oteh, while welcoming participants stated that the Commission’s learning series was part of its contribution towards enhancing economic growth and development even as the country’s capital market continues to play its traditional role of mobilising medium to long-term funds for development purposes.

Commending the National Bureau of Statistics, NBS, for the GDP rebasing, Oteh stated that the exercise received applause from the African Development Bank, International Monetary Fund and the World Bank

*FORUM: From left: Propertygate Development and Investment Plc’s Manager, Development Trading, Mr. Olayiwola Asere; Managing Director/Chief Executive Officer, Mr. Adetokunbo Ajayi, and Chief Executive Officer, SOFUNIX Investment and Communications Ltd, Mr. Sola Oni at Propertygate’s Advisory Services Forum in Lagos.

Rebased GDP: SEC examines implications for Nigerian capital market which showed that the NBS did a very good job on the rebasing of the country’s GDP. She said: “I have never seen a job well done as the rebased GDP done by the Nigerian Bureau of Statistics."

While highlighting some of the objectives of the presentations at the Series, the SEC DG said the aim was to evaluate the macroeconomic conditions of the Nigerian Capital market in the context of the rebased GDP and to determine the

Shareholders task Unilever on local content, seek interim dividend

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hareholders of Unilever Nigeria Plc have directed its Board of Directors to consider backward integration policy in order to manufacture all of its products using local contents, just as they called for interim dividend payment.

The shareholders at the company’s 89th Annual General Meeting, AGM, approved the resolutions recommended by the Board of Directors and commended the management and staff on the performance for the financial year ended December 31, 2013, stressing the need for the company to look inward in the sourcing of its raw materials rather than depending on importation.

Speaking at the AGM the various leaders of shareholders’ groups, such as Sir Sunny Nwosu, Chief Timothy Adesiyan, Mr. Boniface Okezie, Mr. Nonah Awoh and others, said: “We appreciates the dividend of N1.25 per share that has been recommended and this shows

the sustainability of the company’s dividend policy, but we think going forward, interim dividend payout should be considered instead of bonus issue to avoid dilution of stake holdings.

According to them “The company should look at sourcing its raw materials locally. We don’t want the company to make Nigeria a dumping ground, the idea of importing and coupling goods should be discouraged. If our raw materials are sourced locally, the prices of our products will be very competitive.”

The shareholders equally advised the company to reconsider its finance costs and find a way of reducing it.

Responding, the Chairman of Unilever Nigeria Plc, His Majesty Nnaemeka A. Achebe, commended the shareholders for their contribution and comments

at the meeting, saying “The Board will look at all issues and act on them for the good of all the stakeholders.

According to him “The company’s results for 2013 are reflective of short term effects of deliberate investment strategy to achieve a more sustainable future. Our company nevertheless continues to demonstrate strong fundamentals and strong agility to weather the increasing fiercely competitive landscape and tough operating environment.

“Our turnover grew by eight percent compared to 1.5 percent in 2012; Operating margin was 13.1 percent with earnings per share of N1.27. We are paying a dividend of N4.7 billion, translating to N1.25 per share. Revenue went up to N60.004 billion from N55.547 billion, while operating cost went up by 87 percent from 84 percent in 2012.”

static, dynamic and linkage impact of the new GDP configuration and the Nigerian capital market.

Another objective, according to her, was to examine the implications on financial services and capital markets and above all, to recognise that Nigeria is a rising star of African investment opportunities for which the capital market has to foster the prospect.

Apparently, this is made possible through some of the vital roles played such as channeling resources, promoting reforms to modernise the financial sectors, financial intermediation capacity to link deficit to the surplus sector of the economy and a veritable tool in the mobilisation and allocation of savings among competitive uses which are critical to the growth and efficiency of the nation’s economy.

She said the new GDP would help the country manage its economy better while prospective foreign investors, who probably have been ignoring the Nigerian economy, would reconsider their stand and begin to invest in the economy because of its attractiveness.

“Any investor that had in the past ignored investing in this country, can no longer afford to ignore Nigeria again.

“The rebasing has also helped to inform the world, investors and policymakers how large the Nigerian economy is and has placed it in the middle income country.

“It has also improved the Nigerian capital market’s profile,” Oteh said.

Vanguard, MONDAY, MAY 19, 2014 — 25

Corporate Finance

May & Baker plans N3bn fresh capital injection

By NKIRUKA NNOROM

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ay & Baker Plc has d i s c l o s e d plans to raise at least N3 billion from the capital market to boost its working capital.

The Managing Director, Mr. Nnamdi Okafor, who made the disclosure at a facility tour of the company’s production factory in Ota, Ogun State, said the company will be paying dividend to shareholders in the current financial year after failing to pay them dividend the previous year.

Though he did not disclose the date for commencement of the capital raising exercise, he said it will be through a combination of rights issue, private placement or debt equity by private investors.

He, however, ruled out raising the money through a public offer and undertaking further capital investment, saying that the company has done quite a lot in that direction in the last few years.

“We want to apologise to all investors and shareholders

for our inability to give them something to smile about last year. We have actually in the past two or three years been trying to build strong foundation for the business so that we will begin to return very good profit and of course dividend.

“And I think that last year will be the last that we would have to deliver this kind of result because all the issues except the need to recapitalise have been addressed, and going forward, we believe that we should be in a better position to deliver good profit and dividend,” Okafor said.

I believe that the worst days are now behind us and that our company will progressively begin to deliver better returns. We have already started taking steps to reverse the loss position of 2013 and bring the company back to profitability.

“These measures include strategies to sustain revenue growth through more aggressive marketing and product initiatives, efficient management, enhancing working capital and aggressive reduction in overheads costs,” he added.

“We made some huge capital investment in the past three to five years. We are not going into any major capital investment anymore. What we need to do now is to shore up our working capital so that we will have to compete strongly in the market place and deliver value to all our shareholders.

So, the money we will be raising will be majorly for working capital,” he stated.

He also noted that the

company is in the process of securing WHO certification, saying that an audit of the products and processes was conducted earlier this month.

According to him, “We expect that in the next couple of months, we should be able to scale through the first stage of bagging a World Health Organization (WHO) pre- qualification and look forward to fast tracking the second and final stage and

before the end of the year, we would have our products pre/ qualified,” he said.

The company had in 2013 financial year ended December 31, 2013, posted loss after tax of N103.089 million as against profit after tax of N75.943 million in 2012 and turnover of N6.368 billion compared to N5.668 billion posted in corresponding period in 2012.

TOURISM WORKSHOP: From left: Mrs. Taba Peterside, GM, Nigerian Stock Exchange; Mr. Bassey Essien, Managing Director, International Style Week; Mrs. Funmi Ajila-Ladipo, National President, Fashion Designers Association of Nigeria and Dr Osuji Otu, National Professional Officer, Science, UNESCO during the 2014 Tourism Development Workshop in Lagos. Photo Lamidi Bamidele

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Vanguard, MONDAY, MAY 19, 2014 — 27

Micro Finance

Commodity index May 09 -May 15, 2014

Islamic micro finance not for religious intervention – CIBE Stories by BY PROVIDENCE OBUH

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lhuda Centre of Islamic Banking and Economics(CIBE) has said that Islamic banking is not for religious intervention but a business model.

Chief Executive Officer, Alhuda CIBE, Mr. Muhammad Mughal, said this while addressing an International Conference on Islamic Micro finance Business Model, saying, “Islamic micro finance is being utilised as only for Muslim communities in few countries including Nigeria, India, Tanzania, and Ethiopia. But this is quite wrong, it should be used as a business model not as religious intervention." Islamic Micro finance is a system which can be utilised and operated by all the segment of the society without any religious discrimination. Yes, there is an extra benefit for muslims, that it is in accordance with their religious belief but for non-muslims it is an ideal financial instrument for poverty alleviation and social uplifting.”

Mughal added that the demand for islamic micro finance is rapidly increasing in order to serve poverty alleviation and social development, hinting that its active client base have exceeded two million from which more than 700,000 belong to Sudan and more than 400,000 clients of islamic micro finance institutions are from Pakistan.

According to him, Yemen, Indonesia, and Bangladesh also have a good number of clientage with satisfactory demand in Morocco, Senegal, Nigeria, and Tunisia.

One of the challenges of the institution is funding, he said, stating, “ there are lots of challenges faced by islamic micro finance i.e. squeezed volume of organisations, lack of technical expertise and quality HR, lack of standardisation of the products, they are many but the main hurdle is lack of funds for the

institutions, this is why growth is not so constant in the system but it can be rectified with venture capital.”

AlHuda: CIBE is an organisation for education, training, awareness and islamic financial product development, conduct training session of islamic banking, Takaful & Sukuk for Islamic Banks and other financial institutions.

MTN to empower 10 entrepreneurs with N10m

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sing its Link Forum as a platform, Africa’s leading ICT Company, MTN, is sourcing for 10 entrepreneurs with ideas in order to empower them with N10 million grant.

