Financial Vanguard

JANUARY 27, 2014

Financial haemorrhage: Nigeria bleeds as $1.7bn goes out weekly — $18.3bn paid out in 12 weeks

year ago. It is the depletion of this component of the reserves that has become a major concern to the handlers of the nation’s finances.

However, the foreign exchange out flows, according to Financial Vanguard’s findings, has resulted in an average of $1.7 billion leaving the shore of Nigeria every week as payment on travels, cash purchased from banks and bureau de change, letters of credit, direct remittances on behalf of expatriates working in Nigeria, Wholesale Dutch Auction and debt service payment. In twelve weeks a total of $89.647million was spent by Nigerians in foreign travels.

Cash sales in dollars by bureau de

By OMOH GABRIEL, Business Editor

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total of $88.4 billion left the shores of Nigeria to foreign lands through official channels in 2013 of which $18.3 billion was remmitted in three months thus giving an average foreign exchange outflow of $1.7 billion weekly This is just as the Excess Crude Account (ECA) component of foreign reserves has now fallen to just $2.5 billion, compared to $11.5 billion a year ago. The $18.3 billion went out of the country in the form of capital flight, which Nigerians indulged in.

According to figures captured by the International Remmittance unit of CBN, the amount was remitted through banks, Bureau De Change, Travel agencies and debt payment to foreign creditors to which Nigeria owes some money. This and the monthly withdrawals from the Federation Account have resulted in the depletion of the nation’s foreign reserves. The financial haemorrhage, which has been plaguing the nation for years due to the low productivity of the economy, has resulted in blame games in political and financial circles.

Nigeria foreign reserves, according to CBN, is made up of dollar proceeds from oil earning which the CBN monitises and pays the naira equivalent into the Federation Account for allocation to the three tiers of government and then holds the dollars in reserves for those who intend to buy abroad. The second component is the proceeds from the Excess Crude Account which is the amount realised from sale of crude oil in excess of the budget benchmark that is held on behalf of the three tiers of

Continues on page 18

113.85

-1.35

2,786.00

-5.00

15.11

0.07

107.22

-0.36

97.09

-0.23

CURRENCY BUYING CENTRAL DOLLAR

government by the CBN. According to Sanusi Lamido Sanusi, the CBN Governor, the Excess Crude

Account (ECA) component of foreign reserves had now fallen to just $2.5 billion, compared with $11.5 billion a

155.25

SELLING 155.75

STERLING

257.0398

257.8703

258.7008

EURO

212.2706

212.9564

213.6423

FRANC

173.2923

173.8522

YEN

1.4864

1.4912

CFA

0.3011

0.3111

WAUA

Source: CBN

154.75

236.4395

237.2035

RENMINBI

25.5814

25.6645

RIY

41.2612

41.3945

174.4121 1.496 0.3211 237.9674 25.7476 41.5278

KRONA

28.4399

28.5318

28.6237

SDR

237.8198

238.5882

239.3566

CBN Exchange rate as at 24/01/2014 C M Y K

18 — Vanguard, MONDAY, JANUARY 27, 2014

Cover Story

The Basic Guide to Starting Your Business Part 3

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From left: President Goodluck Jonathan, Chairman, Heirs Holdings, Mr. Tony Elumelu ; and GMD/CEO, UBA Plc, Mr. Phillips Oduoza, at the ongoing World Economic Forum, in Davos, Switzerland.

Financial haemorrhage: Nigeria bleeds as $1.7bn goes out weekly — $18.3bn paid out in 12 weeks change and banks to small scale businesses and individuals amounted to $2.665 billion. In the twelve weeks, amount attributed to dollars sales through letters of credit opened on behalf of Nigerians for business purchases amounted to $365.810 million, while a total of $1.159billioin went out of the country as direct remittances.

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ccording to the CBN figures, within the twelve weeks, foreign exchange purchases through the official market of the Wholesale Dutch Auction sales stood at $13.906 billion and payment of interest on foreign loans by the Federal Government took out the sum of $144.83million from the nation’s coffers. A break down of the foreign exchange out flows from the CBN showed that in the week th ending 20 September 2013, the sum of $38.93 million was spent on travels, while cash sales to bureau de change and banks took out the sum of $263.575 million out of the nation’s foreign reserves. In the same vein, within the same week, the sum of $96.05million went out through letters of credit and the sum of $1.26billion was sold by CBN at the foreign exchange market to Nigerians, who apply to buy goods and service abroad.

This resulted in the depletion of Nigeria foreign reserves by a total of $1.708 billion in this particular week. In the week that ended th on the 6 of September 2013, the sum of $3.2 million went

out through travels while cash sales to bureau de change during the week stood at $240 million. The value of the Letters of Credit opened on behalf of several Nigerian’s businesses amounted to $19.71 million and direct remittances stood at $79.491million.

Wholesale Dutch Auction during the week sold a total of $1.122billion to those who applied for foreign exchange to the CBN. Government interest payment on foreign loans that fell due during the week amounted to $14.444million. At the end of

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Continues from page 17

Nigeria's foreign reserves peaked at $48.2billion in August 2013 before it moderated to $43.9 billion at the end of 2013

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th 6 September 2013, a total sum of $1.479 billion was paid out from the foreign reserves. The story is the same for the rest of the ten weeks surveyed by Financial Vanguard. Nigeria's foreign reserves peaked at $48.2billion in August 2013 before it moderated to $43.9 billion at the end of 2013.

Nigerians penchant for foreign made goods, the

insistence by political actors in the country on the sharing of the proceeds of the excess crude account, the falling receipt from the nation’s mainstay oil and gas are largely responsible for declining level of the nation's foreign reserve.

But Minister of Finance, Dr Ngozi Okonjo-Iweala, says the present amount in Nigeria’s external reserves should not be seen as declining.

Addressing reporters in Abuja before she left the country, Tuesday, to attend the World Economic Forum in Davos, Switzerland, Dr Okonjo-Iweala attributed the role of the accountability of the fund to the Central Bank of Nigeria. She said that Nigeria’s external reserve was in a robust condition.

“When the reserves decline by few million dollars, there is a big headline.

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he external reserve of the country is really robust compared to what is really needed,” she said.

Her statement is expected to clear the air on reports that the external reserves of the country was declining.

Reacting to the depletion in foreign reserves, Sanusi expressed concern about Nigeria’s dwindling Excess Crude Account, saying that its ability to successfully protect the naira will be based on the amount in the Excess Crude Account and the Foreign Exchange Reserve. According to him, Continues on page 19

opportunity to meet the demands of consumers. The following make up the mindset of successful business men.

Optimism Optimism continues to be a primary factor in whether or not an individual will stay focused on goals rather than be thwarted by the negative events that would impede progress. It is the absolute ideal that leads to achievement as nothing can be done without hope.

Therefore, it is the very essence of success.

If you want to have a successful business, it is important that you start out as an optimist, refusing to see impossibilities and obstacles.

