AUGUST 26 ,
2013
FG orders shutdown of ports facilities with security challenges ...As US Coast Guards arrive Nigeria BY GODWIN ORITSE
T
HE Federal Government has ordered that any port and terminal facility across the country having security deficiencies be shut down following the arrival of officials of the United States Coast Guards in Nigeria to carry out security audit exercise on Nigerian ports Vanguard learnt. Disclosing this fact to Vanguard the Senior Special Assistant to the President on Maritime Mr. Leke Oyewole said that any terminal or port facility that is found to have security deficiencies will be short before the arrival of the US Coast Guard officials who will begin their inspection exercise on Tuesday.The officials of the US Coast Guards will arrive Nigeria today to carry out an audit exercise of the security deficiencies observed in some ports and terminal facilities to determine their compliance level with International Ship and Port Facility Security (ISPS) Code, Operators of such facilities were seen over the week end putting last minutes measures in place to avoid sanction. The U. S Coast Guard had observed on their first visit that Nigeria port facilities fall short of compliance with the International Ship and Port Facility Security (ISPS) Code hence a second verification exercise to test compliance level. Already, the Nigerian Maritime Administration and Safety Agency (NIMASA), which was appointed as the Designated Authority to midwife the implementation of the ISPS Code, has been collaborating with various stakeholders in the Nigerian maritime industry to ensure that there are no deficiencies in their facilities. It will be recalled that the United States Government, about three months ago threatened to withdraw shipping services to Nigeria, if some of the security deficiencies observed
MOVEMENT IN NIGERIA’S FOREIGN RESERVES
NIMASA to ensure compliance, industry operators have also expressed concern over Nigeria’s preparedness to meet the ninety days ultimatum saying that the consequences of failing to comply will be very grave. Speaking at the end of its monthly meeting, some members of the Port Facility Security Officers (PFSO) Forum had said that vessels will now sail to neighbouring ports and Nigeria importers will be forced to take delivery of their cargoes from these ports. The officers who spoke on conditions of anonymity also said that non compliance with the Code will not only lead to loss of revenue to government, it will also lead to the loss of jobs at the various port facilities in the country. Addressing the media last week, the Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA) Mr. Ziakede Akpobolokemi said that the agency encountered some challenges when Continues on page 22
113.00
-0.20
2,426.00
+6.00
16.44
+0.16
109.92
-0.23
104.65
-0.46
CURRENCY BUYING CENTRAL
in some facilities are not corrected within ninety days. The United States had said it will stop vessels that call at ports and terminals with
deficiencies in Nigeria from entering America territorial waters adding that it will encourage its allied countries to do same. Besides the moves by
DOLLAR STERLING EURO FRANC YEN CFA WAUA RENMINBI RIYAL KRONA SDR
154.76 240.7447 206.682 167.2358 1.5876 0.2953 234.2687 25.2784 41.2649 27.7104 235.9007
155.26 241.5225 207.3497 167.7761 1.5927 0.3053 235.0256 25.3605 41.3983 27.8 236.0573
SELLING 155.76 242.3003 208.0175 169.4148 168.3164 0.3153 235.7825 25.4427 41.5316 27.8895 236.8175
CBN Exchange rate as at 23/08/2013 C M Y K
22 — Vanguard, MONDAY, AUGUST 26, 2013
Cover Story
The Basic Guide to Starting your Business -Part 2
FG orders shutdown of ports facilities with security challenges Continued from page 21 it took over the implementation of the Code some of which include the expiration of all Statement of Compliance for Port Facility (a document that verifies how prepared a facility is to absolve security threat or challenges). According to Akpobolokemi, the agency has taken up the challenge of Designated Authority with a view to ensuring that the country does not suffer the embarrassment of such sanctions as contained in the report. The NIMASA boss however disclosed that in a bid to correct the deficiencies observed in some facilities, an action plan was developed and immediately activated to aggressively close the reported gaps. He explained that some of the efforts employed to close the gaps
been commended by officials of the United States Coast Guard adding that it also pledged to support the effort of NIMASA His words “The action plan has been given a nod by the USCG and it has pledged to support the efforts of the DA in ensuring the issues raised are remedied. “The DA has outlined its implementation frame work in the form of a handbook to enable the public understand its agenda with respect to the new implementation regime. The Management of NIMASA has since approved an ISPS Code implementation Committee to help oversee the implementation mandate”. Aside from key NIMASA personnel who form part of the Committee, membership of the Committee are also drawn from other government agencies such as the Nigerian Ports Authority (NPA), the
This audit Akpobolokemi said will help the agency capture and catalogue all port and berthing facilities as well as verify their ISPS compliance status. All port facilities including those mentioned in the U S diplomatic note to Nigeria are also currently undergoing security assessments as a step towards preparing plans that are ISPS compliant
,
,
includes the dispatch of competent “Recognised Security Organisation” to conduct security surveys and assessment aimed at identifying and correcting these deficiencies and any other observed vulnerabilities. The action plan according to Akpobolokemi has also C M Y K
Nigerian National Petroleum Corporation (NNPC), the Nigerian Police, State Security Service (SSS), the Customs and Immigration. On the funding of the ISPS Code project, Akpobolokemi said that the agency will not require any subvention from government as maritime
regulating body can take care of the financial needs of implementing the Code in Nigeria. It was also said that in order to establish the number, location and nature of operations of all port facilities in the country, NIMASA has also commissioned a stocktaking of the nation’s coastal maritime assets. This audit Akpobolokemi said will help the agency capture and catalogue all port and berthing facilities as well as verify their ISPS compliance status. All port facilities including those mentioned in the U S diplomatic note to Nigeria are also currently undergoing security assessments as a step towards preparing plans that are ISPS compliant. The agency, Vanguard gathered only recently concluded Verification Inspection Exercise (VIE) on all shore based port facilities in Nigeria. In order to address the issue of relevance and application due to the lack of understanding of the ISPS Code exhibited by security personnel that man these port facilities, NIMASA has also put measures in place to ensure more training and capacity building for security personnel and operators in the maritime industry. NIMASA’s DirectorGeneral, further disclosed that security companies providing guard force personnel to companies operating in the maritime are now required to provide ISPS training for their personnel adding that everybody has a role to play in the ISPS theatre. The agency also stated that Continues on page 23
b) The mentality of a businessman: There’s a saying in the good book which reads thus “by their fruits you shall know them”. The same applies to businessmen; they possess certain qualities and mindsets that make them stand out. Consequently, before you start a business, you need to be adequately sure that you possess the die-hard mentality of an entrepreneur to withstand the challenges that will arise. c) Who is an entrepreneur? Over time various definitions have been given to the term, but I will be teaching you the difference between an entrepreneur and a businessman, the boundless and countless opportunities open to an entrepreneur, the traits and characteristics of a successful entrepreneur. In short, everything you need to know if you want to be not just a businessman but also an entrepreneur. d) Your readiness to be your own boss: A lot of people embark on a journey without fully preparing for it, and as such, they are knocked off balance by the slightest wind that blows. No warrior goes to war without his arms and it’s only a stupid farmer that goes to farm without his hoe. At the end of this topic, you would know if you are ready to start a business and peradventure you are not, you would be taught steps that will help you to be both mentally and financially ready.
,
From Left; Comrade Ayodele Akele, Mordinator / Chairman Gani Fawehinmi Memorial Organisation, Dr Sam Amadi, Chairman / Chief Executive Officer Nigerian Electricity Regulatory Commission, [NERC], and Comrade Adewale Adeoye, Coordinator South West Human right Community/ Director Journalists for Democratic Right [JODER], During the Interactive Session Between Nigerian Electricity Regulatory Commission, [NERC], Human Right Group in Nigeria, Theme' Public Forum on Transparency Growth and the Energy Sector, Held on Friday 23-8-2013, At Femi Falana Chambers, Fajuyi Way, Ikeja G.R.A, Lagos. PHOTO; Kehinde Gbadamosi
a) What is not business? One might wonder the importance of knowing what is not business, but this is necessary because you need to know the kind of business you should not go into, and businesses that are prohibited by law. Not every business is a genuine one and I will be taking you through a list of businesses you must not be found doing.
e) The basic steps: In this chapter, I will be taking you through the steps that you cannot overlook, if you want to have a successful business.
An organisation that provides goods and services to people who want or need them
,
These include: conceiving an idea, planning, funding, structuring, location, training and so much more. I am of the sincere opinion that this would be more than just a book for you and your loved ones; it will be a compass that will guide you on your journey into the world of entrepreneurs. There is no better time to start your own business than now. These same steps have worked for me and I dare say are still working for me, and I am confident they will work for you and everyone that reads this book. WHAT IS BUSINESS? Before you start a business, it is very important to understand what a business is in order to avoid making mistakes that can be very detrimental. The term business is very broad and can be vague; for some it is any activity or trade with the sole aim of making profits. On the one hand, it can be said to be the occupation, work or trade in which a person is engaged in. On the other hand, a business can be defined as “an organisation that provides goods and services to people who want or need them”. When many people think of business careers, they often think of jobs in large wealthy corporations, but for the entrepreneur, a business is any activity aimed at creating and keeping customers. There are basically two ways to carry out a business: 1. Sell goods (physical things like books, toys, cars, houses, etc). 2. Sell services (intangible things like nursery education, legal services, health care, insurance, etc). Many business-related careers though, exist in small businesses, non-profit organisations, government agencies, and educational settings. Conversely, your business may consist of selling both goods and services; for example if you are a computer dealer, you may sell goods (hardware and software) and services (maintenance, troubleshooting, or consulting). While it is very important to get a degree or some level of academic qualification, you can still go into business if you do not have one. Starting and growing your business is very much like having a baby and bringing up the child.
Vanguard, MONDAY, AUGUST 26, 2013 — 23
This week, we give readers opportunity to express their views on issues raised in this column. Here are a few of such views.
S
tan wrote in and said; “We cannot wait for 2015 to come after which the GEJ government will be extensively x-rayed. How can GEJ’s government give a waiver to Coscharis Motors to import over 180 BMW cars to be used for African First Ladies' conference? These vehicles were only used for three days - from hotel to International Conference Centre. GEJ’s inefficiency is killing Nigerian economy. Ngozi is telling Nigerians lies. We cannot she stood for earlier. She than the people but you cannot continue like this. EVIL IS preached against arbitrary be wiser than their God, who EVIL.” waivers of duty and she is will judge every secret and doing same now plus some open deed. Bukola Ajisola on her part other things.” On the same issue, Azeez said; “This is the height of Bashwaziri wrote and said; Rahamon, a youth corps criminal absurdity. Before we “Who is fooling who? A very member said; “A very good start drinking our oil as Simon good question for foolish thought. Unless we try and Kolawole recently diehard Nigerians." solve our problems locally and prognosticated, every well desist from photocopying meaning Nigerian must voice foreign policies, that is when On the issue of “Look out and question the propriety inward for solution to Nigeria can feel the impact of of Okonjo Iweala’s poverty in Nigeria” any economic transformation supervision of arbitrariness, Ed James said; “Your giving rise to monumental Excellency, please with all due economic loss to the nation. respect to you Mr. President, She should resign and leave is it not better to say the truth the position for another PDP that is in the heart than the “thieftain” to complete the one in your mouth? Those who cycle of kleptomaniac speak from their hearts say appropriation of the Nigerian nothing but the truth, commonwealth in the guise of therefore, “how can poverty be family affair. Nigerians are eradicated or tackled when wiser now, the 2015 voters are ALL the wealth of the nation not going to the polls with are in banks overseas? The gullible and ethnic parochial man who keeps the CASH mindset, which has left them always appears healthier than impoverished." the one who gave him the fund to save. How long will it take Chioma Bukola Ajisola for African leaders to realise aimed at developing the said; “So, it is NOI that is your that they are not leading country and not for the sake problem now? Why can’t we uninformed people. Therefore, of stealing public funds.” be just objective in our it is better for them to stop all Mr. President, where analysis of issues and the hypocrisy now. You knew situations?” too well that the leaders in is Nigeria's Industrial African nations are stronger policy? Umutakere Chioma said; than the judiciary, (laws), they “In your own objective make laws that subdue the Rohlit’s comment said; “It assessment, do you think NOI people under their powers and is no where and we see it.” is doing a great job as she did pretend it is for the betterment during Obj's era? She is doing of the people. Ashuke Njideka said; “I love exactly the opposite of what Remember you may be wiser your write-up. You are a true
On Okonjo-Iweala or Jonathan, who is fooling Nigerians? Nigerian. May God continue to bless you.” Heaven shall judge said; “Wise write-up. God bless you. It's time Nigerians understood industrial policy and stop depending on imported items. Those in Aso Villa need to change and implement policies that will help Nigerians grow and jobs will be created for the poor ones.”
,
The best way to remedy this crass injustice is to return to true federalism and have all territories be in full control of their resources, paying an agreed percentage of their revenues to the centre
,
Ken said; “WOW! I am highly impressed by the wirteup; this is actually the challenge Nigeria as a country is facing. Ministry of National Planning should take note as policies that have to do with Nigeria's development should not be personalised by a few but rather a platform with clear aims and objectives. God Bless
Nigeria”
On the “The Structure of Nigeria” Osagix said; “Vanguard, your illustration picture is discriminating. Why was Anthony Enahoro not included in the picture?” Sarginho said; “The most shortchanged region in the old federal arrangement is the Mid-West Region, which now has only two states (Delta and Edo). Second most shortchanged is the Western Region which now has six states (Lagos, Ogun, Oyo, Osun, Ondo and Ekiti). The old Eastern Region now has nine states (Anambra, Abia, Ebonyi, Enugu, Imo, Akwa Ibom, Bayelsa, Cross River and Rivers). The old Northern Region has gained the most from arbitrary state creation by the military, grossing 19 states and the FCT of Abuja. When we bring in the number of local governments created, the injustice becomes even more glaring (compare the 44 local governments in Kano State with the nine recognised in Lagos State which has more population than Kano State). The best way to remedy this crass injustice is to return to true federalism and have all territories be in full control of their resources, paying an agreed percentage of their revenues to the centre for use by the Federal Government on agreed federal functions."
Cover
FG orders shutdown of ports facilities with security challenges Continued from page 22 it was its responsibility to set or change security levels for port facilities just as it decided to work closely with the office of the National Security Adviser and other security agencies in determining operating security levels based on the evaluation of risks and trends. Akpobolokemi stated that incentives will be given to port facilities that maintain and sustain their compliance over a period of time just as sanctioned will be meted out to facilities that fall short of expectation. Speaking to Vanguard on both the expectation of the Designated Authority (NIMASA) and the U.S Coast
Guard, a security expert Dr. Ona Ekhomu said that NIMASA has adequate time to have prepared itself in ensuring that the observed deficiencies are corrected before the arrival of their guests. He however opined that he will be surprised if Nigeria as a country and the deficient port facilities fail to pass the audit adding that it was very important that the U. S Coast Guard gives Nigeria a clean report. Ekhomu explained that beyond passing the audit test, sustainability of the entire security system in the port is what NIMASA should be considering at this moment. He advised that the only way to sustain the system, is for the facilities to regularly carry out
a self audit of themselves while NIMASA ensure regular verification and monitoring exercise of these facilities. “Sustainability will be an issue because passing this audit exercise is not enough, the tempo should be sustained for as long as possible such that with or without the presence of the U. S Coast Guard our security situation must not fall below certain standard. “The best way to sustain the tempo is to periodically carry out a self audit or a penetration test on your facility ”. He explained that should Nigeria fail the test, then doing business in the nation’s ports will be more difficult and
expensive. A former official of the defunct Presidential Committee on the Implementation of Maritime Security and SAFETY )PICOMSS) Capt Abel Memuduaghan observed that the issue of access control to some of these port facilities is a major problem adding that more measures are needed to be taken to control both human and vehicular movement in and out of these facilities. The ex- PICOMSS official noted that NIMASA does not have the capacity to implement the ISPS Code adding the U. S Coast Guard knows what they are looking for. He said that since PICOMSS was wound up,
there has been an increase in the issue of oil theft noting that when PICOMSS was in charge of the ISPS Code implementation the rate of oil theft was manageable. Speaking in similar vein, Chief Chris Orode noted that after the first visit of the U S Coast Guard officials, there was a down turn in cargo traffic, adding that it will be disastrous both to the maritime industry and the economy should Nigeria fail to pass the verification test. He advised against a fire brigade approach to the implementation of the ISPS Code saying that “such approach cannot stand the test of time. C M Y K
24 — Vanguard, MONDAY, AUGUST 26, 2013
Business & Economy BRIEFS Confab on Nigeria as strong African financial centre holds Sept
A
n international magazine, Euromoney, said it would organise a conference on Nigeria’s attractiveness as a strong financial centre in Lagos. Mr Hakeem Jimo, spokesman of the magazine, said in a statement in Lagos that the conference would discuss global market conditions and its effects on Nigeria. He said the conference would also discuss how Nigeria could prepare for the global stage. “The conference will discuss how corporate organisations will expand their businesses into neighbouring countries and other countries of the world. Many Nigerians have entrepreneurial flair, which supports the prediction that Nigeria will be Africa’s largest economy within five years. Nigeria, with her abundant natural and human resources, has the strongest potential growth story across the continent,” he said.