The entrepreneurs will be sponsored to the 2014 World Entrepreneurship Forum taking place in Lyon, France with the grants.

The company announced its 2014 empowerment programme known as Link Forum, which took off in Enugu on May 16, extending to other cities like Port-Harcourt, Lagos and Abuja.

The programme tagged “ Budding Entrepreneur Challenge” with a view to budding entrepreneur challenge, is an innovative and interactive platform that is focused on advancing the aspirations of budding entrepreneurs and professionals, by providing them with the opportunity to interact with renowned and successful Nigeria Business icons, who will share with them knowledge, experiences and insights on their business success.

A statement made available by the company, states that notable personalities like Mr Tonye Ibiema, CEO, Graftin Entertainment and Security Limited; Mr Opriebo West, a Charted Architect and the Director of EST Company Limited, a construction company based in Port-Harcourt and many others have participated in the past.

Turkish Navy partners Nigeria to facilitate maritime security

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he Turkish Naval Forces has entered into collaboration with the Nigerian Navy on its water ways to facilitate maritime security.

For the first time, Turkish warship berthed in Lagos penultimate week and was handed over to the Nigerian Navy and Defence personnel during a port visit led by Vice Admiral/ Commander of the Southern Sea Area, Turkish Naval Forces, Mr. Hasan Usaklioel, at the Apapa Ports in Lagos.

Turkish Ambassador to Nigeria, Mr. Mustafa Pulat said that it is working on building a solid ground to ensure relationship with the country fairs better.

Pulat said that the Turkish Nigeria relationship has grown stronger in the last two decades, stating, “We attach so much importance to our relationship with Nigeria and we do our best to improve it in all fields including security cooperation, which is why our navy is here to participate in the

coming urban game express programme.

“At the political level, we have high level of exchanges of ministerial visits and at humanitarian level there is strong exchange of business people visiting Nigeria and Turkey respectively from each others country, we have a relatively strong legislative basis,” he said.

Describing the visit as historical, Commander, Turkish Maritime Task Unit, Captain Ihsan Bakar, said, “We are enjoying port visit to Nigeria for the first time in the Turkish Navy history, this port visit is not only associated with urban game express exercise but is a historical event from our perspective because is coming for the first time.

“We are here to make contributions to enhancing divided relations from navy to navy, this is the sixth port visit we are undergoing and the previous port visit was to Ghana.

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30 — Vanguard, MONDAY, MAY 19, 2014

Homes & Housing Finance Stories by YINKA KOLAWOLE

Lagos to introduce e-building plans

Lagos State government is set to introduce electronic building (e-building) plans in the state to fast-track the process of building plan approval.

Commissioner for Physical Planning and Urban Development, Mr. Olutoyin Ayinde, revealed this at a seminar in Lagos. He said the procedure for obtaining approval for building plans is cumbersome, time-consuming and have not made an impact on mass housing development, hence the necessity for e-planning permit. “Apart from other strategies, we have been able to put in place for proper administration of the building plan approval, we are making frantic effort at ensuring that we bring the ebuilding plan approval policy into the system,” he added.

Ayinde said the ministry introduced pre-submission approval scheme to ensure that construction conforms to current trend, adding that a committee had been set up to work on the reduction of building plan approval fee, adding that development permit was getting better.

US fixed mortgage rate dips to 4.2% Average U.S. rates on fixed mortgages declined for a third straight week. The low rates could give a boost to the spring home-buying season, which has gotten off to a slow start.

Mortgage buyer Freddie Mac said that the average rate for a 30-year loan eased to 4.20 percent from 4.21 percent the previous week. The average for the 15-year mortgage fell to 3.29 percent from 3.32 percent.

Mortgage rates have risen nearly a full percentage point since hitting record lows about a year ago. The increase in mortgage rates over the year was driven in part by speculation that the Federal Reserve would reduce its bond purchases, which have helped keep long-term interest rates low. Indeed, the Fed has announced four declines in its monthly bond purchases since December because the economy appears to be steadily healing. But the Fed has no plans to raise its benchmark short-term rate from record lows.

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he Federal Government is to adopt an American building technology for the development of mass housing across the country in a bid to tackle the huge housing deficit in the country.

Minister of Lands, Housing and Urban Development, Mrs. Akon Eyakenyi, stated this during a visit to the site of the pilot project being undertaken by the Ministry in partnership with American Building Systems to develop 80-unit prototype houses in Kuje, in the Federal Capital Territory (FCT). The building system adopted for the prototype housing scheme employs the use of light gauge steel technology and local raw materials.

The minister said the new technology was being adopted by government to rapidly address the huge housing deficit gap in the country estimated to be 17 million units. She asserted that the new technology, which is mainly used in the United State of America, ensures the completion of a unit of housing within five to10 days. According to her,

A privately developed house

FG tackles housing deficit with American technology after the completion of the 80-unit prototype affordable housing scheme, the new technology would be replicated in other parts of the country.

“I came here to see one of the project sites of the ministry handled by the American Building Systems where they use special American technology to build the

housing units. And I have seen the construction and each block can be delivered about 10 days after the foundation would have been laid. I have gone round and seen the structure and I want to say that I am very impressed about the technology. The former US Ambassador to Nigeria, Robin Sanders, is also here with me

NMRC seeks memoranda on model mortgage, foreclosure law

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he Nigeria Mortgage Refinance Company (NMRC) has called for contributions from the general public in support of the formulation of a Model Mortgage and Foreclosure Law to be adopted by pilot states. The move is in furtherance of its mandate of promoting legislative reforms to improve processes in land administration towards creating an enabling environment for mortgage origination in the country.

The pilot states are those that have committed to supporting the NMRC initiative by creating an enabling environment for mortgage orientation to be refinanced by the company.

They include Abia, Anambra, Bauchi, Bayelsa, Delta, Edo, Ekiti, Enugu, Gombe, Kaduna, Kano, Kwara, Lagos, Nasarawa, Ogun, Ondo and the Federal Capital Territory (FCT).

A statement from the company calling for the memoranda stated: “NMRC has engaged a panel of reputable law firms and experts to advice on and coordinate the process of

formulating and drafting the model law, which will be implemented in close collaboration with the pilot states and key stakeholders.

“The key issues the model mortgage law will seek to address include fasttracking the process for

creating legal mortgages (including reducing the cost and the processes for obtaining the relevant consents and registration), timely resolution of disputes arising out of mortgage transactions, consumer protection and creating an efficient foreclosure process.

to give explanation of her role from the US NEXIM Bank to back up the Nigerian government, my ministry in this project,” she said.

Eyakenyi explained that the choice to adopt the system was because it is cheaper and faster. “From what we have seen, it is cheaper to deliver and also timely to deliver. For instance, in 10 days, a three bedroom unit that goes for N6 million only can be delivered. If we go with our conventional building method, except subsidised, you will have a similar building going for about N8 million to 10 million. On completion, the developer would have a maintenance unit at the site. Government would replicate this technology in other states of the federation,” she remarked.

Less than 25% of Nigerian workers subscribe to NHF •RSL disburses N102m to subscribers

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ess than 25 percent of Nigeria’s working population subscribe to the National Housing Fund (NHF).

Oyo State Controller of the Federal Mortgage Bank of Nigeria (FMBN), Mr Raheem Onitolo, disclosed this in Ibadan, noting that most Nigerians have a wrong perception of the fund.

“NHF is available to both government and private workers, but unfortunately most workers are pessimistic about it. Many believe that nothing works in Nigeria and because of this, they hold back from contributing to the fund or even harnessing it,” he said.

Onitolo assured that FMBN had improved the process of accessing the fund, allaying the fear of potential contributors on the bureaucratic bottlenecks usually associated with the processing of the fund. He advised workers applying for the fund to ensure their landed property were supported with government approved title deeds. “Having a registered title document is a major consideration we cannot

overlook,” he added.

For retired subscribers who did not access the fund while in service, he said their contributions would be refunded in lump sum with two per cent interest and that the refund would be paid within 90 days of the receipt of their application.

In a related development, FMBN has disbursed about N102 million housing loans to qualified NHF subscribers through Resort Savings and Loans Plc (RSL) in the first quarter of this year.

Managing Director/CEO, RSL, Mr. Abimbola Olayinka, who said this in a statement in Lagos, noted that the fund is open to all Nigerians from the ages of 18 years to 65 years. He reiterated that the opportunity is open to private sector employees, public servants, self- employed individuals, businessmen and tradesmen, adding that the minimum requirement is to have at least 10 percent equity contribution of the cost of the house.

Vanguard, MONDAY, MAY 19, 2014 — 31

Insurance

‘Transfer of N305bn Police Pension, illegal’

By NKIRUKA NNOROM

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he move by the National Pension Commission, PenCom, to transfer the N305 billion Police pension fund to the proposed NPF Pensions Limited has continued to generate criticism as financial analysts have insisted that the move is illegal and suspicious.

They also said that the action if hatched will jeopardise the future of men and women of the Police force after retirement, saying that it contravenes the Pension Reform Act, 2004.