An optimist is not discouraged, but rather looks for other ways

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WHAT IS NOT BUSINESS? ften time people engage in all sort of shady deals and call it business. This should not be, because any act/trade that is not genuine and is to the detriment of others cannot be called a business, especially if it doesn’t fall within the confines of the law or is aimed at getting profit wrongly. Some of these wrong businesses include, money laundering (government officials), abuse of office, stealing, defrauding, internet scam otherwise known as yahooyahoo, 419 and a host of others.

If you are involved in any of the above, then you cannot say that you are in a business as the above named are prohibited by the laws of the land and they do not create opportunities. Rather they ruin or cripple the country, portraying it in a very bad light to the rest of the world. It is only a lazy man that looks for an easy way out all the time, not wanting to go through the right process and procedures.

THE MENTALITY OF A BUSINESS MAN: We have discussed what a business is in the previous chapter and what business is not; we have also looked at the importance of self analysis in starting a business as well as the disadvantages and advantages.

Now it’s time to talk about the mentality a business man should possess.

We cannot underestimate the power of the mind and I make bold to say that that is where every idea and dream is born. The good book also emphasizes this by saying “as a man thinketh in his heart, so he is”.

When starting a business, you would need to ask yourself if you possess what it takes to run it efficiently and get the desired results. Every successful business man has a mentality and should possess a strong sense of character. That is why it is important to carry out a self analysis before commencing a business.

The business man does not see failure as a reason to quit; to him failure is a stepping stone that launches him to his next level.

He is not afraid but is a risk taker, possessing the utmost desire to succeed; he is not just out to make money, but rather to bridge the gap between demand and supply.

He is a sharp thinker and very witty, seizing every available

If you want to have a successful business, it is important that you start out as an optimist, refusing to see impossibilities and obstacles

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to make things better. A good business man will always diligently search for answers that will work. He possesses the “yes I can” aura and mentality which will endear him to clients and friends alike.

Before you start a business it is very important that you have a very optimistic mentality, one that is not easily swayed by various obstacles you will encounter in the course of carrying out your business.

This is because nobody wants to do business with a pessimist.

Creativity A creative ability is a very vital tool in the hands of a person who intends to start a business, although sometimes even as a business owner there is a risk with being creative; it is not possible to do something the same way and expect a different outcome. You have to be very dynamic in your choice and approach to the business you intend to start. Brainstorm a list of possibilities no matter how wild it seems. Look for the unusual but plausible.

Vanguard, MONDAY, JANUARY 27, 2014 — 19

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hen the governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, September 2013 wrote informing the president that t h e Nigerian National Petroleum Corporation (NNPC) had not remitted $49.8 billion of oil revenue to the Federation Account over a 19-month period, it was meant to be a wake up call for the government to act on what many Nigerians have come to believe is corruption personified. The figure of nearly $50 billion was such that neither the president nor his aides would let go as usual.

The various agencies concerned went to work and came out with the fact that it is about $10.8 billion that was yet to be accounted. Certainly, Sanusi as the custodian of government funds has every The alarm raised by Sanusi’s right to raise issue when in by the militants. These, over doubt. But a governor of an the years, have risen letter is a serious indictment apex institution in the banking considerably. What the on the capacity of the CBN to industry cannot afford to be Corporation has been telling act as a banker of last resort. trivial in raising false alarm. the Federation Account It would mean that whatever He must not be in a hurry to Allocation Committee, FAAC, is coming out o the apex bank act and raise alarm when he is that it is unable to remit the should not be taken as given. is in a position to cause the money because government Both the government and the various agencies involved in has not settled obligations or citizenry will have to double government revenue collection the outstanding liabilities due check information coming out of the apex bank. The letter to look into their books and to it.”

Sanusi was certainly not seriously indicts the various come up with the fact.

Yes! There are some figures saying anything new, but the government agencies as it yet to be reconciled, but the magnitude of the figure is appears that there is no issue with NNPC pre-dates both Sanusi and President Jonathan.

When Mansur Muhtar was the Minister of Finance under Alhaji Umaru Yar A’adua, he said that NNPC had about N1.2 trillion claims submitted to his office. Dr. Mansur Muhtar said that the downstream sector of the Nigerian petroleum industry is hemorrhaging as a result of inefficiencies in the system. what was alarming. If the element of cooperation among The then minister, in an matter did not unnerve the Ministries, Department and exclusive interview with President, it would have been Agencies of government. It is Vanguard published on the 9th swept under the carpet and this simple fact that has made of December 2009, said that nothing would have been done the economy prostrate as each NNPC posed a challenge to to reconcile the figures. arm of government is working the Federal Government. Sanusi’s alarm, however, at cross purposes. This also According to him, “NNPC raised several fundamental explains why there are no presents a big challenge to us. issues that needed to be reliable data in the country called Nigeria.

Again, I think there are some examined.

The CBN as we know it since More seriously, the letter issues to be considered here.

“NNPC has outstanding inception has a very reputable and the facts therein cast doubt claims against the government research unit which data until on the Sanusi’s CBN in relation to petroleum recently cannot be faulted. The orchestrated reforms. It was in subsidy, which has not been CBN then boasted of very high the same manner in 2009 that paid over the years. In grade economists who could Sanusi accused banks of huge addition, as an organisation, hold their heads high any non-performing loans and it also has taken some money where in the world. That sacked with immediate effect to repair pipelines vandalised cannot be said of today ’s the Managing Director/Chief CBN. Executives and Executive

Sanusi’s $49.8bn alarm and its implications

Sanusi was certainly not saying anything new, but the magnitude of the figure is what was alarming

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BUSINESS & ECONOMY Continues from page 18 a stable currency is absolutely critical for price stability and financial stability in general, adding that it is not in the interest of the country to devalue the naira, because it will not have impact on the country’s current account balance, given the highly inelastic nature of imports and the dominance of oil. He said that the Excess Crude Account (ECA) has now fallen to just $2.5 billion, compared with $11.5 billion a year ago, noting that until it is replenished, there would be little room for a reduction in the Monetary Policy Rate, MPR, below the current 12

Directors of five banks. When Sanusi made the allegation against these banks, he was believed and no second check was made to verify the gravity and veracity of these allegations. The government turned deaf ears to all pleas to cross check the fact of the allegations.

To remind Nigerians, Mallam Lamido Sanusi at the time said “the banks officials were removed due to high level of non performing loans in the five banks, which was attributable to poor corporate governance practices, lax credit administration processes and the absence or non-adherence to the banks' credit risk management practices. As at June 4, 2009 when I assumed office as governor of the CBN, the total amount outstanding at the Expanded Discount Window (EDW) was N256.571 billion, most of which was owed by the five banks.

“The five banks were either perennial net-takers of funds in the inter-bank market or enjoyed liquidity support from the CBN for long periods of time, a clear evidence of liquidity. In other words, these banks were unable to meet their maturing obligations as they fall due without resorting to the CBN or the inter-bank market. As a matter of fact, the outstanding balance on the EDW of the five banks amounted to N127.85 billion by end July 2009, representing 89.81 percent of the total industry exposure to the CBN on its discount window, while their net guaranteed inter-bank takings stood at N253.30 billion as at August 02, 2009. Their Liquidity Ratios ranged from 17.65 percent to 24 percent as at May 31, 2009. (Regulatory minimum is 25 percent)”.