Financial inclusion: Low awareness characterises mobile money services — NOI Poll *Teenagers, young people show higher interest By PETER EGWUATU
T
he target of monetary authorities to attract the unbanked into the banking system and other cashless initiative introduced by the Central Bank of Nigeria, CBN, in the banking sector is yet to gain momentum. Latest weekly poll results released by NOI Polls Limited revealed that about six in 10 (59 percent) Nigerians are not aware of mobile money services and only 13 percent of the 41 percent that are knowledgeable of it, have adopted it, showing a very low adoption rate. Findings have also revealed that, teenagers, young and middle aged adults are more willing to adopt the services than senior citizens.
Furthermore, all respondents (100 percent) that use mobile money services operate a bank account and 93 percent operate their mobile money account in connection with their bank accounts. This shows that Mobile Money services have not had any impact on the financial inclusion of the unbanked Nigerians so far. The general perception of users of the mobile money service as indicated by majority is that it is easy to use, it is secure, service providers are easily accessible, it saves cost and time. These are the key findings from the Mobile Money Services Snap Poll conducted in the week of 5th August 2013. In recent times, the CBN introduced mobile money services to provide basic
financial services and create payment access especially to unbanked Nigerians, and also help drive financial inclusion in the country. Mobile money enables monetary transactions to be done on mobile phones through text messaging. Operations that can be carried out include money deposit, bills payments, funds transfer and withdrawal, payment for purchased goods and services and it serves as an alternative way of storing money for both the banked as well as the unbanked. More than a year into its introduction, the scheme has suffered slowadoption by Nigerians as the licensed operators of the mobile money services have not made great headway in the deployment of the services across the country. Some
FG committed to boosting nonoil exports — Jonathan
P
resident Goodluck Jonathan has reaffirmed his administration’s determination to do all within its powers to facilitate and encourage the rapid diversification of Nigeria’s economy. The president stated this in Abuja at the send-forth ceremony of the outgoing Ambassador of the Czech Republic to Nigeria, Mr. Jaroslav Siro. Jonathan declared that his administration was fully committed to moving the Nigerian economy away from dependence on crude oil exports by promoting the development of the country’s non-oil sectors. He said that in keeping with the commitment, the Federal Government was actively exploring all avenues of boosting trade and economic relations with other countries in areas not related to the oil and gas sector. “With current developments in the world, we are more interested in diversifying our economy, not in overemphasising oil and gas exports. Our intention is to move our country away from being a mono-product economy." C M Y K
From left: Managing Director, American Porters Water group, Mr Richard Wukish; Managing Director, Osun State Investment Company, Mr Bola Oyebamiji; Managing Director, Safari Holding Solution, USA, Mr Carole Obam, and Managing Director, Unicapital Consulting, Mr Bode Adikoye at the Osun International Trade and Investment conference in Osogbo.
Multiple borrowing, a challenge in micro financing, says operator T
he Chief Operating Officer, Fortis Micro Finance Bank (MFB), Mr Jero Omare-Ogah, says multiple borrowing by customers remains a major challenge to the survival of the MFBs in the country. OmareOgah in an interview in Abuja said that the development was worrisome in spite of the Central Bank of Nigeria’s efforts at checking the trend by setting up Credit Bureau. Credit Bureau was set up by the CBN to check the financial status of potential borrowers. “The issue of multiple borrowing is a major problem
in the industry. Customers go from one MFB to the other to access loans and it becomes a problem when it is time for payment. “The high number of bad debts recorded by MFBs have to do with the attitude of not repaying loans by borrowers.” OmareOgah called on the CBN to put in place a re-financing institution that could re-finance the bad debts of MFBs, pending when a legal system in that regard was instituted. He explained that the duty of a refinancing institution would be to refinance bad loans and the borrower would repay the
money over a period of time with interest to sustain the institution. According to him, another way to minimise the occurrence of multiple borrowing is by asking customers to provide bank statements from other banks they do business with. “This way, if a customer has already taken a loan somewhere, it will be reflected in the bank statement and we will know.” He urged MFBs operators to collaborate to eliminate the problem of multiple borrowing in the sector.
challenges the scheme has faced is the low awareness and adoption, lack of finance and basic infrastructure; few agents, and the exclusion of mobile operators from taking part in the execution of the service. NOI Polls conducted its latest poll on Mobile Money Services Snap Poll to explore the level of awareness of Nigerians on the services, determine the present adoption rate by banked and unbanked Nigerians, as well as the potential for its adoption in the future. The findings from the poll revealed that 41 percent of the respondents are aware of mobile money services and out of these, only 13 percent have adopted it. Major sources of awareness of mobile money services that emerged from the poll include “Banks” indicated by 36 percent , “Media (TV, Radio, Newspaper etc.)” indicated by 29 percent of the respondents, and “Family and friends”, indicated by 27 percent . Majority of the users (86 percen) indicated “Banks” as their provider; this may be due to the fact that licenced banks have been majorly given the responsibility to establish the services in Nigeria. Relatively, 12 percent indicated “mobile money agents” as their provider and one percent indicated other sources. The perceptions of Nigerians on the general use of mobile money showed that regarding the ease of its use, 55 percent affirmed that the service is easy, 38 percent say the service is not easy to use and seven percent were indifferent about the ease of its use. In reference to the accessibility of service providers, 55 percent of the respondents are of the opinion that service providers are easily accessible, while 39 percent are in disagreement to the statement, six percent are neutral. In terms of the security involved in using the services, 56 percent affirmed that it is secure to use, 26 percent consider it unsecure, and 18 percent are indifferent. In terms of the processes involved, 60 percent affirmed that it saves time. 36 percent do not agree that its use saves time and four percent remained indifferent. Concerning cost savings, 63 percent are of the opinion that it saves cost, 36 percent do not agree that there is cost saving associated with the use of mobile money services. The poll also revealed that the mobile money services has great future adoption potentials as 71 percent of the respondents who have not yet adopted it are willing to give it a try in the future.
Vanguard, MONDAY, AUGUST 26, 2013 — 25
FP STANBIC
C M Y K
26 — Vanguard, MONDAY, AUGUST 26, 2013
Banking & Finance BRIEF NDIC's report on bank fraud worrisome — ASSBIFI
T
he Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) has described as worrisome the level of bank fraud as recently reported by the Nigerian Deposit Insurance Corporation's (NDIC). The National President of ASSBIFI, Mr Olusoji Salako, told News Agency of Nigeria (NAN) in Lagos that the report indicated that the level of fraud in banks was high. The NDIC's annual report and statement of accounts released on Tuesday said that bankers committed fraud amounting to N17.97 billion in 2012. "This development calls for concern from every stakeholder. We have the report, and we are considering the steps to take to prevent a reoccurrence in the future. In most cases, these bankers are mobilised by outsiders to commit fraud in the system. We are not going to sleep with this report; we will work on our members," Salako said. He said that the union would intensify education of its members on the dangers of allowing outsiders to use them for fraudulent purposes, noting that fraud in the banking industry escalated due to reckless deposit mobilisation, casualisation and outsourcing of workers. "Casualisation and outsourcing are two key factors. If you employ a person on a casual basis, and the person has to handle a lot of cash, yet, he or she is being paid peanuts, there will be the temptation to steal. Also, in the last decade, aggressive marketing came in and people with questionable characters were employed in the industry to source for deposits. Our flanks have been opened by this practice, all safety measures thrown overboard, and all that the bank executives are concerned about is the amount of deposits brought in," he said. Salako said that the banking sector might continue to record leakages and fraud until the Central Bank of Nigeria (CBN) and management of banks take steps to curtail it. He urged CBN and management of banks to de-emphasise deposit mobilisation and engagement of contract staff and casual workers.
s ank
C M Y K
FirstBank CEO cautions on sterilisation of public sector deposit * Dismisses allegation of excessive profits *Former House of Rep member calls for 100% sterilisation BY BABAJIDE KOMOLAFE
M
anaging Director/ C h i e f Executive, FirstBank of Nigeria Limited, Mr. Bisi Onasanya has called for caution in the implementation of the 50 per cent sterlisation of public sector deposit. He also dismissed allegations that banks are making excessive profits, saying that any attempt to reduce the profitability of banks would weaken the nation’s capital market, and reduce the attractiveness of Nigeria to foreign investors. Last month the Central Bank of Nigeria (CBN) effectively sterilised about N1 trillion public sector deposits, when it raised the cash reserve requirement (CRR) on public sector deposits to 50 per cent from 12 per cent. Public sector deposits refer to deposits of ministries, departments and agencies of federal, state and local governments with banks. The aim of the policy was to tighten money supply, so as to reduce idle funds in the banking industry and curb inflation. It however occasioned sharp increase in interest rates by about 200 basis points. Onasanya warned that the policy should be implemented with caution as it might lead to decline in loans to small and medium enterprises. In a keynote address delivered at the Lagos Bankers' Night organised by the Chartered Institute of Bankers of Nigeria (CIBN), Lagos State Chapter, he said, “Whilst there are still debates around the recent moves of the central bank and the government to sterilise public sector funds due to interventions from the regulatory authorities as part of their macrop r u d e n t i a l responsibilities), I believe there must be a clear framework for interpretation that adopts practical and pragmatic means of identifying qualifying accounts for sterilisation as the misapplication of compliance may have certain drawback effects on the availment of credit especially for the real sector of the economy, and in the
From Left: Professor Wole Adewunmi, FCIB, Past President, CIBN; Mr. M. A. Kazeem, FCIB, Past Chairman, CIBN, Lagos State Branch; Mr. Bisi Onasanya, FCIB, Managing Director/ Chief Executive Officer, First Bank of Nigeria Limited; Mr. Bismarck Rewane, Chief Executive Officer, Financial Derivatives Company Limited; Mr. Bolade Agbola, FCIB, Chairman, CIBN, Lagos State Branch and Mr. Segun Aina, OFR, FCIB, President/Chairman of Council, CIBN; at the just concluded 2013 Lagos Bankers’ Nite event held at the Federal Palace Hotel, Victoria Island, Lagos
SME space. (We must be careful to ensure that the sterilisation does not extend to accounts and funds that are not in class of public sector deposits. What this does is that we may find ourselves in a situation where the much needed liquidity in the banking system is strained to such extent that it becomes difficult for banks to grant credit and loans which are much needed for the development of the economy”. But a former Chairman, House Committee on Finance, Honorary Leonard Dilkon, called for 100 per cent sterilisation of public sector deposits, saying the policy will make banks to invest in wealth and job yielding ventures that would stimulate growth. “Speaking to News Agency of Nigeria, Dilkon, who is the Executive Chairman, Hamtul Press Ltd, a Jos-based large scale printing outfit, argued that the banks had not helped the economy much as they "merely collect monies from local, state and federal governments”. “The banks collect monies from all tiers of government and give them out as loans to the same governments. Such monies are deducted at source with heavy interests. The banks do not support any business initiative; when
you are building your business, the banks will not be there to support, but once you have established, they come for deposits. Banks hardly support small scale industrialists and may not even care if they ever existed. The commercial banks hardly seek out ways to help the society,” he claimed. He suggested the withdrawal of, “up to 100 of government deposit from the commercial banks”, adding that the commercial banks were “exploiting depositors by collecting Commission On Turnover (COT),” even when they had no input on such turnover. He stated the banks could do more in addressing the problem of violence in most parts of Nigeria, by stimulating the economy. Defending the huge profitability of banks, Onasanya said, “Let me speak to the perception that Nigerian banks are making excessive profits. Let me say that the Nigerian capital market today, relies extensively on the performance of the financial services sector including the banking industry. I am aware that a lot of families depend to a great extent on the dividend they received from the capital market to pay their children school fees. “Let me state therefore that
attempt to ensure that banks reduce their profits or become less attractive in terms of profitability may weaken the capital market as it is today. There is no economy that can develop to the maximum of its capabilities without strengthening its capital market. “We therefore must be cautious in making comments about the perceived excessive profitability of Nigerian banks. We do have a responsibility to develop the economy but however, against this, we also have to grow the portion generated for profit to ensure that we shore up our shareholders’ funds which also enable us to have larger single obligor limit to do large ticket transaction. “Let me take it from another perspective. How many Nigerian banks have return on equity invested in excess of 15 per cent? I dare say you cannot count five. And so when you measure the profitability of banks, you need to relate it in relative terms, to the return on equity invested, which is a measure of the returns expected by those who invested in those organisations. I therefore say that the present attractiveness for foreign investors to invest in Nigeria is through the attractiveness they have found in the few Nigerian banks that are declaring good returns in relative terms.
Vanguard, MONDAY, AUGUST 26, 2013 — 27
FP ETISALAT
OMOLAFE
28 — Vanguard, MONDAY, AUGUST 26, 2013
Banking & Finance BRIEFS Minister inaugurates NEXIM board, extols achievements BY EMMANUEL ELEBEKE he Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi OkonjoIweala on Friday inaugurated a new board for Nigeria Export-Import Bank, NEXIM in Abuja. The minister who expressed satisfaction with the performance of the bank so far, commended the management of the bank for making giant strides in encouraging non oil exports in the country. She said that the bank has a critical role in the Nigerian financial process and economy with huge expectations, saying that the bank was set up to support internal and external trade within the country and the West African Sub Region. ”We are all aware of the efforts of the present administration in partnering with the private sector to expand trade. Nigeria’s economy is 55 per cent of the regional economy and therefore, what we do in terms of supporting the private sector is key to economic success not only in Nigeria but also in the sub region. We are happy that NEXIM is there to provide the needed support and help to deepen trade in the region”. Also speaking at the occasion, Minister of State for Finance, Dr. Yerima Lawan Ngama said that the bank had achieved a lot within the past few years of its operation and commended the management on the right footing and sustainable pedestal and profitability. He explained that the bank was able to pay second dividend to the Federal Government and Central Bank of Nigeria, the shareholders, since the establishment of the bank, due to efficient management. He underscored the need to subject the bank to international rating as that will assist them to go out and access funds outside the shores of the country. He then charged the new board to ensure that it subject itself to external audit, as that according to him is the only way to measure their performance as an international bank. On the issue of capitalisation of the bank, he said the bank needs to go all out and raise money by floating a bond among others.
T
STORIES BY BABAJIDE KOMOLAFE
L
eaders in the field of finance must embrace diversity in order to remain competitive in the global economy. Global Chief Executive Officer, Association of Chartered and Certified Accountants (ACCA), Helen Brown made this call last week in Lagos while speaking at ‘Women in Finance’ conference organised by ACCA Nigeria. Brown noted that diversity is becoming an increasing challenge for the financial world. “In a globalised business environment, so the finance function is increasingly global – new markets, new regulations, and new business demands. Mastering the technical requirements of operating across many countries is one challenge, but finance leaders and finance functions must also bring together finance personnel in different countries, different cultures, different working practices, different languages to work together to provide a consistent service to the business. “Dealing with this huge cultural diversity and multi geographic delivery represents a huge challenge to finance leaders trying to drive world class finance functions. It has a significant bearing on the type of chief finance officer (CFO) businesses need at a global level – they must be able to deal with these differences effectively and be able to leverage these differences positively for the business”, she said. Brown said that one major aspect of the diversity
From left, Executive Director, Corporate Banking, Skye Bank Plc, Timothy Oguntayo; Chairman/CEO, HDV Nig Ltd, Olufemi Okenla, his wife Dupe Okenla; and Deputy Governor of Lagos State, Adejoke Orelope-Adefulure, at the commissioning of Ibis Hotel, in Ikeja, financed by Skye Bank Plc.