Some analyst had raised the alarm that given the history of the fraud associated with police pensions, the N305 billion savings currently being managed by existing Pension Fund Administrators (PFAs) should not be moved to a new PFA to be known as NPF Pensions Limited.

Reacting to the fears of the analysts, PenCom, had through its spokesman, Mr. Emeka Onuora, assured that licensing of NPF Pensions Limited to manage the pension savings of men of the force pending the opening of the transfer window would not pose any threat whatsoever to the scheme.

However, a financial and legal analyst, Mr. Ayodele Adekunle, said in a statement that the federal government should re-consider the move because it does not only pose a threat to payment of men and officers of the NPF, but also moving the funds from existing PFAs contravenes the law which the government, itself, had put in place.

“We all are living witnesses to the stories about police pensions in this country and the N305 billion has professionally been managed under the pension reform over the years. Changing the status quo has so many risks and I believe the government should consider the demerits of this move before taking further action,” he said.

Adekunle explained that section 11(2) of the PRA 2004 gives every contributor the right to choose any PFA , stressing that the move by PenCom contravenes this provision and also raises some suspicion.

“Apart from the fact that moving the funds contravenes that section of PRA 2004, I am suspecting some foul play. The regulator is saying that after the transfer, the police personnel will have the freedom to transfer to the PFA of their choice after two years. To me,

there is ulterior motive in this position.

Instead of transferring the entire pension to a new PFA, the opportunity should be given to the police personnel right from day one so that they decide which PFA to use

rather than compelling them to move to a new PFA and after two years they will transfer from the new PFA to any other one of their choice.

This will not only be cumbersome but it is also doubtful,” the statement said.

Adekunle, therefore urged the government to re-evaluate the implications of the plan for the pension fund industry and future of the personnel of the NPF.

FORUM - From left: LEAP Africa Board Directors; Mr. Babatunde Dabiri, Dr. Abdul Mukhtar, Lagos State Commissioner for Commerce and Industry, Mrs. Sola Oworu and LEAP Africa”s Founder & Director, Mrs. Ndidi Nwuneli at the LEAP Africa 9th CEO Forum held in Lagos.

Leadway Assurance donates to charities, fetes less privileged children I

n commemoration of the 15th year anniversary of the passing of its founder, Sir (Dr.) Olusola Hassan Odukale, Leadway Assurance Company Limited has donated medication, foodstuff and equipment worth thousands of naira to four homes in Lagos state.

The homes are Modupe Cole Memorial Child Care and Treatment Home School, Akoka; Ile Aanu Olu Preschool, Surulere; Nigeria Society for the Blind and Wesley Schools for Hearing Impaired Children.

In a statement, the underwriting firm said that the donations were made following the May 3 anniversary date in furtherance of the ideals of the late founder who was wellknown for his philanthropy, integrity and sound professional/business ethics within the industry.

Using the platform of the Leadway movie club, the company also hosted about 180 children from less privileged homes to a kiddie movie at the Silverbird Galleria, Ahmadu Bello, Victoria Island, Lagos. The children from Modupe Cole

Memorial Child Care and Treatment Home School, Down Syndrome Foundation Nigeria, the Slum to School Project along with their caregivers, were treated to popcorn and drinks and were excited to visit the renowned cinema house.

Speaking at the event, Amaka Obidi of the Down Syndrome Foundation Nigeria, lauded the company ’s initiative in providing the platform as an alternate means of educating the children. She enjoined other corporate institutions to take a cue from Leadway and show similar constructive philanthropy to the children.

Born on March 1926, Sir Odukale started his business

life as the general goods store owner of Hassan Stores. He established Leadway Assurance Company Limited in 1970 to fill the gap of an indigenous Insurance Company that would compete favourably with the foreign companies at the time and was its founding Managing Director/Chief Executive Officer. He sat as the Company’s chairman from 1993 till 1999 when he passed away. Sir Hassan Odukale was a devout Christian and philanthropist. He was blessed with children and died on 3rd May, 1999 at the age of 73.

Etisalat strengthens partnership with distributors

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tisalat Nigeria has strengthened its route to the market platform with distribution partners Awards, christened, Heroes Awards 2013.

The 2013 Awards which held in Lagos saw the company giving out rewards in 11 categories to appreciate the effort of its distribution partners towards its success in the past business year.Acting Chief Executive Officer, Etisalat Nigeria, Matthew Willsher, said Etisalat was pleased to recognise and reward its distributors because they are an important link with the subscribers and have to believe in the business to represent it well before the public.

Willsher who was appreciative of the distributors role in taking Etisalat to its present position in the telecommunications industry in Nigeria, said he hoped that both parties will take the brand to a higher level.

According to him,”the awards we have given today are just a token to show that we appreciate the effort of our distribution partners in helping to take our products and services to the end users.

Continuing, he stated: “ we are grateful to our distribution partners for the part they have played in taking us to where we are today. We hope that they will keep up the effort so that we can both achieve our goals.”The distribution partner with the Highest SIM Activations Award went to Upper Room Limited. Mr. Olukorede Odukoya, Managing Director of the company, went home with a new Toyota Hilux truck. 10 distribution partners won in the Best Overall Performance category. The CEO’s Award for Overall Excellence went to Office Devices Limited, Alennsar Infinity Company Limited and CantStop Nigeria Limited. A total of 50 distribution partners were rewarded at the event.

NIIA DG for WBF lecture

By WILLIAM JIMOH

T

he Director General, Nigeria Institute of International Affairs, Prof.

Bola Akinterinwa will deliver a lecture on poverty eradication at this year ’s Wilson Badejo Fundation, WBF annual lecture.

The event which is 7th in its series is scheduled for May

21, 2014 at the Nigeria Institute of International Affairs, NIIA, Lagos.

Addressing newsmen in Lagos, Chairman of the foundation, Dr. Wilson Badejo, said the lecture tagged; Nigeria, Limited Education Access for Underprivileged and the Escalation of the Incidence of Mass Poverty: An Initiative of

Positive Change.” was aimed at reliving the plight of the less privileged in the society.

According to him “Studies in recent times have shown that Nigeria today is a country in which poverty, human degradation and despondency reign supreme.

But this situation need not remain so.

C M Y K

32 — Vanguard, MONDAY, MAY 19, 2014

E - Commerce Online travel demand expands 60% annually

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anaging Director of Nigeria’s online hotel booker, Marek Zmyslowski, has said that online travel demand is expanding rapidly at a 60 percent annual growth rate, and will continue to increase rapidly so in the foreseeable future.

Travel e-commerce, he said, is an increasingly booming industry especially in the sub Saharan Africa Speaking at the Mobile West Africa conference in Lagos, he noted that SubSaharan Africa receives 5 percent of all global travelers.

“Last year alone, the number of search queries for Hotels and Tourism has grown astronomically, reinforcing the debate that travel e-commerce is booming at a fast-growing rate and mobile access to ecommerce websites and companies alike will only continue to grow,” he said.

He explained that, “With 61 percent of internet users accessing through mobile devices, Nigeria’s travel industry has become an increasingly blossoming ecommerce. ”

Bitcoin Foundation hit by resignations

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s the most prominent trade group pushing adoption of the electronic currency, Bitcoin began its annual conference on Friday last week; it was being roiled by controversy.

At least 10 members of the nonprofit Bitcoin Foundation resigned over last week’s election of onetime Disney child star and current Bitcoin entrepreneur and financier, Brock Pierce as a new director.

Some of the members cited Pierce’s troubled past.

That includes allegations in lawsuits from three employees of Pierce’s first company,Digital Entertainment Network, that he provided drugs and pressured them for sex when they were minors.

WORKSHOP - From left, Minister of Tourism, Culture and National Orientation, High Chief Edem Duke, Honourable , Chairman, Citi Lodge Hotel and Conference Centre, Olufemi Talabi, Director-General, Nigerian Tourism Development Corporation, Mrs Sally Mbanefo, and Chief Executive Officer, International Style Week Limited, Bassey Essien, at the Tourism Development Workshop in Lagos.

Expert advocates localising solutions to drive e-commerce STORIES BY JONAH NWOKPOKU

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o-Chief Executive officer of Supermartng.com, Raphael Afaedor has called for localization of solutions by e-commerce operators in the country in order to achieve maximum impact and succeed in the business.

Afaedor made the call while speaking at this year’s edition of the Mobile West Africa conference held in Lagos.

Speaking on what is driving development in ecommerce and retail in Nigeria and on whether African version of Amazon can emerge from Nigeria, he explained that the key to success is to start from a customer and that it is not so much about the model than about good solutions that will serve a customer’s needs.

“Ask yourself, who is this customer that I am serving?

Design a solution for that customer. It is not so much about the model. It is not so much about e-commerce. It is not about an Amazon or eBay model, it is about who is this customer and how are you going to fulfill this

customer’s needs? Also remember that the winning solution will reflect the African situation,” he said.