The expanded window that was offensive to Sanusi was a lending outlet from which

banks could borrow from on interest, but the N620 billion he injected into the banks was public funds. Which was more cost effective for the nation, the expanded window or the N620 billion?

He thought in this last move he could end his tenure by yet another sensation, this time around to embarrass the nation, the president and present all the other revenue generating agencies as incompetent and manned by unpatriotic fellows.

Nigerians are swayed by whatever data they are given; no one would bother to cross check. The CBN governor went ahead and liquidated those banks. Today, with the benefit of hindsight many at the CBN officials privately, are saying that those banks were not as bad as they were portrayed and they could still have been saved even if their chief executives were clamped in jail. It is the economy that suffered as the number of the unemployed swells by the day. What the government did not ask the CBN governor then was what was the supposed role of the apex bank as the bank of last resort?

Was it not supposed to bail out ailing banks and save the economy? Were those banks not paying their customer as at when due? If the banks were given due opportunity would they not have been able to recapitalise?

Further, if the Sanusi’s letter did not unnerve the president, and cause an inter ministerial reconciliation of revenue flows, Nigerians would have taken up arms against the NNPC, and if it were a private sector driven company, it would have been liquidated just as some of those banks were. Is it not time the government considers taking a second look at the famous banking reform spearheaded

by Sanusi Lamido Sanusi now that we know that his figures are always not correct and sometimes exaggerated?

Financial haemorrhage: Nigeria bleeds as $1.7bn goes out weekly — $18.3bn paid out in 12 weeks percent benchmark. He said, “We should continue to seek a stable exchange rate for as long as the reserves and monetary conditions can support this.”

Sanusi said he has no fears of tightening monetary policy further to keep inflation down and to stabilise the currency, noting that, if needed, the CBN will increase its Monetary Policy Rate from 12 percent and the Cash Reserve Requirement on public sector funds to 100 percent.

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resident of Lagos Chamber of Commerce and Industry, Alhaji Remi Bello, had said “We are satisfied with the apex bank’s efforts at ensuring exchange rate stability and we hope that this is sustained in 2014. Our concern is the continued protection of the exchange rate on the back of high interest rate with the attendant negative outcomes for businesses, output, employment and growth. The naira exchange rate also fluctuated within the set

bound of N160 per dollar plus and minus five percent throughout the year.

Managing Director/Chief Executive, RTC Advisory Ser vices Limited, Mr. Opeyemi Agbaje, said, “There are some significant negatives that we would also be taking into 2014. Most importantly is the management of the oil sector, vis-a-vis the absence of Petroleum Industry Bill, PIB, divestment of multinationals, and the general state of uncertainty in the industry, oil theft, oil

piracy, and declining production. “Now if you go into 2014, I see several levels of uncertainty, and for me, that is the defining concern for 2014. We have uncertainty in the foreign exchange market because oil sector outlook is not clear. Two, our domestic oil sector is not settled because of issues I mentioned earlier, and that is where we get 85 percent of our foreign exchange earnings. So, there is doubt

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20 — Vanguard, MONDAY, JANUARY 27, 2014

Business & Economy Financial Smuggling: OPS seeks stiffer penalty haemorrhage: against importers, shipping firms Nigeria

BY FRANKLIN ALLI due to evasions of import duty, bringing in products do the annually in terms of revenue, bleeds as as amongst the economic right things, there won’t be tobacco manufacturers lose £3 he Organised Private impacts of smuggling on the smuggling. I support the OPS billion annually and other $1.7bn calls for heavy sanction of stakeholders in the trade lose TSector, OPS, says Nigerian economy.

Nigeria can halt smuggling He said that the key drivers of importers and their shipping £2 billion annually to goes out into the country within the next smuggling are trade policy that firms or agents. Smuggling is smuggling across the world.”

He said Nigeria currently six months if the Customs is not sustainable; high import affecting our mandates at SON. weekly Services and other law tariff and levy; porosity of the I have said at several fora that loses $200 million annually to enforcement agents policing nation’s borders, tariff doing the wrong thing affects illicit tobacco trade.

— $18.3bn paid out in 12 weeks Continues from page 19

over our foreign exchange. I see a very high probability of naira devaluation, and the pressure is already building.

In the financial sector, there is also some uncertainty around liquidity; the CBN’s CRR policy and expectation in some sectors that they are going to raise the CRR. With CBN’s determination to curtail inflation in the face of political spending in 2014, so there is going to be further squeeze in liquidity and pressures on inflation.

Samuel Durojaiye, President, Finance House Association of Nigeria, said, “Then for the economy in general, the challenges we foresee has to do with revenue generation and the expenditure profile. In terms of revenue generation, you will discover that over the last two years, we have been losing between 300,000 and 400,000 barrels of crude oil per day to oil theft and breakage of pipeline. So, how will the government be able to curb all these, knowing that we have a deficit of almost N1 trillion. Also is the fact that this is an election year, the expenditure pattern is likely going to be above the budget. The deficit will go beyond the budgeted N1 trillion.

And oil prices, you will find out that, because of shale oil in United States and discovery of oil in other places, and peace in the Middle East, and Iran threatening that it would go beyond its OPEC quota; this might flood the market with oil and this might force down the price. If you look at our budget price, which is above $70 per barrel, if oil price falls to $90 per barrel, we would have serious problem with the budget.

These are the things I am looking at, and I am saying I only hope that things will not get worse in terms of foreign exchange generation and the rate of the naira.”

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the nation’s borders (airports, seaports and land borders) embark on the destruction of confiscated banned items which importers and shipping companies are bringing into the country.

Smuggling is importing and exporting products illegally.

The OPS strongly believes if government can adopt constant destruction over the next six months, stricter enforcement and harsh penalties of this nature will wipe smuggling activities in its totality or reduce it by 70 per cent. Speaking through its Director General during a seminar on‘ The Menace of Smuggling in Nigeria’ organised by the Commerce and Industry Correspondents Association of Nigeria, CICAN, in Lagos, OPS said, beyond chasing smugglers here and there and seizing contraband goods, the Customs and other law enforcement agents should go further by burning seized items again and again.

"By the time you confiscate and destroy goods worth N500 million, the importer and the shipping company will be frustrated and they won’t’ like to continue in the business.

"Fighting smuggling requires seizure and burning of the items. When you destroy the products, you have destroyed the investment; if you lost N500 million six times nobody will tell you before you opt out of the business, and others will be deterred to go into it,” said Mr. Rasheed Adegbenro, the Acting Director General of MAN. John Isemede of NACCIMA noted that another aspect of smuggling is faking of import document and underinvoicing.

“If you are bringing in 20 containers and your invoice declared five containers, it is smuggling; if you are bringing in chemical A and declared it chemical B, it is smuggling,” he said.

In his presentation, titled: ‘Impacts of Smuggling on the economy’, Muda Yusuf of Lagos Chamber of Commerce and Industry, cited the closure of BEREC battery, Dunlop and Michelin tyre, Afprint and other textile companies and revenue loss to government

differential between Nigeria and neighbouring countries in ECOWAS; weak infrastructure which increases cost of production, including foreign exchange policy.