Embracing diversity critical for finance leaders — ACCA Global CEO challenge is gender diversity and that is why it is one of the focus of ACCA. “Our membership itself is the most diverse of any international accountancy body. We have more than half a million members and students in 170 countries bringing with them a multitude of socio-economic, ethnic and cultural experiences. Our raison d’être when we were founded more than 100 years ago was to give opportunity to people of talent and application whatever their background – and we really believe in the value that
diversity brings. “Secondly, on the gender issue, 45 per cent of our members and half our student intake is female. Given the rate at which the proportion of students is changing – many have said that the future of finance is female. And yet – women account for only 20 per cent of the most senior posts held in finance. So there is a great deal of work to enable the thousands of young women entering the accountancy profession to fulfil their potential and meet their aspirations.
We believe that diversity is not simply about gender – diverse organisations need to ensure they address equal opportunities in all areas – there is diversity of cultures, diversity of skills and experiences, diversity of ideas and business perspectives that help create and drive great finance functions and deliver enhanced business performance. As a body which qualifies finance professionals, we are committed to playing our part in ensuring the maximisation of the finance function.
NES to open agric sector for more investment —Shamsuddeen he 19th edition of the Nigeria Economic summit (NES 19) will open up the agricultural sector for increased foreign and domestic investment. Minister for National Planning/Deputy Chairman, National Planning Commission (NPC), Dr. Shamsuddeen Usman stated this at a press conference to announce the summit. The NES 19 is scheduled to hold next week in Abuja, and the theme is “Growing Agriculture as a Business to Diversify Nigeria’s Economy. “This year ’s Summit is unique, for two reasons. First, this year marks the 20th year anniversary of the annual Nigerian Economic Summit. Secondly, it is the first time that the Summit is
T
focused on a single sector of the economy, Agriculture, not only for the critical importance of the sector, but also because of its pride of place in the Government’s Transformation Agenda and Nigeria’s longer-term Vision 20:2020,” the Minister said. Speaking further, he said, “As you are aware, Nigeria’s Agricultural sector is undergoing massive transformation with the focus on growing agriculture as a business. For the first time, an Agricultural Transformation Agenda (ATA) has been developed and is being vigorously implemented by the Government. The Agricultural sector is also to play a critical role in the realisation of the objectives of the Transformation Agenda. The Summit would present
the opportunity for major domestic and global leaders to discuss the ongoing reforms in Nigeria’s agricultural sector, with focus on improvement in infrastructure, agroprocessing zones, financing and an enabling policy environment which are central to the full exploitation of the agricultural value chain, the attainment of food security and employment generation and wealth creation. “The theme of this year’s Summit is clearly a call to action by all, if we are to successfully diversify Nigeria’s economy for enhanced growth and development. It has been established that the agricultural sector has the largest potential to diversify the economy, create jobs,
secure food supply, lower inflation and expand foreign exchange earnings for the countr y. The sector contributed an average of 40 percent to the GDP between 2011 and 2012. The sector, which currently employs about two third of the entire labour force, has sustained its position as the highest contributor to non-oil GDP, contributing 47.17 per cent in 2011 and with an average GDP growth rate of 7.0 per cent in 2011 and 2012 and 6.56 per cent in the first quarter of 2013, the prospects for Nigeria are huge, remains committed to growing agriculture as a business to diversify Nigeria’s economy, through the sustained implementation of the agricultural Transformation Agenda (ATA).”
Vanguard, MONDAY, AUGUST 26, 2013 — 29
Corporate Finance
MSMEs contribute 47% to GDP in 2012 — CBN By PROVIDENCE OBUH The Central Bank of Nigeria (CBN) has said that Micro Small and Medium Enterprises (MSMEs) contributed about 46.54 per cent to country's GDP in 2012. Specifically, Nigeria had about 17.6 million MSMEs employing about 32.4 million people in the year under review. Governor of the CBN Mr. Sanusi Lamido made these statements at the Annual MSMEs Finance Conference & D-8 workshop on Microfinance for Small and Medium Enterprises (SMEs) Sanusi said, "In 2012, Nigeria had about 17.6 million MSMEs employing about 32.4 million people, and contributing about 46.54 per cent of nominal GDP. A recent survey by IFC and Mckinsey (2010) suggests that 80 per cent of these MSMEs are excluded from the financial markets. "The state of MSMEs in the country underscores the importance of this conference. Between 2003 and 2012, commercial bank loans to small scale enterprises dropped at an exponential rate. Analysis of the annual trend in the share of commercial bank credit to small-scale industries indicates a decline from about 7.5 per cent in 2003 to less than one percent in 2006 and a further decline in 2012 to 0.14 per cent. Some of the reasons for the financing gaps are not limited to the fact that the banks readily attribute their risk aversion stance for not lending to MSMEs to demand-side constraints, which include the lack of managerial capacity, inadequate collateral, and poor record keeping, amongst others, he added, noting that there also exist supply-side issues such as high transaction costs and lack of understanding by the banks of the nature and operations of MSMEs. "Other constraints plaguing the MSME sub-sector in Nigeria include infrastructure deficit (especially, power and transport), policy inconsistencies, bureaucracy, multiple taxation and levies, weak intellectual property protection and contract enforcement, and insecurity." The CBN governor said that there is a need for the formulation and implementation of policies to strengthen the MSME subsector. "The CBN on its own part has been working assiduously towards developing a robust regulatory and supervisory
framework and initiatives for improved access to finance for the sub-sector. Some of these are the Revised Microfinance Policy, Regulatory and Supervisory Framework; Certification Programme for MFBs; Designated NonFinancial Businesses and Professionals (DNFBP); Competency Framework; Payment System Transformation; development
of a Moveable Collateral Registry; and the Financial Ombudsman Bill currently before the National Assembly." Sanusi. however, noted that the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) is designed to further enhance access to finance by MSMEs with the following major objectives:
Provide wholesale financing windows for participating financial institutions (PFIs); Improve the capacity of the PFIs to meet credit needs of MSMEs; Provide funds at reduced cost to PFIs; Enhance access of women entrepreneurs to finance by allocating 60 per cent of the Fund to them; and Improve access of NGOs/MFIs to finance.
Forum: From left: Pastor Adetoyi Olabode, Managing Director, Hi-Nutrient Intl. Co. Ltd.; Mrs. M. O. Amore, Director, Veterinary Medicine and Allied Products (VMAP); Dr. Paul Orhii, Director, NAFDAC; Mr. Chinedu Ahamneze, General Manager, Sales & Marketing, Livestock Feeds Plc at the stakeholders forum for manufacturers of animal feeds and premixes, toll millers and importers of bulk feed supplements, at NAFDAC auditorium, Oshodi, Lagos recently.
Berger Paints N543m rights issue opens BY PETER EGWUATU
T
HE Berger Paints’ 72.5 million ordinary issues of 50k per share at N7.50 to its existing shareholders has opened across the country following the completion board meeting held in Lagos recently. The rights are being offered on the basis of one new share for every three held by members as at May 31, 2013 The net proceeds of the offer amounting to N543.42 million will enable the leading paints and allied company to finance the modernisation of its manufacturing operations. Chairman, Berger Paints Nigeria Plc, Mr. Clement Olowokande, said the net proceeds of the rights issue estimated at N521.71 million would be used to finance the modernisation of the company ’s factory operations. According to him, the modernisation was the main thrust of a strategic plan to ensure that the company continues to operate at the
forefront of paint technology by replacing its aging m a n u f a c t u r i n g infrastructure. He said the modernisation of the company ’s factory operations would lead to improved efficiency that would positively impact on turnover and profitability. Olowokande said that the company also plans to
commit substantial investments on major improvements of its distribution channels. He said the company has taken several initiatives and entered new partnership that would greatly enhance its products and services in the Nigerian paint and coating industry in the period ahead.
Africa solicits IMF, World Bank support on infrastructure
F
inance officials from 50 African countries have called on the World Bank (WB) and the International Monetary Fund (IMF) to help African countries in the areas of infrastructure development. They said the bank and the fund should assist them to address their debt arrears and gain full access to debt relief. After two days of meetings in Khartoum, Sudan, the African Governors of the World Bank Group and the International Monetary Fund issued a Declaration calling on the World Bank Group to partner with other donors to
ensure the realisation of this dream. The partnership is to establish a Single Infrastructure Project Preparation Facility for Africa to support large-scale transformational infrastructure projects. They urged the IMF to make sustained efforts to encourage remaining countries to expeditiously submit their pledges on the gold sales windfall distribution to enhance the Fund•fs concessional resources under the Poverty Reduction and Growth Trust (PRGT).
BRIEFS Global shares gain, bonds fall as signs point to world growth
G
LOBAL equity markets gained and bond prices fell last week after business surveys from around the world reflected a global economy in expansion, helping cement expectations the Federal Reserve will trim its bondbuying stimulus program in September. Purchasing managers surveys showed better-thanexpected growth in the euro zone, a rebound in China’s vast manufacturing sector and U.S. manufacturing activity rising to a five-month high in August. Data from the U.S. Labor Department also showed the number of Americans filing new claims for jobless benefits held near a six-year low last week, adding to signs the U.S. economy is starting to find a firmer footing. While weekly initial claims for state unemployment benefits climbed 13,000 to 336,000 - just above the level expected by economists in a Reuters poll - the four-week moving average fell to its lowest level since November 2007.
US stocks rise on jobless claims
U
.S. stocks rose on data showing improvement in global manufacturing and the American labour market amid a trading halt on the Nasdaq Stock Market after a computer error. A gauge of home builders added 1.7 percent after a report showed house prices rose 7.7 percent in June from a year ago. Yahoo Inc. rallied 2.7 percent as data showed it attracted more U.S. visitors than Google Inc. in July. HewlettPackard Co. slid 12 percent after the personal computer maker ’s quarterly profit forecast missed some analysts’ estimates. Abercrombie & Fitch Co. plunged 18 percent as second-quarter earnings that fell short of forecasts. The S&P 500 gained 0.8 percent to 1,655.38 in New York. The Dow Jones Industrial Average rose 65.43 points, or 0.4 percent, to 14,962.98. Trading in S&P 500 stocks was 21 percent below the 30-day average at this time of day. Computer errors shook American equity markets again as malfunctioning software that feeds data between exchanges prompted Nasdaq to halt trading in stocks and options.
C M Y K
C M Y K
4.00
1.41 4.41 1.26 5.32 1.33 59.00
5.60 1.23
71.00 9.06
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
34.50 62.49
10.99 6.65 14.89 2.77 4.75 25.35 4.16 2.59 7.59 10.59 0.50 1.08 20.10
0.50 0.99 1.19 0.50 0.50 1.49 0.50 0.50 0.50 0.50 1.49 0.50 0.50 0.50 0.50 2.30 0.50 0.75 0.50 0.50 0.55 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.79
Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc
FINANCIAL SERVICES Banking Access Bank Plc Diamond Bank Nigeria Plc Ecobank Transnational Incorporated Fidelity Bank Plc First City Monument Bank Plc Guaranty Trust Bank Plc Skye Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc
Insurance Carriers, Brokers and Sector African Alliance Insurance AIICO Insurance Plc Continental Reinsurance Plc Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guinea Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mansard Insurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Unity Kapital Plc Universal Insurance Plc Wapic Insurance Plc
Other Financial Institutions Africa Prudential Plc Crusader (Nigeria) Plc Deap Capital Management & Trust Plc FBN Holdings Plc Nigeria Energy Sector Fund Royal Exchange Assurance
0.50 1.00 1.20 0.50 0.50 1.57 0.50 0.54 0.50 0.50 0.50 0.50 0.50 0.50 0.50 2.32 0.50 0.72 0.50 0.50 0.55 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.79
10.95 6.60 14.90 2.83 4.75 25.25 4.30 2.60 7.54 10.55 0.54 1.04 20.14
35.00 62.00
32.27 3.90 0.81
1.88 0.50 2.02 16.35 552.20 0.55
1.90 0.50 1.34 16.36 552.20 0.55
6.00 1.81
32.27 3.93 0.62
Household Durables Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc
52.95 935.00
1.53 0.50 0.50 0.50
52.95 935.00
Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc
9.50 10.90 83.90 3.13 11.40 0.80
1.53 0.50 0.50
9.50 10.90 76.29 3.09 11.70 0.80
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
72.00
17.42 254.04 21.45 167.50 0.75
0.50
100.00 50.00
16.70
71.00 10.07
5.60 1.23
1.41 5.43 1.26 5.32 1.30 59.00
3.91
0.50 45.00 34.99
0.50
Closing Price (N)
6.60 0.80
72.00
Beverages-Non-Alcoholic 7-UP Bottling Company 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
17.42 264.04 21.45 167.00 0.68
0.50
100.00 50.00
Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc
Real Estate Investment Trusts Skye Shelter Funds Union Homes Real Estate Investment CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc
17.80
0.50 45.00 33.00
1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc
Real Estate Development UACN Property Development
0.50
Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc
Company
Opening Price (N)
Capital Market
360,637
694,636 22,000 70,000 69,684,902
200 1,000,000 600,000
3,000 1,701,023
1,200 23,919,889 110,800 1,727,466 10,000 631,851 1,765 62,500 30,953 370 7,000 1,670,890 20,000 85 37,000 953,255 10,500 1,919,181 200,000 3,410 991,434 3,500 57,520 2,000 2,000 744 100 120,000 85,000
6,952,371 7,443,990 966,817 8,419,743 865,336 14,046,504 4,986,683 3,902,811 17,151,524 274,926 13,139,962 1,018,390 5,206,064
407,088 1,032,802
60 327,848 50,000
166,274 347,998
366,717 511,379 1,674,995 729,415 1,429,659 81
89,598
1,200 82,574 516,870 629,799 20,000
174,030
13,400 -
553,647
81,400 1,000
4 691,921
37,438 1,000 81,118 10,000 81,118 88,305
202,957
100,000 387,656 117,516
3,000
Quantity Traded
0.75 0.50 2.02 20.00 552.20 0.78
1.57 0.50 0.50 0.50
6.00 1.18
0.50 1.11 1.03 0.54 0.50 2.44 0.50 0.68 0.50 0.50 0.50 0.50 0.50 0.60 0.50 2.59 0.54 0.81 0.61 0.50 1.01 0.50 0.56 0.50 0.50 0.50 0.50 0.50 1.08
12.39 7.51 14.04 3.47 5.70 26.09 6.50 3.05 7.69 10.60 1.22 1.75 21.49
41.02 47.39
36.19 5.54 2.88
37.27 840.10
19.90 16.20 95.00 6.60 6.70 0.88
51.49
4.63 255.00 7.10 100.00 1.01
0.50
100.00 -
20.15
62.26 8.28
4 2,720,390.38
2.54 7.60 8.82 8.28 1.82 42.50
0.66
0.50 24.58 8.30
0.50
Year High
0.00 0.50 2.02 8.57 552.20 0.50
1.37 0.50 0.50 0.50
0.00 0.92
0.50 0.50 0.58 0.50 0.50 1.08 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.06 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50
4.70 1.92 9.90 1.13 2.90 13.02 2.65 0.80 1.64 2.34 0.50 0.52 11.96
21.02 27.60
33.96 2.91 2.88
8.33 400.00
4.31 4.02 57.00 2.31 3.80 0.50
,39.00
2.23 186.00 5.23 72.50 0.93
0.50
97.00 -
11.59
32.96 3.01
20
1.45 6.43 5.89 5.52 0.50 28.70
0.48
0.50 14.53 6.40
0.50
Year Low
0.19 0.00 0.00 2.03 12.68 0.13
0.19 0.02 0.00 0.00
0.04 0.92
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
1.42 0.90 2.81 0.43 0.00 2.10 0.71 0.54 0.67 0.00 0.00 1.34 2.09
0.82 1.44
13.89 0.61 0.00
1.35 25.43
0.00 0.91 4.09 0.39 1.01 1.13
2.69
0.00 9.95 0.41 5.08 0.00
0.00
11.75 -
1.69
4.11 4.73
0.16 0.31 0.00 0.35 0.24 6.89
0.11
0.10 7.33 2.75
0.09
E.P.S.