He further explained that the e-commerce space is large enough for anyone to play profitably and that despite challenges and cultural influences of retail in African

societies, opportunities still abound for people to provide solutions using the internet medium.

“Lagos is an interesting market to play, because it is very big. If you find a customer and design a solution for that customer, then the customer will pay

you for the services you are providing, and then you stand a good chance of succeeding. Then also, if you have an overview of the market opportunities, then you will understand that it is to serve customers conveniently. Retail is not what retail should be and so you have customers always asking for solutions. And so anyone who will design such solutions also stands a chance of winning.

“It is also important to note that our traditional retail markets will not disappear anytime soon. As a matter of fact, it will never disappear.

This is because the markets are as African as the people in the continent. Also they serve a significant part of the market. The brick and mortar shops will continue to grow but there will still be room for opportunities in the ecommerce space. There will still be room for partnerships and collaborations,” he said.

He noted that having been a major player in the ecommerce space for awhile now and tried different models, he has been able to learn that anyone delving into the space should have a deep appreciation of what retail and e-commerce mean and how they play interchangeably.

“What I have been to learn over time is that the concept is e-commerce and the reality is that retail is what is being solved. People have retail needs and e-commerce operators should be able to provide that option for people to shop for what they need using the internet medium. Whatever you do, you have to localize the solution. You have to be certain from the start what retail solution you want to provide. You can succeed if you identify a key customer needs, focus and make sure you serve the need of that customer.”

Gloo.ng unveils plan to capture online grocery market C hief Executive Officer of Gloo.ng, Dr Olumide Olusanya has said that he aims to capture at least 5 percent of Nigeria’s online grocery market in the next five years and to cover the whole of Lagos by September 2014.

Gloo.ng is an online grocery store.

He stated this while speaking to Vanguard in an exclusive interview on the operations of the firm in Lagos.

He said the e-commerce space in Nigeria remains a huge one that no one, including Gloo.ng has scratched the surface.

He said Gloo.ng is aiming

for 5 percent market share in the medium-term with a plan to cover the whole of Lagos

by September 2014.

Olusanya who abandoned medical practice for the ecommerce business said, “His value proposition is that of exchanging trust our users repose in us with happiness we deliver to their doorsteps continually. Gloo.ng enriches their lives with happiness by virtue of the precious time, the valuable money and the needless stress it saves one from the inconvenience of going to shop at the supermarket.”

“This time should be better spent on other activities that promote happiness, such as spending quality time with

friends and family,” he added.

He said he was inspired by the desire to reduce stress for home keepers, especially women who have to combine their jobs with keeping a happy home.

He said the idea is to relieve such women of the stress of balancing these responsibilities.

“Gloo.ng will enable us to partner with them to build the happiness they want to build into their homes and families, by saving them the precious time, the valuable money and the needless stress spent on the very unnecessary inconvenience of supermarket visits,” he said.

Vanguard, MONDAY, MAY 19, 2014 — 33

Minister of Agriculture in fantasyland —1

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n Monday, May 12, 2014, the entire world read in the PUNCH, on page 9, that “We’ve achieved 85 per cent selfsufficiency in rice production.” The statement was credited to the Federal Minister for Agriculture, Dr Akinwumi Adesina. He was further quoted to have said that “In 2013, we produced 2.9 metric tonnes of paddy rice. In 2012, we produced 1.4 million tonnes.

Nigeria is now 80 to 85 per cent selfsufficient in paddy rice production.”

With all due respect to the Honourable Minister, unless repudiated by him, this statement represents an illusion.

And I fervently pray that this is not what he presents every week to the Federal Executive Committee, FEC, as progress report.

That statement is the most ridiculous thing anybody in any government, Federal, State or Local government had uttered in a long time in Nigeria. Let me explain. But, before the explanation, permit me to make a necessary diversion – which is pertinent to the discussion.

On May 7, 2014, I set out for Sokoto from Lagos in order to fulfill a pledge made in a church in 1990 that if God kept me alive until May 8, 2014, I will return to that church to offer thanksgiving. Instead of flying as my family advised, I decided to go by road despite the horrible condition of most of the roads from Lagos to Sokoto. My reason was simple. I wanted to know from personal experience how far that zone of Nigeria had progressed with rice farming.

Until 1990, I had operated a rice mill, Haske Rice Mill Limited, next to Sokoto Cement, on Kalambina

Road in Sokoto. I had also operated farms at Talata Mafara, Yelwa Yauri and some villages near Jega and Koko. In addition to this, I had a network of farmers supplying rice to the mill in Sokoto. I was among those responsible for the introduction of the Fadama Project in Sokoto complete with the construction of the dam which collapsed two years ago.

I need not go into the details of the work I undertook to get the International Rice Research Institute, IRRI, at Badeggi, Niger

,

“The most obstinate illusions are ultimately broken by facts, Trevor Roper, in THE LAST DAYS OF HITLER. (VANGUARD BOOK OF QUOTATIONS p 100).

On this trip, I was in no hurry; I stopped at will and spoke to farmers, millers, sellers and buyers – especially at Yelwa Yauri, where the main market is situated off the road near the Emir of Yauri’s impressive palace

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State to introduce several varieties of rice into Nigeria – each variety being the most suited for its own ecological zone.

So, the Honourable Minister and the readers must know that I am an expert on rice production in all its aspects – from farm to table. Going north and driving through Oke Ogun in Oyo State, Jebba in Kwara State, Mokwa, Makera, Kontagora in Niger

Cover Story Oil majors fleece Nigeria with inflated project costs Continued from page 23 awarded to Eiffage Construction Métallique, in November 2011.

The value of the contract is $424m.

Aveon Offshore was awarded a $50m contract to fabricate OFQ jacket, helideck, utility deck and piles for the LQ platform, in December 2011. The subsea systems are expected to be installed in March 2013.

Sofresid and OOPE are the engineering consultants. Akmos Global Services is the spare parts supplier for platform maintenance.

A consortium of Actemium Oil & Gas Engineering (AOGE) and Yokogawa was selected for providing the detailed engineering, functional analysis, HIPS detail studies, instrument database management, supply of machines vibration monitoring system and electrical network power shading 5,000

,

I/O, and Nexans will provide Halogenfree thermoset compound SHF2 or XLPE low smoke PVC outer sheath to reduce gas flaring.

New facilities Total listed some new facilities to be added to the existing complex to include a new processing platform; two new bridges to link the production facilities; two well head platforms; a living quarters platform to accommodate about 124 people; a 70kilometre 12-inch gas export line; 40 kilometres of infield lines and cables linking the well heads to the central complex; 24 new wells. Total also noted that the project “has been a tremendous technical and technological offshore undertaking with substantial Nigerian content designed to maximize revenue for the joint venture and the Federal Government.”

State, to Yelwa Yauri, Koko, Jega in Kebbi State and Tambuwal in Sokoto State, it was clear to me that there had been a quantum jump in rice production in the Northwest generally. Coming back down through Talata Mafara, Gusau, Chafe in Zamfara State and Funtua in Katsina State, it was even more obvious that Nigerian farmers had risen to the challenge of producing rice in large quantities. On that count the Minister and I are in total agreement.

On this trip, I was in no hurry; I stopped at will and spoke to farmers, millers, sellers and buyers – especially at Yelwa Yauri, where the main market is situated off the road near the Emir of Yauri’s impressive palace. Yelwa Yauri was, and is still, a weathervane for studying the rice situation in Nigeria. The Local Government is one of the largest producers of local rice, more than national average in terms of per capita consumption of rice (they eat more because they grow more), it is also a rice milling community.

Despite its large production of local rice, it is also a battle ground for local and imported rice. Price is always the determinant of choice. Whenever, the disparity in price between local and imported rice becomes too wide, consumers eat more imported rice. So, even in a large rice-producing community like Yelwa Yauri, it was clear to me that Nigeria had not achieved anything close to 80 to 85 per cent self-sufficiency as the Minister is stating everywhere.

I have gone to all those details just to let the readers, including people close to President Jonathan know that one of the reasons Nigerians fail to trust government is because some, if not most, of his Ministers say things that would please him rather than the truth he should know. Unfortunately for the President, a lot of people know the truth which his officers try very

hard to hide from him. Getting the Minister of Agriculture sacked is not the objective of this write-up. Getting Nigerians fed, real food instead of hot air is the goal. And let me address why the Minister of Agriculture and his staff, some of who will be identified soon, are not helping matters.