Dr. Joseph Odumodu, Director General of Standards Organisation of Nigeria, SON, asserted that, "beyond the loss in value of transaction, a smuggling–free is possible if and only if people who are

the whole economy."

Mr. Sola Dosumu, Head of Regulatory Affairs, BAT West Africa, painted a bigger picture of the economic impacts of smuggling on manufacturing industries, governments and distributors when he said tobacco sector across the globe loses a total of £17 billion annually to smuggling. He gave the breakdown as follows: “Governments lose £12 billion

He noted that illicit cigarettes worth approximately $10 million were seized and destroyed by regulatory agencies in Nigeria between 2008 and 2013. He added that the major reason illicit trade exists is the economic opportunity it offers for the smuggler and illicit vendor to make money and also for the consumer to save money.

From Left: Area Head of Regulatory Affairs, British American Tobacco West Africa Area, Mr. Sola Dosunmu; Assistant Comproller General of Nigerian Customs, Edema CN, Director General , Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf at the forum on the Menace of Smuggling in Nigeria, organized by the Commerce and Industry Correspondents Association of Nigeria (CICAN) sponsored by BATN in Lagos.

FG parleys cement manufacturers on rigid pavements

BY FAVOUR NNABUGWU

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he Federal Government has said it is collaborating with Cement Manufacturers Association, CMAN, in rigid pavements for road networks across the country.

The cement manufacturers comprise Dangote Cement Plc, Lafarge WAPCO Nigeria Plc, including Cement Company of Northern Nigeria, Ashaka Cement and United Cement Company UniCem, Calabar.

The Minister of Works, Arch Mike Onolememen, who received an audience of Lafarge WAPCO Cement management led by the company’s Managing Director, Mr Guillaume Roux, in Abuja, said it is part of the ongoing process to identify

good solutions for the federal roads in the country, Onolelemen said the ministry of works would start experimentation on rigid pavements in the country.

“The Minister said, “We want to know what the manufacturers are bringing to make the projects realistic. We have identified cement companies as one of the source of the excessive overloading of our roads. We would carry out laboratory test on the products to ensure that they are good as we prepare to begin the construction of rigid pavement carriageway in Nigeria.

“We have identified major road works where we want to experiment rigid pavement design and consultants were commissioned and they told me that one of those roads is the

Kachie-Ajie road to connect the Federal Capital Territory to Baro Port in Niger state.

“The second one is the Ikorodu-Shagamu road. We have completed the design of the rigid pavement and we have commenced procurement for the two roads. Once the 2014 budget is approved, the projects will come on stream”.

“They are projects where you have to showcase cement for road works. We are looking forward to collaborating with your organisation in bringing that experimentation to a successful end. We believe there are certain terrains in our country that are unfriendly to asphaltic concrete. So we have to design this solution for those terrains so that they can last longer."

Vanguard, MONDAY, JANUARY 27, 2014 — 21

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22 — Vanguard, MONDAY, JANUARY 27, 2014

Banking & Finance

Ecobank unveils card 4 prizes promo to boost e-payment

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cobank Nigeria has unveiled card 4 prizes promo being part of efforts in promoting the use of alternative payment channels by customers and also strengthening the Central Bank of Nigeria (CBN)’s cashlite initiative. The promo which will run for three months, will see customers of the bank winning prizes that includes sedan cars, allexpense paid trip to Brazil and scholarships valued at N300, 000 each for different sets of winners to be drawn from different parts of the country.

Announcing the draws in Lagos, Ecobank Head, Cards and e-banking, Mr. Tunde Kuponiyi said there will be three monthly draws and a grand Finale draw to be held in Lagos, Port Harcourt and Abuja simultaneously.

He disclosed that 15 winners will emerge monthly from the draws. Each of these winners will take home smart phones; LCD TVs; air conditioners; home theatres and power generating sets. There is also instant reward for customers who walk into any of the bank branches, pick up debit cards and activate them instantly.

On the modalities for the promotion, Mr. Kuponiyi explained that “a point based rating” will be utilized in choosing winning customers.

GIS partners STG Bank security certification

By CHARLES MGBOLU

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nformation Security Consulting firm, Global Info Swift (GIS) has partnered Security Technology Group STG in a bid to strengthen information security controls of financial institutions in the country.

This is against the backdrop of the mandate from the Central Bank of Nigeria to all banks to get their information security management systems certified by 2015.

According to Mr. Afolabi Oke, Executive Director, GIS “In the wake of cashless society, we have to start embracing technology which comes with a lot of risks, these security certification procedures ensures that we protect the information access within our financial institutions. It means we have to standardise to international practices.”

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(L-R): Executive Director, Lagos, Sterling Bank Plc, Puri Davendra; Business Development Associate, 234give Limited, Rita Igbhofose; CEO/MD, 234give Limited, Sola Fatoba and Executive Director, South, Sterling Bank, Mr Lanre Adesanya, at the presentation of cheques to charities who benefited from the Sterling Bank’s “Raise a child project,” in Lagos.

CBN moves to address N15 exchange rate difference

*Removes limit on banks’ forex sale to BDCs

By BABAJIDE KOMOLAFE

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he Central Bank of Nigeria (CBN) has removed the limit of $250,000 that banks can sell to each Bureaus De Change per week.

This move is aimed at addressing the N15 difference between the official and parallel market exchange rates. The official rate closed last week at N155.74 per dollar while the parallel market closed at N171 per dollar.

The removal of the limit was announced by Alhaji Batari Musa, Director, Trade and Exchange department of the CBN, via a circular titled, “Developments in the Foreign Exchange Market: Foreign Exchange sales to Bureaux De Change operators by banks”.

The circular stated, “Further to the Circular ref: TED/FEM/ GEN/FPC/01/009 dated September 26, 2013 on the above subject, we write to inform all Authorized Dealers and the general public that the provisions of paragraph (1) of the circular under reference has been reviewed with immediate effect.

Consequently, the limit of $250, OOO.00 as the maximum weekly forex sales to a BDC is hereby removed in order to shore up liquidity in that segment of the foreign exchange market. Authorised Dealers are therefore free to

sell forex to BDCs subject to compliance with the provisions of extant AMUFT laws and regulations in the disbursement of forex.

Furthermore all transactions between Authorised Dealers and BDCs as well as the latter and end-users must be supported with appropriate

documentation.

In addition, Authorized Dealers and Bureau De Change Operators are to continue to render weekly returns on their transactions to the CBN and other relevant regulatory agencies, failing which, appropriate sanctions, including revocation of

operating license shall be imposed.”

Recently, while announcing the decision of the Monetary Policy Committee (MPC), CBN Governor, Mallam Lamido Sanusi expressed concern over the gap between the official and the parallel market exchange rates. He said, “The Committee noted with satisfaction that the year-on-year headline inflation remained within the indicative target range of 69% in the second half of 2013.

However, the Committee noted the underlining pressure on core inflation, which may not be unconnected with the widening spread between official and BDC exchange rates. In order to head off the spectre of rising inflation in 2014, concrete actions will be needed to stabilize the currency and minimize the divergence between the two segments of the foreign exchange market.”