9.16 0.00 0.00 9.85 43.55 6.00
47.6 7 25.00 0.00 0.00
150.00 10.56
0.00 22.20 6.79 27.30 10.00 7.43 50.00 0.00 16.67 50.00 0.00 25.00 0.00 0.00 16.67 16.19 0.00 2.19 26.00 16.67 15.50 12.50 5.65 0.00 0.00 0.00 25.00 0.00 15.43
8.73 8.34 5.00 7.93 0.00 12.39 9.15 5.43 11.19 0.00 0.00 0.43 10.24
4.39 32.91
2.44 7.07 0.00
27.61 32.84
16.91 14.38 16.89 16.92 5.75 8.83
13.92
0.00 19.98 16.29 22.22 0.00
0.00
8.51 -
7.33
10.11 2.26
5.18 20.74 0.00 15.77 3.64 4.14
15.00
50.00 2.77 4.37
P.E. Ratio
0.88 1.80 0.50
Paper/Forest Products Thomas Wyatt Nig. Plc Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc
Intergrated Oil and Gas Services Oando Plc
0.50
4.90 4.28 6.15
Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company
0.74 Speciality Interlinked Technologies Plc
1.74 1.60 2.52 4.10 Road Transportation Associated Bus Company Plc
0.50
4.55 0.80
0.50
4.50
1.38
0.50
Printing & Publishing. Academy Press Plc Learn Africa Plc Studio Press Nig. Plc University Press
Media/Entertainment Daar Communications Plc
Hotels/Lodging Capital Hotel Ikeja Hotel Plc
Courier/Freight/Delivery Red Star Express Plc Trans-National Employment Solutions C & I LEASING PLC
SERVICES Afromedia Plc Automobile/Auto Part Retailers RT Briscoe Plc
Hospitality Tantalisers Plc
20.50 0.50 29.80 39.00 119.00 36.14 155.00
0.50 11.30
OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service
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
3.98 13.18 12.68 4.30 1.05 2.92 0.66
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
1.44
0.50
10.55
Metals Aluminium Extrusion Ind Plc Non-Metalic Mineral Mining Multiverse Plc
6.50
7.85
171 2.74
NATURAL RESOURCES Chemicals BOC Gases Plc
Tools and Machinery Nigerian Ropes Plc
Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company
3.88 6.74
4.90
0.90
1.91 1.60 2.52 4.10
0.50
4.55 0.86
0.50
4.70 1.00
1.37
0.50
0.50
20.50 0.50 29.80 39.00 119.00 36.14 155.00
11.11
0.51
3.98 13.18 12.68 4.30 1.05 2.78 0.66
1.44
1.86 0.50
0.81
0.50
10.55
6.50
7.85
1.99 2.70
21.05 8.70 43.65 9.21 188.00 0.50 1.30 95.00 5.56 1.67 10.93
0.50
0.50
ICT Telecommunications Starcomms Plc
20.66 8.70 43.65 9.30 190.00 0.50 1.43 93.00 5.56 1.82 10.93
0.50
0.50
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
18.70 2.29
18.70 2.29
0.50
0.71
4.80 4.74 2.01 68.00 2.40 1.26 8.17 2.07
0.50
2.23
16.37 17.20 1.23
Closing Price N
IT Services NCR (Nig) Plc Tripple Gee and Company Plc Processing Systems Chams Plc
0.66 0.50
ICT Computer Based Systems108 Courteville Investment Plc Computers and Peripherals Omatek Ventures Plc
0.50 4.32 4.74 1.99 65.00 2.40 1.40 7.36 2.03
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
2.01
103.50 16.01 1.24
Opening Price N
HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers Union Diagnostics & Clinicals Services
Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc
918,618 1,452,914
1,050
346,371
116,600 129,284 500 123,844
2,000
10,000 86,591
1,004,000
431,124 372,940
177,442
500
1,000
82,191 100 25,202 142,427 33,238 3,721 11,700
5,027,658
3,322,150
6,888 1,500,100 500 29,198 200 84,311 2,749,340
2,000
367,417 1,318,179
223,345
5,000
500
8,606
40
2,000 2,717,101
379,029 41,000 35,185 19,109,277 77,615 2,000 85,333 3,982,620 13,000 5,000 30
2,307,692
75,000
790 100
100,000
272,000
400 6,500 837,490 5,204,469 68,890 421,750 1,894 25,000
400,000
785
6,284,405 446,392 3,584,131
Quantity Traded
Year Low
2.78 11.75
5.15
0.80
0.00 6.82
3.68
0.50
400 2.07
1.64
3.67 247,420
3.65
0.72
1.57 6.50
4.90
0.50
3.17 0.30 0.00 3.60
0.48
3.00 1.33
0.90
2.65 0.25
1.30
0.51
141.00 63.86 195.50
163.50 2,100 240.00 200
0.50 0.50 3.89
27.99
0.87
3.98 12.71 13.97 3.60 1.05 2.92 0.63
1.33
1.62 2.58
1.38
0.50
10.70
6.80
8.26
5.94 1.47
12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93
0.50
3.25 3.25
0.50
0.50
5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28
0.50
9.52
103.50 10.64 0.03
37.10 0.70 5.59
78.97
0.97
3.98 15.58 15.03 4.30 1.86 2.92 0.63
1.51
2.50 2.58
1.38
0.50
12.39
9.20
8.69
6.91 3.60
30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40
1.47
50,000
9.31 3.59
0.50
0.52
5.31 1.45 3.20 23.11 5.61 1.96 12.91 200
0.50
10.54
103.50 15.69 1.41
Year High
0.60 12.53
0.00
0.00
0.54
0.25
0.00
0.34 0.92
0.04
0.60 11.12
0.21
0.00
0.01
6.11 2.98 14.63
4.93 0.00 0.61
1.73
0.19
0.00 3.90 0.90 1.22 0.30 0.07 0.00
0.03
0.11 0.00
0.00
0.01
0.13
0.78
0.00
0.5 0.25
2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00
0.00
0.00 0.01
0.00
0.10
0.19 0.44 2.62 0.20 0.09 0.00 0.00
0.00
0.00
10.56 0.87 0.21
E.P.S
4.22 8.75
0.00
0.00
27.69
12.19
0.00
34.09 2.12
11.25
4.91
8.19
12.75
11.11 19.23 17.07
7.40 0.00 6.99
4.17
6.06
0.00 3.26 0.00 3.52 6.18 41.71 0.00
28.80
13.15 0.00
0.00
0.00
85.77
7.37
0.00
39.60 9.16
7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00
0.00
1.43 0.00
12.50
10.00
9.05 14.13 0.00 0.00
88.50 0.00 3.07
0.00
0.00
9.71 18.03 6.71
P.E Ratio
Daily Stock Market Report as at Friday, August 23, 2013
30 —Vanguard, MONDAY, AUGUST 26, 2013
Vanguard, MONDAY, AUGUST 26, 2013 — 31
Corporate Finance By PETER EGWUATU
T
HE Managing Director/ CEO, Enterprise Bank Limited, Mallam Ahmed Kuru, has affirmed that the appointment of Citigroup and Vetiva Capital Management Limited by the Asset Management Corporation of Nigeria (AMCON) as financial advisers for the sale of the financial institution is certainly the last lap of the long journey that will guarantee better days ahead for all stakeholders of the bank. Commenting on the
Financial advisers:
Enterprise Bank assures stakeholders of smooth sale development of appointing financial and legal advisers for the sale by AMCON, Kuru stated that “In line with the plan of AMCON, this is obviously the last lap of the entire process that started on August 5, 2013 when we came on board. However, what is important for me is that the
bank will at the end of the process run like every other strong and healthy bank not owned by the government or AMCON and without any encumbrances whatsoever. For me, it is on this solid foundation that a financial institution needs to soar.” Speaking further, Kuru, who
10X4 EMIRATE
said he was happy leaving behind, a better Enterprise Bank and a happier workforce, also added he was convinced that customers will have the best deal at the conclusion of the process. Said he:”I am convinced our customers expect the best deal at the end of the day. So their expectation should be high.” The Enterprise Bank boss also said he does not think the last lap of the process would experience any hitch. According to him, “As I have said on many occasions before now, the appointment of the advisers are part of the overall plan of AMCON. We are not being distracted by it. Rather, everything is being
done to make the process go smoothly.” Further elaborating on the role of staff of Enterprise Bank at this important period in the history of the financial institution, Kuru again said, “As members of staff of the bank on the other hand, we have had the responsibility of explaining to all our esteemed customers that the process is in the best interest of everybody. I say this because if there is any singular beneficiary of this process, it is the staff whose jobs have been secured because whoever is buying the bank is definitely going to be interested in the quality of staff that we have developed in the bank. What we have done as a management is to ensure job sustenance as well as welfare of all staff. So it is also important that the staff are not distracted by this process. Our attention rather has been to concentrate on running the business.” Asked whether the coming of financial and legal advisers at this period has interfered with the day to day running of the bank, the MD/CEO replied, “No it has not.
Union Bank unveils bank-of-the-future prototype U
NION Bank of Nigeria Plc has entered into a collaborative initiative with S a m s u n g Electronics West Africa, to develop a ‘Bank-of -theFuture’ prototype aimed at providing s u p e r i o r experience in financial services to both existing and potential customers of the bank. The initiative called ‘.Union Bank’ is a prototype e-branch that would completely redesign the banking hall as it is today, transforming it into a 100 percent selfservice, electronic branch. The ‘Bankof-the-Future’ initiative fits into the bank’s strategy to retain existing customers and attract new ones, especially the young and
technologically savvy. The ‘Bank-of-the-Future’ prototype is being test-run at the bank’s Silverbird Galleria branch, Victoria Island, Lagos. At the unveiling of the initiative, Mr. Emeka Emuwa, Group Managing Director of Union Bank, re-affirmed that the focus of the bank was to serve its teeming customers well, and added that Union Bank would seek to leverage on the Samsung technology platforms to deliver consistent and reliable service to its customers. Mr. Adekunle Adeosun, Executive Director (Commercial/Retail and Consumer Banking – South), Union Bank, noted that the initiative was part of efforts to make Union Bank a leading provider of innovative financial services in Nigeria and beyond, adding that the ‘.Union Bank’ branch was just one of the new ways in which the bank was using technology to enhance its service delivery and experience for customers. The event was attended by customers of the bank, executive management and members of staff.
C M Y K
32 — Vanguard, MONDAY, AUGUST 26, 2013
Interview The Director-General, Debt Management Office (DMO), Dr. Abraham Nwankwo, in an exclusive interview with selected newsmen in Lagos spoke on issues affecting the economy and the public debt management of the country. He challenged the private sector to raise long-term fund to finance the real sector. Other issues discussed include: privatisation, infrastructure financing and raising of long-term funds amongst others. Excerpts:
A
s at December 2012, you said that foreign investors' holding of FGN securities amounted to $5.1 billion, can we have a more updated figure? We are used to emphasising statistics that our public debt is so much, and that is why in today’s event, we focus on talking about what the benefits are to the Nigerian economy particularly through the private sector that derive this beautiful statistics we talk about. So is it good enough to tell Nigerians our debt is so much? We have spent today explaining to financial journalists those statistics, what are the opportunities embedded in them in real term that will translate to good standard of living for our people and that’s why our emphasis is on pointing out the opportunities we have created for the private sector so that they will issue their own debt instrument in the markets. We have developed the market so that they can raise long-term money to invest in the real sector of the economy and infrastructure. By so doing, they will create jobs for our teeming population and it will lead to more income in the society; because for every Nigerian who earns income by being gainfully employed, you know that there are many other dependents relying on that person, so there will be spread in welfare and reduction in poverty.
W
,
hat is the most current figure of total government debt? Our focus now is not talking about figures, yes, let me say in summary that our debts as usual, remain sustainable, and the statistics are there; but it’s not an issue of statistics. Over the past seven years, we are one of the least borrowed countries in the world in terms of statistics; however, government has continued to emphasise from the public debt management point of view that yes, our debt is sustainable. All of us should appreciate there is the need for us to diversify our economy because we are overdependent on oil revenue for driving our economy as a source of foreign exchange and revenue for government and there is need to diversify that. So, the focus is •Dr. Abraham Nwankwo on diversifying the sources of revenue for government. If we do this, we will observe that beyond the statistics, our debt will even be more sustainable instead By PETER EGWUATU of depending on oil and gas for about 80 per cent of our revenue. For instance, we can depend on easing is going to taper oil and gas for about 30 per cent, because there is a belief that while we also depend on revenue the US economy is getting from agriculture. Yes, agriculture better; following this is the biggest sector in the statement, investors all over economy; but it's high time we the world started recalling operate it in such a way that many their investments wherever of our farmers will be so they were in anticipation for productive and competitive and higher yields so they could are exporting their products; also diversify their including the processed ones in investments into the US particular and as they export economy to take advantage them, government earns income of it. in terms of duties; while the So you could expect that farmer also earns more income. the level we achieved in 2012 In that way, our economy will be has come down to anything diversified both for the private around five and seven per sector and as a source of revenue cent; but certainly, we are not for government and our debt will in a position to stabilise yet. therefore be more sustainable. All over the world, if you Our debt GDP ratio is still below listen to the financial market 21 per cent currently. news from the CNBC or Now, in terms of participation Bloomberg, you will of foreign investors in the wake appreciate that recently, the of the global financial meltdown, additional reports coming and because of Ben Bernanke, from the UK shows that their Chairman of the Federal Reserve, economy is getting better to Central Bank of the United States' the extent that there was a statement that quantitative huge drop in the
The IMF didn’t raise Nigeria’s borrowing threshold, maybe indirectly; countries are classified in various groups
unemployment figure which is positive for the US economy. For the fact that it’s positive for the US economy means that for investors, there is a higher prospect that they can earn more by investing their money in the US economy, therefore, it’s a time for them to wait a little longer, hold their money and take advantage of the positive development in that economy. The global economy in respect of that stimulus from the US economy in terms of possibility of the quantitative easing being drastically reduced, that
,
intermediate period is still on and I guess it will take us up to the next two or three months to be able to settle at the new level.
W
hat did you do to sell the $1.0 Eurobond to the international community? The job was done by Nigerians. Investors looked at the fact that the transformation agenda of President Goodluck Ebele Jonathan is on course, they looked at the various components of the various sectors and saw what the
government is doing in agriculture and the fact that the distribution of fertiliser, seedlings and other inputs had been rationalised and made very efficient and they are reaching the real farmers. Also, the fact that the Power sector has been successfully privatised and we are at the threshold of private sector power-led initiative that will ensure adequate and stable supply of electricity. A look at the infrastructure transformation going on; especially roads, the fact that the railway lines have been revitalised and some lines have started operating and more are underway to be reactivated. Also, look at the dramatic changes that have taken place in the aviation sector and with our airports. They looked at the fact that in terms of institution building, a lot has happened. For example, in public debt management in Nigeria, efforts have been made over a couple of years to ensure that not only the Federal Government; but every state of the federation has a functional debt management department. When they look at all these as part and parcel of the transformation agenda of President Goodluck Jonathan, they came to the conclusion that the Nigerian economy is doing well and that it is on the right path and if we continue the way we are going, there is no doubt that in the next five to seven years, Nigeria would have arrived at a stage where
Vanguard, MONDAY, AUGUST 26, 2013 — 33
Interview
L
ooking at your efforts to create a flexible market and considering the variety of debt instruments you have in line with the medium-term strategy, when do we expect to see some of these products? Some of the products are already coming in the near term; some will be in the medium term. For example, the Global Depository Note we talked about which is a way of encouraging special classes of international investors who would not invest directly in the domestic bond market except through a depository arrangement, this is likely to come on stream before the year ends as approved by the National Assembly. We are working on the inflationlinked bond and we believe in the near term, it will come to fruition. The other flexibility arrangements we talked about including the securities, lending certainly will come on stream before the end of the first half of 2014. So, many of these measures, the concrete
new products as well as the flexibility instruments are coming in the near to medium term.
R
ecently, the IMF raised Nigeria’s borrowing threshold, what does that imply for the economy? The IMF didn’t raise Nigeria’s borrowing threshold, may be indirectly. Countries are classified in various groups, so Nigeria belongs to a particular category and because of the changes in Nigeria’s per capita income, it has changed categories and the one in which it belongs is allowed technically to borrow up to 56 per cent of our debt GDP ratio without raising eyebrows in terms of credit worthiness just as it’s much higher in developed countries. So, it’s an appreciation from the point of view of those global financial institutions that Nigerian economy is moving to the next level and in doing so, it has been reclassified in terms of its capacity to borrow. However, Nigeria’s President, the Coordinating Minister of the Economy and the Debt Management Office have made it clear that in spite of that technical space created, Nigeria will continue to be
developed domestically, the private sector is now being challenged to take advantage and be the borrowers to invest in agriculture, solid mineral, infrastructure and so on.
