Experts split on using reserves to defend Naira...As external reserves falls below 18mths low by Vanguard Media Limited

MARCH 24, 2014

Experts split on using reserves to defend Naira ...As external reserves falls below 18mths low BY BABAJIDE KOMOLAFE

ith the nation’s external reserves falling below its lowest level in eighteen months, economic experts are divided over the policy of using the reserves to defend the naira. A snap poll of foreign exchange dealers and economic experts conducted by Financial Vanguard on the likely outcome of the meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) holding today and tomorrow revealed divergence of opinions on the policy of using the reserves to defend the naira. The poll revealed that while foreign exchange market operators prefer that the CBN suspends the policy by allowing depreciation of the naira, other operators however prefer that the apex bank maintain the status quo. Last week, the external reserves fell further to $38.13 billion, representing the lowest level since August 2012. The decline in reserves started May last year after a peak of $48.85 billion in April. This

implies that the reserves have shed $10.72 billion between May, 2013 and last week while it has declined by $5.48 billion this year. The decline in reserves is attributable to depletion of the excess crude accounts and increased sales of dollars by the CBN in its quest to stablise the exchange rate. This year, the apex bank has sold $8.7 billion through the bi-weekly foreign exchange auction, representing 33.1 per cent of the $25.37 billion sold last year. The fear is that, if the apex bank maintained the policy of using reserves to defend the naira, the external reserves might continue to fall further. Foreign exchange dealers who participated confidentially in the poll argued that with the current levels of reserves, the focus of the MPC should change to protecting the reserves. Hence they predicted that the MPC would shift the midpoint of the official exchange rate from N155 per dollar to N160 or N165 per dollar. “No Naira should be devalued”, said a senior bank treasurer, who

spoke on condition of anonymity. He believes that the MPC would raise the official rate to N165 per dollar from N155. A senior economic analyst with one of the banks, who does not want his name mentioned, argued for depreciation of the naira. He told Vanguard, “There is a balanced outlook between the current efforts to support the naira and keep depleting the reserves or to preserve the reserves and move the midpoint to N160 per dollar plus/minus three percent. The latter will allow naira exchange rate in the interbank to oscillate to N164.8 per dollar. Interestingly, there is a resistant above N165 by the CBN, and also a resistant below N164 by the operators. Whichever is the case, the latter option will suit all parties. Although this could be seen as indirect devaluation, but it might not, if we

Continues on page 18

171.0 2,951.00

16.86 107.20 -99.55

-3.15 -23.00

-0.19 +0.75 +0.56

CURRENCY BUYING CENTRAL SELLING DOLLAR

154.74

155.24

155.74

STERLING 255.3829

256.2081

257.0333

EURO

213.4793

214.1691

214.8589

FRA

175.2236

175.7898

176.356

CFA

0.3057

0.3157

WAUA

238.1654

238.9349

239.7045

RENMINBI 24.8557

24.9365

25.0173

RIYAL

41.394

41.5273

KRONA

41.2607 28.5941

0.3257

28.6865

28.7789 240.4781

SDR

238.934

239.7061

YEN

1.5128

1.5176

1.5225

CBN Exchange rate as at 21/03/2014 C M Y K

18 — Vanguard, MONDAY, MARCH 24, 2014

Cover Story

Vocation and technical education – A Key To Improving Nigeria’s Development (3)

Reception: General Secretary, Emeralds Club of Lagos, Eng. Bolaji Williams; Lagos State Head of Service, Mrs. Seyi Williams; Former Chief of Naval Staff and President of Emeralds Club, Admiral Mike Adelana and Retired Air Vice Marshal Funsho Martins during a recent reception by Emeralds Club in honour of the newly appointed Lagos State Head of Service.

Experts split on using reserves to defend Naira The Bank of America consider that the 2014 Budget benchmark is N160.” Supporting these views, Opeyemi Agbaje, Chief Executive Officer of RTC Consulting Limited, said, “sensible policy will be some depreciation”. Some operators however differ. These include Managing director/Chief Executive, Partnership Finance and Investment Company PLC, Mr. Victor Ogiemwonyin and President, Finance House Association of Nigeria (FHAN), Mr. Samuel Durojaiye. “We cannot afford to devalue the Naira now, the negative fallout has too many unpredictable outcomes. I believe CBN will keep supporting the currency because it will cost us less than wholesale devaluation that will have no end. Though, our foreign reserves are below $37b now. My feeling is that as the western economies recover, oil prices will gradually rise to boost the current reserves level”, Ogiemwonyin. According to Durojaiye, “The issue is what will support our economy. Our economy is import dependent. If you devalue our currency, imports will become expensive cost of production will increase. The argument that such a step will promote export will bring only little gains. What do we have to export? Furthermore, two major investment firms Financial Derivatives Company (FDC) Limited and Bank of America expressed different opinions on whether the CBN should continue to defend the naira. C M Y K

While the FDC in a monthly report issued last week agued for depreciation of the naira, the Bank of America said that there is no need for such depreciation now. According to the FDC report, “We anticipate two possible scenarios alongside the hike in CRR. The first scenario is a shift in the exchange rate midpoint from N155 to N165 per dollar, which is estimated 3-5 percent depreciation in the naira. The rationale for this is the increased volatility recorded at the interbank and parallel markets, and the CBN’s continued support of the naira at a cost to external reserves.

Continued from page 17

We anticipate two possible scenarios alongside the hike in CRR. The first scenario is a shift in the exchange rate midpoint from N155 to N165 per dollar, which is estimated 3-5 percent depreciation in the naira

The premium between the official and parallel market remains wide at N16.26 compared to N8.25 in October, 2013. Our second scenario is an increase in the MPR to 13 percent per annum to tighten liquidity conditions in the money market.”

however stated, “We expect the MPC to keep the Monetary Policy Rate (MPR) on hold at 12.00 percent per annum given that the recent elevated levels of dollar sales by the CBN have successfully brought the Naira down from last month’s highs. This means there is no immediate need for a rate hike, in our view. However, there is a small chance the exchange rate band could be slightly adjusted. The CBN has been selling roughly $400 million per auction for the past month, compared with an average of $300 million per auction in 2013. Its intervention brought the Naira down by three percent from N169 on 20 February to N163 in just two weeks. Reserves currently stand at $39 billion. Clearly the CBN can sustain net outflows for some time before reserves fall to the $32 billion level seen at the time of the last devaluation in November 2011. This was equivalent to five months of import cover compared with just under nine months of import cover currently available. Reserves are clearly sufficient to defend the Naira band in the medium term, and we believe exchange rate stability continues to be at the core of MPC policy given the high degree of exchange rate pass-through into inflation. This is especially true given that the February core CPI ticked up slightly to 8.0 percent year- on-year. Therefore, we see only a small chance that the current exchange rate band will be moved.”

also in process designs using in manufacturing industries. These components of ICT have great implications for the enhancement of entrepreneurship education in technology and vocational education field of work. According to Azuka, Nwosu, Kanu and Agomuo (2006), classroom behaviour must align with ICT- driven environment which is constantly shaping and reshaping the work place and consequently, what is learnt and how learning takes place. There are various numbers of opportunities for technology and vocational education graduates with entrepreneurship skills in ICT driven technical and vocational education environment. These opportunities exist in various forms for the enhancing entrepreneurship skills.

n entrepreneur is a person who makes plans for a business or a piece of work and gets it going. Anyanwuocha (2001) observes that the entrepreneur is the chief coordinator, controller and organizer of the production process. The entrepreneur combines other factors of production (land, capital and others) in such a way as to obtain maximum production of goods and services at minimum costs. In order to effectively enhance occupational skills in the present day, entrepreneurs need also to acquire information and communication technology knowledge and skills. Mkpozi (1996) observed that a country that is developing and manufacturing its own goods either from Hi-Tech or small/medium scale industries using indigenous skills and exports some of those goods to other countries is usually economically stable. This could be better achieved through the acquisition of entrepreneurial and occupational skills in technology and vocational education. Individuals with technical and vocation skills and good knowledge of ICT are characterized by selfreliance, self-employment and fit properly into today’s technical, entrepreneurial and business world. The entrepreneur should therefore possess technical skills, ideas and management skills which are necessary for the success of the venture. One of such skills is information and communication technology which is characterized by employee empowerment and involves the making of unskilled and semiskilled workers to be skilful and functional in today’s world of work. It also involves the development of task oriented team of workers who no longer depend on individual managers for all their decisions to achieve targets. Technical process reengineering are also required to redesign technical work processes, jobs, organizational structure, management system, and

Individuals with technical and vocation skills and good knowledge of ICT are characterized by selfreliance, selfemployment and fit properly into today’s technical, entrepreneurial and business world.

Nwabuona (2004) views entrepreneurship education as the identification of the general characteristics of entrepreneurs and how potential entrepreneurs can be trained in management techniques needed for effective performance of persons for long time survival of an organization after the acquisition of occupational skills. Therefore, the roles technology and vocational education in enhancement of entrepreneurship skills is to identify and equipped graduates with critical wealth of skills, technical knowledge, and a good measure of self-confidence using information and communication technology competence. The entrepreneur should therefore possess entrepreneurial and management skills which are necessary for the success of the venture.

Vanguard, MONDAY, MARCH 24, 2014 — 19

When will the drum beats of revolution start in Nigeria? dramatically and the reverse is the case. Banks are now asking for second class upper or first class degrees as minimum job entry requirement. They are also demanding that such graduates should not be older than 26 years. Now, Nigerian graduates are not even acceptable for employment in Nigeria. American degrees that were looked down upon 25 years ago are what most employers are now searching for. It is not that there are no jobs in the country; it is the lack of the required skills that has prevented many Nigerians from accessing jobs. There are several banks and companies employing people with requisite skills from abroad. The question is; how did we come so low in value while others have improved so much? So much that jobs are now only available to relations of the dead? What a tragedy! Each year, Nigerian leaders tout figures of economic growth of about six or seven per cent, but the level of unemployment keeps rising by the day. Perhaps, many have thought that the unemployment situation was exaggerated by media harp until Saturday when for 4,000 job openings in Nigeria Immigration Service, attracted over 60,000 applicants for a written test in Abuja alone. Maybe the Minister of Internal Affairs

wanted this government to see the magnitude of the unemployment issue in Nigeria, by allowing all the applicants to show up the same day for the test. Or how else can it be explained that any reasonable employer will gather that number in a stadium to write a test? Did the minister have any sense of crowd behaviour? The unfortunate event brings to mind the 2012 lamentation of President Goodluck Jonathan. On that occasion, he had lamented the growing unemployment situation in the country stating that it may

hen some of us were in secondary school, a grade one WAEC certificate will make you unacceptable for employment in a Nigerian bank and most companies in Nigeria. The thinking then was that with grade one, the holder will in a matter of one year gain admission into the university. There was no need to waste resources training him. Those who got jobs easily in banks in those days were WAEC certificate holders of grade three. Also during the same period, a degree from any Nigerian university was a precious possession. Employers of labour in Nigeria questioned many of the certificates obtained by those who went abroad especially to the USA to study. While at the University of Benin in the late 70s to early 80s, a lecturer who had his PhD from an American university was forced out of our class because he could not stand the demand for advanced macroeconomics. She entered the class one fateful Monday and said; ‘You know all of us cannot be good in calculation. Before she finished the sentence, the class rose in unison and asked her what she was doing there if she could not express her know-how in figures. That day, the class met with the HOD and she was removed from the class. Twenty-five years down the line, the situation has changed

It is not that there are no jobs in the country; it is the lack of the required skills that has prevented many Nigerians from accessing jobs. There are several banks and companies employing people with requisite skills from abroad

lead to some social unrest in the near future. Every Nigerian, in low or high

places, knows this simple fact. This government has not shown to the people anything that will suggest that it is tackling unemployment. What Nigerians need to see is how far this administration has gone to tackle the problem. Since the days of the ill-fated Structural Adjustment Programme, or the Shehu Shagari Austerity Measures of 1982, unemployment has been a phenomenon that has refused to go away in Nigeria. Unemployment in Nigeria has become one of the most critical problems the country is facing. Many years of corruption, mismanagement of the economy, civil war, military rule, etc., have hindered economic development of the country. Nigeria is endowed with diverse and infinite resources, both human and material. However, years of negligence and adverse policies have led to the underutilisation of these resources. This is one of the primary causes of unemployment in the country. Analysis of employment data shows that the rate of new entrants into the labour market has not been uniform. The rate was on the increase from 2007 to 2009 but declined significantly between 2009 and 2010. The rate increased again from 2010 to date. Within the period, there has been an average of about 1.8 million new entrants into the active labour market per year. In 2011, Nigeria’s estimated population stood at 164.3 million, 92.3 million are said

to be economically active, labour force - 67.25 million, employed - 51.18 million, unemployed - 16.07 million and newly employed - 2.13 million. 2010 statistics showed that about 10 million Nigerians were unemployed in Nigeria at March, 2009. The 2011 survey showed that the national unemployment rate is 23.9 per cent compared to 21.1 per cent in 2010 and 19.7 per cent in 2009. The Federal Government since 2009 has been singing the tune of tackling unemployment but so far, there has been no serious sign of improvement. Today in Nigeria, almost half of 15-24 year olds living in urban areas are jobless, yet reducing unemployment and enhancing economic productivity are top priorities for the National Economic Management team. It is sad that year in, year out, billions are budgeted for recurrent with little for capital expenditure that will lead to job creation. Fortunately, the buck stops at the President’s table. He is the one who has the key to unlock and unleash the nation’s economic potentials for the benefit of all Nigerians. The President has no one to cry to other than putting on a thinking cap and getting the job of the office of the President done creditably. With what happened that Saturday, Nigeria is ripe for a change, a revolution. Who will cast the first stone for the drum of revolution to sound?

Business & Economy

Nigeria's manufacturing real content capacity still 18% —NCDMB boss R

eal local content in Nigeria industries is alarmingly low at about 18 percent, Executive Secretary, Nigeria Content Development Board (NCDMB), Mr. Ernest Nwapa, has disclosed. He lamented that Nigeria has focused on revenue derived from oil and gas and has neglected the human development needed to grow the economy. Nwapa stated this in Abuja at the 2014 Nigeria Oil and Gas Conference and Exhibition.