The first thing one notices about Dr Adesina’s presentation of figures is their lack of breakdown that will enable individual verification. For a scientist, a long-term researcher, Dr Adesina should be among the first to recognise the importance of a second view in order to establish the validity of statements made. The Minister had tossed out figures about millions of jobs the Ministry of Agriculture had created since 2012. He had also provided figures about rice and cassava production nationwide. He had failed to provide a breakdown as proof of his claims. On a recent visit to Olam Farms in Nassarawa State, the Minister announced to reporters, at least DAILY TRUST and VANGUARD reported the visit, in his entourage that “We can conveniently boast of about 4,200 small mills in Abakaliki and several other places across the country as at today.” That statement can be read two ways; either there are 4,200 small mills in Abakaliki alone or there are 4,200 mills in the entire country. Any way you read it, one would expect that the Minister would have a breakdown of the number of rice mills in each state, as well as the Federal Capital Territory making up the 4,200. Yet, if the request is made, the Ministry will not be able to provide it –just as it has been unable or unwilling to provide the breakdown, by states, of jobs claimed to have been created.

Visit: www.delesobowale.com or Visit: www.facebook.com/ biolasobowale

Austin Okere to chair NIGF 2014 G ROUP Managing Director and Chief Executive Officer, Computer Warehouse Group (CWG) plc, Mr. Austin Okere has been named as the chairman of the Nigeria Internet Governance Forum (NIGF) 2014.

Confirming this development, the chairperson of the Local Multi-stakeholders Advisory Group (LMAG) of the Nigeria Internet Governance Forum, Mrs. Mary Uduma, said that Mr. Okere has accepted to preside over this year ’s edition of the event to be held at the Musical Society of Nigeria (MUSON) Center, Onikan-Lagos on June 10, 2014.

According to her, LMAG is excited to have Mr. Okere chair the event as his nomination and acceptance was unanimously endorsed by members which consist of the Ministry of Communication Technology (MCT), National Information Technology Development Agency (NITDA), Nigerian

Communications Commission (NCC), Nigeria Internet Registration Association (NIRA), DigitalSENSE Africa (DSA), Internet Society (ISOC) Nigeria, Rita Talabi Foundation, Creative Technology for Development Initiative (CTDI) and Global Network for Cybersecurity (GNC).

Mrs. Uduma also said that the twoday 2014 NIGF would host its youth workshop on the first day with focus on “Internet Governance for Job Creation & Social Enterprise Development” to be presided over by an Internet Security Consultant and former D-G of NITDA, Professor Cleopas Angaye.

On the second day, she explained it would centre on “Harnessing MultiStakeholders Framework for Internet Governance & Economic Growth” with discussions led by 2014 forum chairman, Mr. Austin Okere of Computer Warehouse Group Plc on June 10.

34 — Vanguard, MONDAY, MAY 19, 2014

Agric Business

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hen he talks about agriculture, he does so with passion and facts. You might not agree with his positions on some issues, but you will not be disappointed at the ways he goes about marshalling his points.

That person is Mr. Emmanuel Ijewere, the CEO, Best Foods.

He is involved in agriculture in terms of farming and many of the value chains like meat processing and horticulture.

He is also involved as the coordinator of a body called Committee of Agricultural Stakeholders of Nigeria (CASON), apart from being asked to help coordinate the new group set up by the Federal Ministry of Agriculture, called the Agriculture Business Group.

In this interview with JIMOH BABATUNDE, the man who chairs the agriculture and food security commission of the Nigeria Economic Summit Group talks about the Agric Transformation Agenda, the role of the private sector and the need to ban rice importation come next year.Excerpt.

On his assessment of the agriculture transformation agenda The word transformation agenda was talked about not as an agenda, but transformation. It is this government that now gave reality, gave life and form to the concept of transformation agenda. So, NESG is not taking credit for it. This government should take credit for it.

Now, how is it affecting our people? It is easier for me to explain it in a practical fashion. You will remember that there was a time when Obasanjo being a farmer himself wanted to help farmers and he said let us go for area we have comparative advantages.

He started with cassava; he went abroad and got contracts from China and asked Nigerians to produce cassava. He meant well, but there was something that went wrong with the value chain.

First, we had not prepared the ground for the right type of stems that would suit it. you have to do everything. So, Two, the farming system we this Transformation Agenda is had always adopted had set up to address that kind of always been the same and situation. therefore there were small Let us start from the other holders, even the cost of end. It is not just on cassava going to collect from these specifically, it is not just today little farms on one acre, half that you are talking of supply acre, two plots was so of chips to China, it has gone expensive. beyond that.

Thirdly, there was no central The starch industry in processing. Fourthly, the type Nigeria is getting bigger, of specie of cassava that was ethanol is coming on board. required for this huge We are now having a situation demand was not there. now where this government is In other words, everybody driving the composite cassava was producing cassava, but flour bread and this same some are different from others cassava will be held for so for specific purposes and many other things. finally where were these So with that now, you are processing units to which the creating a market and the various farmers would sell market is diversified as more their products? and more people are getting You will remember that to know more about this and cassava has short life you are now having bigger immediately after harvest. farms. The more big farms you The beautiful idea became a have, the more economic it is nightmare. A lot of people for whoever is doing it. planted cassava to the extent You can harvest in one place they had nothing else to do and process in that same place, as the only thing they knew about cassava was making garri.

And the markets were filled up with garri to the extent these women carry the garri to the market and they could not sell, it was cheaper for them to throw it away than pay for transportation to take it back home.

It was a disaster. It was not because Obasanjo didn’t mean well, it was because the value chain had not been created. Everybody should be an expert in his own field and not create a situation where

Emmanuel Ijewere ... Obasanjo being a farmer himself wanted to help farmers

Government must ban rice importation in 2015 — IJEWERE but if you have to go from place to place, the cost of doing that will be very expensive.

So what is really wrong was the fact that we did not include the value chain that saw to the need of every stage of the value chain. That is indeed the transformation agenda.

The transformation agenda also say that agriculture or farming is no longer a project; the concept is now wealth creation. It is a profitable business, it is a business you must go into because you see it as profitable, don’t go into it if it is not profitable. And it is true, it is very profitable and that is why we must make sure, we handle it well and create more wealth as over 65 per cent of our people are in agriculture. If you can empower these people, you empower Nigerians.

Are challenges barring

We must ban it.

Government must continue, no matter how inconvenient it is, it must happen. In the worst case scenario, which is not going to happen, if we don’t have rice we should eat more yam or cassava

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youths from coming into agriculture being attended to?

Simple answer is, as at today, no. But the situation is changing. There are a lot more discussion now on the youths. This morning I had a long meeting on a programme on how we shall engage the youths in giving them an avenue to know what agriculture is and what the opportunities are; that agriculture today or agriculture business today is not just farming. Farming is just one of the aspects. There are lots of opportunities. The environment which we shall present this to them on an ongoing basis , we are also creating what we call a help line, the information line where they can call or send mails and we will give information to them.

Nigeria is a large country, yet these things are not falling in place, it takes time.

It took us so many years of finding out which direction should we be going, now we are beginning to get it right and to get it really right, you must take things stage by stage.

On the actual figure of food importation into the country As for the figure, I am not too sure, but we have a proportionately high importation when we can grow ourselves. Let us take rice as example. I don’t know about you, but in my own days as a young man in

school, we ate rice once in a week. We looked forward to it. Sunday lunch was rice.

There were other families that eat rice only on Christmas day, but today, everyday is Christmas, even we eat it twice. Situation has changed, but unfortunately, while we had this local rice they have not grown to meet the increased demand for rice of Nigerians.

And unfortunately, oil has further destroyed our agricultural base; it was cheaper to go to Indonesia, Thailand, wherever to bring in rice and they ended up being cheaper.

Whereas those people in Thailand and others have since mechanized, they can grow 10,000 hectares of rice and they do it automatically and therefore far cheaper than what you get in Nigeria.

Worse still the quality of Nigeria rice did not improve in consonance with the demand, but part of the transformation agenda is to change this concept.

But one thing I will say emphatically, government must change that philosophy, nobody should be given the impression that we will not ban rice in 2015.

We must ban it.

Government must continue, no matter how inconvenient it is, it must happen. In the worst case scenario, which is not going to happen, if we don’t have rice we should eat more yam or cassava.

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Vanguard, MONDAY, MAY 19, 2014 — 35

Tax Matters

Tax implication of mergers and acquisitions

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 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 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) 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: (I) 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.

(II) 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:

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M

erger is defined as “ a n y 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.

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

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(i) 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

(i) 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. (ii) 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. (iii) 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.

4.3.1 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.

4.3.2 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: (i) The surviving company must file its returns in line with the provisions of section 55(3)(a) of CITA. (ii) Commencement rules under section 29(3) of CITA will not apply to the surviving company, as it will be regarded as an existing company. (iii) 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. (iv) The surviving company may however claim annual allowance only on the tax Written down Values (TWDV) of the assets transferred to it.

(v) 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. (vi) 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. Ceased Businesses The merger or consolidation exercise may also result in cessation of business for any of the merging parties. In this case, cessation rule as applicable under section 29(4) of CITA will apply to any of the merging companies which have now ceased business permanently, except if any of the following circumstances occur: (i) Where the merging companies are connected. Here, the Service may direct, in line with its discretionary powers, under section 29(9) of CITA that the cessation rule may not apply. (ii) Where a reconstituted company is formed to take over the trade or business formerly run by its foreign parent company. (See Section 29(10) of CITA. Capital Gains Tax Shares or Cash Received Section 32A of Capital Gains Tax Act (CGTA) Cap 121LFN 2004 provides that a person shall not be chargeable to tax under the Act, in respect of any gains arising from the acquisition of the shares of a company, either merged with, or taken over or absorbed by another company, as a result of which the acquired company has lost its identity.