O
n diversification of instruments and investors base, what are you doing to tap into the global alternative market like the Sukuk and others? Government is already working on alternative financing sources and generally the non-interest financing products including the Sukuk. Just recently, there was a workshop in Abuja organised by the Africa Development Bank (ADB) which involved other African countries and we deliberated on how to go forward, so Nigeria is seriously working on establishing the necessary frameworks for tapping into alternative sources of funding; including Sukuk like I mentioned earlier. Nigeria is going to take advantage of all available and appropriate sources. At the Abuja forum, I did say that it should not be taken that development of alternative financing should be restricted to government just as in the conventional debt instruments whereby we are encouraging the private sector to take advantage. We are also for the noninterest financing including Sukuk, while encouraging the
,
it would be so obvious to everybody that we have left the group of underdeveloped countries and more importantly, they are looking at the various measures government is taking to ensure that the growth process is inclusive, that in the process of growth even though we have been registering very credible growth rates in the world over the past five or more years, the current efforts being made by government to ensure that the growth process is inclusive like I said earlier, is generating maximum employment and poverty reduction. These are the things that private investors all over the world are taking into account. Of course when we went to sell the bond under the leadership of Dr. Ngozi Okonjo-Iweala, the Coordinating Minister of the Economy and Honourable Minister of Finance, we told the Nigerian story forcefully, being as factual as we could; all aspects of the Nigerian economy; including, politics, agriculture, banking, infrastructure, human resources and media. We told all the stories about Nigeria effectively with facts and figures and it was obvious to the international investors that Nigeria is on the right path; essentially we are crossing the threshold and that Nigeria given its potentials, has eventually come to terms and we have taken advantage of those potentials transforming them so that it will lead to welfare for the generality of the Nigerian people.
•Dr. Abraham Nwankwo
conservative in its borrowing as if nothing has really happened in terms of more space for it, so Nigeria will continue to be prudent and continue borrowing as if it's using the old limits, because the emphasis is not for government to do more borrowing, but to create space for the private sector to do the borrowing and that is why the theme of our interaction was on the opportunities created for the private sector from debt management achievements so they are now being encouraged based on the benchmark created in the international capital market, based on the benchmark and market we have
W
hat are the different things government is doing to encourage private organisations in the real sector to approach the bond market? It is not the responsibility of
Government is already working on alternative financing sources and generally, on the noninterest financing products including the Sukuk
private sector to play the lead role, it's not for government to start issuing sovereign Sukuks. At the appropriate time, they will do that, the private sector should understand this new financing alternative so they could take advantage of this.
I
seeking funding through this alternative. There are arrangements in place if some foreign investors possibly in collaboration with Nigerian partners, want to invest in the country and they need some form of political guarantee that can be assessed from the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, this is available. Let me also mention that something related to that is the fact that the Minister of Finance has made known on a number of occasions that before the year ends, government would have established the mortgage liquidity facility which is to help the private sector to fund mortgages. These are some of the credit enhancement schemes in various forms. The collaterised mortgage obligation (CMO) has made it clear in many occasions that government has obtained $300 million from the World Bank as a mortgage liquidity facility and that is being finalised before the end of the year, so there is a lot that the government is doing to make sure that they provide the necessary support for the private sector to overcome some of the structural constraints that they have.
s there a possibility of providing enhancement for Nigerian corporates? There are various credit enhancement that are already in place. For instance, the partial risk guaranty offered by the World Bank Group and this usually comes through the Ministry of Finance, I’m aware there are a couple of projects
,
government to force private sector, the private sector is always in a search for profit. Now, what government has done is to provide that bigger framework; especially the infrastructure. Government has done the best thing it can do for the private sector as far as the bond market is concerned. Government used the opportunity of the fact just like any other government, it would need to borrow money from the market to fund its fiscal deficit which is what every government does and did in the past. The government is subjecting itself to the
discipline of the capital market, borrowing from the capital market. The government didn’t simply go to borrow from the capital market, it made sure that it’s structured in such a way that it borrowed from the capital market, it developed the market for a long-term fund for the private sector; so that’s the best the government can do in that particular respect and it has done so. Government knows that it also needs to establish a benchmark for the private sector and it has done that successfully making sure that it succeeded in raising funds at attractive coupons which will ensure that when Nigerian companies go to raise their own fund it will serve as a benchmark. Go and look at other countries that have issued bonds since we issued ours, and what their own coupons are, compared to ours. So government has done the best it can do as far as debt market is concerned, it's permanently working with the private sector like I said earlier, to make sure their various concerns are addressed whether in terms of tariffs, duties or infrastructure, the private sector does make proposal to the government on what to do so as to make sure there are appropriate infrastructure. However, the private sector is encouraged not to abdicate its own duty because in every economy, we have three agents; we have the household, firms (private sector) and the government that can work on its own while interacting with others. Go and monitor all the countries the world over, in the past 10 years, there are few countries that have achieved the type of macro economic stability that Nigeria has achieved and that’s one of the major things our private sector requires, a stable macro economic environment and I’ m sure if you conduct a research of countries in the world that have achieved high level of macro economic stability, Nigeria is amongst the first 20. Also, amongst the emerging market economies, Nigeria is on the top five lists. These achievements were as a result of government's deliberate policies in terms of monetary, fiscal, public debt management, exchange rate and banking policies. These are some of the things that government has done to make sure that the economy is relatively stable, but if government has not been performing optimally as it has done in the last two or three years, we will not have been doing as well as we are doing now.
34 — Vanguard, MONDAY, AUGUST 26, 2013
Homes & Housing Finance BRIEFS LSDPC, Heirs Holdings to redevelop Falomo Shopping Complex
L
AGOS State Development and Property Corporation (LSDPC) has sealed a partnership deal with Heirs Holdings, a panAfrican proprietary investment company, to redevelop Falomo Shopping Complex located in Ikoyi, Lagos State. A statement obtained by Vanguard disclosed that the complex would be redeveloped to accommodate shops, office complex and world class residential apartments to serve the needs of the Lagos populace. Managing Director, LSDPC, Mr. Biodun Oki, speaking during a tour of the site stated, “the Falomo Shopping Complex’s redevelopment is long overdue. Our partnership with Heirs Holdings is in line with the state government’s urban redevelopment project and it bodes well for the state, the country and for the citizens. Once this project is completed, we can all look forward to a new and improved landscape that will stimulate business activity in this area and beyond. Involving the private sector in our redevelopment agenda is the model for all future projects.”
Ogun to revive abandoned housing sites
O
GUN State government has said it has taken measures to utilise sites abandoned by the immediate past administration to construct low cost housing estates for the people. Commissioner for Housing, Mr. Daniel Adejobi, during an inspection tour of existing and proposed government estates in Abeokuta, said that the government plans to use the sites for the construction of low cost housing estates. He pointed out that the Ibara Housing Estate in the state capital, inherited from the past administration, had been completed, and urged civil servants to expect the second phase of the Workers Estate, Laderin for which development plans had been concluded. Adejobi noted that affordable housing for all cannot be achieved by government alone due to the huge capital outlay required. He therefore called on genuine property developers to partner with the government, adding that government had signed a Memorandum of Understanding with some registered private companies in order to deliver on it housing mandate to the people. He said the existing low cost estate at Ibara would be inaugurated in September.
FMBN disburses 43% of approved NHF loans Stories by YINKA KOLAWOLE
F
EDERAL Mortgage Bank of Nigeria (FMBN) has so far disbursed N39 billion out of about N90 billion that has been approved, representing just over 43 percent; while out of the N110 billion approves as estate development loan (EDL), only N62 billion representing about 53 percent have been disbursed.
Managing Director, FMBN, Mr. Gimba Ya’u Kumo, who disclosed this in Abuja, lamented the low capital base of the bank which is currently N5 billion, out of which only 50 percent or N2.5 billion being the Federal Government’s share has been paid up. He noted that the other shareholders, namely the Central Bank of Nigeria (CBN) and the National Social Insurance Trust Fund ( NSITF) have not paid up their 30 percent and 20 percent
share respectively. Ya’u Kumo noted that the National Housing Fund (NHF) presently only has 3,772,031 contributors, adding that it would require 50 contributors to contribute N500 monthly for 10 years before the bank can be able to provide a loan of N15 million for one individual. He called on the Federal Government to increase the bank’s share capital from its present N5 billion to N200 billion, to enable it address the housing
•Development of mass housing
deficit in the country. He asserted that the over 17 million housing deficit in the country would require aggressive injection of funds by the government. According to him, the total number of houses delivered through NHF scheme is just 56,000 units, conceding that the number “is just a drop in the ocean when compared to the housing deficit we are confronted with in the country.” He however claimed that 46 to 52 per cent of the houses delivered so far were done by the current management of FMBN within the last two years, while a further N1.6 billion representing 1.58 per cent of total collections was refunded to retirees. The FMBN boss also noted that the bank in partnership with some trade unions has been able to bring down the housing deficit for registered workers in the country to 4 million, while efforts are being made to clear the deficit within the next eight years. He commended state governments that are already part of the scheme, but urged them to provide infrastructure to help reduce the cost of housing delivery. “We also appeal to those states that are not yet in the scheme, about eight of them, to do so to enable Nigerians in those places to begin to derive the benefits of NHF and own their homes” he said.
Abia, Greenfield partner on Aba shopping mall A
BIA State government has entered a development lease agreement with a real estate investment and infrastructure company, Greenfield Assets Limited, in consortium with its development partners from Canada, US and UK, to build a modern shopping complex in the state capital, known as Aba Mega Mall. The project which is to be completed within 12 months will be erected on 23 hectares of land. The mall would consist of 5,830 ultra modern shops, in four sizes of 12sq meters, 16sq meters, 24sq meters and 48sq meters. The facility will also have provisions for banks, security post, petrol station, 25,000 sq meters of climate-controlled warehouse space, restaurants and a massive parking space for over 5,000 cars. Governor Theodore Orji, said the Aba Mega Mall project is part of efforts by his administration aimed at encouraging development of modern shopping centres as decent alternatives to what obtains at the present. “The conception and realisation of
the need to build a modern mega shopping mall in the city is a part of my administration’s drive to transform the landscape of Abia through our Urban Regeneration Policy, thereby providing a decent life for the people of the State,” he stated. The governor said on completion, the mall would be
capable of “generating employment opportunities, as the new businesses and the mall facility management will require considerable manpower in excess of 20,000 direct jobs and over 100,000 indirect jobs.” In speech at the signing ceremony, CEO, Greenfield
Paul Obanua, CEO Greenfield Assets Limited shaking hands with Abia State Governor,Chief Theodore Orji, at the signing ceremony of Development Lease Agreement between Abia State Government and Greenfield Assets Limited for the development of Aba Mega Mall at Osisioma-Ngwa, Aba, Abia State.
Assets, Paul Obanua, said to develop the mega mall, the company would be working with its development partners, one of which is JK Structures UK Ltd to introduce cutting edge concrete building technology. “Tried and tested in various parts of the world, the technology for example, was used in developing the Euro Disney, Paris, the largest amusement park in Europe. This system entails the use of three dimensional galvanised steel mesh reinforced with galvanised wire beam and alleviated concrete. The JK Structures system can deliver top quality mass housing and other civil works in a fraction of the time it takes using conventional building methods,” he stated. Obanua assured the governor of the commitment of his firm to deliver a world-class mall. “We wish to assure you that Greenfield Assets Ltd and her development partners will deliver a world class facility to become a testimonial and an inspiration to present and future citizens of God’s Own State,” he asserted.
Vanguard, MONDAY, AUGUST 26, 2013 — 35
FP SAMSUNG GALAXY
36— Vanguard, MONDAY, AUGUST 26, 2013
Insurance BRIEFS Insurers consider avenues to cover fundamental risks By ANGELA OKPE r. Wole Adetimehin, immediate past President of the chartered Insurance Institute of Nigeria, CIIN, said that the insurance industry is looking at ways of providing insurance covers for terrorism, war, and political risks because Nigerians are starting to request for them. Adetimehin who stated this to Vanguard said that insurers have not been covering them because of their catastrophic nature. Adetimehin said, “In our markets, people are asking that we provide cover for kidnapping, terrorism, political risks which are known as fundamental risks. By the day people are beginning to look at ways and means of providing cover for such risks which are insurable.” According to Adetimehin, in the early times of insurance, they were not insurable but in modern times, they are insurable but because of their catastrophic nature and magnitude it has been difficult for insurance houses or markets to build the required capacity that can provide for such losses.
M
Respond to changing customer needs, says Suncorp lients must be placed at the core of everything from underwriting to claims experience, according to a report on the future for the commercial insurance industry. The customer is now king thanks to the availability of information in the digital age, Suncorp’s latest Insurance Insights paper says. “There is a real threat to the viability of insurance player, if they do not view their businesses from their customers’ perspective,” according to report author and CEO Commercial Insurance Anthony Day. He says multiple distribution channels are needed to cater for changing and diverse requirements. “The commercial insurer needs to have the broadest distribution strategy it can sustain. At the same time, the strategy needs to be flexible in adopting technology, which is in itself evolving rapidly.” Shifts in customer buying preferences are a crucial concern for intermediaries such as brokers and authorised representatives, the report says.
C
Stories by ROSEMARY ONUOHA
C
ommissioner for Insurance, Mr. Fola Daniel has charged the newly inaugurated Insurance Industry Consultative Committee, IICC, to fashion ways of returning the insurance industry to its rightful place as a catalyst for national economic growth and development. Daniel, who gave the charge at the inauguration of the Committee in Lagos, said the industry and the public expect to see remarkable changes in the way insurance business operates. Daniel said, “The IICC is a body whose time has come. In line with the objective behind its establishment, the committee has been entrusted with the following mandate: To serve as a unifying voice for the industry; to represent the industry on national issues such as budget formulation; make input to national economic matters and any other issues affecting the industry; act as a body for resolution of intra and inter sector conflicts and take up and assume any other roles that will serve the best interest of the industry.” He urged the committee to take necessary steps towards uplifting the profile of the industry, improve public confidence in the profession and enhance the fortune of the industry. Daniel noted that the task before the committee is enormous, but is optimistic that they would engender robust and qualitative outcomes. “Suffice to say that the unification of purpose and the cooperation of all players in the industry at this point in the history of the industry is not an option, but an imperative. From the composition of the committee, it is satisfying that every arm of the industry is adequately represented. This is expected to aid the achievement of the much needed unity so that the industry would be seen to always speak with one voice. “Let me remind members of the committee that the industry expects so much from you. They expect to see remarkable changes in the way we do our business and the way we are perceived by not just members of the public, but by government at all levels. “They expect to see great improvement in the contribution of the industry to national discuss and its due recognition as a significant segment of the nation’s economy. I could go on and on, but the fact is the time has come for the
From left: Bimbo Oyetunde, journalist who had an accident receiving a medical bill compensation cheque from Bode Opadokun, General Manager, Technical and Nike Nihinlola, Senior Manager, Technical both of Consolidated Hallmark Insurance plc on an insurance cover by the company for members of the National Association of Insurance Correspondents (NAICO) at the Surgical Emergency Ward of the Lagos State Teaching Hospital, Ikeja, Lagos.
NAICOM tasks consultative c’mtte on industry transformation industry to assume its rightful place as a catalyst for national economic growth and development,” he said. He noted that the inauguration of the committee will mark the beginning of a new era in the industry. He urged members of the committee to remain steadfast, committed and dedicated to their mandate for the overall benefit of the industry.
President of the Chartered Insurance Institute of Nigeria, CIIN, Mr. Fatai Lawal, said the IICC would give the industry a voice, guarantees a collective medium for dialogue, provides a clearing house for vital industry policies, engenders a firm anchorage for industry ’s growth agendas, constitutes a powerful group for government relations and platform for resolution of conflicts.
He maintained that the success of the committee lies on the honest, open and sincere hearts of all arms of the industry to shed their individual toga for the benefit of the sector. Past President of the CIIN, Mr. Wole Adetimehin, said for many years, if the industry has had this kind of bonding, it would have made tremendous progress.