He said: “Our partial Nigeria content is at 70 to 87 percent, while our real content, which is based on proportion of contract sums spent on Nigerian made products, is from 12 to 18 percent. This is considerably very low, and it is a major factor to lack of investment o p p o r t u n i t i e s , underdevelopment and unemployment. “We have decided to neglect human capacity development, which is essential to the development of the sector, and

we have focused on revenue derived. Presently, we still seek foreign partners in rebuilding our refineries,” he said. He said that the major challenge of the industry was non-development of its manufacturing sector. “The greatest problem we have is that Nigeria procures virtually all it needs from abroad. No matter how we try, if we don’t raise the level of manufacturing, we will not. He said that the local content was still low in spite

of efforts by the Federal Government to ensure that the manufacturing industry in Nigeria improved and competed favourably with industries in the international community. He said that the Nigerian manufacturing industries were currently being run with machines brought in from different parts of the world. “That is why we are designing product and strategies starting from component and we believe that this is the area we can

explore.” He said that it has become compulsory for foreign and local investors interested in establishing business places in Nigeria to patronise local industries. Nwapa decried the mis-interpretation of the content act by foreign investors, saying that the law was not meant to drive out foreigners but to attract and encourage better collaboration. “What makes a great oil producing nation is the ability to manufacture all necessary equipment needed, asset ownership and human capital development,” he said. C M Y K

20 — Vanguard, MONDAY, MARCH 24, 2014

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Vanguard, MONDAY, MARCH 24, 2014 — 21

Business & Economy

CBN to sell Treasury bills worth N313bn

he Central Bank of Nigeria (CBN) said it will sell N313.88 billion worth of treasury bills. The CBN posted the information on the sale of the treasury bills for the second quarter of the year on its web site. It said the bills would have 91-day, 182-day and one year tenor and would be re-opened at the regular debt auction. The apex bank explained that the 91-day treasury bills would be worth N50.28billion, 182-day worth N33.27 billion and the one year bills were worth N63.73 billion. It also said it would sell new bills including 91day Treasury bill worth N33.27 billion, 182-day bills worth N50.28 billion and one year bills worth N83.05 billion.

COREN calls for professionalism in building construction

ashim Ali, the President of the Council for the Regulation of Engineering in Nigeria (COREN), has advised developers to always engage the services of professional engineers in building construction. Ali gave the advice in Abuja at a send-off party for three retired members of the council. He urged the retired members to continue to support the activities and programmes of the council. He said that a lot of researches were required to produce mix design information that would guide the construction industry. The correct mixture of cement would help to achieve strength of sand and concrete used in different grades of cement available. Ali said it had become necessary for COREN, as stakeholders, to caution individuals and organisation on the “misguided utterances” on the quality of cement in circulation in the country. Ali said that the quality of cement in the country was not responsible for building collapse. He said the engagement of quacks in constructions in the country had led to building collapse and stressed the need for professionalism.

Africa accounts for 10% global cybercrime incidents - IDC, NUS BY EMEKA AGINAM

hile governments are increasingly partnering with local associations and vendors to combat the scourge of piracy and the associated risk of cybercrime, a joint new study by IDC and the National University of Singapore (NUS), has revealed that African continent accounts for 10 per cent of global cybercrime incidents. The study was released as part of Microsoft’s Play It Safe campaign, a global initiative to create greater awareness of the connection between malware and piracy. According to the report, enterprises worldwide are expected to spend nearly $500 billion in 2014 to deal with issues caused by malware deliberately loaded onto pirated software, $127 billion dealing with security issues, of which $8 billion accrues from the Middle East and Africa, and $364 billion dealing with data breaches respectively. “Using pirated software is like walking through a field of landmines: you don’t know when you’ll come upon something nasty, but if you do, it can be very destructive. “The financial hazards are considerable, and the potential losses could leave once-profitable businesses on shaky ground. Buying legitimate software is less expensive in the long run, at least you know that you won’t get anything ‘extra’ in the form of malware.” John Gantz, chief researcher at IDC. This is even as Microsoft Nigeria has already partnered with the Nigerian Copyright Commission (NCC) to combat piracy, which according to the 2011 BSA Global Software Piracy Study, currently sits at 83 per cent across the East and Southern Africa region. Microsoft said it was committed to protecting its unsuspecting consumers from downloading or purchasing nongenuine software that exposes victims to malware that can lead to identity theft, loss of data and system failures. According to the report, global consumers are expected to spend $25 billion, including Middle East and African consumers who will pay $2 billion on

security threats and costly computer fixes stemming from malware on pirated software. This will also amount to 1.2 billion hours of wasted time in 2014. The study entitled: The Link Between Pirated Software and Cybersecurity Breaches, also revealed that 60 per cent of consumers surveyed say their greatest fear from infected software is the loss of data, files or personal information, followed by unauthorised internet transactions (51 per cent) and hijacking of email, social networking and bank accounts (50 per cent). However, 43 per cent of those same respondents do not

install security updates, leaving their computers open to attack by cybercriminals. “There is now a firm link between the detected malware on illicit software and criminal organisations, for whom malware in pirated software can be a lucrative vector for cyberattacks. With many of these criminal organisations also behind the distribution of infected software, it means that an increase in software piracy translates to an increased vulnerability to cyber attacks. “In the sub-Saharan region, the internet population is fast growing, meaning a large and unsuspecting base of targets to cybercriminals. Combine this with the lack of strong

cybercrime laws and high piracy rate on the continent and its clear why we’re seeing more and more people fall victim to attacks,” Daniel Kamau, Anti-piracy lead for sub-Saharan Africa said. While government officials expressed concern about the potential impact of cybersecurity threats to their nations, the survey further revealed that governments were most worried about the loss of business trade secrets or competitive information (59 per cent), unauthorised access to confidential government information (55 per cent) and the impact of cyberattacks on critical infrastructure (55 per cent).

Briefing: President, White House Group, Mr. Austin Eruotor; Principal Consultant, Rare Gem Consulting UK, Miss Chinwe Maduike and Chief Executive Officer, White Waters Limited, Mr. Nsikak Daniels, during a Press conference to announce the forthcoming Foreign Business Investment held in Lagos.

NLNG to build $12m engineering labs in 6 varsities BY CHRIS OCHAYI

etermined to enhance e d u c a t i o n a l development in Nigeria, the Nigeria Liquefied Natural Gas Limited, NLNG, has announced a donation of $12 million for construction of modern engineering laboratories in six selected Nigerian universities. Managing Director of NLNG, Mr. Babs Omotowa who disclosed this at a media briefing Wednesday in Abuja, explained that each of the universities selected from the six geo-political zones will get $2 million to execute the modern laboratories project which will be equipped with

cutting-edge equipment. Omotowa, who said the projects would be completed in the next one year, added that the NLNG will partner with the benefiting universities to ensure effective joint monitoring of the construction projects. Beneficiary universities under the project entitled, NLNG University Support Programme, USP, according to Omotowa, include, University of Ibadan, University of Ilorin, University Port Harcourt, University of Maiduguri, Ahmadu Bello University, Zaria and University of Nigeria, Nsukka. He said: “No Nigerian university is ranked amongst

the 500 best universities in the world today; neither is our ranking amongst African universities impressive. The MD explained that, “the six universities were selected based on their top position within their geo-political zones, in the ranking by the National Universities Commission, NUC, and other international bodies. In addition are their longstanding contributions to the development of local capacity in Nigeria, especially in grooming notable Nigerians who have contributed to national development. “All the predictions about Nigeria’s ascent as a developed country will only come true if and when we also take firm steps to fix our educational system."

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22 — Vanguard, MONDAY, MARCH 24, 2014

Banking & Finance

irst City Monument Bank Limited announced it has commenced commercial banking operations at its London subsidiary, FCMB (UK) Limited, following approval by the regulatory authorities in late 2013 to begin wholesale deposit taking for businesses and corporate organisations. These activities represent an expansion of its existing stock broking and corporate finance activities, which commenced in 2009. A statement by the bank said, FCMB (UK) Limited has received approval from the Prudential Regulation Authority, the UK financial services regulator, to carry out deposit taking and commercial banking operations. This represents the next step in FCMB’s plans to further internationalise its activities in the area of commercial banking. Mr. Ladi Balogun, the Chief Executive Officer of the UK banking subsidiary ’s parent company, First City Monument Bank, said. “We are pleased to be commencing banking operations in ourUK subsidiary."

Ecobank, MTN partner on mobile financial services

TN Mobile Money users, who are also Ecobank customers in 12 African countries, will soon be able to withdraw cash from Ecobank ATMs. They will also be able to transfer money between their Mobile Money and Ecobank accounts. The service was piloted in Ghana last month, and will soon be launched in Benin, Cameroon, Ivory Coast, Ghana, Guinea Bissau, the Republic of Guinea, Liberia, Congo Brazzaville, Rwanda, South Sudan, Uganda and Zambia. MTN and Ecobank have partnered to improve access to mobile financial services in the African continent. Both pan-African multinationals have vast experience in extending financial services in several of their markets, with MTN’s Mobile Money registered subscriber base growing 57,3 per cent to 14,8 million in 2013. C M Y K

BY BABAJIDE KOMOLAFE

oday is a critical moment for the Naira. Its fate, at least for the next two months, will be decided by eleven economic experts who meet regularly to review and take decisions on policies that influence money supply in the Nigerian economy. For the past three years or so, members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) have consistently decided to defend the naira. Though the main objective is to ensure stable prices of goods and services, by curtailing the rate of increase in these prices (known as inflation rate), they reasoned that since most of the things we consume in Nigeria are imported, it is critical that the amount of naira we spend to obtain a dollar (naira exchange rate) should be stable. The belief is that if the naira exchange rate is allowed to increase, the price at which we buy these imported goods will increase and thereby increase the inflation rate. But the amount of dollars available to the country, for transactions with other parts of the world (external reserves) has been declining steadily. From a peak of $48 billion last year....it dropped to $38.2 billion as at last week. If this trend continues, we may not have enough dollars to import and meet other foreign obligations. When a commodity is scarce or would soon become scarce, its price will definitely go up, and people will begin to horde the commodity either against future use, or to sell when the price goes up and hence make huge profit. That is already happening with respect to the dollar. Individuals and organisations are buying the dollars today for their future needs. Foreign exchange traders are also buying to sell when the price (the naira exchange rate) will be higher than what it is today. But the CBN has kept the price at which it sells the dollar (naira exchange rate) or official exchange rate stable at N155.74 per dollar for some time now, though the rate at the open market on the street is N170 per dollar, and the rate at which banks sell dollars among themselves

Forum: Managing Director & CEO, Citibank Nigeria Limited, Mr. Omar Hafeez; (right) Executive Director/Secretary to the Board, Centre for Petroleum Information, Mr. Victor Eromosele (Centre) and Board Member, Centre of Petroleum and Information, Dr. Arinze Agbim (Left) at the justconcluded Energy Finance Conference powered by Citibank in Lagos.

FCMB subsidiary commences operations in London

Naira: Critical moment for currency on life support

The only basis for a decision to continue to defend the naira and maintain official rate at present level is hope, nothing but hope that the price of crude oil will continue to be favourable

(interbank rate) is N164.. dollar. The decline in the nation’s external reserves is unprecedented. Since it recovered from the huge decline promoted by the global financial crises in 2008, the reserves have not gone below $38 billion. And without a sharp increase in the price of crude oil, which generates ...per cent of the nation foreign exchange revenue, or increase in volume of crude oil produced by the country (especially courtesy of drastic reduction in crude oil theft), inflow into the reserves will not be

enough to offset outflow, hence the reserves will continue to fall. Thus as the MPC meets today, its members would have to decide whether to continue to defend the naira, and maintain the current exchange rate or they will decided not to defend the naira by adjusting the official exchange rate upward in deference to the law of demand and supply. There is little or no consensus among economic operators on what should be the decision of the MPC members. Most people in the banking industry especially foreign exchange dealers, recommend that the MPC should allow the naira to depreciate (lose some value by raising the exchange rate). They argue that the focus now should be to protect the nation’s external reserves and not to protect the naira. “No Naira should be devalued," said a senior bank treasurer, who spoke on condition of anonymity. He believes that the MPC would raise the official rate to N165 per dollar from N155. A senior economic analyst with one of the banks, who does not want his name mentioned, also routed for depreciating the naira. He told Vanguard, “There is a balanced outlook between the current efforts to support the naira and keep depleting the reserves or to

preserve the reserves and move the midpoint to N160 per dollar plus/minus three per cent. The latter will allow naira exchange rate in the interbank to oscillate to N164. 8 per dollar. Interestingly, there is a resistance above N165 by the CBN, and also a resistance below N164 by the operators. Whichever is the case, the latter option will suit all parties. Although this could be seen as indirect devaluation, but it might not, if we consider that the 2014 Budget benchmark is N160.” According to Opeyemi Agbaje, Chief Executive Officer of RTC Consulting Limited, sensible policy will be some depreciation. There are however some experts who believe the MPC should maintain the policy of defending the naira. These include Victor Ogiemwonyin, Chief Executive of Partnership Investment Company, and Samuel Durojaiye, President Finance Houses Association of Nigeria (FHAN). “We cannot afford to devalue the Naira now, the negative fallout has too many unpredictable outcomes. I believe CBN will keep supporting the currency because it will cost us less than wholesale devaluation that will have no end. Though, our foreign reserves are below $37b now".

Vanguard, MONDAY, MARCH 24, 2014 — 23

C M Y K

24 — Vanguard, MONDAY, MARCH 24, 2014

Corporate Finance brokers, fund managers or in whatever capacity an operator operates . So I took some time to study the issue, after doing that, I then set up a committee that was chaired by our then Commissioner for Operations and had representations from the Chartered Institute of Stock Brokers, from the Owners of Association of Stock broking Houses of Nigeria (ASHON from the Nigerian Stock Exchange ,NSE and others. And they came up with a proposal. They completed their work at the end of 2012, we studied the work that they did, and we also had an international expert who was Deputy CEO of the Toronto Stock Exchange comment on that work. We reviewed it internally, and then made proposals on the basis of that work. Essentially, the issues are first we want our institutions in Nigeria to be as strong as institutions everywhere. As the market is evolving and we are building a world class, you are not going to be world class if you do not build institutions. You do not want people to come

By PETER EGWUATU & FAVOUR NNABUGWU

USTDA, Honeywell, sign $514,000 budget for gasbased complex BY VERA SAMUEL ANYAGAFU

nited States Trade and Development Agency (USTDA) and Nigerian Honeywell Group, have signed a budget worth $514,000 dollars for the construction of a gas-based industrial complex to be built in country. The grant signing ceremony officiated by US Deputy Chief of Mission Maria Brewer alongside Honeywell Group Head, Corporate Development and Investment, Dr. Teddy Ngu, is a part of the US efforts to promote economic development and employment across Nigeria. In his key note address, US Consul General, Jeffery Hawkins said that the US is ready and willing to offer support for Nigerian entrepreneurs and through the grant, Honeywell Group would be able to complete the feasibility study for the gas-based industrial complex project. “Our goals are to ensure that the US and Nigerian government remain in committed partnership that would bring about progressive bi-national relationship both in the trade and investment sector as well as other key sectors of the two countries economy”. Hawkins added.