However, where shareholders are either wholly or partly paid in cash for surrendering their shares in the ceased business, the gains arising from the cash payment will be subject to CGT. Effect of Taxations on Consolidation Acquiring/Acquired Companies The tax implications of consolidation on an acquiring company or acquired companies are similar to those of mergers. Acquisition expenses are non-deductible while fees paid to professional bodies are equally subject to WHT and VAT.

36 — Vanguard, MONDAY, MAY 19, 2014

Appointment & Promotions vicahiyoung@yahoo.com 08033348923

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n line with its commitment to rewarding excellence, hardwork and dedication, and boosting productivity among staff, Sterling Bank Plc has announced the promotion of 386 staff across all cadres following the conclusion of its full year 2013 appraisal exercise. The Bank in a statement noted that the promotion exercise was based on merit using a transparent and robust performance management system in line with global practice.

Out of this, 368 staff were promoted in the Junior and Middle Management cadre while 18 Senior Management staff were elevated.

According to the breakdown of figures made available to our correspondent by the Bank, 14 Managers were promoted to Senior Managers, 15 from Deputy Managers to Managers, 26 from Assistant Managers to Deputy Managers, while 80 Banking Officers were promoted to Senior Banking Officers. In addition, 128 Senior Executives were promoted to Banking Officers while 69 staff moved from the Executive Trainee grade to the Senior Executive grade.

In the Senior Management cadre, two Deputy General Managers, Mojisola Bakare and Mr. Adegun Adegboyega Adelani of the Corporate Banking Groups 1 and 2 respectively, were elevated from Deputy General

Felix Ohiwerei foundation gets BoT

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SAFETY - From left : Alhaji Bukar Abbar Isa, Managing Director of Greenview Development Nigeria Limited (GDNL), Captain J.A. Oyewumi, Managing Director, Dangote Ports Operations, Engr Abdulahi Sule, Deputy Group Managing Director of Dangote Sugar Refinery Plc and Usen Udoh, Group Human Resource Officer, Dangote Group at the Safety awareness week organized by GDNL, a subsidiary of Dangote Group

Sterling Bank promotes 386 staff Managers to General Managers, while Mrs. Kikelomo Adefolahan Kuponiyi of Retail Loans, Mrs. Isioma Ada Ubosi, Regional Business Executive, Lagos Island I, Mrs. Adebimpe Olambiwonnu, Group Head, Finance & Performance Management, Mrs. Obe Eniola, Regional Business Executive, Lagos Mainland 3 and Mr. Segun Anako of the Information Technology

Group, were elevated from Assistant General Managers to the Deputy General Manager position.

The new Assistant General Managers promoted from the Senior Manager level include Mr. Abiodun Muniru Oladipupo, Regional Business Executive, Lagos Mainland 5; Mr. John Akingbade, Group Head Treasury & Financial Institutions; Mr. Richard

SAT appoints new global manager; communications

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OUTH African Tourism, SAT, has announced the appointment of Ms Risuna Mayimele as its new Global Manager; Communications.

The appointment took effect from May 2, 2014.

Prior to joining SAT, Mayimele worked as a Marketing Manager for SABC3, where she headed Marketing and Communications for the channel which was also voted the best TV channel in the Star Readers’ Choice Awards under her marketing tenure.

Her career spans over 13 years, as a Marketing Communications practitioner.

She has years of experience in Marketing Research and Strategic Planning in the advertising and media industry.

Also, she has worked in leading global advertising agencies in the area of Strategic Planning, both in South Africa and outside the country, including Nigeria and Ghana.

Prior to SABC, she worked as the Strategic Planning Director for the Ogilvy Ghana office, where she was instrumental in launching the Vodafone Brand to the Ghanaian market. She has also worked in other countries in West Africa as a Marketing Communications consultant.

Locally, some of the roles she occupied include; Strategic Planning Manager at RedNail, Lead Strategist on Media brands at DRAFT FCB where she played a major role in re-positioning SABC brands, including SABC1.

Mayimele is a BA C o m m u n i c a t i o n s Management graduate, and holds a post-graduate diploma in strategic Brand Management.

“South African Tourism welcomes Ms Mayimele to her new position.

With her expertise, extensive knowledge and experience in media, we are confident that she is best

suited to take over this challenging but rewarding position. We know she will be more than capable of enhancing our organisation’s global communication strategy,” says Ms Janine Hutton, Chief Marketing Officer of SAT. “Tourism is one of the most important sectors that drive economic growth in South Africa.

I am extremely motivated to be part of the SA Tourism. I am joining a strong team that has managed to successfully position South Africa positively on an international scale. I look forward to contributing towards the growth of this sector and positioning South Africa as the place to visit,” adds Mayimele.

Oshungboye, E-Business; Mrs. Titilayo Adewonuola Ogundipe, Group Head, Customer Care and Mr. Ademola Adeyemi, Regional Business Head, South West 2, Others include Mr. Lateef Aliu, Channels Operations; Mr. Adekunle Adewole, Group Head, Recovery; Mr. Tsunuku Kingaba, Business Manager, Abuja and Mr. Olabisi Ogunwoye, Group Head, Human Resources Management.

These appointments have been approved by the Central Bank of Nigeria (CBN), and are with immediate effect.

HE Felix Ohiwerei Foundation, FOF, has appointed an eight man Board of Trustees, BoT, to pilot its affairs. Made up of seasoned business men, academics and corporate executives, the Chairman of the Foundation is Mr. Lawrence Agose, while the Vice Chairman is Mr. Fidelis Ayebae. Other Trustees of the Foundation are Mr. Emmanuel Imoagene, Prof.

Emmanuel Emenyonu, Engr.

Greg Ojieh, Mr. Yusuf Ageni, Mr. Ohiosimuan Ohiwerei and Mr. Idode Ohiwerei, who is the General Secretary.

Addressing the Trustees at its inaugural meeting, Mr. Felix Ohiwerei expressed his happiness with the calibre of members of the Board of Trustees.’’ I’m quite confident the Trustees would ensure the Foundation takes off successfully and execute the agreed programmes, drawing from its aims and objectives’’.

Noel Douglas

Noel Douglas now MD Wild Fusion

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oogle AdWords certified partner, Wild Fusion Limited has appointed Noel Douglas as its new Managing Director.

Noel Douglas has over 25 years’ experience in the marketing and advertising ecosystem, working with agencies across the globe.

Speaking on his appointment, Noel said he is “delighted to be given the responsibility of driving one of Africa’s leading digital agencies forward. It is a new chapter in our world of marketing – where we are at the forefront of new technology – where traditional fuses with digital and the language become one. For our clients, we will continue to push the boundaries of technology and creativity to grow their brand awareness and sales, while maintaining high standards of service and brand guardianship”.

The appointment of Douglas was

sequel to Mr. Abasiama Idaresit, the former Managing Director, becoming Chief Executive Officer, CEO, of Wild Fusion Africa, overseeing operations and providing strategic support to Wild Fusion Group.

While congratulating the new Managing Director, he said: “After a rigorous selection process, Noel Douglas emerged as the outstanding candidate to be the Managing Director for Africa at Wild Fusion. He brings a great depth of knowledge and experience in marketing and advertising; I am delighted to welcome him on behalf of our African team.

It is an incredibly exciting time at Wild Fusion as we look forward to building a truly African business.”

Vanguard, MONDAY, MAY 19, 2014 — 37

Aviation

By LAWANI MIKAIRU & DANIEL ETEGHE

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cting Director General of the Nigerian Civil Aviation Authority, NCAA, Engr. Benedict Adeyileka has revealed that the investigations into the IRS plane crash will be handled by the civil aviation authority of Niger Republic. He has also tasked the management of AZMAN Air Services Limited to ensure safety at all times as well as protect and make passengers comfortable during its flight operations.

Engr Adeyileka made this disclosure at the NCAA annex, Murtala Muhammed International Airport, Lagos while presenting the Airline Operators Certificate ,AOC, to AZMAN Air. He said the investigation into the IRS plane crash was being handled by Niger Republic noting that the Accident Investigation and Prevention Bureau ,AIPB, and the Nigerian Civil Aviation Authority, NCAA, would assist in the course of the investigation.

According to him “As soon as we have an update on the pilot, we will let you know.

The investigation is being handled by the Niger Republic because it is within their territory, the NCAA and the AIPB are offering assistance, so we have a team together and we are trying to contact them so that we can work together but the most important thing to note is that it was not within Nigeria territory” Meanwhile, Engr.

Adeyileka told AZMAN Air that safety was one of the major factors every airline must adhered to. He said getting the AOC was not the major challenge stressing that the challenge comes during the course of flight operations.