Consolidated Hallmark pays compensation to insurance correspondent rs. Bimbo Oyetunde of Radio Nigeria who was recently involved in a ghastly motor accident alongside other members of the Nigerian Union of Journalist (NUJ) on their return from Abuja after an official assignment where three people died has received a medical bill compensation from Consolidated Hallmark Insurance (CHI) plc. Oyetunde, an insurance reporter got the monetary compensation having been part of a Group Personal Accident insurance Scheme of the members of the National Association of Insurance Correspondence (NAICO), provided by Consolidated Hallmark Insurance plc as part of its Corporate Social Responsibility. According to details of the policy covering all insurance correspondents in Nigeria and renewed annually, CHI will pay a death benefit of N1million; permanent or temporary disability of N1 million or N200,000
M
maximum for medical bills. Mr. Bode Opadokun, General Manager, Technical, of the company who led the management of the Company for the cheque presentation to Oyetunde at the Surgical Emergency Ward of the Lagos State University Teaching Hospital, Ikeja thanked God for the survivors and prayed God to grant families of deceased ones the fortitude to bear the loss. Opadokun stated the need for all and sundry to embrace the culture of insurance because of its ability to provide succor in the event of the unexpected, stating that journalists particularly need to have adequate insurance because of the risky nature of their job. He called on media houses, the NUJ and other stakeholders to take insurance policy for journalists more seriously because of the high risk nature of their jobs. “The journalism profession both within and outside the country is exposed to different
kinds of risks and such calls for the need for insurance to mitigate the risks in the event of this nature.” He stated that insurance is not a luxury but a necessity, adding “That is why as part of our CSR we decided to provide Group Personal Accident insurance for journalists covering the insurance beat so that they can do their jobs with rest of mind.” He said that CHI has over the last 18 years been in the business of providing insurance services to people across the country and takes its claims payment very seriously. Mr. Modestus Anaesoronye, one of the insurance journalists covered in the policy while expressing appreciation to the company on behalf of other insurance journalists stated that NAICO’s joy knew no bounds in October last year when the policy was presented to it, adding that no one knew the policy was going to mature so quickly.
Vanguard, MONDAY, AUGUST 26, 2013 — 37
Is your bank in trouble? Act before it goes down again poised to experience one of the worst traumas to which the financial sector was subjected about 24 years ago. That was when the Central Bank of Nigeria first embarked on a massive withdrawal of public funds from banks. The impact was devastating; in the end, over 20 banks went under in the first major banking crisis in Nigeria since the early 1960s – when banks like AGBONMAGBE Bank collapsed in the first ever banking disaster. In the late 1980s to the early 1990s, when the second set of banks went down, the build up to catastrophe had been the same. Banks had left over 70 per cent of the money in circulation outside the banking sector and had allowed themselves to be seduced into chasing, securing and operating on public funds – when the public sector had more money than sense. Federal and state government officials deposit money at no interest in banks and borrow their own funds back at high interest rates. It was scandalous when “money was no problem” for governments, that is, when revenue outstripped budget by a wide margin. It became policy insanity when revenue fell short of budget. Even a good primary school pupil can
understand that when you deposit your cash without interest and borrow from the same bank at 14 per cent, you have, in effect, given away 14 per cent of your deposit. Why this simple fact became difficult for Finance Ministers, including Dr Ngozi OkonjoIweala, to understand remains one of the most baffling puzzles of the century in Nigeria. Why she did not put a stop to it sooner boggles the mind that wants to contemplate it. As usual, a time comes when the interest rates payable to banks are gobbling up an increasing percentage of the funds on deposit. Then, government officials start to “do what they have left undone” because the truth was sent on
,
“Those who do not remember the past are condemned to repeat it”, George Santayana, 1863-1952. (VANGUARD BOOK OF QUOTATIONS p 93). “When an old man dies, you lose a library,” according to an old adage. Having survived all odds to reach the age of 69, in a country where life expectancy is still under 52 years, it might not be too presumptuous to call myself “an old man.” Not just an old man, but one who actively attempts to document historical landmarks in the management of our national economy. The reason is obvious and simple, I am an economist and one of the founding fathers of Economics, Alfred Marshall, 1842-1924, has enjoined us that “The economist, like anyone else, must concern himself with the ultimate aims of man.” I am primarily concerned with the ultimate aims of Nigerians within the context of economic development and aggregate social welfare. I believe we can organise our economy better than we do at the moment and we have done for almost 30 years; and the worst area of our macro-economic policies had always been the banking sector – the sector that really should be creating wealth for most of the people but it is not. Instead, banks are once again on the verge of deepening our woes. Nigerians with deposits in banks and their bankers are
time, carries with it dire consequences for the banks, for the economy and for Nigerians. Like somebody who had never had to lift a finger or rise from bed to get fed, asking him to suddenly go to the farm to harvest raw food, return home and cook it, can result in heart failure. Yet, this is what the Federal and state governments do to our banks every ten years or so. We feed them free government money; then, we force them to compete when they are least prepared and the casualties follow predictably. The graveyards of banks are waiting for the corpses of 201314 – as they swallowed OCEANIC etc.
T
he withdrawal of public
Banks which had declared unbelievable profits turned out to have once again falsified their reports. By the end of 2008, another banking party was over; Nigerians were staggering around with the hang-over from that banking misadventure.
holiday all along. Unfortunately, encouraging banks to avoid the difficult task of funds mobilization, for a long
,
funds from banks by the Central Bank in 2013 will inevitably produce the same result. Naturally, it will affect banks differently; some will
withstand the pressure better than others. A few will resort to the tried-and-failed approach of issuing falsified Annual Reports and Accounts or Interim Reports in order to mislead depositors and some will even approach the capital market to raise additional capital. The ones to avoid now are those attempting to raid the market for funds. The banking sector is once again likely to experience a downturn rather than an upward surge in the short and medium terms. People should ask for advice before investing – because investors stand a good chance of losing their funds. Perhaps, the most important question on the minds of depositors remains: “Is my bank safe”? Before attempting to answer that question let me again remind us of the lessons of our banking history. Some people might be able to answer their own questions. Before the “sudden bank failure” during the Abacha administration, it was standard operating practice for banks to announce eye-popping profits over the last year. Among the leading banks was Alpha Merchant Bank whose Managing Director, Jimi Lawal, was the toast of the Nigerian Stock Exchange, NSE.
Micro-Finance
NAMB applauds CBN over MSMEDF Stories by PROVIDENCE OBUH
T
HE South West Zone of the National Association of Microfinance Banks (NAMB) has expressed delight over Micro, Small and Medium Enterprises Development Fund (MSMEDF), launched penultimate week by the Central Bank of Nigeria (CBN), saying it will bring liquidity into the system. Chairman of the zone, Mr. Olufemi Babajide, in a telephone conversation said, “The fund will bring confidence into the system and the interest rate will serve as a sustaining vehicle of the fund. Penetration would be massive and people will reach us properly.” Meanwhile, Women in the Micro, Small and Medium Enterprises (MSMEs) subsector would be enjoying about 60 percent of the fund, representing N132 billion of the approved N220 billion.
Chapter one of the “Guidelines for the Operation of Micro, Small and Medium Enterprises Development Fund for Nigeria,” shows that a large number of un-served and under-served clients exist in the Nigerian MSME subsector. In order to address the funding requirements of this critical segment of the economy, Section 6.10 of the revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria
stipulates that; “a Microfinance Development Fund shall be set up, primarily to provide for the wholesale funding requirements of MFBs/MFIs.” The Policy also stipulates 80:20 prescription for onlending to micro enterprises and SMEs respectively, hence the decision of the CBN to rename it “Micro, Small and Medium Enterprises Development Fund’ (MSMEDF). According to the guideline, “Considering the peculiar
challenges faced by women in accessing financial services in Nigeria, the Revised Microfinance Policy, Regulatory and Supervisory Framework in Section 4.2 (iv), provides that women’s access to financial services should increase by 15 per cent annually in order to eliminate gender disparity. “In order to achieve this, 60 percent (N132.00 Billion) of the Fund has been earmarked for providing financial services to women.” The key objectives
of the guideline shows that 10 per cent has been earmarked for social and developmental categories and the balance of 90 per cent of the fund, amounting to N198 billion, will be utilized for the provision of direct on-lending facilities to Participating Financial Institutions (PFIs). For monitoring and evaluation, “the financed projects shall be subject to onsite verification and monitoring by the CBN, the Managing Agent and PFI during the loan period. There would be off-site ICT based reporting system to provide up-to-date information on the fund’s activities.
MTN introduces cloud software for Nigerian SMEs M
TN Nigeria has introduced cloud services for small and mediumsized enterprises (SMEs). Chief Enterprise Solutions Officer, MTN Nigeria, Mr. Babatunde Osho said that the services would offer SMEs enterprise applications for
human resource management and customer relationship management. ” Osho said, “It is a range of prepaid cloud-based services designed to offer Human Resource Management, Customer Relationship Management and other
enterprise software over a secure internet connection. And this without any of the associated IT infrastructure costs.” He added that the operator is using the service to support SMEs in Nigeria by removing the attending costs of the
applications, explaining that the SMEs will enjoy more flexible offerings on a pay-asyou-go basis. “We will continue to explore opportunities to help in stimulating the economic growth and development of this great country,” he said.
38 — Vanguard, MONDAY, AUGUST 26, 2013
Appointment and Promotions vicahiyoung@yahoo.com 08033348923
MasterCard appoints Ofili Vice-President sub-Saharan Africa
M
asterCard has a p p o i n t e d Ezediashi Ofili Vice President and Business Leader to drive the growth of its Prepaid Business in sub-
Saharan Africa. He will also oversee MasterCard’s Global Products and Solutions team in the region. Ofili joins MasterCard from
From Left: The Director General , Centre for Democratic Governance, Dr. Dafe Akpocha, Chairman Momas Electricity Meters Manufacturing Company Limited, MEMMCOL, Engr. Kola Balogun, Member of Board, Centre for Democratic Governance, Esther Ebiere Gboukumar and the National Vice President, National Association of Nigerian Students, NANS, Jubril Ahmed, during the presentation of the Distinguished Gold Service Award and Award of Excellence by the two bodies to the Chairman of MEMMCOL.
Kola Balogun gets 2 awards hairman of Momas Electricity Meters Manufacturing Limited, MEMMCOL, the only indigenous manufacturers of digital prepaid electricity meters, Kola Balogun, has been honoured with two awards. The awards are the “Distinguished Gold Service Award” by the Centre for Democratic Governance in Africa, CDGA, and “Award of Excellence” by the National Association of Nigerian Students, NANS, in recognition of his contribution to the economic growth and development of the nation. The Awards were presented to him when leaders of the two bodies paid him a courtesy call at the company’s factory located at Lagos – Ibadan Expressway, Ogun State. The CDGA team was led by the Director General, Dr. Dafe Akpocha, while the NANS delegation was led by its national Vice President, Jubril Ahmed. Explaining the rationale for the award, Dr. Akpocha said CDGA was particularly impressed by his achievements and immense contributions to nation building through the establishment of the company which serves as a critical intervention in the Nigerian power sector. According to him, CDGA recognized the immense contributions and resilience of Engineer Balogun to putting Nigeria in the global technology map and creating employment opportunities for teeming Nigerian youths. He called on the federal government, concerned ministry, parastatals and agencies to give all necessary support for the company to continue to add value.
C
Also speaking, Ahmed commended Balogun for his foresights and believe in the Nigerian dream by investing in what he tagged, the future.
Access Bank PLC where he was the Head of Business Engagement for Northern Nigeria. With more than twenty years’ experience in the banking, energy, Information Technology and credit rating sectors in both Africa and Europe, Ofili has played a key role in several major projects most recently the launch of the Nigeria National Identity Card project. MasterCard is seeking to expand its prepaid product offering in the region and has partnered with several financial institutions to drive this strategy. Speaking on the appointment, Daniel Monehin, MasterCard’s Division President subSaharan Africa, said growing the prepaid business in Africa would bring more people into the formal financial system thereby increasing levels of financial inclusion in the continent. He said “We are happy to welcome Mr. Ofili to the MasterCard team. As we work towards realising our vision of a world beyond cash we acknowledge that Africa’s position as an emerging
Ofili market provides increasing opportunities for the growth of prepaid card payments, especially as the market begins to witness a shift from cash to cashless transactions.” “We believe that investing
in the kind of talent that will make our vision a reality is central to our success, and we are glad to bring on board someone with the experience and passion required to drive our growth in this region.” Mr. Ofili is a qualified Petroleum Engineer from the University of Ibadan, and is also a Microsoft Certified Engineer and Project Management Professional with PRINCE2® certification. In addition, he holds a Master’s degree in Business Administration – Strategic Management of Technology – from Cass Business School in London. On his appointment, Ofili said, “The potential for Africa to become as technologically advanced as its counterparts in the developed world in the area of payments is enormous, and I look forward to contributing to this growth. With the African market poised to grow significantly in the coming years as the middle class expands and use of electronic payments gains traction, now is the time to ingrain prepaid card usage in our consumers’ daily transactions.”
EY appoints four new partners
E
Y (also known as Er nst & Young), has announced the appointment of four new partners to the firm. The new partners are Yhiza Pena, Yemi Saka, Colin Daley and Akinbiyi Abudu. The appointment comes under the Africa investment plan to help the firm builds strong capacity in the advisory, assurance and tax services across the region for the long-term success of its business and clients.
Yhiza Pena: Yhiza, who has since relocated to EY Nigeria, is a Partner in Assurance service line with focus on financial services industry in West Africa. She joined EY Indonesia in 1989 and rose through the ranks to become Partner in 2000. A of Business Administration, University of the East, Manila, Yhiza, has extensive experience in banking industry with over 27 years of audit and advisory work experience in Nigeria, the CIS (Russia, Georgia, Azerbaijan, Uzbekistan, Belarus), Indonesia, Taiwan and the Philippines.
Yemi Saka As a new Partner in Advisory, Yemi will be leading IT Advisory for West Africa. As part of the EMEIA Information Security Centre of Excellence (CoE) with the objective of driving Security
Daley Pena across the Europe, Middle East, India and Africa, Yemi brings to EY’s clients over 15 years of world-class experience in consulting across industries (Financial Services, Telco, High-Tech, Public Service, Resources, Retail). Through direct client experience, Yemi has increasingly delivered complex work programs and business-driven IT strategies to a diverse set of clients.
Colin Daley Colin is a new partner focused on the financial services sector. He comes with vast professional services experience in Change and Business Improvement and has held roles within the financial services and automotive industries. Colin has worked in the UK, Norway, Poland and countries in Middle and South America with a primary focus on helping global banks to profitably organise themselves to improve
Saka banking for their valued customers. He has had great success in the African continent working with leading financial organisations to improve customer engagement, regulatory compliance and profitability. Colin led the launch of our Global Consumer Banking / Insurance surveys in South Africa, Zimbabwe and Nigeria, which survey over 55,000 Customers in 35 countries across the Globe.
Akinbiyi Abudu Akinbiyi Abudu is a new Partner in tax service line. Prior to joining EY Nigeria in 2011, he worked in the United States for one of the other Big 4 firms. Akinbiyi has over 12 years experience in the consulting industry, primarily in global tax structuring and planning. He has proven excellence in achieving results and generating revenue. He currently leads the EY Nigerian tax advisory team as
Abudu well as the human capital team for global clients. In addition to client service, Akinbiyi has been active in people activities, particularly as it pertains to recruiting. Akinbiyi holds a BBA in Accounting and MTx in Taxation from Georgia State University in the US and is a Certified Public Accountant (CPA).
Vanguard, MONDAY, AUGUST 26, 2013 — 39
People in Business BRIEFS Third set winners ends “33” promo
T
•AUN Library houses a business and entrepreneurship centre, radio and television studio, communication department etc.