Turkish assets fall as Twitter ban raises political tension urkish assets dropped on T Friday after Turkey ’s courts blocked access to Twitter, unnerving investors and raising uncertainty just days before local elections. The lira weakened to 2.2387 against the dollar by 0951 GMT, from 2.2371 late on Thursday. In the aftermath of the launch of a corruption probe, social media platforms in Turkey have been awash with alleged evidence of government wrongdoing in what Prime Minister Tayyip Erdogan has cast as a plot to unseat him before municipal polls on March 30. “It remains to be seen whether (the ruling) AK Party will benefit or suffer from the Twitter ban in the upcoming elections,” said Inan Demir, chief economist at Finansbank. C M Y K

he Director General, Securities and E x c h a n g e Commission, SEC, Ms. Arunma Oteh, who was a guest speaker at the recently concluded annual lecture of Women in Business in Lagos spoke on a lot of issues affecting the Nigerian capital market as well as issues affecting women’s investment in the capital market. Excerpts: Few years ago people lost a lot of money in the capital market. How have you been able to stabilize the market? I have been at this job for four years. First and foremost , please don’t go into something you are not familiar with, the financial literacy agenda is big. Second and more importantly is that as the apex regulator, we will not permit wrong doing in our markets; we will take the necessary steps to ensure that people who do the wrong things are brought to book. There were a lot of things that were done wrong in the past and that is a signal, so those who are in this market today know that you cannot do the wrong thing. Third is going back to the financial literacy agenda. It is to really make sure that people understand that investing particularly in the stock market is not something you do with money that you need to feed with tomorrow. It is what you do with savings that you are going to use in the future and therefore there will always be volatility in the markets, you will not feel as hurt as if you understood that this money is not money that we need immediately. The other thing is just to make sure that the market is deeper, that there are many more companies listed, that

SEC DG, Arunma Oteh

SEC won't permit wrong-doing in our market — Oteh there are other instruments other than equity, so the bond market is one of the things that we have supported. Why are there issues regarding the new minimum capital requirement? The SEC is very comprehensive when it does anything. Many of you may know that in 2007, I had not joined the commission but I read some of what journalists had written. The SEC had asked for capital requirement to be raised and that was foiled. When I

joined in 2010, as fallout of the global financial crisis, the SEC staff felt that we need to raise the capital requirement primarily because there were accusations of people selling customer shares without authorization, people holding on to the proceeds of sale and all kinds of accusations. So, my colleagues were like we need an immediate response. But because I was new, I wanted to study the issues; I also wanted the circumstance to be much easier for all of the market participants, whether

from outside Nigeria and take the benefits of what is happening in Nigeria because our own firms are not prepared. The NSE is getting advisers for demutualization. What role is SEC playing in this? On demutualization, we agree with you about the importance to Nigeria and that is why we started very early. If you remember in 2011, we set up an industry committee on demutualization chaired by Mr. Asue Ighodalo a well known corporate lawyer; they did an excellent work which they made a submission to us.

Lafarge WAPCO profit up by 30% to hit N27.7bn By PETER EGWUATU

afarge Cement WAPCO Nigeria Plc has recorded announced a Profit Before Tax (PBT) of N27.7billion for the year ended December 31, 2013. This represents a growth of 30 per cent when compared to N21.3 billion recorded for the corresponding period in 2012. Other performance indicators show that revenue increased by 12 per cent to N98.8billion for the year ended December 31, 2013 compared to N87.9billion for the year ended

December 31, 2012. Operating Income also increased to N31.6billion for the year ended December 31, 2013 compared to N26.7billion for the year ended December 31, 2012, thus representing an 18 per cent increase in the year under review. Profit After Tax (PAT) was N28.2billion for the year ended December 31, 2013 compared to N14.7billion for the corresponding period in 2012; a growth of 92 per cent in the period under review. Reduction in the Net Finance Cost from N5.5billion to N3.8billion was as

a result of the reduction in interest charges due to the full repayment of the Naira syndicated bank loans. Consequently the Basic Earnings per share grew from 490kobo to 942kobo; a growth of 92% in the year under review. Commenting on the results, the Chairman, Board of Directors, Chief Olusegun Osunkeye said “the results shows a steady growth and demonstrates the strength of the company in delivering value to shareholders and to other stakeholders.”

Vanguard, MONDAY, MARCH 24, 2014 — 25

C M Y K

C M Y K Company Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc 1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc Livestock/Animal Specialities Livestock Feeds Plc CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc Chellarams Plc John Holt Plc SCOA Nigeria Plc Transnational Corporation UACN Plc CONSTRUCTION/REAL ESTATE Building Construction/Structure ARBICO Plc Constain (WA) Plc CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc

Opening Price (N) 0.50

Daily Stock Market Report Closing Price (N) 0.50

Quantity Traded 5,000

Year High 0.50

Year Low 0.50

E.P.S.

P.E. Ratio

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

0.09

0.50 42.00 38.80

353 683 46,520

0.50 24.58 8.30

0.50 14.53 6.40

0.10 7.33 2.75

50.00 2.77 4.37

3.38

3.23

1,965,834

0.66

0.48

0.11

15.00

1.34 3.95 1.21 5.06 3.78 58.90

1.34 3.95 1.21 5.32 3.98 59.99

55,350 4,500 1,796 5 11,635,850 518,704

2.54 7.60 8.82 8.28 1.82 42.50

1.45 6.43 5.89 5.52 0.50 28.70

0.16 0.31 0.00 0.35 0.24 6.89

5.18 20.74 0.00 15.77 3.64 4.14

5.30 1.33

31,443 384,466

4 2,720,390.38

ICT Computer Based Systems Courteville Investment Plc Computers and Peripherals Omatek Ventures Plc IT Services NCR (Nig) Plc Tripple Gee and Company Plc Processing Systems Chams Plc

62.26 8.28

19.75

19.25

20,750

20.15

11.59

1.69

7.33

100.00 50.00

250 20

100.00 -

97.00 -

11.75 -

8.51 -

0.50

50,000

0.50

0.00

14.51 165.00 24.00 146.00 0.77

14.51 163.85 23.14 152.89 0.77

2,000 921,518 300,787 2,649,897 10,000

4.63 255.00 7.10 100.00 1.01

2.23 186.00 5.23 72.50 0.93

0.00 9.95 0.41 5.08 0.00

0.00 19.98 16.29 22.22 0.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

91.00

184,638

51.49

,39.00

2.69

13.92

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

Tools and Machinery Nigerian Ropes Plc

8.99 8.80 74.50 3.65 11.48 0.54

8.99 8.81 67.25 3.70 12.00 0.56

213,915 6,020,789 885,698 470,952 239,392 137,422

19.90 16.20 95.00 6.60 6.70 0.88

4.31 4.02 57.00 2.31 3.80 0.50

0.00 0.91 4.09 0.39 1.01 1.13

16.91 14.38 16.89 16.92 5.75 8.83

NATURAL RESOURCES Chemicals BOC Gases Plc

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

78.00 958.80

78.00 973.00

291,344 216,547

37.27 840.10

8.33 400.00

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

4.11 4.73

1.35 25.43

10.11 2.26

ICT Telecommunications Starcomms Plc

9,133 125,934

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

32.96 3.01

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

75.00 8.46

Real Estate Development UACN Property Development

75.00 8.46

5.30 1.27

Opening Price N Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

27.61 32.84

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

32.27 4.11 1.66

60 37,450 2,000

36.19 5.54 2.88

33.96 2.91 2.88

13.89 0.61 0.00

2.44 7.07 0.00

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

32.30 45.00

30.69 45.10

1,482,271 756,618

41.02 47.39

21.02 27.60

0.82 1.44

4.39 32.91

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

7.60 6.50 13.25 2.01 4.75 25.00 3.40 2.22 6.99 10.00 0.50 0.98 20.79

7.61 6.50 13.38 2.15 4.75 25.65 3.57 2.22 7.10 10.00 0.50 1.02 22.00

23,856,692 6,655,042 1,667,183 2,643,320 865,336 57,919,849 3,992,600 4,575,912 40,619,528 568,435 46,285 3,154,339 56,415,431

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

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

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

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

0.50 0.80 1.00 0.50 0.50 2.00 0.50 0.50 0.50 0.50 0.57 0.50 0.50 0.50 0.50 2.04 0.50 0.74 0.50 0.56 0.58 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.68

0.50 0.84 0.96 0.50 0.50 2.06 0.50 0.50 0.50 0.50 0.56 0.50 0.50 0.50 0.50 2.10 0.50 0.74 0.50 0.58 0.56 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.71

500,380 1,755,953 904,691 3,278,858 30,000 9,054,578 32,000 93,000 2,750 2,000 1,681,525 1,670,890 500 3,200 10,000 2,781,400 40,000 1,179,900 10,000 1,500,693 102,444 200 1,000 1,000 3,000 1,000 2,000 21,600 6,460,781

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

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

0.00 0.50 0.14 0.02 0.50 0.28 0.01 0.00 0.03 0.01 0.00 0.02 0.00 0.00 0.03 0.16 0.00 0.37 0.02 0.03 0.06 0.04 0.09 0.00 0.00 0.00 0.02 0.00 0.07

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

6.60 0.71

6.60 0.74

4,100 443,942

6.00 1.18

0.00 0.92

0.04 0.92

150.00 10.56

1.35 0.50 0.50 0.50

500 2,177,655 20 109,000

1.57 0.50 0.50 0.50

1.37 0.50 0.50 0.50

0.19 0.02 0.00 0.00

47.6 7 25.00 0.00 0.00

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

2.63 0.50 0.99 11.99 552.20 0.61

2.78 0.50 0.99 12.45 552.20 0.61

4,535,971 22,000 500 23,083,714 30,000

0.75 0.50 2.02 20.00 250 0.78

0.00 0.50 2.02 8.57 552.20 0.50

0.19 0.00 0.00 2.03 12.68 0.13

9.16 0.00 0.00 9.85 43.55 6.00

INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

Closing Price N

103.50 20.07 2.08

103.50 21.00 2.28

Quantity Traded

as at Friday, March 21, 2014 Year High

956,048 3,032,802

103.50 15.69 1.41

Year Low 103.50 10.64 0.03

E.P.S 10.56 0.87 0.21

P.E Ratio 9.71 18.03 6.71

1.91

2.23

785

10.54

9.52

0.00

0.50

387,550

0.50

0.00

3.72 2.22 2.83 70.00 1.85 1.60 7.36 1.57

3.72 2.22 2.81 70.00 1.94 1.60 7.36 1.57

30 49,814 1,084,416 23,641 278,777 34,200 2,000 354

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

0.19 0.44 2.62 0.20 0.09 0.00 0.00

0.71

118,000

0.52

0.50

0.10

10.00

88.50 0.00 3.07 9.05 14.13 0.00 0.00

0.50

2,600

0.50

0.00

12.50

15.99 1.97

16.83 2.07

5,098 360

9.31 3.59

3.25 3.25

0.00 0.01

1.43 0.00

0.50

511,000

50,000

0.50

4,000

1.47

0.50

0.00

14.23 9.01 45.00 8.75 228.51 0.50 1.41 112.50 4.41 1.90 10.00

14.00 8.56 45.00 9.15 228.00 0.50 1.28 109.10 4.19 1.90 11.00

1,042,447 183,627 6,466 119,870 777,318 11,600 7,016 104,382 595,377 10,000 123,564

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

1.63 2.70

3,081 2,717,101

6.91 3.60

5.94 1.47

0.5 0.25

7.85

8.69

1.55 2.74 7.46

8.26

0.00

6.66

1,000

9.20

6.80

Metals Aluminium Extrusion Ind Plc

10.50

12.39

10.70

0.13

85.77

Non-Metalic Mineral Mining Multiverse Plc

0.50

33,333,333

0.50

0.01

0.00

Paper/Forest Products Thomas Wyatt Nig. Plc

0.83

1.38

0.00

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

1.74 0.50

1.82 0.50

50,000 200

2.50 2.58

1.62 2.58

0.11 0.00

13.15 0.00

1.44

2,000

1.51

1.33

0.03

28.80

3.98 19.02 12.68 4.30 1.05 2.92 0.63

3.98 18.25 12.68 4.30 1.05 2.78 0.66

6,888 10,600 10 29,198 200 84,311 2,749,340

3.98 15.58 15.03 4.30 1.86 2.92 0.63

3.98 12.71 13.97 3.60 1.05 2.92 0.63

0.00 3.90 0.90 1.22 0.30 0.07 0.00

0.00 3.26 0.00 3.52 6.18 41.71 0.00

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

0.50

571,500

0.97

0.87

0.19

6.06

Intergrated Oil and Gas Services Oando Plc

14.56

16.04

2,132,125

78.97

27.99

1.73

4.17

20.50 0.50 51.90 93.86 124.86 54.44 148.00

20.50 0.50 51.90 93.86 124.86 54.44 153.00

82,191 2,000 16,356 111,325 47,385 100 94,935

37.10 0.70 5.59

0.50 0.50 3.89

4.93 0.00 0.61

7.40 0.00 6.99

163.50 2,100 240.00

141.00 63.86 195.50

6.11 2.98 14.63

11.11 19.23 17.07

Hospitality Tantalisers Plc

0.50

5,000

200

SERVICES Afromedia Plc Automobile/Auto Part Retailers RT Briscoe Plc

0.50

0.72

0.51

0.00

1.35

2,000

3.65

1.30

0.21

8.19

4.47

4.47 2.62

45,000 2.49

3.67 393,194

2.65 0.25

0.60 11.12

4.91

0.50

182,250

1.64

4.55 0.63

1,000 24,500

400 2.07

Mortgage Carriers, Brokers and Se Abbey Building Society Plc INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc

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

Courier/Freight/Delivery Red Star Express Plc Trans-National Employment Solutions C & I LEASING PLC Hotels/Lodging Capital Hotel Ikeja Hotel Plc

0.50 4.55 0.63

Media/Entertainment Daar Communications Plc

0.50

2,200

0.50

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

1.80 1.64 2.40 3.34

1.72 1.56 2.40 3.88

60,000 602,671 1,080 489,461

3.68 0.00 6.82

0.91

Road Transportation Associated Bus Company Plc

0.78

39.60 9.16

7.37

0.01

0.90 3.00 1.33

0.04

12.75

11.25

0.34 0.92

34.09 2.12

0.48

0.00

3.17 0.30 0.00 3.60

0.25

12.19

0.54

27.69

0.00

0.93

8,000

0.80

Speciality Interlinked Technologies Plc

4.90

1,995

5.15

4.90

0.50

0.00

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

2.93 4.73

2.93 4.96

15,785 735,889

2.78 11.75

1.57 6.50

0.60 12.53

4.22 8.75

26 â&#x20AC;&#x201D;Vanguard, MONDAY, MARCH 24, 2014

Capital Market

Vanguard, MONDAY, MARCH 24, 2014 — 27

Commodity index

Micro-Finance

Mar 14-Mar 20, 2014

A cross section of student of Education District 1, Agege, during the Institute of Chartered Accountants of Nigeria’s “Catch the Young” programme in Lagos.