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, however attributed the wide gap to the restrictions on foreign exchange supply in the market. In an interview with journalists last week, he said the $250,000 limit on banks’ forex sale to BDC and ban on importation of foreign currency are examples of the restrictions causing the divergence between the official exchange rate, and the parallel market rate.

Mainstreet Bank targets N20bn lending to agriculture in 2014

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ainstreet Bank is set to increase its lending to agriculture sector to N20 billion in 2014. Group Managing Director Mainstreet Bank, Faith Tuedor-Matthews disclosed this at the formal flag-off of the 2013/ 2014 Dry Season Farming Support Programme which held at the banquet Hall of the International Conference Centre Abuja.

She also commended the current Agricultural Transformation Agenda (ATA) of the Federal Government as a revolutionary initiative which has accelerated the nation’s quest for food security.

The ATA initiative, she noted, has further encouraged Nigerian banks to brace up to the challenge of lending to the agricultural sector.

Highlighting the experience of the banking industry prior to the introduction of the initiative, she noted that bank lending to the Agricultural sector was below 1 per cent of total bank lending, however within two years, this figure has grown to N368bn which is a growth position of 4.29 per cent. She further noted that the banking industry has set a target to grow lending in the Agricultural sector to 7 per cent and subsequently to 10 per cent by 2017.

Sharing her industry experience of Growth Enhancement Support Scheme (GESS) in the last two years, Faith Tuedor-Matthews noted

that Total Bank lending under the GESS has grown from N4 Billion in 2012 – N20 Billion in 2013.

Through the Federal Ministry of Agriculture and Rural Development programme; the Nigerian Incentive-based Risk Sharing System for Agricultural Loans (NISRAL) the GESS initiative has been able to successfully mobilise fertilizer agro-dealers, farmers, suppliers, seed companies to create an effective distribution mechanism that eliminates middlemen and the attendant corruption which existed in the input distribution chain Under the scheme, Mainstreet Bank lent N10bn to 30 Agro-dealers in 2013 and recorded zero default. She maintained that whilst previously the Bank would not deal with Agrodealers because they lacked the structure to qualify for borrowing, today the story is cheering as all the loans to the dealers are performing whilst through the scheme, over one million farmers have been reached and this translates to more jobs as a result of the additional hands who have been employed through this initiative. She further maintained that following from the experience of Mainstreet Bank, many banks have now realized that lending to Agriculture is a viable business, noting that there is great optimism that the target of N60bn lending to the GES

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Corporate Finance

Trade Fair Services presents: 'largest packaging & processing'

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Global stocks, emerging markets swoon on China data; euro up

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lobal equity markets sold off on Thursday on disappointing Chinese manufacturing data and weak corporate earnings, while the euro jumped against the dollar after mostly encouraging survey results from the euro zone’s private sector. MSCI’s emerging markets equities index .MSCIEF fell 1.2 percent to a nearly two-week low as emerging sovereign debt spreads widened nine basis points over U.S. Treasuries after factory activity in China contracted in January for the first time in six months.

A decline in the flash Markit/ HSBC Purchasing Managers’ Index was the first indication of sentiment in the world’s second-largest economy, and reinforced concerns about global growth, especially in commodity-sensitive emerging markets.

•Ngozi Okojo-Iweala, Coordinating Minister of Economy & Minister of Finance.

Access Bank Conference: Stakeholders react on sustainable economic leadership PETER EGWUATU

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n a bid to address sustainable leadership issues in the various sectors of the economy, be it in capital market, banking, insurance etc, the Access Bank conference has provided insightful commentaries from investors and other stakeholders from both local and international community.

For the first time in Nigeria, the conference hosted by a firm in the banking industry addressed the issue of leadership from a holistic perspective, as it presented outstanding success stories from a variety of internationally recognized speakers.

With over 800,000 shareholders spanning several Nigerian and International Institutional Investors, Access Bank has enjoyed what is arguably Africa’s most successful banking growth trajectory in the last ten years.

It ranked amongst Africa’s top 20 banks by total assets and capital in 2011.

In terms of embracing sustainable leadership, the conference, hosted by Access Bank Plc, brought together some of the world’s brightest minds, who paid tribute to the departing Chief Executive Officer of the bank, Aigboje Aig – Imoukhuede. In just a few years ago, Aig - Imoukhuede succeeded in transforming the bank from a small player in the Nigerian financial landscape,

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rade Fair Services Limited, the West African regional representatives offices for Messe Dusseldorf (organisers of the fair) are facilitating Nigerian business involvement at the most pivotal meeting place for the packaging sector and related processing industries, INTERPACK 2014.

A presentation and press briefing platform will occur at Sheraton Hotel & Towers on the 12th of February 2014. The scope of the fair as well as support services will be discussed. As in previous editions, from 8 to 14 May 2014 about 2,700 exhibitors are expected from industries ranging from food and beverages, confectionary and baked goods to pharmaceuticals and cosmetics, non-food consumer goods, industrial goods and related services. At the last event in 2011, there were 2,703 exhibitors and 165,000 visitors, of whom 84 percent indicated that they were involved in decision-making processes in their companies. A host of ancillary programmes will also be presented at the fair.

“Components for processing and packaging” is an event being staged for the first time in 2014 as an additional exhibition for suppliers to the packaging industry. During the first three days from 8 to 10 May. INTERPACK visitors and exhibitors will have direct access to “Components for processing and packaging”.

“Leaders must respond to issues that come their way, the response of a leader to an issue will determine his greatness or failure”

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to one of the most prominent and respected bank in the country. This remarkable transition can be attributed, among other things, to the exceptional qualities of leadership he displayed over the years. The Access Bank conference aspired to capture the essence of good, sustainable leadership, highlighting what it means to be a leader in today’s world.

The event which was essentially to discuss and share ideas on how to embrace sustainable leadership in a rapidly growing economy drew high profile delegates, including former Ghanaian President, John Agyekum Kufuor (2001-2009), President of Carbon War Room and former President of Costa Rica, Jose Maria Figueres (1994-

1998), Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi OkonjoIweala, Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, Initiator, Chairman and Pilot, Sola Impulse Project, Bertrand Piccard, Managing Director, Bank of Industry (BOI), Ms. Evelyn Oputu, Olympic Champion and Chairman of LOCOG, Sebastian Coe, Chairman, and host of others.

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uring panel discussions at the conference, exceptional leaders and worldrenowned thinkers guided participants through the principles of good leadership, and explore their multiple facets.

President George W. Bush, the 43rd President of the United States of America stated in his remark, reasons his Administration supported aids to Africa. According to him “There is need for resources in Africa. It’s a US interest to encourage economic growth in Africa. This is strategic for the US because it also creates opportunities for American entrepreneurs. Passion for lives influenced decisions to put in place a strategy that achieves results. In order to achieve results, it is important to set goals. The initiative was aimed at improving the living condition in Africa.”