E-learning is cost-effective — Amed Demirhan
M
r Amed Demirhan is the Director of Library Services at the American University of Nigeria (AUN) in Yola. In 2006, he started the first digital library in the University of Kurdistan, Iraq. In November 2011, he moved to AUN as Director of Library Services where he has transformed the library from a traditional library to a digital library and now, AUN is about to unveil its new smart library, all in a bid to go green and make education cheaper. In this chat with Vanguard, Demirhan speaks on how the institution, strongly supported by its President, Dr. Margee Ensign, is leading the movement toward digital libraries around the world. He says if AUN could achieve this to become Africa’s only global library, other institutions in Nigeria can achieve that too. Excerpts:
A
ccording to Demirhan, AUN is doing something unique in the area of library services not just in Nigeria, but internationally. Recently, the AUN e-library project received the American Library Association’s (ALA) Presidential Citation for Innovative International Library Projects. One of the reasons given by ALA for choosing AUN was that AUN has created a digital library model for other libraries that is affordable, sustainable and increases availability of resources for users. “We are applying information technology both to organisational structure, space and collection. Those are the things that created the magic. So that was why this year (2013), the AUN was selected as one of the best innovative international projects in library and I think every Nigerian should be proud of that. Also,
a publication by The Guardian of UK singled out AUN, along with Oxford, New York, Manchester, and six other universities around the world, for its extraordinary achievements. It was the only African library to make the list. “This is really bringing us close to the founder’s dream of creating efficient, functional, competitive institution that could be replicated all over Nigeria and Africa. We are not saying we are doing this because we are better than everybody else, we are saying we are doing this and we can prove everybody else could do it. We want every university, every school in Nigeria to know they can do what we are doing regardless of their resources because this did not cost a ton of money. We create sustainable, affordable libraries. In the last two years, we have moved from traditional to digital and now to smart library. We are constantly improving. Only very few
,
By EBELE ORAKPO
•Amed Demirhan saves money, more e n v i r o n m e n t - f r i e n d l y, consumes less electricity and takes up less space. We have a business and entrepreneurship centre, radio and television studio, communication department, all located in the library. That is why it is called
We want every university, every school in Nigeria to know they can do what we are doing regardless of their resources because this did not cost a ton of money
universities in the world have done it.” Advantages: “A smart library is basically like a smart phone – multifunctional, efficient, has more services and because you deal with e-resources, you don’t need too much space, so we have more space to add more services. We use more mobile applications. For instance, the scanner, desktop computer, laptop, photocopy machine, and telephone have been replaced by smart phones, tablets and netbooks, thus providing a new level of efficiency and effectiveness. It
,
smart library. That is efficient use of space and we did not spend so much money to get to where we are. We spent much less than what the Petroleum Trust Fund gives to a university library in Nigeria. Every library gets about N30 million from the fund. Almost every university is erecting new buildings; but if they can put that money into tablets or other devices, every university with the cost of one building, can become an AUN as far as elibrary goes. “We used to pay about $11, 360 for 76 newspapers and magazines plus the cost of handling, displaying and
archiving them. With that money, we can buy tons of ebooks and thousands of ejournals. So e-learning is money saving, it is effective and that is why I am saying this is an equalizer for developing countries. It is not magic. When I talk with others from universities in Nigeria, they tell me 'you have all these resources because you have all the money. The issue is really nationally critical for development," he said. “An organisation visited AUN and observed that the whole place was so organised and clean and I tell them ‘look, the people who do the job are Nigerians, they are not from the moon so Nigerians work for you and work for us too. So if they can do this for us, they can do it for you too. It is so simple. But the difference is not being Nigerian or American or Japanese or whatever; the difference is organisation, functionality and efficiency. That is the key and everyone can do it," said Demirhan Community service: “The use of the latest technology has dramatically increased both the library’s ecollections, and user access (24/ 7), regardless of location. "The community benefits from our Open Access resources. We offer them training on how to use resources and evaluate them. Open access is the best investment for expansion of global education and development. Through that, we are able to help other Nigerian universities and independent researchers. In 2012, we trained 147 faculty and administrative staff from the Federal College of Education, Yola and 20 faculty members from Modibbo Adama University of Technology, Yola. As at today, the library has subscribed to more than 210,000 e-books. This is more than most university libraries' e-book collections in America. "People in the community who want to start their own business can come to our entrepreneurship centre in the library and get free advice and may be application forms."
hree consumers of Consolidated Breweries Plc's “33” Export larger have won N3 million in the national consumer promotion tagged; Cracking the code. The trio; Mr. Tunji Odusanya, Sunday Edobor and Henry Emama emerged the third set of winners in the recently concluded “33” Export lager promo. The consumers won N1million each after successfully cracking the code of friendship by combining their crown corks to form the phrase - Code Of Friendship. This latest set of winners has increased the number of grand prize winners so far to nine since the promo commenced on June 7. Presenting cheques to the winners, the Brand Manager, Consolidated Breweries Plc., Mr. Dare Olateju expressed appreciation to consumers of the beer for making the promo a huge success.
SBC’s 3rd HBS winner emerges
S
EVEN-Up Bottling Company, SBC, Plc was the recipient of this year’s 7Up Harvard Business School MBA Scholarship. The scholarship was instituted in 2010 as part of the 50th anniversary celebration of the company to provide young Nigerians the opportunity to acquire skills that will equip them to become global leaders. Miss Mayowa Kuyoro, a young Mechanical Engineer, was unveiled in Lagos as the recipient of the 7Up HBS Scholarship for this year. She joined two previous winners: Ms. Misan Rewane and Mr. Olujimi Williams. Speaking at the event, the Executive Director, Human Resources, Seven-Up Bottling Company Plc, Mr. Femi Mokikan, said that the country would benefit from young, energetic Nigerians who are capable of transformational leadership by virtue of their education and exposure. He listed some of the criteria for the scholarship selection to include: a valid admission letter from Harvard Business School, residency in Nigeria, relevant post-graduation selfapplication proposal to contribute to national development and the critical needs criterion – financial need to fund the scholarship.
40 — Vanguard, MONDAY, AUGUST 26, 2013
Aviation BRIEFS NCAT launches book on air navigation maintenance tomorrow
T
HE Nigerian College of Aviation Technology, (NCAT)Zaria in conjunction with the Chief Aeronautical Te l e c o m m u n i c a t i o n Engineering Instructor of the College, Engr. Emmanuel Onwuka, is to launch a book to enhance the training of aviation personnel tomorrow in Lagos. Speaking in Lagos on the proposed book titled Introduction to Air Navigation System Maintenance in Nigeria, Onwuka noted that aviation training colleges in the country lacked training books which has made it difficult for students to get the required knowledge. He disclosed that the dearth of books in the training of aviation personnel is a source of worry to the college and other aviation colleges as it was becoming increasingly difficult to get materials for aviation training and research. He explained that it was based on this that after about 20 years as an instructor with NCAT, that he decided to write the 200page book which provides an insight into navigation telecommunication.
Ghana’s Africa World Airline to begin flights to Nigeria
A
frica World Airlines, a Ghanaian carrier has been granted rights to begin flight operations to Nigeria by the Nigerian Civil Aviation Authority, NCAA. Ch-aviation reports that while speaking to Ghana’s Citi Business News, Africa World Airlines (AW) Chief Operating Officer, Mr Apiigy Afene, revealed that the airline would tentatively begin plying its Nigerian routes, named as Abuja and Lagos originally, from October this year, though this is still not fixed. “We are fortunate that five months after putting in application, we have been successful. Tentatively, we are looking at October 2nd to start flying into Nigeria but it may change but we will work hard to ensure we start flying in October,” he said. Fellow Ghanaian carriers, Antrak Air (O4, Accra) and Fly540 Ghana (5G, Accra), have also claimed that they have been tentatively granted traffic rights to Nigeria following the intervention of the Ghanaian Ministry of Transport and Civil Aviation Authority (GCAA). Africa World currently operates two routes, both domestic, to Kumasi and Tamale.
NAMA to train 96 AIS staff at NCAT By LAWANI MIKAIRU
N
IGERIAN Airspace Management Agency , NAMA, is to train 96 members of its staff in Basic Aeronautical Information Course at the Nigerian College of
Aviation Technology , NCAT, Zaria. According to Supo Atobatele, General Manager, Public Affairs, NAMA, this training is part of on going efforts by the agency to beef up capacity and manpower requirement preparatory to the imminent take-off of
Aeronautical Information Service (AIS) automation in November. The Managing Director, NAMA, Engr. Mazi Nnamdi Udoh , said “ the affected staff are to be trained in Basic Aeronautical Information Course at the Nigerian College of Aviation
From left: Sullivan Akala, Executive Director, Business Development, E-Tranzact International plc; Kemi Okusanya, Business Development Anglophone, West Africa, MoneyGram, and Kunle Olumuyiwa, Operation manager Anglophone, West Africa, MoneyGram at the partnership agreement signing between MoneyGram and E-Tranzact to flag-off MoneyGram Goes Mobile platform in Lagos Photo by Lamidi Bamidele
Technology, NCAT, Zaria . For effective deployment of logistics, the group shall run the course concurrently in four batches.“ Addressing participants at NAMA headquarters in Lagos, Engr Udoh congratulated them for the privilege just as he enjoined them to justify the agency’s huge investment in their training by taking their studies seriously. Atobatele further said; “The International Civil Aviation Organisation (ICAO) has set November 15, 2013 as deadline for the implementation of AIS automation worldwide and the project in Nigeria has reached advanced stage of completion.” AIS automation when in operation, would enhance air safety with pilots sending their aeronautical messages online and this would reduce excessive telephone conversation between pilots and air traffic controllers. NAMA said the airports to benefit from the project include Lagos Kano, Abuja, Port Harcourt, Ilorin, Jos, Sokoto, Maiduguri, Owerri and Yola. Others are Zaria, Calabar, Osubi, Minna, Kadunna, Enugu, Katsina, Ibadan, Benin, Akure, Bebi, Bonny, Eket, and Eskravos.
FAAN MD deserves merit award — Aviation Minister T
HE Minister of Aviation, Princess Stella Oduah, has said that the Managing Director of the Federal Airports Authority of Nigeria, Mr. George Uriesi, deserved the National Productivity Order of Merit, NPOM, award bestowed on him and 19 other distinguished Nigerians by President Goodluck Jonathan recently in Abuja. According to Yakubu Dati, General Manager, Corporate Communication, FAAN, Princess Oduah made this remark when she made an unscheduled appearance at a reception held in honour of Mr. Uriesi by some staff of FAAN in Abuja, soon after the award ceremony. “ She said that it was remarkable that Mr. Uriesi had turned the fortunes of FAAN, from that of a parastatal reeling under the weight of heavy indebtedness to the tune of about N8 billion, to one that is becoming increasingly financially selfsustaining in less than two years of his appointment as the authority’s chief executive officer.” Dati said Oduah described Mr. Uriesi as “a tr ue professional who understands his tasks and is bent on achieving them.” She added
that Mr. Uriesi inherited one of the worst Government agencies in Nigeria which he had undoubtedly transformed through his “passion to deliver.” The Minister told FAAN staff who were present at the event that they did not have any choice but to transform
the authority into an efficient agency that would contribute significantly to the socioeconomic development of the country, promising that government was willing to encourage them to make that goal feasible. “Apart from being a past General Manger of the
award-winning Cape Town International Airport, in South Africa, Mr. George Uriesi, continues to play active part in the Airports Council International (ACI), both at the regional and international levels, in airport safety and technical matters. He is also a United States-certified Business Coach.”
NCAA advises airlines to comply with industry laws By LAWANI MIKAIRU & DANIEL ETEGHE
T
HE Director-General, Nigerian Civil Aviation Authority, Capt Fola Akinkuotu has advised airlines operating in Nigeria to comply with extant aviation laws to avoid sanctions by the regulatory agency. Capt. Akinkuotu made the remark while receiving the chairman and management team of Caverton Airlines who paid him a courtesy visit. According to Fan Ndubuoke, General Manager, Public Affairs, NCAA, the D-G said that "one good thing about the aviation industry is that the laws are there and compliance is very essential. As a regulator, we will always assess airlines from the point of view of adherence to the industry laws.” Capt. Akinkuotu further said that the authority will provide the enabling
environment for airlines to operate and succeed adding that the way to go is to stand to accept compliance to the law at all times. While expressing his wish for airlines to succeed and make profit, the D-G prayed for accident/ incident-free period throughout his tenure. Earlier, the Chairman of Caverton and leader of the team, Mr. Aderemi Makinjuola told the D-G that his team has come to pledge their support to him, promising to continue to execute their work and responsibilities with due diligence and recourse to the existing industry laws, adding that they are always willing to make corrections whenever there is a mistake in the course of their operations. He said that they have also come to know the policy thrust of the D-G even though according to him, it has always been safety, safety and safety, so that they will know areas he would want them to contribute in line with his policy thrust and also towards the growth of the industry.
Vanguard, MONDAY, AUGUST 26, 2013 — 41
Agric an Africa where no child will go to bed hungry. And we felt that apart from me being a Nigerian that my first port of call is solving Nigeria’s Food challenge is actually solving 25 per cent of African’s challenge, because the demographic information available to us today says that Nigeria’s population is a quarter of the continent. So whatever, we can do to support the minister especially in the context of the Agricultural Transformation Agenda (ATA)is equally a deliverable for us in FARA. So it is a win-win scenario for both FARA and the government of Nigeria to actually now step-up our collaborative engagement in the quest of providing research tools for our stakeholders. On Value chain approach As mentioned earlier on, am an animal scientist and I have made my mark when it comes to livestock research and livestock integrated systems. I am particularly delighted that the minister has chosen to pursue the value chain approach and that is the way to go, if we look at countries that have broken the food insecurity barrier of late (last 30 years), we have countries like Brazil and China; these two countries paid the heavy price of investing in agricultural value chain. Brazil is a model to emulate and if you go to China, it is another scenario where you have demand approach to research from farm to fork which means that
Yemi Akinbamijo
Investment in agricultural research has gone down —Akinbamijo r Yemi Akinbamijo has an agriculture background with specialization in animal production. As an agricultural expert who has served in various capacities over the last 28 years, he is solidly pluggedin on agricultural development issues in Africa. Dr Akinbamijo was recently appointed Executive Director of the Forum for Agricultural research in Africa (FARA), he had served the African Union Commission as head of the Agriculture and Food Security Division until June 2013 at the Headquarters in Addis Ababa, Ethiopia. Dr Yemi Akinbamijo holds a PhD of the Wageningen Agricultural University, The Netherlands. In this interview with journalists after a visit to the office of Minister of Agriculture, Dr. Akinwumi Adesina , he shares his thoughts on Agriculture in Africa. Here is an excerpt. On his visit the Minister of Agriculture Where are here in Abuja because I received an invitation, from the Federal Ministry of Agriculture and Rural Development, to meet with the Minister of Agriculture, Dr. AKinwunmi Adesina. Let me put it in perspective, this is the very first mission that I will be undertaking after assuming office, and it is very interesting for me in particular
,
D
Across the continent today, the key supporter of African research and development have been European and American countries, but we felt that Nigeria should now come to the fore and support the effort of FARA de Forum
because, I am a Nigerian and I thought it right that I should commence my engagement with the international community from my home country. I also came as the head of a delegation called FARA de Forum. Now let me make a brief description between the secretariat of FARA and FARA de Forum. The secretariat services the interest of the Forum, and de forum is the agglomeration of all the stakeholders in agricultural research for the continent. So it was a delegation that was composed of a cross-section of stakeholders. In the delegation, I have three of the senior colleagues from FARA, and we have from Nigeria the head of Agricultural Research Council, Professor Abubarkar and we also have two representatives of the Director General of the International Institute for Tropical Agriculture (IITA) based in Ibadan, and we also have the Director General of the
,
International livestock Research Institute, DR. Jimmy Smith. Basically as I said, it was my first mission out of office and I wanted to keep the minister abreast of my desire to have Nigeria continue to play an important role in the domain for agricultural research development in the continent. However, from what I am beginning to see over the last couple of years and this is not peculiar to Nigeria, investment in agricultural research has been down. Across the continent today, the key supporter of African research and development have been European and American countries, but we felt that Nigeria should now come to the fore and support the effort of FARA de Forum and the secretariat in its drive to have a food secured Africa. It should be noted that late President Bingu wa Mutharika in his tenure as the chair of the AU made a pledge which we still try to uphold when he said that he wanted
you disaggregate every segment of the chain from the farm until it reaches the table. In other words, if we adopt what I referred to earlier on as demand driven research as opposed to the supply driven research, we look at the table and see what the demand on the dining table of Nigerians is and what will be the demand facing Nigeria 50 years from now. Now the question facing us is will we be able to meet this demand? And if yes, there are a few things we still have to do. Well it is on record that about 45% of the foods we produce do not get to the table because of post-harvest loss. One of the key issues in the reduction of post-harvest loss is definitely the issue of value addition, processing and transformation of products and when we look at the value chain, there is the issue of dealing with inputs, agrodealership, fertilizers, seeds, access to credits and enhancing the capacity of the farmers not to do business as usual because just like Albert Einstein said that if you do the things you always did, you will get the results you always got. And we know it that the result we always got is not the result that will sustain drive. At the moment the food import bill on this continent is in excess of 40 billion US dollars and we in this continent have the capacity to reduce this bill by the way, this is the money we do not have so it is incumbent upon us that we do anything we can to reduce this bill and we can.