Consumer right not observed in Nigeria —CPC Stories by PROVIDENCE OBUH

he Consumer Protection Council (CPC) has said that consumer’s right is not observed in the country. Head of CPC, Lagos Office, Mr. Tam Tamunokonbia, said this at the World Consumer Right Protection Day held in computer village with the theme: “Fix your phone right.” Tamunokonbia said, “Consumer right is not observed in Nigeria where there should be value for money on every product purchased or service rendered.” He said that the literacy level in the country is not encouraging, given that so many people who come to complain do not have e-mails. According to him, “Our activities are not limited to road shows alone but we do it once in a year. It is sensitization that drives the message more than enforcement, with enforcement you can scatter a place and in two weeks they are back, but if we sensitize the public and Nigerians are no more buying the product, you will see that they also will be out of the market, we believe in sensitization and not just road shows. “Our job depends on thorough investigation, people do not understand the role of the CPC, we are not for food and drugs, computers and phones, not just appliances, but services as well. “Government at all

levels and regulatory agencies should understand the role of CPC. We have come up with a bill of right for the consumer, for example, if your flight is delayed at the airport, at some point you are suppose to be given accommodation by the airline, if your flight

is delayed for one hour, you are suppose to be given snacks and drinks at the airport. “The law stipulates that CPC must enforce every law that protects the consumer, which is why we are working out a compendium for the aviation industry.

FG to set up council on public procurement

he Federal government has disclosed plans to set up National Council on Public Procurement (NCPP) to enhance best practices. Speaking during the Annual Conference/ Award Dinner of the Chartered Institute of Purchasing and Supply Management of Nigeria (CIPSMN) with theme: “Mainstreaming The Procurement Practice In Nigeria: Its Implication On The Transformation Agenda Of The Federal Government,” Senator Pius Ayim, said that the council will be inaugurated as soon as the militating barriers are removed. Ayim assured the institute that the g o v e r n m e n t acknowledges its comment, stating, “This is a sign that the institute is very proactive. Let me also assure you that Government is committed and on the same page with you on this subject and is working assiduously to resolve one or two issues militating against the inauguration of the council.

“Once the issues are resolved, I can assure you, the Council will be i n a u g u r a t e d immediately. This may come even sooner than you have envisaged. “Procurement is central to good governance and good governance will naturally lead to transformation, which is why government has continued to support the BPP in the discharge of their responsibilities. “Even though a lot of progress has been made in the ongoing procurement reforms, a lot of work still needs to be done. Government will not hesitate to invoke all the sanction provisions of the public procurement act 2007 against any public officer or contractor or consultant who contravenes any provisions of the law,” he said. To this end, he urged the institute to prevail on all its members involved in the public procurement process, saying that they conduct themselves with the highest sense of r e s p o n s i b i l i t y, accountability, ethics and integrity. C M Y K

28 — Vanguard, MONDAY, MARCH 24, 2014

Interview

What is your assessment of epayment in Nigeria presently? Our assessment is that it is something that has placed Nigeria where we have something to offer to the world. Especially in the area of corporate payment, I personally will be interested in entering into a competition with any country that has been able to achieve the kind of things we have been able to achieve here in Nigeria. I mean we have a very efficient platform now and it’s proven. Many other countries did not have the kind of problem that we have suffered from, and they were not as desperate to come up with solutions that we were forced to come up with. What is the connection between Remita and the cashless policy? Remitter is an e-payment platform and for quite a while now, we have been propagating the gospel that we believe to a large extent that we can minimise the use of cash but at some point in the future I believe the society can operate without the physical cash. With the kind of rate at which technology is moving, I easily see a day ahead when the society an easily operate without cash but at this point in time what Remitter does is promote payment electronically, paperless. For quite a while, we say each time you hand-write a cheque, just know that remitter could do the same for you. We can encourage people to stop handwriting cheque, use their mobile device or computer; they would have the same thing the cashless way. That is where Remita comes in. We want to reduce people’s need for handwriting cheque, we want to reduce the need to make payment using physical cash. I heard it said that an individual can decide not to write cheque, can you expatiate on that? As I said, our objective is that we do not want to see cash; we don’t want to see cheques. We believe these things can be done in an electronic manner both from a corporate perspective where you have joint signatories and from an individual perceptive. An individual can instead of writing cheques to his father or mother, send an electronic cheque to achieve the same thing. What we have on our screen is to make it look like the image of a physical cheque, just complete the necessary details as would have in handwriting a cheque. You achieve the same goal electronically, you monitor the transaction yourself even from a historical perspective. So even though you are an individual, you will be able to see all the cheques you have issued over the last ten years for instance. C M Y K

What’s more especially for individuals, is that they can give standing order payments. For their routine payment, they don’t have to keep writing a cheque all the time. You just have to write one and the system remembers at every recurring date of the mandate. So, yes individuals can use it hand-write a cheque normally or to issue standing order payments to clients. Remita has evolved over the last seven years; can you trace the challenges you have faced so far? The first challenge is that the original project that we intended to address in 2005 didn’t quite work out because the focus of the Pension Office then was different. But because we had developed what we knew was a very successful application, we then had to redirect the application to focus on payment. Thank God that has proved to be successful. Now we can do not just payment but we have been able to get on board to Pension Funds Administrators (PFAs) and part of the significant sums of money are paid today through Remita to the pension industry. So the first major challenge we had was that all our transactions were going through the switch and we had challenges because of the volume we were simultaneously trying to pass through the switch. This is because this switch was designed primarily to serve individual customers who want to do one transaction at a time. They maybe many but they do it one at a time as against where we started which was salary processing and you need to pay fifty to one hundred thousand people at once through the same file. So we were having quite some technology issues. That led us to start thinking of an alternative approach to the same problem and that’s how we ended up creating the non-switch model. This involved a lot of technology thinking and accounting knowledge to be able to arrive at that model. That’s one major challenge we had along the way. The second challenge we had was because of the way the non switch model worked. It has advantages and disadvantages. One advantage is ease of deployment. Any bank can come on board, and within one to two hours you can set up a new bank or microfinance bank, electronic purse or whatever. The disadvantage was that some banks having set up the application and it was working did not take it to our recommended next level which was a full system integration with their banking application to do a straight through process. Now that has taken awhile to resolve but happily as at today we have about twenty banks that have completed this straight through process which means that we will now have a far more efficient processing platform. Another challenge we had was that having brought in payroll and all that features that makes life easier for customers and because we tend to work with banks, they would have agreed some fixed amounts with customers and no matter what you come up with after that, they now expect you to reduce your own price to match whatever random number

Out next challeng cashless to paper —Systemspec CEO

John Obaro ...what Remitter does is promote payment electronically, paper you have promised whoever. Those are the challenges but we will continue to educate that for you to have premium platforms, you need to invest in technology financially. How were you able to convince Nigeria Interbank Settlement System (NIBSS) to the level that they now trust you and now want to replace

ohn Obaro is the Managing Director/Chief Executive, Systemspec Limited, an indigenous I.T firm that developed Remita, an information technology platform used by the banks, federal government and some states for epayment, e-collection and e-payroll. In this interview, during a conference on, Winning Big With E-Payment, organised by the company, Obaro spoke on the state of the e-payment industry in Nigeria and the role of Remita in future of the industry. Excerpts

One advantage is ease of deployment. Any bank can come on board, and within one to two hours you can set up a new bank or microfinance bank, electronic purse or whatever

all of their major software with Remita? I can say that any assignment we are given, we put our heads into it and make sure it succeeds. This is because the track record of Remita in the industry is gradually gaining traction. Initially people ignored us and didn’t think that we will succeed. But in time we have succeeded, especially when we had the federal government’s mandate in January, 2012. One of the reasons why the project succeeded was because those who did not want it to succeed were so carried away that it would not succeed and they just left us to sink but by God’s grace it has become a visible success to everybody. And because this has succeeded, it opened the door for more interests in what we are doing. And as you are aware, NIBSS has also had a change in leadership, a change in vision and they are equally interested in coming up with industry wide solutions that would add to the efficiency of not only the banking community but the economy as a whole. Having seen what we are doing, it became very easy for us to talk together and arrive at a partnership to creating a platform of leapfrogging in terms of efficiency both for the banks and the user community. Hopefully in the coming weeks, the market will be hearing more of what we are doing with NIBSS. How ready are you for the government, given the plans that it has for e-project this year to which you are connected with all of them?

Vanguard, MONDAY, MARCH 24, 2014 — 29

Interview

ge is to move from rless transactions O

rless

One thing that has distinguished us over the years is that you cannot associate us with any failed project. Having committed to any project, if we have to do it at a loss, we do it at a loss, because having committed to the project we put our neck into it until it is successful and in line with our regional mandate. One thing that God has blessed this company with is very intelligent and enthusiastic workforce which you would have seen in your interaction with them at various levels. That apart, we believe in the passion that we have in the organisation, that any assignment we are given, we will deliver. Even for Nigeria, our country, it’s a vision come true, being given the privilege to deliver those things. So by God’s grace we will not fail. Where we may have problem is if for some reasons some individuals try to frustrate this project. We have had two or three unpleasant situations in the past where because of the level of corruption in the country, some people deliberately do not want this type of project to succeed. Unfortunately we do not always have an answer to confront that, because we would rather work in the society than succumb to practices that destroy our 22 years investment in this technology. So to your question, if we are ready, yes, we are very ready and by God’s grace we will succeed. Which of the factors, ranging from opportunity, competence to political will, has most helped Remita to succeed in the past

Nobody gave us a chance for this project to get to where it was and there are a number of projects that foreign friends have moved into that failed and local friends have moved in and succeeded

opportunity and do not have the competence, you are bound to fail. So maybe I would put the two of them at the same place. Thank God we have the competence and platform, so when we had the opportunity it was very easy for us to deliver. Political will, unfortunately we don’t do too well because we are a technology firm, we enjoy technology and we have focused on technology to come up with excellent and usable technology. So while spending time to develop technology, I wouldn’t say we have enough time to develop what you would require as political will. So in that order I will say competence, opportunity and then political will. Being a wholly Nigerian product, what are your plans to take it outside the country to sell it to the world and has there been any competition from any foreign solution whatsoever? Like you rightly mentioned, the issue of opportunity comes in and I believe we must prepare to meet opportunity so that when the opportunity comes we would at least be able to recognize it. And that’s what we are trying to do, develop the product, now we are here, we are looking for the opportunity and one of the reasons we brought this to Ghana is to begin to psychologically prepare the people. Beyond the human managers, Remita too can move into other countries. Looking at the way Remita has been accepted, where it is going, I am very sure that many people may be having the concern that so much of the nation’s payment infrastructure is relying on this solution. They also might want to ask, even yourself, do you ever think that you are assuming so much responsibility in the country’s e-payment space? As far as we are concerned, the whole of Nigeria is still one customer. When we have covered maybe thirty to forty countries, maybe I would then be able to think about the question you raised. In other words, the Nigeria market, it’s a computer that’s running it, and we are not scared in any way

seven years? I am not sure I know the difference between opportunity and competence because you may have the competence and may not be given the opportunity. On the other hand, you may have the opportunity and may not deliver. Also, if you have the

John Obaro

of the volume and we believe that with what we have, we will be able to address the issues on ground. Part of our immediate dreams is how to move beyond the borders of Nigeria, so we are actually not scared by what we have on ground now. The other question of what people might say, I would say it’s about time we began to have confidence in ourselves and if a whole nation that can give their identity to another, we don’t have to do that. Many of the things that we have done in this country, we give it to foreigners, that question does not come out, why is it that when it is an indigenous company that we suddenly become aware that its one company. I think we need to move beyond that and develop confidence in ourselves as a people. Nobody gave us a chance for this project to get to where it was and there are a number of projects that foreign friends have moved into that failed and local friends have moved in and succeeded. So I believe that Systemspec will set that track record as a company that the nation can feel comfortable with. What was your real objective when you were designing this e-payment conference? The reason is that Remita has been proven to be a reliable solution, very easy to use, set up and operate on a continuous basis. Having established that it works through interaction with the customers, we want to really create the awareness for people to know, because there is no use having such a fantastic solution if the market is not aware of it. And to get to the market we believed that one of the factors would be to work through the banks who already have accounts of some of these customers and that is why we said let’s organize a programme like this, take the bankers to a place where they cannot be easily distracted and have their attention. This is so that together we can look at the solution, understand the product better, and they will take it to their customers. From all the discussions and the interaction and feedback, what would you say is your major take home from the banks? My major take home is a clear reconfirmation that there is a gap in the Nigerian market. We have a solution that clearly addresses the needs that we set out to resolve and we knew the enthusiasm on the part of the banks. So all and all, I am optimistic that the solution has met the market and now we will just move on to delivery. Is this particular event going to become a recurring decimal in the history of Remita? That is our dream. Periodically we should be able to meet with our principal partners and channels and understand the direction of the industry in case we are missing out on anything and continue to create optimal environment to support their own operations. Our target is to do everything we can, gather information from where can including the user community on how to continue to operate on our platform. We look forward to a yearly event.