Commenting at the conference, Fola Adeola, a former Chief Executive, Guaranty Trust Bank Plc, and

Chairman, Fate Foundation said, “The Mandela phenomenon is one of providence: reaching the souls of the people towards producing. Leaders must respond to issues that come their way. The response of a leader to an issue will determine his greatness or failure. The purpose of the leader is to engender leadership across the organization down to the bottom. As the saying goes, leadership emanates from the top but does not reside there.”

Mr. Sebastian Coe, Olympic Champion and Chairman of LOCOG said, “The challenge of leadership is the time and space needed to make decisions. Leaders should be able to answer the question of ‘Why’ behind their leadership role or task.”

In his own remark, Mr. Christopher Meyer, Founder, NERVELLC and Senior Legal Adviser Deloitte said “Some specific skills peculiar to sectors can be learned. Management is technical and Leadership is not. The practice of leadership comes with tradeoffs. A leader is always perceived to have all the answers. Active leadership is continuous conversation and being conversant with change.

The information age is about innovation which requires a new set of skills.”

On his own part, Magatte Wade, Founder and CEO, Tiosanno said, “There is leadership crisis in Africa. A lot of the times leaders are expected to know it all, to have all the answers. People tend to wait for someone to do something for them. The young people find it difficult to adequately communicate the challenges they face. The development of minds and nurturing is also there. There is a downside of traditional education in Africa and devolution of power is critical, while Gender bias is also another issue. Inspired people should believe in themselves.

There’s a Mandela in everyone.”

Mr. Gbenga Oyebode in his own remark said, “The concept of sustainable leadership, which Mandela epitomized, was evident in the fight for unity in diversity, his resourcefulness and his conservatism. All these are in line with the theme of the event. Access Bank is committed to sustainable leadership, which can only be achieved by building sustainable leaders across the country ’s landscape.

Sustainable development must be an integral part of any economy for it to succeed. With the diversity of the world, we need to understand what it takes to be leaders. A much broader intervention would be required to drive sustainable leadership.

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26 —Vanguard, MONDAY, JANUARY 27, 2014

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Commodity Index Jan. 17-Jan 23., 2014

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28 — Vanguard, MONDAY, JANUARY 27, 2014

Interview

Difference in exchange rates caused by restrictions in forex supply—ABCON President

BY BABAJIDE KOMOLAFE & JONAH NWOKPOKU

regulatory authorities. There was a sensitisation programme organised last week by CBN; there is another one coming up this week in Kano. There is also the NFIU sensitisation workshop that is coming up next week in collaboration with the association. So we are making sure that the basic priorities of this leadership is transforming the BDC operation in this country and by making them 100 percent compliant.The present leadership of ABCON has made several representations to the management of the CBN.

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•Alhaji Aminu Gwadabe earlier. Our members have to keep that with the CBN, meaning it’s a buffer, in case any member of the public complains. That is why we are saying that people should patronise the registered Bureau De Change.

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or instance, you walk into my office, do a transaction, you find out that there is something dubious about my transaction, you can quickly go back to CBN and report, and CBN will take that money from that my $20, 000 and refund you for the business that I could not deliver. There are lots of disadvantages in patronising illegal BDCs. We agree that the black market is a menace and we are calling on the enforcement agencies to look at their activities, because if the so called black market can be eliminated, it will help in a long way for the CBN and the federal government in monitoring foreign exchange inflows and outflows in the economy. So, it will not only help the BDCs, but also the government and the economy.

So, how many licensed BDCs do we have in Nigeria?

As I am talking to you today, tentatively, we have CBN licensed BDC members, an average of 3,500 members across the country. In Lagos alone, we have about 1,500 active members; in the northwest zone, we have about 700 active members; in the North West zone, we have about 500 active members and in the south east zone, we have active members of about 500.

On our part, before you become a member, there are certain steps you must follow.

One, you must have a licence from the CBN. Two, you must have a CAC certificate. So, we have registration and identification systems. The registration involves these requirements.

On the identification, each BDC must provide identification of two directors or shareholders, and then we do not stop at that, we also have a compliance department at the secretariat.

The work of this department is to monitor all our members to make sure they are guided, to

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he difference (margin) between the official exchange rate and the parallel market exchange rate has always been a challenge in the foreign exchange market. In 2006, and for the first time, the Central Bank of Nigeria, CBN, succeeded in eliminating this gap, by incorporating bureaux de change to access the official foreign exchange, which is sold to end-users with regulated margin. But as at last week, this gap has widened to N16.26 with the official exchange rate at N155.74 per dollar and the parallel market rate at N172 per dollar.

In this interview, Alhaji Aminu Gwadabe, President, Association of Bureaux De Change Operators of Nigeria (ABCON), umbrella body of the over 3000 licensed bureaux de change in the country, speaks on factors responsible for this wide gap, the challenge of illegal foreign exchange traders (black market operators) and efforts of the association to improve capacity of its members.

There are confusions about bureaux de change operators, and how to differentiate them in the foreign exchange market You see, there are different sectors in the foreign exchange market and different players. You have the Central Bank, the commercial banks, and you have the BDCs. And then you have the unlicensed BDCs that also operate in the market. The activities of the unlicensed BDCs - the so called BDCs that operate along the streets are unfortunate. They are not our members; they have existed long before the emergence of licensed Bureau De Change in Nigeria. It is a traditional business too for those that are into it. It has to do with the enforcement agencies because they are also our competitors in the market.

You see, we are regulated even in terms of the commission we charge. We were licensed before we became Bureau De Change operators, and before we get access to the CBN, we have to register with the Corporate Affairs Commission. Part of the requirement is even the $20, 000 that I mentioned

e met the CBN governor on behalf of our members to appeal to him on behalf of our business. We met with the Deputy Governor, Economic Policy, Sarah Alade, all in respect of how we can have a better relationship, how we can improve our business, how they can use us because the BDC sector is one of the major monetary tool of the CBN to achieve the convergence of the exchange rate in Nigeria.

So, we are interacting with stakeholders and we believe in the role that we are playing. The association has been meeting with different organisations, even to the chairman of Federal Inland Revenue. We met with the Inspector General of Police, so we are expanding our tentacles; we are making the association to be known so that our members can be protected.

The CBN has severally expressed concerns over the

The activities of the unlicensed BDCs - the so called BDCs that operate along the streets are unfortunate

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make sure that they are responsible and to make sure that they do not abuse the privilege given to them by the CBN. Also, we have published the first edition of our Operational Manual that will be launched very soon. It contains all the dos and don’ts for dealing in foreign exchange. These are part of the things that we are doing to make sure that our members comply with regulation requirements. Finally, we believe in training. Very soon, we will be training our members nationwide in collaboration with the

wide gap between the official and parallel market exchange rate.

In the communiqué of the monetary policy committee, the CBN governor said that we are a small segment of the market.