He urged the management of AZMAN Air to always treat their passengers with care.

The Acting NCAA DG further said that the regulatory authority would work with the airline as partner in order to ensure safe skies noting that if there was a delay, AZMAN AIr should manage the situation carefully by making sure that the passengers are well catered for and the reason for the delay or cancellation adequately explained to them.

He said “Having a delay or cancellation is not the problem, it is how you manage it. If it happens ensure that your passengers are well treated and if you can manage that, you are good. If there is a technical fault, delay the flight and at the same time treat the passengers well

Niger Republic to handle IRS plane crash investigation

Arik Air alerts travellers on new security measures at ailrports

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WORLD HYPERTENSION DAY: From left: Mr Abiola Adbul, Regional Manager; Mr Olayinka Ebenezer, Products Manager; Mr Ogheneochuko Omaruaye, Managing Director; Mrs Olubunmi Omaruaye, Director of Operation and Mr Felix Anyanwu, Regional Manager, East all of New Heights Pharma, the official Business partner for Omron Healthcare in Nigeria during the media parley in Lagos to commemorate World Hypertension Day. because it affect safety.

Each time you fight with your passengers, you put safety at risk” He also advised AZMAN Air to comply with all the regulations of NCAA as falling to do so would attract serious sanction.

Also speaking, President of AZMAN Air Services Limited, Alhaji Abdulmunaf Yunusa said that the management of the airline was grateful to NCAA for granting AOC to it. He also said the airline would start

its flight operation on T h u r s d a y, 15th May 2014, with two Beoing 737 classic adding that their in flight services was very good as passengers will be treated with care.

Discovery Air takes delivery of second aircraft

By LAWANI MIKAIRU

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iscovery Air has taken delivery of another aircraft, B737-300.

The aircraft which landed in Lagos from England at the weekend brings the number of aircrafts in its operations to two.

According to the Managing Director of the airline, Captain Abdusalami Muhammed, “the acquisition of this additional aircraft is in line with our vision to commence operations soon in the Nigerian aviation market.

We are excited that our dream of providing quality service to our prospective guest is becoming a reality. We are more than ready. We are on track. As soon as all the necessary requirements are met, the Airline Operators Certificate AOC issued, we will begin operations We will continue to emphasize our mission which is to facilitate our customer ’s success by providing a Safe, Affordable, Fast and Efficient travel solution through excellent customer service delivery. (S A F E).”

At the inspection of the new aircraft, the Team Lead Internal Audit and Control of First Deepwater Discovery Limited, Taiwo Osinloye said it is good to start on a good note.

rik Air, has alerted air travelers of new security measures put in place at Nigerian airports by the Federal Government. The airline is therefore advising all intending air travelers to set out early for their flights to avoid loss of travel time.

According to General Manager, Public Communication, Arik Air, Mr Ola Banji “The Federal Government has put extra security measures in place at all airports and this could cause traffic snare on airport roads leading to unforeseen delays or missed flights for travelers.”

“The new security measures being implemented by government has led to visible presence of more security personnel across the nation’s airports.

38 — Vanguard, MONDAY, MAY 19, 2014

Vanguard, MONDAY, MAY 19, 2014 — 39

Advertising, Media & Marketing

Kwara's branding as investment hub yields positive results

By PRINCEWILL EKWUJURU

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Things Customers Hate – Part 3 CONTINUED FROM LAST WEEK Broken promises Keep your promises. Whenever you promise to call, do call. When you promise to come or deliver, always do so. You are building your credibility and a reputation for reliability. The reward for both you and your business is tremendous. Those sales people who make glib promises they don’t intend to keep will definitely reap the outcome of a poor credibility rating.

Abdulfatah Ahmed and people.

Cassava represents abundant agricultural potential. The Cowries connotes the forebearers of enterprise and deep cultural heritage.

For the Crown on the logo, it depicts royalty and deep cultural heritage, the Flowing water is a source of natural goodness.

The Precious stones represents abundant natural resources, while the Shield means the unyielding spirit to succeed and excel.

Blue represents flowing water and the beautiful seasonal belts. Deep red represents the pride, passion, royalty and great spirit of enterprise that has been a life long heritage Black represents being part of the African race as Nigerians, while Gold represents the minerals and industrial wealth, and Green represents the rich agricultural and potential) And that was why Ahmed said in his May 29, 2012 speech, “It is in line with this quest to grow our state for greater prosperity that we are re-branding Kwara State.

This campaign and the new logo that comes with it are designed to promote our state as a top investment destination using our reputation for peace, our strengths in agriculture, commerce, solid mineral development, tourism and strategic infrastructure. We intend to strongly market our state as a haven for lucrative domestic and foreign direct investment. Let me state here this is not a mere political gimmick. Rather, we are setting the foundations for the long-term prosperity of our great state and its people.”

Continuing, he had said: “As you are all aware, the previous administration placed the state on a global stage through innovative programmes and policies.

Today, we make history by midwifing a new Kwara, one which gives us all a greater sense of pride, ownership and participation.

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he Kwara State government said the transformational branding agenda embarked upon to position the state as an investment hub in the middle belt and Nigeria has started yielding positive results.

The government noted that the unveiling of the state’s investment and rebranding logo on May 29, 2012 democracy day celebration has put the state on the radar of investors, both local and international.

Taking an overview of the performance index of set plans to transform the state, the government of Abdulfatah Ahmed, incumbent governor of the state observed that it is time to measure its micro and macro economic performance.

How the state is able to attain this height, is to the credit of the investment logo or sign designed and tagged: ‘’Its Good Here’’, which exposes the plans of the state to existing investors and prospectives.

However, in terms, logo connotes different meaning for different agenda. Logos as signage system works as an instrument of information, identity and stimulation. For instance, Buenos Aires, Argentine underground signage designed by Diseno Shakespear between 1995 to 2007, code named, ‘Subte’, was chosen following local survey and focus groups studies that showed a need for a collective memory term.

The government of Kwara state on its own carried out survey that pointed the way to achieve a prospective economic and branding agenda for the state.

Like Shakespear put it, “a sign is not just a panel with images, figure and letters.

They are active expressions of identity that go beyond giving directions and solving basic circulation and communication problems.”

Thus, the Kwara State logo was fully integrated to its surrounding. The result was a multi-level information system that helped prospective investors understand and identify the state’s different agenda for locals and international investors.

According to SBA website, the cost-per-thousand, is a common method employed to measure the cost of reaching a thousand potential consumers, this tool worked for the Kwara government.

Elements of the logo: The antelope, ‘Tragelaphus Eurycerus’, (biological name ), represents humility, goodness, down-to-earth and natural beauty of the land

It is in line with this quest to grow our state for greater prosperity that we are rebranding Kwara State

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Contributing, Dr. Femi Akorede, SSA Media and Communication stated: “Both Shared Prosperity programme and the State Logo have down really well with the people.

People can relate to Shared Prosperity and the logo slogan, “Its Good Here”. People can easily relate to both and grasp the meaning. It is interesting to chant Kwara State and hear people reply “Its Good Here’. Both have streamlined how we communicate both our brand identity and government programmes.”

Aside its economic growth, and support to agriculture, human capital development is another area the government has fared well, even as it strengthened healthcare delivery through 500 meter access to quality primary health centres supported by a cluster of secondary health institutions.

Testimonies: Residents of the state have varying views on the performance of the state government at different levels, in education, Mrs. M.T Ogunifa, Teacher, Gaa-Akanbi GBA School B, said that the renovation of the school has improved enrolment.

Hajia Abdul Malik Mariam, Principal, Govt. High Sch. Senior Section said the the Info Tech and Food and Nutrition laboratories were renovated. whilst the school has been provided with f bore hole.

Akeem Lawal, Mechanic, Fate Road. The government is working, we used to encounter problem on this road during rainy season but since the reconstruction of the road, we have not witnessed any flooding.

Keeping callers on hold for too long It is better to call back than to keep a caller on hold for too long. That way you save the customer both time and money. But how long is too long? I think a minute is already too long. This is why telecom customer care lines are great irritants to customers. From experience, to get through to customer care representative on those lines, you need to wait for at least 20 minutes. Although the customer doesn’t pay cash for such calls, they do pay a lot in terms of time and stress. By the time they get to speak to a customer care person, they are usually a little more irritable.

Asking callers to use another line This sucks, especially when you know the other line does not work. We often hear,”This is a direct line.” So what? Secretaries enjoy saying this, as if the telephone line were a symbol of their authority or position in the organisation. If you can’t reach the person the caller wants, say so politely. Take down the caller ’s details or message and promise to pass it on.

Vilifying your competitors You should respect your competitors. Don’t run them down. Present only facts and let the customer make up their mind. Running your competitors down actually draws attention to them and makes you look desperate to make a sale. It is not a sin to acknowledge something good in the competition without diminishing the worth of your own product.