C M Y K

30 — Vanguard, MONDAY, MARCH 24, 2014

Homes & Housing Finance

UK’s February mortgage lending leaps 43%

ross mortgage lending in the UK increased by 43 percent in the year to February, according to the latest data from banks and buildings societies, underlining the turnaround in the housing market over the past 12 months. Despite a seasonal dip, which saw lending drop 6 percent on January’s figure, the Council of Mortgage Lenders said its members had recorded their strongest February performance since 2008. A total of £15.2 billion was advanced over the month, down from £16.1 billion in January, but up on the £10.6 billion of the previous February. It is now a year since the chancellor announced the Help to Buy scheme in his 2013 budget, underpinning a pick-up in housing market activity which began with the launch of the government’s Funding for Lending scheme. Help to Buy, the first part of which was extended to offer loans on newbuild homes until 2020, has given buyers increased access to 95 percent mortgages, and helped first-time buyers to enter the market.

US mortgage rates near record low

verage US rates on fixed mortgages declined last week, edging closer to historically low levels. Mortgage buyer Freddie Mac said that the average rate for the 30-year loan fell to 4.32 percent from 4.37 percent recorded in the previous week. The average for the 15-year mortgage eased to 3.32 percent from 3.38 percent. Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion-a-month bond purchases, which have helped keep long-term interest rates low. Deeming the economy to be gaining strength, the Fed announced in December and January - and again last week - that it was reducing its monthly bond purchases. The Fed said after its latest two-day policy meeting that even after it raises short-term interest rates, the job market strengthens and inflation rises, the central bank expects its benchmark short-term rate to stay unusually low.

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Building collapse: Lagos tto o mak e make professionals accountable Stories by YINKA KOLAWOLE

agos State government is set to introduce new building regulations that will ensure that engineers and architects put their seal on their drawings and give letters of indemnity on buildings they handle. Under the regulations, aimed at stopping the scourge of collapsed buildings in the state, professionals would be held if buildings under their charge collapse. This was revealed by the General Manager, Lagos State Building Control Agency (LASBCA), Dr. K. A. Animashaun-Odunayo, at a stakeholders’ town hall meeting in Ikorodu aimed at ensuring a safer environment in the state. Participants at the meeting included officials of LASBCA, chairmen of Ikorodu local government and other Local Council Development Areas (LCDAs), executives of various artisans groups, block makers, and Community Development Associations. Animashaun-Odunayo said the rate at which buildings were falling in the state was regrettable, adding that government is concerned about the development. She noted that some of the incidents were caused by the use of sub-standard building materials, non-qualified artisans and “pseudo-

professionals” in the industry. “This stakeholders meeting has become imperative in the sense that rainy season is around and we normally witness collapse of buildings during this period, hence, the need to sentisise our people on what to do and what not

to do,” she said. According to her, it has become mandatory for builders to involve the agency from the beginning of construction to the end to ensure that required specifications were followed, and ensure its quality, adding that every stage of

•Development of affordable housing

FCT inaugurates committee on mass housing

he Federal Capital Territory (FCT) administration has inaugurated a 14-member White Paper committee to advise it on whether or not to continue with the mass housing scheme in the territory. The mass housing initiative was introduced in 2000 to facilitate provision of

affordable houses to meet the increasing housing demand occasioned by the population upsurge in the territory. But implementation challenges which confronted the initiative prompted the setting up of a Ministerial committee in October 2011 to examine the issues with a view to making appropriate recommendations for

Osun eases C-of-O issuance to attract investors

construction must be certified. She further stated that it has become mandatory that only registered artisans, such as plumbers, electricians, mason, and others are involved in building construction. Besides, she said contractors handling such project must provide insurance, not only for the building, but also for the workers, who may sustain injury.

sun State government has eased the process of issuing Certificates of Occupancy (C-of-O) to land owners with the aim of attracting investors to the state. Commissioner for Lands and Physical Planning, Mr. Muyiwa Ige, said the state government was ready to issue C-of-O to would-be investors in a day as part of its commitment to lure investors to come to the state. “Unlike before, we are now making it easier for people to get the Certificate of Occupancy on their land and the process has been simplified. The process has been simplified and we can even issue the Cof-O in one day, especially if the land is meant for investment,” he said. According to the commissioner, the administration is opening up a new Government Reservation Area at the back of the state secretariat, which will be called the Oranmiyan New Town. He said the new GRA would afford those who did

not dream of owning houses in good locations the opportunity to do so, adding that the area would be opened up very soon. Ige said that the ultimatum given to owners of empty plots of land at the GRA in Osogbo injected nothing less than N3.8 billion into the state’s economy. He said that the GRA had been fully allocated before Governor Rauf Aregbesola came into office but that the land was not developed by many allottees. He said a six-month ultimatum was issued to the land owners to either develop their plots or forfeit them to the government. According to him, many of the owners immediately started erecting structures on the land and about 215 houses sprang up. “We gave them six months to build and a few of them started building. About 215 houses were built following the ultimatum and N3.8 billion entered into the local economy,” he said.

improved service delivery in the sector. The committee submitted its report to the FCT administration for consideration and further action. It was on this basis that the 14-member committee was inaugurated to look examine the document and make recommendations with a view to giving the FCT Mass Housing Scheme the character it desires in conformity with the Abuja Master Plan. Inaugurating the committee, FCT Permanent Secretary, John Chukwu, said the move is aimed at revolutionising the Abuja mass housing sector. He said that part of the terms of reference of the committee is to critically examine the conclusions and recommendations of the ministerial committee, as it guided the provisions of mass housing development guidelines for FCT; guidelines for final engineering design of infrastructure for the Federal Capital City (FCC) and Satellite Towns; FCT development control manual as well as generate conclusions that will represent the position of the FCT Administration.

Vanguard, MONDAY, MARCH 24, 2014 — 31

Insurance Stories by ROSEMARY ONUOHA

amilies of police victims of the security situation in the country, particularly in the North, have not really felt the impact of loss of loved ones because insurance have been responsive to their plight. Commissioner for Insurance, Mr. Fola Daniel, who stated this, noted that the families have not really felt the impact because insurance claim settlement ability has significantly improved. Daniel said, “If you look at the Nigerian Police claims for 2012, as a result of the unfortunate incident that is on-going in the North-East of Nigeria, you could see that there has been an upsurge in claims by the police and the armed forces. Can you imagine if claims were not settled, the kind of security situation we would be having? People have lost their dear ones; they should not be made to suffer. They should not be made to cry again because they have shed all the tears. The insurance industry has been very responsive. “ “Also, the Dana crash was a very big claim. At a time, there were technical hiccups sufficient for some insurance entity to say we walk away from this business. Insurance practitioners are not just businessmen; they are nationalists, Nigerians, human beings. We sat together and we said, yes we know technicalities you can deploy to do this work, we have lost more people; the international community is looking at us, let us rise to the occasion and I am very

Businesstoday online holds maiden insurance awards

From left: Chairman Activities Committee, Chartered Insurance Institute of Nigeria, CIIN, Mr. Shakiru Oyefeso, Chairman of the Occasion, Hon. Lanre Laoshe and the CIIN President, Mr. Fatai Lawal during the 2014 Miss Insurance Dance recently organised by the CIIN.

Insurer e tto o victims of Insurerss responsiv responsive security incidents — NAICOM happy about what I am about to say: the claim has been dealt with satisfactorily. Those who have genuine reasons to disagree, we are able to persuade them and say please let us not deploy technicalities, we are not going to win the argument if they call for public opinion,” Daniel stated. Daniel said that all of the positive initiatives taking place in the insurance sector are meant to entrench consumers’ confidence, adding “We also recognise that even if insurance companies have all the cash, some people might still be

needed or might still need to keep some people out of old habits. And so, we said now that there is money, what do we do? We need to reinvigorate our claims to complaint bureau which is dedicated to take complaints from members of the public.” The insurance Commissioner said that the Nigerian Insurers Association, NIA, ombudsman the complaint bureau established by NAICOM are working well. With the no premium no cover mandate of NAICOM, Daniel said that insurance companies lost few

Stanbic IBTC Pension Managers raises awareness on service channels

tanbic IBTC Pension Managers Limited, has commenced an awareness campaign that will bring pension services to the doorsteps of existing and potential customers via multiple service channels. Apart from its offices dotted across the country, the PFA listed other service channels available to customers to include the website, mobile app, online chat, email, SMS Shortcode, mobile offices and Stanbic IBTC Bank ATMs. Others are the 24-hour multilingual call centre, Stanbic IBTC Bank branches and selected branches of Zenith Bank. Chief Executive of Stanbic

IBTC Pension Managers Limited, Dr. Demola Sogunle, in confirming kickoff of the campaign, which will run on radio, television, and press, described it as another way to deliver value to customers by providing more choices for them to interact with the PFA. “Our central objective in launching this awareness drive is to enhance convenience and accessibility by providing our customers with the choice to engage Stanbic IBTC Pension Managers the way they prefer. This is in line with our commitment to respond to the ever-changing preferences and needs of our customers

by deploying the appropriate tools and technology,” Sogunle stated Sogunle listed benefits accruable to customers from the initiative to include easy access, time saving, comfort, and professional assistance and customized pension solutions and building robust long-term relationships. The Stanbic IBTC Pension Managers mobile office, which was launched last year, has proven a revolutionary initiative, Dr Sogunle emphasized, as pension services are brought to the doorsteps of customers and prospective customers alike.

businesses though insignificant, but on balance, they had more money at their disposal. “Now that insurance companies’ have more money at their disposal, I can wield the big stick because if you go to the mortuary to flog dead bodies, you are dissipating energy, even God will be angry. Why should you do that to the dead? What I am saying is that if an insurance company is broke, if they do not have money at all, I am not required to cancel their licence from day one, I just look at the gaps, you have insolvency margin, liquidity squeeze; the law requires that I give them 60 days to make good that deficit. Can you imagine what damage would have been done to people who have suffered losses and then you wait for 60 days before they find more money? “ “In practice, those 60 days is not doable because there are other regulators that would be involved. So really, when you say 60 days, literally, you are talking of about five to six months. A lot of damage would have been done. We now have a situation where companies have enough cash and they can pay. It is no longer beating a dead body. If I knock at your door, you know that I know you have money and you will pay. That money you put in a fixed deposit, quickly you will terminate it so I don’t make a public show of you,” Daniel stated.

usinesstoday Online, a Nigerian Business news website has concluded plans to hold its maiden edition of Businesstoday Insurance award 2013. According to statement by the Publisher/editor Businesstoday Newsonline, Nkechi Naeche, the award which is going to be a yearly event will help to refocus the industry for better performance and enable the industry to be a leading voice in the financial sector in the country. She said that the award is aimed at recognizing insurance companies that have distinguished themselves in 2013 and have contributed immensely towards deepening of insurance in the country. She added that the award is in five categories which will be contested by underwriting and broking firms who believed they have done very well in these categories.

Florida man accused of defrauding more than 270

he Florida Department of Financial Services, Chief Financial Officer, Jeff Atwater announced the arrest of David Glincher, 47, of Weston on charges of theft, white collar crime and fraud for allegedly filing car insurance claims on behalf of consumers who were either unaware of the filings or never received claim payouts. The Department of Financial Services’ Division of Insurance Fraud worked alongside the Broward County State Attorney to reveal an elaborate scheme targeting more than 270 victims. “I am proud of our investigators’ work to stop this fraudster from taking advantage of any more Floridians,” said CFO Atwater. Insurance fraud drives up costs for all Floridians, and we will not allow it to continue.” Glincher allegedly sent letters to victims of traffic accidents and encouraged them to file claims through his company, Auto Loss Claims Consultants, LLC (ALCC). Regardless of whether the victim completed the claim form or discarded it, claims were still filed and funds were paid to ALCC by various insurance companies without the knowledge of the victims. C M Y K

32 — Vanguard, MONDAY, MARCH 24, 2014

The Inheritors (4):

Chief Adeyemi Lawson (1)

C M Y K

compete with the Bank of British West Africa (now First Bank) and Barclays Bank, D.C.O (now Union Bank). The promise, with which the victims were lured into their traps, was simple – they would extend credit to those who were denied facilities by the colonial banks. Virtually everybody lived to regret believing them. Today, off Herbert Macaulay Way, Ebute Meta, one building still carries the name Agbonmagbe Bank. It was the Titanic of all the banks that sank in the first sector wide failure in Nigeria’s banking history. It remains a monument to a war our fathers lost. The difference between Kolapo and late Chief

COBANK Transnational Incorporated has announced the departure of Group Chief Executive Officer, Mr Thiery Tanoh with effect from March 12, 2014..” PUNCH, March 12, 2014 p 29. The report by Oyetunji Abioye, also said that “SEC investigated the lender after do Rego [the Group Executive Director of Finance and Risk] told the SEC in August that Tanoh and former Chairman, Kolapo Lawson planned to sell assets below market value. Do Rego said she was pressured to write off debts owed by a business headed by Lawson and manipulate the bank’s results. Tanoh and Lawson have denied any wrongdoing,” Once upon a time, there was a successful and highly esteemed indigenous conglomerate called the Lawson Group of Companies headed by Chief Adeyemi Lawson, old boy of Ilesha Grammar School, Osun State, lawyer, former Lagos City Councillor, also known as the founder of the Grail Movement in Nigeria. Mr Kolapo Lawson, scion of the late Chief, unlike the Ojukwus, Dantatas and Abiolas, was brought into the family business quite early – leaving no doubt in anybody’s mind about who the successor to the helm would be. Kolapo, an old King’s College boy, Chartered Accountant and educated at the best institutions money could make possible, would have been voted as the Inheritor Most Likely To Succeed. Under him, the Lawson Group had disappeared into oblivion. By his removal, Kolapo Lawson has joined the ranks of Chairmen and Board members of banks — who were forced to step down under clouds of allegations regarding possible fraud or attempted mismanagement of bank funds. In that connection, he also joined his late father, who was one of the first indigenous promoters of banks – all but one of which were later liquidated. Late Chief Lawson’s bank was one of those which went under during that era of bank failures – mostly on account of directors engaging in insider trading, borrowing from their banks and not repaying the loans and asking Financial Directors to juggle the books to cover up the crimes until it was impossible to bury the truth anymore. My father, a tin miner in Jos, but with accounts in Lagos, was among the hundreds of thousands of Nigerians, especially Yorubas, who opened accounts with the socalled tiwa ni tiwa (this is our own) banks which tried to

To some extent, the ECOBANK debacle serves as a point of departure for this article on the Lawson Group – which, like all great establishments has failed to survive the first generation of founders (Edewor, Fajemirokun, Odutola, Ekene Dili Chukwu, etc)

and their banks lies in the fact that the ECOBANK Transnational has not gone belly up – at least not yet. But, the lamentation of the biggest shareholder, represented by one Mr Elias Masilela, speaking ‘bankese’, which is the official language of bankers when covering up the unpleasant truth, points to the possibility that Tandoh and Lawson had left ECOBANK in a bit of a mess. After all, nobody pressures the Chief Financial Officer of a firm to “manipulate results” if they were good to begin with. Only time will tell if ECOBANK will survive the shock. Otherwise, it will amount to two generations of Lawsons sinking two banks. To some extent, the ECOBANK debacle serves as a point of departure for this article on the Lawson Group – which, like all great establishments has failed to survive the first generation of founders (Edewor, Fajemirokun, Odutola, Ekene Dili Chukwu, etc). In all fairness to Kolapo, the Lawson Group of Companies, like some others we shall be touching upon, was already unraveling – even before his father handed him the baton. Some enterprises in the group of the companies, especially the beverages division (West African Breweries, North Brewery, Kano, Jos International Breweries, Sunrise Bottling Company, Ijebu-Ode and Associated Breweries, Agbara), were in a shambles and close to liquidation. Even the Agbara Estate conceived of originally as the largest residential/industrial estate in Africa, was heavily in debt and cash was being juggled, sometimes in off balance sheet deals, from one company to another to stave off creditors. Kolapo’s baptism of fire occurred when he was posted to the West African Breweries, Iponri, at a time when the three surviving brands – TOP lager, BARRON lager and VITAMALT were facing serious challenges. The Ipori Brewery was supposed to be the extension to the main brewery at Abeokuta. But, the Abeokuta brewery had closed down on account of one of the most costly mistakes an extremely brilliant entrepreneur, Chief Adeyemi Lawson, had ever made. And, before Chief knew it, the closure created collateral damage in other breweries, especially, North Brewery, Kano, which was making tons of money.