FG targets 500,000 metric tonnes of Cocoa from 2015 T
he Federal Government has targeted the production of 500,000 metric tonnes of Cocoa annually, from 2015. Mr. Akinwumi Adesina, Minister of Agriculture, disclosed this in a paper entitled: “Agriculture: The Value Chain Roadmap” on Friday at the 9th All Nigerian Editors Conference with the theme “Nigeria Beyond Oil: Role of the Editor ” in Asaba, Delta. The News Agency of Nigeria (NAN) reports that the fourday conference which started on Wednesday was organised by the Nigerian Guild of Editors in collaboration with the Delta State Government. According to him, government’s target is to double the production of cocoa from the current 250,000 metric tonne per annum to over 500,000 metric tonne per annum by 2015. “We are taking advantage of the recently released high yielding hybrids of cocoa by the Cocoa Research Institute of Nigeria. “These varieties give yields five times the yields currently obtained by farmers and in
half the time.” The minister also said that irrespective of the nature of products be it crops, livestock or fisheries, marketing has remained a daunting challenge to farmers adding that government was already addressing that. He said that the challenge of marketing was basically due to the absence of market information system, poor storage facilities, poor rural road networks among others. “Post harvest loses can be as high as 45 per cent for some agriculture commodities, especially perishable such as onions, tomatoes, fruits and horticulture products. “We are addressing this challenge. We have completed a total of 10 new silos for strategic food reserves within one year. “We now have a total of 30 silos of different capacities in various locations in the six geopolitical zones of the country,” he said. He said that government was also supporting the silos with warehouses to ensure that the post harvest loses were reduced.
42 — Vanguard, MONDAY, AUGUST 26, 2013
Commodity Index
half pg Warning
Vanguard, MONDAY, AUGUST 26, 2013 — 43
Advertising, Media & Marketing
Juice content, market leadership tussle
Customers as Elephants - 1
… Chivita deploys content campaign Stories by PRINCEWILL EKWUJURU
R
ECENTLY, the fruit juice market has been witnessing some string pulling by contending brands for the leadership position in the carton packed fruit juice market, breaking campaigns on 100 percent natural juice content. Brands like 5Alive, Fuman, Ribena and few others have been riding on the 100 percent juice content tagline to control the market. More obvious is the Chivita 100 percent natural juice campaign that had taken over media spaces lately. Conversely, since the fruit juice market is a market driven more by volume sales than price differentiation, availability at every point of purchase is critical to market leadership. Distribution network built over time is only able to match and even surpass that of competition in certain locations. In a monopolistic market, leadership in any business category is never a birthright, it is never an accidental occurrence. Instead, market leadership is a strategic decision that must be planned for and excellently executed. To be sure, any brand can desire to be the market leader in its category, but unless the decision is translated into action it will simply remain a wish. The re-enforcement of Chivita’s 100 percent fruit juice content as part of a carefully designed strategy to maintain top-of-the-mind-awareness, remains a tagline that has won accolade for the brand among fruit juice lovers in Nigeria.
Furthermore, a careful look at the campaign shows it is a conscious strategic choice by the owners of the brand on how it intends to compete in the market with its flagship brand - Chivita Premium Fruit Juice. Like Justin Akugo, Managing Director, Kizito Stores, puts it, “managing for market leadership demands courage and boldness to tread where others are afraid to venture. Chi Limited was daring enough to chart new courses and risk operation in a developing economy like Nigeria where uncertainty is the only certainty.” Continuing, he said, Chivita’s success stands on three strategic pillars. The first pillar is the fruit juice itself. As thousands of customers have attested to, even in blind taste tests, Chivita Premium Fruit Juice is truly 100 percent fruit juice in content and contains
no added sugar, no added preservative and no artificial colours and flavours. Chi Limited was able to deliver the product through massive investment in latest technology that helps to address the needs of a growing healthconsciousness Nigerian fruit juice consumers. Further, he explained that in its quest to enrich the quality of its flagship brand with premium taste and quality, the new Chivita Premium Fruit Juice comes with a newer, more attractive pack designed to give more impact and to focus more on brand elements. Relying on consumer insights, the fruit juice is packaged in Tetra Pak elongated rectangular and easy-to-open formats that are a huge delight to consumers. The third strategy adopted by Chi Limited was to have a functional campaign strategy to communicate the reality of the 100 per cent fruit juice content of its flagship brand to consumers. That way, the brand has been able to sustain its quality image and is more accessible to the generality of Nigerian consumers.
From Left: Marketing Manager, Diageo Brands Nigeria, Sola Oke; General Manager, Diageo Brands Nigeria, Felix Enwemadu, Diageo Reserve Brands Ambassador, Tim Etherington-Judge and Marketing and Innovation Director Guinness Nigeria, Austin Ufomba and Africa Reserve Senior Brand Manager, Hrvoje Smiljanec at the launch of Johnnie Walker Gold Label Reserve recently in Lagos.
EY’s Africa leadership takes strategic step on global vision E
rnst and Young, which metamorphosed into EY, said the name change is a strategic movement in line with the firm’s global vision, which will make it more distinctive professional consulting firm. Recently in Lagos when the Africa leadership of the firm gathered to discuss the African potentials and growth market strategy, Henry Egbiki, the Regional Managing Partner, West Africa told his colleagues and clients at a reception for the Africa leadership that the objective of the firm is to be number one tax, transaction and advisory services firm in Africa. “What the one management, one leadership, one
governance across EMEA does for us is that it allows us to make the right investment to drive the right level of quality in technology to ensure we deliver seamless and consistent client service at all times. The power in this kind of model is the ability to pull resources where ever they exist and the focus is to ensure we assemble the right team to deliver quality for clients”, Egbiki said. According to him, EY is investing heavily in the Nigerian market because of our clients and we want to meet their expectations and exceed them. He also said that beyond the profit motive, there is higher calling for the firm.
“Everyday, as member of EY, there is something that drives us and that is about building a better working world. To build a better working world entails what we do, including helping our clients, making sure investors make the right investment and the right decisions, supporting communities where we operate and supporting our staff to do the right thing for the right purpose. We recruit quality people, train and ensure we drive the right kind of quality and integrity.” Also speaking, Ajen Sita, CEO, EY Africa, explained that the firm which is investing heavily in Africa, encouraging entrepreneurs through awards and supporting organisaitons in their decision taking is due to the firm’s deep commitment, conviction and belief in the future and potential of Africa.
D
o you still remember a particularly awful service experience you had in the hands of a certain organisation some 10 or 15 years ago? If you do, your memory can favourably compare with that of an elephant. I understand that elephants hardly forget anything. In fact, as they grow older (especially the female) their memory gets better and becomes more useful for adaptation to the environment. Well, some customers are like that. I don’t know of any systematic study that has attempted to unravel the average time it takes customers to forget a poor – or even great – customer experience. (If you have come across such a study, please do bring it to my attention). Anecdotal evidence, however, suggests that some customers simply find it difficult to forget certain experiences – especially the egregiously poor ones. In their book, Satisfaction, Chris Denove and James D. power IV graphically narrate the experience of one of those customers who simply won’t forget. In 1977, Frank Burrows bought a General Motors (GM) car – a Pontiac Trans Am. The car came with a 12-month or 12,000-mile warranty. Seven thousand miles and 13 months later, Burrows began to hear some strange sounds that he easily attributed to a manufacturing defect. He took the car back to GM and then discovered that many other cars had a similar problem. Since the problem was obviously the result of a technical error made at the manufacturing stage, Burrows had hoped that GM would fix the car at its expense. Also considering that his car had done mere 7000 miles, he couldn’t see any reason why GM would not be glad to fix the problem without billing him. Well, the chaps at GM thought differently. They would not fix the car free of charge. In frustration, Burrows wrote several letters to GM without getting a response. The long and short of it was that he coughed out $500 (a huge sum in those days) for the repairs. Almost 30 years later, he was still so furious he hadn’t bought any car from the company ever since. And guess what? Frank Burrows had bought 11 cars since then and had vowed never to go near a GM car. If GM had taken a long-term view of its business, absorbed a $500 bill of a complaining customer and done a few other basic things to keep the customer happy, it obviously would have sold 12 cars to the same customer in about 30 years – an average of one car every 2.5 years – instead of just one car. And who knows how many other people Mr Burrows could have influenced to buy GM cars! In fact, I suspect since he was so angry with GM, he must have discouraged many from buying from the company. It may sound good to blame the rigid executives at GM. But we’re talking about 1977 here! You and I know that thirty years later, many of us still operate our businesses with the same inflexible mind-set. Everyday, many of us choose the same route in our business decisions. Now, let’s turn to personal experience. As a customer, I don’t forget bad experiences too easily. It’s not as if I make any special effort to remember. It’s just that the memories of some experiences refuse to fizzle out. And that’s human, isn’t it? After all, we would never learn anything without a good memory. I remember vividly that in 1995, I boarded a Harka Air (light) aircraft that flew from Lagos to Abuja in all of 95 minutes! And the in-flight service wasn’t particularly great. One of the people I travelled with said he would never patronize the airline again. I knew I didn’t want to spend more than an hour in the sky moving from Lagos to Abuja. Today, Harka Air is moribund. If it were still in operation, I’m sure it would have lost at least two customers that were on that flight. TO BE CONTINUED Comments are welcome.
44— Vanguard, MONDAY, AUGUST 26, 2013
Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997
T
he above is an excerpt of the Finance Minister, Dr. Ngozi Okonjo-Iweala’s responses to ThisDay Editiors, on the seemingly intractable challenge of the dysfunctional interest rates structure. It may indeed be best practice for a country ’s Central Bank to enjoy autonomy in formulating and executing strategies and decisions that would sustain price stability (i.e. low cost of funds, minimal inflation and appropriately priced currency). Nonetheless, the monetary policy directions of Central Banks and the fiscal policy objectives of the Executive branch of government must be in
Okonjo-Iweala perplexed by high interest rates harmony to avoid conflict in the product of their respective actions; for example, the high interest rates currently induced by CBN’s policies deflates the real sector and challenges government’s expectation for industrial and agricultural expansion to promote increasing job opportunities, and by extension, improved social welfare, while it simultaneously increases our debt burden in spite of minimal infrastructural impact. This realisation of the stifled
,
“The first thing I have to say is that we have a central bank that is autonomous and it is the best practice to make these decisions. We may not be happy about it and I am bold to say we are not happy about high interest rates! As I said before, it is tough for our entrepreneurs to function. Even before the withdrawal of this liquidity, they were already charging over 20% interest rates and I think that is alarming. …we need to interrogate why. Structurally, what is the issue? And we are not willing to ask our banks that question. So, as the minister of finance, I have been very concerned about that. Even if the monetary policy rate (MPR) is 12%, inflation is coming and there is no reason why the spread. It is too high! Why are real interest rates in the Nigerian economy so high? Deposit rates are extremely low and Nigerian savers are earning as low as 5% and 3%. But they are giving certain segments high deposit rates. “…But the fact that we are leaving the banks as we are running a free market system, does not mean that you have to have this kind of behaviour. Private sector credit has gone down. I plan to have a meeting with the banking sector operators to really understand what is going on. “That is why we are really going to set up the development bank. I am not trying to bash them (banks), but I am puzzled as to why. I think there is a structural problem within the banks and our banking system and their pricing.”
The option of creating a development bank suggested by the Minister may actually turn out to be a wasteful duplication of the functions of the existing Bank of Industry (BOI)
,
objectives of government led to Dr. Iweala’s above lamentations! Regrettably, the enabling 2007 CBN Act does not finely define parameters for judging acceptable level of price stability; consequently, CBN could still claim that it has successfully maintained stability, even when interest and inflation rates remain ‘stable’ at such high rates that depress economic growth. Consequently it is necessary to circumscribe CBN’s jealously guarded
autonomy with clear parameters, which define success and failure; thus best practice monetary management must sustain lower single digit inflation and interest rates as obtains in successful economies elsewhere; therefore, CBN’s monetary policy rate must never exceed, say, 2% of the international bench mark of the London Interbank Offer Rate (LIBOR). Failure to engender inflation rates below 4% should also lead to the resignation of the Governor and dissolution of CBN’s Monetary Policy Committee.
T
he Finance Minister also expressed her consternation at the huge gap between high lending and very low deposit rates. Instructively, however, best practice interest rate structure can never be attainable with the ever-present burden of surplus cash or excess liquidity in the system. Consequently, any viable strategy must attack the root cause of systemic surplus cash, which curiously does not translate to liberal availability of cheap credit to the real sector!! In spite of the distractive serial arguments to the contrary, undoubtedly, such surplus cash evolves, whenever CBN substitutes naira allocations for dollarderived revenue. This singular factor poisons successful management of the economy, as it instigates the odd reality of government borrowing back its own funds from banks and also crowding out the real sector from available credit. Indeed, excess funds also fuel inflation and facilitates ample opportunities for corruption. Indeed, Dr. Iweala needs no longer search for the cog in our economic wheel of progress. Furthermore, excess naira supply instigates downward pressure on the naira, especially when we earn increasing dollar revenue! Worse
still, a weaker naira increases fuel subsidy and may pose a threat to subsidy-free tariff in the power sector. Incidentally, some critics may observe that before the 2007 CBN Act, which consolidated CBN’s power, cost of funds were between 17 – 20% (still very high rates) throughout the Finance Minister’s first term in office, but there is little evidence that she did anything about it, even when there were no constitutional constraints. Nevertheless, Dr. Okonjo-Iweala’s intended meeting with banking sector operators will certainly be meaningless, if the root cause of surplus cash is not addressed. The option of creating a development bank suggested by the Minister may actually turn out to be a wasteful duplication of the functions of the existing Bank of Industry (BOI). Furthermore, the creation of selective low interest rate by fiat for such a bank together with CBN’s tight monopoly of 80% of forex supply may also not be compliant with Dr. Iweala’s support for a truly free market system. Advisedly, the BOI funding should be heavily supplemented to increase its territorial spread and ensure that cost of funds and other ancillary charges do not cumulatively exceed 7% in place of oppressive cumulative charges above 20%, which manufacturers recently decried. Furthermore, in line with best practice in successful economies elsewhere, agriculture loans should not exceed 2% also cumulatively. Instructively, Dr. Iweala’s dilemma on conflicting economic strategies will be resolved once CBN cuts the umbilical cord that feeds the money market with excess cash by stopping its usual capture of monthly dollar revenue and substituting same with bloated naira sums. SAVE THE NIGERIANS.
NAIRA,
SAVE
Business & Economy
Nigeria's revenues tumble 42 % in July due to oil outages N
igeria’s revenues plunged by 42 per cent in July due to oil theft and production outages, the accountant general said on Friday, underscoring how oil theft is damaging public finances this year. State revenues fell to N498 billion, the lowest monthly earnings this year and down from 863 billion naira in June. Oil theft has cut government earnings in several months this year, and by more than last year, and July was particularly badly hit. Military in the restless Niger Delta say they are renewing efforts to catch oil thieves, while the Oil Minister Diezani Alison-Madueke says she is reaching out to foreign governments to help stop the buying of Nigeria’s stolen oil. “This was due to continuous theft of crude oil, leakages, pipeline breaks at various terminals, compressor failure and repair work,” Accountant General Jonah Otunla told reporters. Shell Nigeria shut its 150,000 barrel per day Trans Niger pipeline on July 11 after a leak was
detected; barely a week after the company re-opened the pipeline following the repair of some crude theft points. Criminal gangs frequently tap into exposed pipelines in the winding waterways and swamps in the Niger Delta, siphoning off tens of thousands of barrels a day. Nigeria lost out on $10.9 billion in potential oil revenues due to production losses caused by theft and sabotage between 2009 and 2011, an audit showed last month. A total of 715.8 billion naira was distributed to local, state and federal governments in July, down slightly from 718.1 billion in June, Otunla said. The excess crude account, where Nigeria saves oil revenues over a benchmark price, holds $5.1 billion currently, compared with $9 billion at the end of last year, data showed on Friday. Nigeria is aiming to cut its budget deficit to 1.85 percent of gross domestic product this year, from 2.85 percent in 2012. Oil accounts for around 80 percent of government
revenues and the crude savings account is often used to fund the budget deficit if oil revenues fall below target. Meanwhile, Nigeria’s Bonny Light oil exports are projected to fall in October. Nigeria will export 95,000 barrels per day of the Bonny Light crude oil grade in October, a provisional shipping list showed on Friday, down from a planned 127,000 bpd in September. The Bonny Light grade, operated by Shell , has been under
force majeure since April. A force majeure relieves companies of their contractual obligations. A firm may opt to keep it in place if it can only partially meet commitments.
OUR TEAM Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Michael Eboh Franklin Alli Ebele Orakpo Ifeyinwa Obi
-
Group Business Editor Finance Editor Energy Editor Head, Capital Market Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Capital Market Reporter Industry/Agric. Reporter Energy Reporter Maritime Reporter
CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT
-
Media/Marketing Industry Micro Finance Graphics Department