But you see, there are so many players when it comes to determination of rates. Every price is a function of demand and supply. Late last year when the rates started going up, and any time this kind of thing happens, it is easier to pass the bulk to the BDCs. But we have made our position known to the CBN. We pointed out some certain factors, which we

believe are responsible for the huge gap. I want to make certain clarifications, sometimes, there is confusion between the BDC market and the parallel market. The licensed BDCs are controlled by the CBN, we are not allowed to charge more than two percent margin. And I tell you, report any BDC to me if you enter his office, just get the CBN rate, what he is allowed to charge on his margin is two per cent. If you are doing your Personal Travel Allowance (PTA), and you have your passport and visa, and you enter a BDC office and the operator charges you more than two per cent, report that operator to us. We will give you that dollar free and also punish that member. That is the differentiation I want to make between the parallel market and the licensed BDCs.

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ow on what is causing the margin, every price is a function of demand and supply.

The recent development in the market whereby the CBN banned the importation of dollars by the banks, and also set the limit of autonomous transactions per BDC per bank to $250,000 limits supply; it caused drastic shortage in the market.

And in so far as there is drastic shortage in the market, the price of that product would definitely go up. Also, is the depletion in the foreign reserve in 2013 from $45.98 billion to $43.61 billion dollars. In excess crude account, there is depletion from $11 in 2012 to $2.5 in January, 2014 and these are the buffers that will determine the currency value of any country. This fuels speculations, as it signals to people that we don’t have the dollars to meet supply. These are the major factors causing these gaps in exchange rates.

Another challenge is the activities of the banks. They buy at N159 and sell at N167; the CBN has addressed this last year when they said that no bank should sell their money above one percent margin. But what the banks decided to do is to even stop selling.

What is obtainable right now?

What is obtainable right now is that the CBN sells to each BDC $50, 000 every week.

Selling $50, 000 at official rates which some of our members are buying. Some banks, (few of them) are selling and then we are also buying from customers in over the counter transactions.

Vanguard, MONDAY, JANUARY 27, 2014 — 29

Economy

What lies ahead for the economy in 2014?

“A b e n o m i c s . ” This is an important development.

The challenge now is to agree on medium-term f i s c a l adjustments and implement the structural reforms – including deregulation of product and service markets and measures to boost the share of women in the workplace – that are needed to give growth a firm foundation and finally banish the specter of deflation.

Europe is also

BY CHRISTINE LAGARDE

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e have certainly avoided the worstcase scenario (Great Depression II) over the past five years, thanks to the efforts of global policymakers – particularly the determination of central banks to keep global interest rates low and to support the financial system, coupled with fiscal stimulus in some countries.

But the time has come to push further, including by using the room created by unconventional monetary policies to implement structural reforms that can jump-start growth and create jobs.

What happens in advanced economies is central to global prospects; and, despite their stronger performance recently, the risks of stagnation and deflation continue to loom large.

Central banks should return to more conventional

•Christine Lagarde monetary policies only when robust growth is firmly rooted.

The United States has long been the main engine driving the global economy, and private demand there has regained vigor. But key challenges lie ahead. For example, it is vitally important that policymakers follow through on the recent budget agreement and end the political wrangling over the country ’s fiscal future.

Greater certainty about the

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he global economy in 2013 remained suspended between the poles of hope and uncertainty. While recovery gained momentum, particularly in some advanced economies, the world economy is not yet flying on all engines – and is likely to remain underpowered next year as well.

The International Monetary Fund’s latest forecast puts global GDP growth at 3.6% in 2014, which is decent, but still below potential growth of around 4%. In other words, the world could still generate considerably more jobs without fueling inflationary pressure.

This means that the IMF’s members – whether advanced, emerging-market, or developing economies – have more work to do. A strong and lasting recovery that lifts all countries and all peoples requires policymakers to press ahead on all fronts – fiscal, structural, and financial. At the same time, the international community must reinvigorate its efforts to strengthen cooperation through the G-20, the IMF, and other actors. Indeed, only through such collaboration can we overcome the lingering impact of the global crisis.

Central banks should return to more conventional monetary policies only when robust growth is firmly rooted

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direction of policy could restore growth to a level that would lift the entire global economy.

In Japan, recovery has been spurred by the mix of aggressive monetary and fiscal policies known as

at a key juncture. The eurozone is finally showing signs of recovery, but growth is uneven and unbalanced.

While many countries are doing well, demand in general remains weak, and unemployment in the periphery remains obstinately high, particularly for young people.

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ne area of uncertainty for Europe is the health of its banks. The forthcoming stress tests and asset-quality review can help restore confidence and advance financial integration, but only if they are conducted well.

Europe also needs to boost demand, strengthen its financial and fiscal architecture, and put in place structural reforms to ensure sustained growth and job creation.

Over the past half-decade, the emerging markets have been in the vanguard of economic recovery: together with developing countries, they have accounted for threequarters of global GDP growth. But these economies’ momentum slowed in 2013, as uncertainty about the timing of monetary-policy normalization in the US coincided with doubts about the sustainability of their growth path.

While the worst fears have faded, the emerging economies face new policy challenges. In responding to slower demand, policymakers must be wary of financial

excess, especially in the form of asset bubbles or rising debt.

They should also focus on strengthening financial regulation, in order to manage credit cycles and capital flows more effectively, and on reestablishing fiscal room for maneuver.

Low-income countries have been a bright spot for the global economy over the last five years as well. They proved resilient in the face of crisis, and many – especially in Africa, where annual output rose by about 5% in 2013 – are enjoying strong growth. Now is the time to build on these gains, primarily by strengthening these countries’ capacity to raise revenues.

With demand from emerging markets weakening, lowincome countries should bolster their defenses against a serious downturn, even as they continue to focus their spending on key social programs and infrastructure projects.

Middle Eastern countries in transition face additional challenges in the form of social instability and political uncertainty. These problems should be addressed by laying the groundwork for dynamic, transparent economies, promoting more inclusive growth, and ensuring continued support from the international community.

While challenges vary by country and region, many common problems must be addressed in the years ahead.

Too many countries face a legacy of high public and private debt, fiscal and current-account imbalances, and growth models that are unable to generate enough jobs. The international community also needs to complete the regulatory reforms required to create a safer financial system that better supports the needs of the real economy.

These are not abstract challenges.

Only by addressing them can we ensure future prosperity at a time when billions of people have rising aspirations – to find jobs, to rise out of poverty, and to one day join the global middle class.

In 2014, we need to take the steps that would help make this dream a reality. The IMF is committed to working with its 188 member countries to define and implement the policy measures that can power the engines of growth – and lift all people to renewed prosperity.

Christine Lagarde is Managing Director of the International Monetary Fund.

She is participating in the World Economic Forum’s Annual Meeting in Davos.

P&G Profit Tops Estimates as Emerging Markets Help Sales

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rocter and Gamble Co posted second-quarter profit that topped analysts’ estimates, helped by sales in emerging markets.

Net income fell 16 percent to $3.43 billion, or $1.18 a share, from $4.06 billion, or $1.39, a year earlier, Cincinnati-based P&G said today in a statement.

Excluding some items, profit was $1.21 a share, exceeding the $1.20 average of 20 analysts’ estimates compiled by Bloomberg.

Chief Executive Officer A.G. Lafley has said developing markets with increasing household incomes will be a “significant” driver of growth.

Those gains have helped P&G overcome weakness in the U.S., where it is trying to recapture market share in key categories such as detergents.