Vanguard, MONDAY, MARCH 24, 2014 — 33

Business & Economy

ANLCA BoT tasks Customs, agents on sincerity BY NAOMI UZOR

he Board of Trustees (BoT) of the Association of Nigerian Licensed Customs Agent (ANLCA) has urged the Nigeria Customs and clearing agents to be sincere and dedicated to their job. Speaking immediately after the first retreat of the ANLCA BoT, the Coordinator BoT and CEO, P yramid Quicker Group, Alhaji Taiwo Mustapha, said for there to be progress in the industry, all hands have to be on deck and that the Nigerian Customs and the clearing agents must be sincere, dedicated and avoid all forms of malpractices. “The president of ANLCA and the Controller General of Customs have been working wonderfully hard to make sure that things work well in the ports, but there are still bottlenecks. Every one

involved in this process has to be sincere and dedicated in the progress of the industry. Just because you are a member of ANLCA does not mean you have to get yourself involved in malpractices and think you can always call on the association to come to your rescue, or because you need

money, you take all sorts of jobs from importers and when you are caught, you start calling on the association or because you are a Custom officer, you leave the right thing that you are supposed to do and do the wrong thing, just because of your position as an officer” he said. He said the association will

not relent in issues that have to do with treating their members in a shady or unlawful manner, adding that, they will continue to fight for their right in areas where things needs to be done properly. Mustapha noted that the present ANLCA administration has

performed wonderfully well, especially with the new secretariat worth N120 million amongst others. “In my personal view, Shittu as ANLCA president has done very well. The new secretariat is going for N120 million and they have paid for N105 million, leaving a balance of N15 million to be paid.

NACCIMA calls on local manufacturers to improve packaging T

he Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has urged local manufacturers to improve on the packaging of their products in line with global standard. Mr. Billy Gillis-Harry, National Vice President of NACCIMA, made this call at the opening ceremony of the Nigerian Centenary Trade Fair organised by the Abuja Chamber of Commerce,

Industry, Mines and Agriculture (ABUCCIMA) in Abuja. Gillis-Harry said that if local manufacturers improved on their packaging, it would enhance their competitiveness both in the local and international markets. He also called on Nigerians to encourage the growth of local industries and entrepreneurs by patronising made-in-Nigeria goods and services.

He advised potential foreign investors to disregard exaggerated negative reports about Nigeria in foreign media and take advantage of the huge economic opportunities that abound in the country. “Nigeria is a great country; the potentials are high and the opportunities are enormous. Investors should come into Nigeria with the mindset to put in their best

and achieve optimum gains. The value chain for Nigeria is very high and returns on investment are guaranteed,” he said. Gillis-Harry emphasised that the country has the potential to be a world leader, but regretted that successive governments has failed to make it a reality. He, therefore, urged the country’s entrepreneurs to rise up and be “the people to lead this country to greatness since the ruling class is not doing enough.”

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34 — Vanguard, MONDAY, MARCH 24, 2014

Tax Matters

Tax System in Nigeria: Issues and Challenges BY ASUQUO, RICHARD GREGORY

fulfil all obligations” (Q5:1).

he Nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost. The recent reforms include the introduction of TIN, (unique Taxpayer ’s Identification Number which became effective since February 2008), automated tax system that facilities tracking of tax positions and issues by individual taxpayers, e-payment system which enhances smooth payment procedure and reduces the incidence of tax touts, enforcement scheme (Special Purpose Tax officers), these are special tax officers in collaboration with other security agencies to ensure strict compliance in payment of taxes. The tax authority now has autonomy to assess, collect and record tax. This enabling environment which came into being on the basis of (Section 8(q) of FIRS Establishment Act 2007) has led to an improvement in tax administration in the country. The Nigerian tax system has undergone significant changes in recent times. The tax laws are consistently being reviewed with the aim of repealing obsolete provisions and simplifying the main ones. Under current Nigerian law, taxation is enforced by the 3 tiers of government, i.e. federal, state, and local governments, with each having its sphere clearly spelt out in the Taxes and Levies (approved list for Collection) Decree, 1998. Despite this improvement, there are still a number of contentious issues that require urgent attention and among them is the issue of the appropriate tax authority to administer several taxes. The crisis between Lagos State and the federal government on the tax jurisdiction of VAT in the state is still a contentious issue that has been taken to the courts. Other states like Ogun, Oyo and Benue have joined Lagos state, while states like Abia, have gone against this. Also, there is the issue of multiple taxes administered by all the three tiers of government which sometimes imposes welfare cost. Furthermore, the issue of the paucity of a data base, which contributes to tax avoidance in the country. The issue of corruption is still a perennial issue in the country; this reduces the confidence and trust of the taxpayers in discharging their civic duty. The issue of infrastructural development is also a crucial issue, in Nigeria, the level of infrastructural facilities is in a deplorable state, most of the facilities are often privately sourced, thus a number of people wonder what the taxes collected are used for, hence the tendency to evade tax payment. Furthermore, the problem of the tax language that is legally codified makes it difficult for an average Nigerian to understand. Policy Recommendations *Disclosure and sharing of information C M Y K

*Ag FIRS Chairman, Mr Kabir Mashi

There is a need for mutual cooperation among different government agencies and parastatals, this collaboration should enhance exchange of information, and reduce the incidence of tax evasion as well as fraudulent tax practices. *Beneficial /welfare schemes. To elicit voluntary compliance, the government should be more responsive to the welfare needs of the citizens. The Nigerian tax system can effectively generate more revenue when the citizens have trust and confidence in the authority. Lagos state in recent times is generating huge revenue due to the fact that many corporate bodies and individuals feel that they can visibly feel the development impact of their contributions *Patriotism and positive tax culture There is a need to enhance a positive tax culture; this can be done through the re-branding efforts of the ministry of information. In most developed countries, tax payment is considered a moral and civic responsibility, thus tax avoidance is frowned upon. This implies that our leaders should demonstrate patriotism through leadership that is worthy of emulation by timely payment of their taxes and discharging other civic duties. *Religious education /responsibility: In Nigeria, most of the citizens are religious and faithful people. Thus, with religious provisions that explicitly support fulfilling religious obligations, tax payment could be enhanced. Therefore, tax education can be encouraged to be part of religious education among the adherents. Evoking religious injunctions could elicit more voluntary compliance and reduce tax evasion and avoidance. For instance, the Biblical saying of “Give unto Caesar, what is for Caesar and to God what is for God” is apt and relevant to the Christians while the Qur ’an calls on the Muslims thus: “O you who believe,

*Civic education Civic education was part of the educational curriculum in the early 1960s and 1970s; however, this was stopped in the mid-1980s and 90s. A reintroduction of this into the school curriculum would not only improve civic responsibility but also infuse a sense of patriotism and commitment to national ideals and interests. There should be vigorous enlightenment and public awareness about tax payment and its importance in the economy. *Hot lines There can be dedicated lines or emails, where issues, observations and queries can conveniently reach the authority; this will contribute to the reduction of tax fraud and avoidance. *Harmonization of taxes to reduce double/ multiple taxation on a single taxpayer There is a need to harmonize the different taxes that are being levied by the different tiers of government so as to reduce the negative impact on the taxpayer. A situation where an individual pays rates and licenses to local government, pays sales tax and personal income to the state government and at the same time pays VAT is not one that will encourage voluntary compliance. *Improving our record or database, to be able to track all potential taxpayers In Nigeria, an improvement in our tax revenue can be enhanced through a regularly updated, comprehensive database. This would enable the country to be able to track all potential taxpayers as well as to reduce incidences of tax avoidance. *Elongated tax operation (Twilight Shift) In order to maximize the revenue accruing from tax collection and especially to fulfil the principles of convenience and economy on the part of taxpayers, collectors of tax should be made to operate on shift throughout the day. *Tax laws should be codified in simple, non-technical language, if possible in the three major languages: Hausa, Ibo and Yoruba *Need for an effective judicial process to adjudicate on tax issue List of approved taxes and levies for the three tiers of government A list of approved taxes and levies for collection by the three tiers of government: (A) Taxes collectible by the Federal Government (1) Companies income tax; (2) Withholding tax on companies; (3) Petroleum Profit Tax;

(4) Value-added tax (VAT); (5) Education tax; (6) Capital gains tax - Abuja residents and corporate bodies; (7) Stamp duties involving a corporate entity; (8) Personal income tax in respect of: Armed forces personnel; Police personnel; Residents of Abuja FCT; External Affairs officers; and Non-residents. (B) Taxes/Levies Collectible by State Governments (1) Personal income tax: - Pay-As-You-Earn (PAYE); - Direct (self and government) assessment; - Withholding tax (individuals only); (2) Capital gains tax; (3) Stamp duties (instruments executed by individuals); (4) Pools betting, lotteries, gaming and casino taxes; (5) Road taxes; (6) Business premises registration and renewal levy; - urban areas (as defined by each state): *maximum of N 10,000 for registration and N5 ,000 for the renewal per annum - rural areas - registration N2,000 per annum - renewal N 1,000 per annum (7) Development levy (individuals only) not more than N100 per annum on all taxable individuals; (8) Naming of street registration fee in state capitals (9) Right of occupancy fees in state capitals; (10) Rates in markets where state finances are involved. (C) Taxes/Levies Collectible by Local Governments (1) Shops and kiosks rates; (2) Tenement rates; (3) On and off liquor licence; (4) Slaughter slab fees; (5) Marriage, birth and death registration fees; (6) Naming of street registration fee (excluding state capitals): (7) Right of occupancy fees (excluding state capitals); (8) Market/motor park fees (excluding market where state finance are involved); (9) Domestic animal licence; (10) Bicycle, truck, canoe, wheelbarrow and cart fees; (11) Cattle tax; (12) Merriment and road closure fees; (13) Radio/television (other than radio/ tv transmitter) licences and vehicle radio licence (to be imposed by the local government in which the car is registered); (14) Wrong parking charges; (15) Public convenience, sewage and refuse disposal fees; (16) Customary, burial ground and religious places permits; and (17) Signboard/advertisement permit.

Vanguard, MONDAY, MARCH 24, 2014 — 35

E-Commerce

Study reveals positive ratings, privacy concerns for digital advertising Stories BY JONAH NWOKPOKU

earch marketing firm Covario, recently issued its Global Paid Search Spend Analysis for the fourth quarter of 2013 and found that spending on payper-click ads by its own global technology, consumer electronics and retail clients rose 13 percent from the third quarter and 7 percent yearover year. Covario's analysis also indicated that the average cost-per-click increased 10 percent versus the same period one year ago. According to the report’s author, Alex Funk, director of global paid media strategy at Covario, “CPC pricing has been fluctuating over the past few quarters, something not surprising after the platform overhaul that Google AdWords went through at the midway point of 2013.” The study further revealed that search-based advertising is doing quite well despite the near-constant rate of change, but display advertising has also made a comeback and it’s quickly becoming bigger than ever. Nielsen’s quarterly evaluation of the global advertising market showed that Internet display

advertising grew by more than 32 per cent in the first three quarters of 2013. Overall advertising, in comparison, grew just 3.2 per cent across all media to hit $243.5 billion at the end of Q3 2013. Analysts explain that what these data illustrate is that despite the immense amount of activity and pace of development in the digital advertising space, there’s still a clear direction of progress on the part of enterprises that are apparently more than willing to keep spending to acquire awareness, new users and stay ahead of the competition. The study further revealed that privacy presents a genuine challenge for brands looking to understand as much as they can about their users and prospects. However, for advertisers, it showed an even more insidious threat which includes the waste and fraud that is caused by bots and rogue publishers. According to the data released by Solve Media, some 59 percent of agency media buyers surveyed see bot traffic negatively impacting campaign performance. The study indicates that

based on current levels of bot traffic, the global display advertising industry is expected to waste up to $11.6 billion in 2014 advertising to bots, a 22 per cent projected increase from 2013. However some analysts believe that while bot traffic is frightening from an ROI perspective it can be stopped. They argue that marketers and publishers are beginning to take necessary preventative action in response to billions of advertising dollars being wasted. It is therefore expected that in the year ahead there will be more

brand safety roles at agencies and brands alike. Data-driven security measures that ensure human audiences, like those that Solve Media provides free to publishers, are a key component to increasing effectiveness in the digital advertising market. The Interactive Advertising Bureau, IAB is also hoping to curtail what some perceive as rampant abuse of the ecosystem. The IAB’s Traffic of Good Intent Task Force released a best practices guide (Traffic Fraud: Reducing Risk to Exposure), which explains and analyzes robotic traffic and other forms of fraud that can derail campaigns by producing illegitimate impressions, skewing audience data.