Avoiding customers No doubt, a lot of sales people indulge in hide-andseek games with customers, especially those customers perceived as “difficult” or “troublesome.” People easily resort to customer avoidance when they have failed to deliver on their promises (see “Broken promises” above). Unfortunately, avoiding the customer not only irritates them but also complicates the service situation further. I think it’s simply escapist to avoid customers.

It’s always better to face your challenges and get them resolved in a professional manner. Better still, don’t put yourself in situations that will make you run from customers.

Refusing to pick calls This is another way of avoiding customers, isn’t it? If you are not able to pick the customer’s call (for whatever reasons), the customer has a right to expect you to return their calls as soon as possible. If you don’t return their calls, then they are justified to believe you’re avoiding them.

Letters with typographic errors or wrongly used words Always read through your letters and email. If the customer spots mistakes in your letter or email, he may think: if this guy is so sloppy with his letter, how am I sure he can perform? Why should I rely on him? In this age of e-everything, many of us are becoming a little careless. We are also relying a lot more on spellcheckers. Unfortunately, most spellcheckers will ignore your use of “site” instead of “cite”!

What are those things you don’t like as a customer?

To share them on this page, send an email to: allwellnwankwo@gmail.com.

TO BE CONTINUED.

40 — Vanguard, MONDAY, MAY 19, 2014 Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

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n last week’s article, we discussed the adverse consequences of a flagging naira exchange rate, and observed that historical evidence suggests that further naira depreciation would simply deepen poverty nationwide.

However, we also noted that available evidence, in fact, suggests that the naira exchange rate has ironically, steadily dipped inversely with vastly improved foreign reserves and extended imports demand cover”.

Hereafter, we will provide answers to some questions relating to the primary cause of a constantly depreciating naira despite bountiful dollar revenue predominantly garnered from crude oil export.

Why have you relentlessly campaigned for a stronger naira for over 10 years?

By 2001, I became concerned that despite our rapidly increasing dollar reserves, the naira exchange rate inexplicably continued to depreciate below the N80:$1, which existed prior to our return to democracy.

It was also ironical that the depreciation was despite our relatively buoyant reserves, which were officially reported to provide extended imports cover than was possible with the existing $4bn total reserves between 1996 and 2000.

What was responsible for the weaker exchange rate despite more bountiful reserves?

Well, it was clear that the weaker naira was not actually the result of dwindling exports revenue, and it was worrisome that the Economic Management Team also insisted that there was surplus naira supply in the system, even when the real sector, particularly the Small

national debt, and it costs the nation over N300bn to service such debts annually.

How does the surplus naira affect the exchange rate?

Well, it is a matter of supply and demand; CBN’s unilateral substitution of naira for dollar revenue inevitably induces the destabilising burden of excess naira supply. Consequently, with available naira values in multiple fold excess of the actual amount of substituted dollar revenue, the naira exchange rate will inevitably, consistently fall against the dollar in the money market.

So, are you saying that the naira rate has nothing to do with productivity and a diversified economy?

In reality, our rebased Gross Domestic Product is a clear indication of increased productivity; however, it is inexplicable that despite the almost doubled GDP, the naira exchange rate has ironically continued to weaken in the last 20 years.

Indeed, the expectation of a diversified and inclusive economy with increasing job creating opportunities will hardly materialize, so long as government consciously continues to borrow back its own money at double-digit interest rates, while actively preventing access to adequate and supportive cost of funds to the real sector, particularly the SMEs, which are the growth engines in all economies.

Fortunately, however, allocations of dollar revenue with “dollar certificates” is undoubtedly a potent antidote to the economic poison of surplus cash in our developmental strategy.

(See “The Sensible Path to Economic Prosperity” at www.lesleba.com)

Systemic surplus Naira as economic poison and Medium Enterprises (SMEs) bitterly complained of lack of access to cheap funds.

So, what causes the surplus naira in the system, and why is it not available to the real sector at reasonable costs?

After several months of diligent observation, it became clear that the destabilising burden of excess naira supply is accentuated every month, whenever hundreds of billions of naira allocations are paid into the bank accounts of the three tiers of government.

Are you saying that it is wrong to make these allocations?

NO. It is constitutionally appropriate to make monthly revenue allocations, but it was disturbing that despite the reality that 80% of government revenue was denominated in billions of dollars from crude oil export, surprisingly, only naira values were ultimately distributed.

What happened to the original dollar revenue?

It was clear, therefore, that someone or some government agency had unilaterally substituted naira allocations for the distributable dollar revenue at their own unilaterally determined exchange rate, (contrary to the provisions of Section 162 of the 1999 Constitution).

How does the ensuing consolidated bloated naira allocations affect the economy?

If, for example, the CBN substitutes a fresh supply of N160bn as the equivalent of

$1bn revenue, such fresh naira cash inflow would support almost a ten-fold leverage in the credit capacity of commercial banks. Thus, if the mandatory cash reserve ratio stood at 10%, the banks will consequently, have an enhanced capacity to lend out about N1600bn, instead of the actual initial deposit of N160bn.

Is this what is generally termed as excess liquidity?

Yes, if the banks were to take full advantage of their enhanced credit capacity to liberally extend loans, this would induce excessive demand with so much easy money being available for bank loans for all forms of consumptions.

This would lead to inflation.

Wouldn’t it?

Yes, it would; as you know, too much money chasing too few goods would lead to an inflationary spiral, which quietly deepens poverty.

Similarly, too much naira chasing rationed dollar supply will also weaken the naira exchange rate.

So, how does CBN react to such a situation?

CBN “altruistically” steps in and offers to borrow and reduce the bloated size of the cash and credit available, by offering mouthwatering double-digit interest rates to commercial banks to encourage them to part with some of the ‘excess’ funds in their custody.

How do the banks react to the CBN’s strategy?

The banks are, of course, happy to lend government’s

money back to government at between 10 and 16% interest rates, as belatedly revealed by Lamido Sanusi, last year.

Thus, with such abnormally huge returns for what are actually sovereign risk-free loans, it is not surprising that the banks show little interest in lending to an infrastructurally-challenged real sector.

Is CBN actually responsible for the high interest rates charged by the banks?

Yes, CBN’s objective is to restrain access to the surplus funds, so as to arrest inflation; higher interest rates undoubtedly remains a useful deterrent to borrowing.

Regrettably, other public sector borrowings will inevitably also suffer the resultant oppressive cost of funds!

QUESTION: So, what does the CBN do with the funds it mops up at such high cost?

ANSWER: Curiously, those funds so borrowed by CBN are simply kept idle; remember that CBN’s objective for borrowing is to reduce spending.

Consequently, it will result in misapplication (compounded naira surplus) if the borrowed funds are again made available by the same CBN for either public or private spending.

You can’t be serious!

No, this is no joke. Indeed, this kind of socially oppressive borrowing by government annually increases the size of our

SAVE THE NAIRA, SAVE NIGERIANS!

Business & Economy

Lagos sensitises residents on non-smoking law

BY PRINCEWILL EKWUJURU

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he Lagos State government has started sensitising Lagos residents on the newly promulgated law banning smoking in public places which takes effect from August 17, 2014.

It recently held a one-day advocacy and sensitisation campaign/stakeholders meeting on the law. In attendance, were Hon. Tobun Abioudun, House Chairman on Environment, Hon. Yishawu Olusegun, sponsor of the non-smoking bill, Barr. Yomi Dada, a Consultant, Engr. R.A. Shabi, General Manager/CEO, Lagos State Environmental

Protection Agency, LASEPA and the representative of British American Tobacco of Nigeria, BATN, Mr. Sola Dosumu.

Governor Babatunde Fashola, who was represented by Dr. Yewande Adesina, Special Adviser on Health, at the meeting, said the enactment of the law does not prohibit people from smoking, but to control tobacco smoking in public places.

The governor went on to say that it is the responsibility of the government in educating and enlightening its citizens on the provisions of the law.

He added that the law should not be seen as an attempt by government to regulate the advertisement or sale of cigarettes, but a simple

restriction of smoking in public places and not an outright ban.

Fashola further said it is unacceptable for smokers to pollute a public gathering with cigarette smoke without regard for the health or convenience of nonsmokers. He said the law has made necessary provisions for conditions under which smokers can indulge in their pleasure without inconveniencing others.

Corroborating, Engr.

R.A.Shabi, General Manager/ CEO, LASEPA, said that smokers have a right to smoke, but that non-smoker need not be impacted by the smoke from cigarette, that vulnerable groups have to be protected. He stated that there are some provisions in

the law that prescribes certain place where smokers

can smoke.

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

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Group Business Editor Deputy Business Editor Energy Editor Asst. Business Editor Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Energy Reporter Industry/Agric. Reporter Energy Reporter Maritime Reporter Insurance Reporter

CONTRIBUTORS Princewill Ekwujuru Nkiruka Nnorom Jonah Nwokpoku Naomi Uzor Providence Obuh LAYOUT

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Media/Marketing Capital Market E-Commerce Industry Micro Finance Graphics Department