Summit: Jamil Ampomah, Marketing Director, Sub-Saharan Africa of the Association of Certified and Chattered Accountants (ACCA) (left) and Head of ACCA Nigeria, Toyin Ademola at the ACCA annual summit in Lagos.

Alibaba invests over $200m in messaging app

hinese e-commerce giant, Alibaba Group Holding Ltd has invested $215 million in a new 280 million funding for the mobile messaging app-maker, Tango. Alibaba invested $215 million while the remainder of the funding came from Tango’s prior investors, which include Access Industries, Draper Fisher Jurvetson and Jerry Yang, a co-founder of Yahoo Inc, Tango said. The investment gives Alibaba a minority stake in a messaging service with 200 million registered users and 70 million active users. Tango claims significant traction in North America, the Middle East, Taiwan and Singapore. Alibaba, which views Chinese rival, Tencent as its most serious competitor, has long recognised the threat posed by Tencent Holding’s WeChat, a massively popular messaging app that has slowly morphed into an e-commerce platform.

Alibaba recently introduced a WeChat competitor called Laiwang, but the service has so far struggled to the extent that Alibaba founder, Jack Ma, according to various media reports, urged Alibaba’s entire workforce last year to recruit

new users. In an interview, Tango cofounder, Eric Setton said he believed his company, which offers games, multimedia sharing and other content, would eventually beat Whatsapp, which offers

purely text and voice communications. “The platform approach I believe is the winning strategy,” Setton said. “We’ve now seen it in a number of key markets, with Kakao in Korea or Line in Japan.”

Kaymu unveils new platform to boost performance

igeria’s online marketplace has unveiled an incentive-based platform that will enable its users earn money without selling any products. The platform which is called Seller Referral Scheme and Seller Pathway will also enable sellers to increase their overall performance and the marketplace to improve its overall traffic as well as quality. The Referral Scheme allows sellers to generate revenue by recommending the service driving high quality traffic to the platform. Existing sellers can take part by asking a potential seller to successfully list products on Kaymu. The Pathway Programme on the other hand, encourages vendors to improve their performance by helping to increase the number of orders, delivery times and ensuring all transactions are completed efficiently. Basically, it’s a reward system that promotes better, greater service overall. Sellers are

awarded bronze, silver, gold, and ultimately, platinum by going through some performance rating systems. Participants go through a step-by-step process in using the Pathway Programme where sellers have the opportunity to gain additional benefits. These include increased visibility on the website, competitor analysis, visibility on Facebook advertisements and newsletters. Kaymu’s Managing Director, Massimiliano Spalazzi, said he hoped the new systems would contribute to the greater Nigerian economy. He said, “Our seller referral scheme and pathway are two great programmes that will contribute towards Nigeria’s economy, employment and growth, by providing users with the opportunity to earn up to N50, 000. 00. We look forward to seeing the Kaymu community grow after the introduction of both programmes.”

StarTimes unveilsfree viewing bouquet As the country commences preparation for its digital switch over with Plateau State capital, Jos as the pilot in June, StarTimes has come up with a free viewing bouquet that would ensure that television viewers in the state are not cut off from their favourite analogue terrestrial channels. According to Irete Anetor, Public Relations Manager at NTA-Star TV Network, the free viewing bouquet is an initiative by StarTimes to ensure that Jos residents have access to television viewership after Nigeria Broadcasting Corporation (NBC) completes the process of the state’s digital switch-over in June. She said, “The bouquet allows subscribers’ access to 10 free channels for Life. As such, the free viewing bouquet would grant them access to their favourite analogue channels after the digital switch over,” he said. Although the free viewing bouquet is currently an offering for Jos, StarTimes would be making the bouquet available and applicable to additional cities chosen by NBC as Nigeria progresses in its digital switch over process. The free to air channels on the free viewing bouquet include NTA 24, NTA Jos, NTA Sports, PRTV, Silverbird, AIT, Channels, NTA Hausa, and ITV.

Appdeveloper releases newsbeat app A new smartphone app developed by Tribune Digital Ventures will read aloud a personalized “playlist” of news articles along with weather and traffic updates, as the media organisation looks for new ways to reach consumers. The free Newsbeat app released on Thursday is the first product developed by the year- old Tribune Digital Ventures group headed by former Yahoo Inc executive Shashi Seth. The app uses text-tospeech technology and recordings of humans reading news articles to produce a daily catalog of roughly 7,000 articles about everything from world news to sports. Similar to the way digital music streaming services such as Pandora Media Inc operate, C M Y K

36 — Vanguard, MONDAY, MARCH 24, 2014

Agric

Olam set to revolutionise rice production ... Cultivates 6,000 hectares, empowers communities

he management of Olam rice farm in Doma Local Council Area of Nasarawa State has disclosed that plans by the farm to cultivate 6000 hectares for commercial rice project will have a far reaching impact on the agriculture sector in the country. Speaking with journalists recently, the Farm Manager, Mr. Reji George said the 6000 hectares (hct) of land is a green field project embarked upon by Olam Farms. “We have been cultivating these areas, this would be the third farm cycle and by July, we would cultivate 4,600 hct. We intend to have full land development by 2015 in which we would have 6000hct of rice farmland fully cultivated through water irrigation, Speaking on the ban on rice importation, George explained that this may not be the right time to do it; “I believe it should be a gradual process, before you ban rice or any agricultural commodity, you must have to develop the local strength of rice production. “The Federal Government is doing a lot in transforming the sector, especially through

the GES programme. Other developed countries have achieved feat in rice production through such programmes and I believe if Nigeria continues like this, we should be self-sufficient in rice production in no time.” Reji George explained that the planned ban on rice importation can come later by the time commercial rice project of the company and others start yielding results. “Companies like Olam are into commercial production of rice with 6000hct in two cycles, that would definitely help bridge the demand and supply gap, and with support from other companies, in addition to the role government is playing, in a few years, we would be able to bridge the demand and supply gap and we would be able to be self- sufficient in rice production." He added that before going for the complete ban of rice, government should also put into consideration the amount of investment private investors are willing to put into local agriculture, more prominence should be given to this, so that the government can attract more private investors into the sector.

•Olam rice mill George disclosed that $70million have been expended on the company’s rice mill project, and they may expend more than that when the mill is fully functional, disclosing that the mill would be fully operational by June 1. He said the mill would be able to produce rice that can favourably compete with imported rice, adding that Nigeria has a huge market potential for rice, so getting market for the milled rice would not be a problem.

Olam rice farm boss hinted that more than 1000 people are employed on the farm on daily basis and more than 90 per cent of them are indigenes of the community. He said when the project is completed, they intend to mill 75,000mt of paddy rice and commission 3,000 outgrowers within and outside Nassarawa State to produce 20,000mt of paddy rice by next year. “By June 1, we will start milling with 105,000mt of paddy, and the mill has the capacity to mill 200,000mt of

paddy rice and this is one of the largest mills in Africa. By 2015, we would be cultivating 6000hct of paddy twice every year. “The tractors were operated by Malawians at first but now, we have trained the indigenes currently operating the machines, and we can fully say now that most of our manpower is sourced from within the local community." Meanwhile, indigenes of the community have commended Olam Farms for the impact it has made on the community through employment and empowerment. One of the natives willing to share the story of impact the company was making in their lives and community was Alhaji Kushunta Adi, the community leader of Ijiwo. He told our reporter at an interaction within the expansive farm: “Before the coming of Olam to our community, most people in this area were idle, which is not good, but today, the story is different. In fact, at that initial time, most of the excavators on the project were foreigners, but today, the company has employed many of our youths and this is helping many families here.” He said some of the youths were working as combined harvester mechanics, while others have found economic empowerment in the other areas of need in the farm. According to the community leader, what Olam is doing in their community is worthy of emulation by both the government at different levels and other companies which have operations in Nigeria.

Economy BY TONY NAVAH OKONMAH

he embattled CBN Governor, Mr Lamido Sanusi has never cut a popular figure in the socioeconomic/political environment of the nation’s polity. He has in the past pitted himself against unnecessary narcissist indulgences ranging from meddling in issues of national security regarding Boko Haram, to attacks on high profile and respectable Nigerian Christian leaders like Pastor Enoch Adeboye. As enraged as I was with his attack against Adeboye, I must put away sentiments and personal loyalty and my dislike for the CBN governor in considering a burning national issue of great international dimensions to our nation and its citizens. This is not about Sanusi, this is about an alleged missing $20b (twenty billion US dollars) from the nation’s C M Y K

Sanusi and the missing $20bn account. Information available from the parties to the issue stinks to high heavens and the Finance Minister and Coordinating Minister of the Economy, Mrs Ngozi Okonjo Iweala has demanded the whole truth about the matter. She is not the only one that wants the whole truth about the matter. All Nigerians want to know the whole truth about the matter and nothing must be swept under the carpet as usual. “The Ministry of Finance reconciliation showed a shortfall of $10.8bn in NNPC remittances to the federation account. After this, the conflicting claim continued with new figures such as $20bn being mentioned.” The other conflicting figures here I will presume, is Sanusi’s $20bn whistle blowing. It is interesting to note the reason given by the Minister for

Information and National Orientation, Mr Labaran Maku for Mr Sanusi’s suspension as governor of the CBN. In his statement in the Vanguard publication of 26 February, 2014 he said: “Mr Sanusi Lamido Sanusi made himself a whistle blower and a voodoo statistician feeding the country with unsubstantiated figures of missing funds." The two key statements from Maku’s tirade were whistle blower and voodoo statistician feeding the country with unsubstantiated figures of missing funds. Looking at Sanusi as a whistle blower, Mr Maku claimed that as the manager of the nation’s monetary policies who advised the president on monetary issues, Sanusi should not have made himself a whistle blower. Interestingly, Maku acknowledged that there had been a long standing issue

since 2012 regarding the CBN account which the tripartite involving the CBN governor, the president and the Financial Reporting Council of Nigeria (FRCN) had been looking into. Mr Maku was clever enough to deflate Mr Sanusi’s pin point of the exact account where the misappropriation occurred but failed to tell the nation the exact source of CBN’s account of 2012 that had issues with the audit of the FRCN. He did acknowledge that there had been communications between the CBN governor and the president since April 2013. Let’s assume that the greater part of the communications between the president and CBN governor was on how to resolve the missing funds from NNPC and the CBN governor was not getting the necessary cooperation from the president, and got increasingly frustrated on the next step

forward. It should be expected that the next option available to the CBN governor was certainly to seek a natural arbiter, and by all standards and rule of law, the place he could only seek a natural arbiter in a matter involving himself as the highest authority of his department and the president of the country is the nation’s Senate. In my opinion, Mr Sanusi was right to go to the Senate to report his concerns which he could not privately reach a resolution with the president. On his cap as a voodoo statistician, no one (including Maku) could dispute the fact that a certain amount of money was missing from the federation account, whether it was actually $20bn as Mr Sanusi claimed, or it was $10.8bn which Dr Ngozi Okonjo Iweala admitted was shortfall revealed her ministry's reconciliation of the NNPC remittances to the federation account.

Vanguard, MONDAY, MARCH 24, 2014 — 37

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38 — Vanguard, MONDAY, MARCH 24, 2014

Aviation

From left: Managing Partner of Norton Rose Fullbright Limited, Mr. Arun Velusani; Executive Director, FCMB Capital Markets Limited, Mr. Tolu Osinibi; former Minister of Power and now Managing Director of Geometric Power Limited, Professor Barth Nnaji, and Managing Director of Century Power Generation Limited, Mr. Chukwueloka Umeh, at the power investors summit held from March 20 to 21, 2014 in Lagos..

Nine airports now have wind shear alerts—Anuforom Stpries By LAWANI MIKAIRU

he Director General of the Nigerian Meteorological Agency , NIMET, Dr. Anthony Anuforom has said that no single Nigeria airport had wind shear alert system by 2006. The DG made this revelation while speaking with aviation reporters. It will be recalled that wind shear was fingered as cause of the two accidents involving Sosoliso and ADC aircraft on December 10, 2005 and October 29, 2006 respectively. Those accidents resulted in the death of hundreds of passengers and crew. “Wind shear refers to a change in wind speed or direction with height in the atmosphere. Wind shear can also be referred to as a rapid change in winds over a short horizontal distance experienced by aircraft, conditions that can cause a rapid change in lift, and thus the altitude of the aircraft. “ The NIMET DG however said airports have now been equipped with wind shear instruments to guide pilots, as according to him weather is a critical thing in the airspace when a pilot is airborne. “Since those accidents, and based on recommendations from the Accident Investigation and Prevention Bureau (AIPB), government swung into action to provide funding to equip more Nigerian airports with low level wind shear alert system. Prior to that ADC crash in 2006, there was no single wind shear alert system in any Nigerian airport. “The first wind shear alert C M Y K

system was installed at Abuja airport. It was also part of the safe tower project. Wind shear alert system is not a cheap technology. It costs quite some money to install one, and of course, we had budgetary constraints. But the news is that presently we have equipped nine airports in Nigeria with wind shear alert system." Anuforom also said the 10th wind shear alert system had been installed at the Margaret Ekpo International Airport, Calabar. “A critical thing in the airspace when a pilot is airborne is the weather. Have you noticed that what the pilot tells you all the time is about weather? He tells you that the en route weather is good; when he is approaching he will tell you the weather is good for landing or he tells you there are a few clouds so you expect some bumps. All that information is coming from NIMET. The procedure is that the information is passed through the air traffic controller. We generate the information and pass it to the Nigerian Airspace Management Agency (NAMA),” he said.

Arik Air operates 1st Nigerian registered plane to US

rik Air, has operated the first Nigerian registered commercial aircraft to the United States of America in two decades. Last Monday night, the airline operated its scheduled Lagos-New York flight using an A330-200 aircraft with registration 5N-JID. The feat by Arik Air is made more outstanding given that the operation of the flight was staffed by Nigerian crew. According to Arik Air Senior Vice President Operations/Deputy Managing Director, Captain Ado Sanusi, “the airline’s latest milestone was the result of almost three years preparation, during which time the airline received the Part 129 approval from the US Federal Aviation Administration (FAA) and was also awarded the Extended Range Twin Operations (ETOPS) approval.” Arik Air commenced direct flight operations from Lagos to New York in November 2009 using its foreign registered A340-500 aircraft operated by Hi-fly of Portugal and it was the first direct flight between Nigeria and the United States to be operated by a Nigerian airline in the last decade.

Vanguard, MONDAY, MARCH 24, 2014 — 39

Advertising, Media & Marketing

MTN Afrinolly breaks barriers in indigenous movie production

frican movie industry has over the years received world recognition for its growth and development. With its arrays of stars ranging from producers, directors to actors, actress, screen writers and other elements that complete the production process, many people now see prospect in the African movie industry. Today, African movies now serve as a means of entertainment and relaxation, as it contributes in no small measure to the alleviation of the stress and strain of our everyday life through its comic movies. Apart from entertainment and relaxation, African movies contribute significantly to other areas of human endeavour. However, it is sad to note that the contribution of African movies to the economic, social and most importantly, national stability in Africa, is unfortunately bedevilled by several challenges. These challenges have hampered the success of the creative ingenuity of the production process, ranging from producers, directors, actors/ actresses, script writers and editors among others. Piracy has been seen as a major bane facing the industry. Many people through piracy feed on the creative sweat of film makers without having any form of empathy. When a producer/ director puts out a selffunded, directing, professional recording and everything needed to get it to the point of release, many people feel no remorse for illegally pirating this creative content. The effort to stop piracy has been a constant battle in this part of the continent. Even though the general public may think of piracy as a victimless crime, this form of copyright infringement damages the creative professional’s ability to earn a living from his work and discourage productivity. South Africa, like other countries in Africa faces many challenges in the areas of copyright protection and enforcement, especially in combating movie piracy. According to the International Intellectual Property Alliance (“IIPA”), South Africa fails to reach the mandated levels of

copyright protection under the Agreement on Trade Related Aspects of Intellectual Property Rights (“TRIPS”) of the Uruguay Round of the General Agreement on Tariffs and Trade (“GAT T”), especially regarding enforcement. Many organisations have tried as much as they can in fighting against piracy, including the Nigerian Copyrights Commission and the Copyright Society of Nigerian (COSON). In other to fight against piracy and encourage film

LG introduces 2014 Hi-Fi systems to redefine sound technology BY PEACE ONYEUKWUA

ith the introduction of LG new Hi-Fi systems, consumers will be able to experience high audio -fidelity, clear and powerful sounds with plenty of innovative features that would afford users the liberty to control how they play and listen to their favorite music with no limits. X-BOOM Pro, CM9540 as well as ARX 10 was introduced into the Nigerian electronic market to redefine what a modern hi-fi system is. Whichever one a user opts for, he is bound to find a hi-fi designed to take his music experience to the next level. Speaking at the experiential roadshow at Ikeja City Mall, Mr. Jae Sang Lee, General Manager, Convergence Audio Division, said the LG X-BOOM Pro allows easy control and automation in mixing music sound effects such as flanger, phaser, chorus and delay while also creating beats with backspin, crossfade, and beatbox or using scratch and voice sampling. “X-BOOM Pro is innovatively fitted with stateof-the-art console for sizzling DJ skills, specifically designed for music lovers who are passionate about becoming Djs in their homes. It boasts of blazing features which enable users enjoy music with ideal blowout mood”. Also speaking in the same vein, the Managing Director of Fouani Nigeria Limited,

BY PETER EGWUATU

makers reap the reward for their creative sweat, leading ICT and telecommunications company in Africa, MTN Nigeria, came up with a digital initiative called MTN Afrinolly. The MTN Afrinolly is an online platform where film makers can make available their movies, trailers and short film and get royalties for their creative sweat. Since its launch, MTN Afrinolly has been able to appreciate African film makers and has constantly given them their royalties, thus, eliminating piracy.

X-BOOM Pro is innovatively fitted with state-of-theart console for sizzling DJ skills, specifically designed for music lovers who are passionate about becoming Djs in their homes

Mr. Mohammed Fouani disclosed that LG has decided to introduce a spectrum of its latest products by giving consumers the opportunity to interface with the products and that the X-BOOM Pro, CM9540 as well as ARX 10 was introduced into the Nigerian electronic market for maximum enjoyment of its teeming consumers, continuing he said that the XBOOM pro is expected to be a stepping stone for young musicians and passionate Djs who want to make a mark in the vibrant Nigeria music community. Mr. Fouani said, XBOOM CM9540 has an unprecedented sound output of PMPO: 29000w speakers which gives it a robust sound, while ARX 10 has a unique and blistering features which makes users enjoy music with authentic sound unlike the conventional home entertainment products which do not have DJ features, the LG XBOOM CM Pro music machine makes it easy for users to enjoy real party mood in their living rooms.

Competing for Talent the Wrong Way

oday, I write with pains in my heart. As result of the tragedy that the recent Nigeria Immigration Service (NIS) recruitment exercise became, I have decided to suspend the write-up planned for this week. First, I wish to express my heartfelt condolences to the families that lost their loved ones and sympathies to the injured. Sincerely, no job opportunity – no matter how juicy – is worth dying or being injured for. The facts The facts indicate that NIS needed to fill 4,556 vacancies. Significantly, over 700,000 Nigerians applied for those jobs and NIS charged each of them N1,000 (for God knows what). Because of the number of applicants and the need to conduct physical fitness tests, the NIS decided to use stadiums in major cities as recruitment centres. However, NIS obviously didn’t have a solid plan to receive the huge number of applicants as the agency was easily overwhelmed by the sheer number of candidates – a situation that resulted in unnecessary stampedes, deaths and injuries. I got the first inkling that something was wrong when one of the applicants told me that NIS had instructed applicants to report to recruitment venues as early as 7.00 am for physical exercise although the main test would commence at 4.00 pm. Instinctively, I wondered whether NIS would provide some refreshment for the applicants who would have been exhausted before the main test. But then, I remembered that customers (citizens, if you like) who go to NIS offices to obtain international passports rarely receive decent or courteous treatment in the hands of the agency’s officials. I also recalled that passengers on international flights often arrive at our airports as early as 5.30 am only to be greeted with insults from morose immigration officials. I instantly realised that poor jobseekers would receive worse treatment from NIS, an agency that thrives on rudeness, insensitivity and carelessness. The service angle How will this recruitment fiasco affect the image of NIS as an employer? No doubt, the recruitment snafu speaks volumes about the organisation’s competence in handling routine administrative issues. It also bespeaks the value NIS places on its employees, who expectedly place similar value on those they serve. Because of their modus operandi, organisations like NIS end up attracting desperate individuals with low self-esteem – which, again, have grave implications for the quality of service they deliver. After experiencing such a dehumanising recruitment exercise, successful applicants are not likely to become service champions soon. Pray, why should any respectable organisation turn a recruitment exercise into a money-making venture? Why didn’t NIS cut down the number of applicants invited for the exercise to a manageable size through proper short-listing? Why didn’t NIS carry out the exercise in phases? Does it make sense to take hundreds of thousands through this kind of ordeal just to hire 4,556? Thank God, the President has cancelled the charade. Lessons for all It is regrettable that because of the level of unemployment in the country, many employers now treat job-seekers like scum. They show no compunction about keeping job-seekers waiting for several hours. Some conduct recruitment tests in halls that even reptiles won’t accept. Such organisations need to understand that to attract great talent, they must become preferred employers. They must treat people decently. They need to woo job-seekers and hire the best ones among them, because people are the organisation. If the NIS recruitment tragedy helps us learn these lessons, it would have served one useful purpose. C M Y K

40 — Vanguard, MONDAY, MARCH 24, 2014

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

The sensible path to economic prosperity

his column has consistently maintained that the root cause of our economic paradox of increasing income, with unbridled unemployment rate, and deepening poverty will be found in the conscious and incorrect adoption of a faulty process for the infusion of our crude export dollar revenue into the economy. In order to facilitate readers’ understanding of our prescription, we will juxtapose the related consequences of the Current Payment Model (CPM) against the Advocated Payment Model (APM) in the distribution of $1bn export revenue, for example, to the three tiers of government! We will rely on the same eight step related scenarios adopted in an earlier article titled “ECONOMY AND RESERVES: BETWEEN THE TRUTH AND G O V E R N M E N T CL ARIFICATIONS” to explain the disenabling impact of the current payment model. Thus, Scene-1, CPM: CBN unilaterally determines naira exchange rate and unconstitutionally captures the distributable $1bn revenue and prints/creates (read as monetizes) N160bn as statutory allocations, which are domiciled in the commercial bank accounts of beneficiaries! Scene-1, APM: The $1bn is not substituted with N160bn; instead, beneficiaries receive dollar certificates for their respective portions of allocation, and the $1bn remains domiciled with the CBN, while naira exchange rate is determined by market demand and supply.

In the absence of the usual liberal spectre of surplus naira, banks become wary of over committing their naira balances to just foreign exchange purchases

Scene-2, CPM: The banks enjoy almost ten-fold leverage on the fresh naira inflow, with an enhanced credit capacity, which could suffocate the money market with excess spending power, and fuel inflation! Scene-2, APM: With strictly dollar allocations, the supply of naira in the system remains the same, and cannot therefore instigate the usual disenabling systemic spectre of surplus naira. Scene-3, CPM: In response to the threat of rising inflation, the CBN ‘altruistically’ steps in with treasury bills to borrow money it does not need at over 10 percent from the banks, to curb inflation. Despite the oppressive cost, the borrowed funds are simply kept idle! Scene-3, APM: In the absence of the usual naira surplus, CBN does not have to borrow money it does not need at over 10%; consequently, our increasingly oppressive debt burden would cease! Banks would have no choice but to

chase the real sector for business! Scene-4, CPM: In order to further prevent liberal access to excess cheap funds in the market, CBN increases its Monetary Policy Control Rate (MPR) to instigate the banks to increase their own lending rates, and thereby restrain the motivation for customers to borrow, in the light of existing crushing cost of funds! Consequently, interest rates, often above 20 percent, reduce the prospects of industrial growth and the creation of increasing job opportunities while irrepressible inflation and contracting consumer demand prevail nationwide. Scene-4, APM: In the absence of the usual excess naira and heavy government borrowing, CBN would reduce its Monetary Policy (control) Rate (MPR); commercial banks will consequently drop their interest rates across the board to single digit, so that businesses can access cheaper funds to finance new businesses as well as grow existing industries with increasing employment opportunities. Scene-5, CPM: Ministries and State Governments, who require imports, are constrained to buy back dollars from banks who are the prime beneficiaries of CBN dollar auctions. Ultimately, naira exchange rate comes

certificates for existing naira balances with banks; (since dollar certificates are not legal tender in Nigeria). The dollars, however, will remain domiciled with the CBN, irrespective of ultimate buyer! Scene-7, CPM: In order to reduce the gap between the black market and the official rates of exchange, CBN commits the unforced error of allocating dollars to Bureau de Change, who in turn funds the requirements of treasury looters and smugglers of contrabands, not minding the adverse impacts of such misguided dollar supply on the economy. Indeed, such monetary policy management must be far from international best practice! Scene-7, APM: In the absence of the usual liberal spectre of surplus naira, banks become wary of over committing their naira balances to just foreign exchange purchases. The black market for the dollar will rapidly contract, while the motivation for smuggling and money laundering will similarly be curtailed. Scene-8, CPM: Despite a gasping manufacturing sector and deepening poverty nationwide, the banks and other speculative foreign investors celebrate another bumper year!! Scene-8, APM: The absence of systemic excess naira will promote single digit and lower inflation rates with positive knock-on impact for increasing consumer demand, industrial consolidation and job opportunities. A stronger naira will drive down fuel prices and ultimately eliminate subsidies! SAVE THE NAIRA, SAVE NIGERIANS!!

under threat as increasingly surplus naira in the market chase the rationed dollars auctioned weekly by the CBN! The market dynamics of demand and supply consequently become unfavourably skewed against the naira, particularly more so, whenever CBN’s total monthly forex auction falls below the $1bn earlier unconstitutionally captured in Scene-1! Scene-5, APM: The three tiers of government own actual dollar values domiciled with the CBN; however, these government agencies can exchange for naira, all or portions of their dollar allocations from time to time, directly through commercial banks. Thus, the usual naira surge when CBN prints/ creates fresh naira balances for allocations of dollar revenue will cease; inevitably, the naira will become stronger against the dollar in the forex market! Scene-6, CPM: The less dollars sold by CBN, the larger are CBN’s reserves, but the weaker also will be the naira, as less and less dollars become pitched against excess naira in the market. The gap between official and black market naira rates consequently widens. Scene-6, APM: The usual biweekly CBN dollar auctions will also cease, as constitutional beneficiaries directly trade their dollar

Business & Economy

NOUN begins certification training on smartphone repairs BY EMMANUEL ELEBEKE

ackup Networks says it is collaborating with the National Open University, NOUN in certificated training programme to empower Nigerians to develop expertise in smartphone repairs. This is to be done through a newly created unit of the company PhoneDoctorService.Com. The Backup special unit is also meant to harvest technology solutions to meet the needs of mobile device users in different organizations. PhoneDoctorService.com is a special unit of Backup C M Y K

Networks Limited designed to aid in providing all sorts of professional training for Nigerian youths on smartphone repairs. Speaking on the initiative, the Chief Executive Officer, Backup Networks Limited, M r. Monday Ogbe, explained that the partnership was aimed at empowering Nigerians to leverage the over 400 million smartphone business boom in the country for worthy employment. Ogbe said PhoneDoctorService.Com would help in curbing the growing rate of unemployment in Nigeria, by providing a platform for unemployed and other interested Nigerians to undergo a week-training after which, they would be provided with the tools that enable them to handle any repair works on

any kind of Smartphone. ”Currently, there are over 400 million smartphone devices within Nigeria cutting across all major manufacturers and this number is increasing on a daily basis, as there are newer manufacturers coming in and one of the biggest challenges to the manufacturers is how to cope with the increasing demand for after-sales services to their customers. This is where we believe a huge opportunity lies for Nigerians,” he said. On the training module, Ogbe, stated that the training is open to both literate and non literate persons regardless of discipline. “During the training, trainees will acquire knowledge in troubleshooting and repair of various

disassembly and assembly smartphones,” he added.

smartphone faults such as broken screens, faulty charging ports and others;

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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