“With soft consumption in the developed world, we expect the company’s growth to be driven by the emerging markets,” John Faucher, an analyst at JPMorgan Chase & Co. in New York, said in a note before the results were released.

Unilever’s Close-Up gives out two cars at ‘Natural Naija Smile’

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lose Up Herbal, the herbal toothpaste from Unilever Nigeria Plc has given out two cars to in the just ended ‘Natural Naija smile’ contest.

The contest was a digital driven campaign, tagged ‘The search for Best ‘Natural Naija Smile’. The competition encouraged consumers to share their Naija smile by uploading a picture of their smile unto an application on Closeup Facebook page, invite friends to vote for their entries.

The contest kicked off in the last quarter of 2013, with over one thousand five hundred and thirty one (1531) entries. Eight winners finally emerged, with Idowu Azeez and Obi Olivia coming first and second respectively winning the grand prize of two brand new Hyandai i10 cars. Other winners went home with Ipads, Iphones, Blackberry phones, Unilever Pureit and digital cameras as consolation prizes.

The Marketing Director, Unilever Nigeria Plc, Mr David Okeme, while presenting the gift, said the brand stands for Social Confidence expressed in people getting close and a smile is always the end product of such closeness.

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30 — Vanguard, MONDAY, JANUARY 27, 2014

Homes, Housing Finance

48 FCT residents benefit from social housing scheme

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inister of State, Federal Capital Territory (FCT), Mrs. Olajumoke Akinjide, has presented keys of completed houses to 48 residents of the FCT. The houses were among those conceived under the social housing programme to mark the 30th anniversary of Abuja, and consist of 28 one-bedroom and 20 two-bedroom apartments.

Akinjide said the houses were allocated at 50 per cent discount, with one bedroom units offered at the cost of N1.3 million and N1.6 million for two bedroom units. •The houses will be given under the •eRent and Own Scheme payable within 11 years, with an initial payment of 25 per cent of total price.

According to her, the project is a palliative measure for low income earners, whose houses were demolished at Idu-Karmo.

She said the housing units were specifically meant for widows, vulnerable and other less privileged.

The minister said the FCTA was partnering with international nongovernmental organisations (NGOs) to provide more affordable houses for residents. •The NGOs are out to help not to make profit, and we will ensure the scheme is not hijacked by political office holders or the rich.

Earlier, the Managing Director, Abuja Property Development Company, Alhaji Bishir Haiba, said social amenities like roads, schools and water were provided in the village. He commended the FCTA for the opportunity given to company to manage the project, and urged the beneficiaries to maintain the houses and amenities provided.

Two beneficiaries, Mr. Idris Baba and Mrs. Kate Okon, who spoke on behalf of others, expressed happiness over the gesture and promised to maintain the environment and live in harmony.

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Property acquisitions in Abuja used for money laundering —EFCC Stories by YINKA KOLAWOLE, with Agency reports

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roperty acquisitions are fast becoming means of money laundering for fraudsters in the Federal Capital Territory (FCT), according to the Chairman of the Economic and Financial Crimes Commission, EFCC, Ibrahim Lamorde.

Lamorde disclosed this during a courtesy visit to the Minister of the Federal Capital Territor y, Bala Mohammed, in Abuja. He said the Commission has uncovered money laundering schemes in the FCT in which the perpetrators disguised the proceeds of crime by investing in properties.

The EFCC boss said that the unscrupulous persons

involved in the nefarious acts prefer to pay for their acquisitions with cash rather than purchase the properties with bank instruments.

According to him, the laundered funds were frequently converted into foreign currencies through Bureaux de Change before the purchases were made. He further noted that in order to make it difficult to verify the identities of the new owners

or the sources of fund, the perpetrators don't bother to do change of ownership after such acquisitions.

Lamorde said over 270 cases of land scam were reported to the Commission in the last three years, adding that the Commission suspects insider abuse in some of the cases being investigated and called on the minister to be prepared to initiate disciplinary action against erring officers.

The FCT Minister commended EFCC on its effort to stamp out corruption particularly in the territory, noting that the Commission had supported the FCT administration in curtailing the scourge of corruption and leakages in the FCT especially on land premiums.

•"It is sad that the capital territory as a jurisdiction is used as a citadel of corruption and also for perpetuating acts of corruption. People from the states and local government illegally acquire money and come to get it hidden in the FCT through acquisition of properties that are not registered and that is a big concern because it is depriving the FCT of the revenue needed and increasing corruption in the Territory. It is also increasing security challenges because most of the houses acquired are left vacant and we have no means of knowing who owns them," he said.

Mohammed further stated that the FCTA was working with the Abuja Geographical Information System, AGIS, to upgrade their system in such a manner that it would be difficult for anybody to impersonate, manipulate or forge land documents.

'NMRC will attract attention to housing sector'

By UDEME CLEMENT

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he Federal Government recently launched the mortgage re-finance scheme aimed at ensuring easy access to loans for housing development.

In this interview, a real estate expert, Mr. Robert Umoette, Managing Director/CEO, DURAN Intermediaries Limited (DIL), speaks on the challenges of the housing finance sector and other issues. Excerpts.

Major challenge impeding the growth of housing finance in Nigeria The major challenge is lack of sufficient finance to boost the growth of this sector and make it work like what

obtains in advanced economies. Now, with the launching of the refinance scheme, I believe government will turn attention to this important sector of our economy.

Are commercial banks not giving enough support to this sub-sector in terms of credit facility for capital projects?

What we have in Nigeria is deposit banking, where money is kept in the banks.

Nigerian banks do not encourage entrepreneurship by giving credit facility for long term development. Also, the interest rate is very high and even close to 25 per cent now. With this high lending rate, how can the entrepreneurs improve their margin and still stay afloat in business?

What is the solution to high

lending rate in the financial sector?

The Central Bank of Nigeria (CBN) needs to intervene and do something to reduce the lending rate to at least 10 per cent. Projects in the housing sub-sector are capital intensive and require long gestation period, but banks are not willing to give long term funding that can last for a minimum of 5 to 10 years.

They can only give about two years, which is too short for any tangible output from the business.

What is the role of the mortgage system in this regard?

Our mortgage sub-sector is also facing numerous challenges. At present, there are a lot of people who do not even know that something like the mortgage institution

is existing in Nigeria, because the sector is rapidly going under. For this problem to be tackled, there must be increased funding for the federal mortgage system to ensure funding of capital projects for long term growth and sustainability.

What•fs your outlook for the economy in 2014?

I believe there is prospect for Nigeria's economy this year because the major issue, which is power is being addressed pragmatically.

The moment government is able to fix this sector fully the entire economy will be repositioned for greater prosperity. Government should also put more emphasis on the housing subsector, which is capable of creating thousands of jobs for the people.

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“Ye Gods, what Cypris, or what love divine took part in this? Sophocles, c495B.Cc406B.C hen he finally died in military detention in 1998, the curtains fell on one of the characters on the Nigerian stage whose life story will remain part of the national legend for as long as there is a nation called Nigeria. M.K.O. Abiola’s life story went beyond the rags-to-riches which have become repetitive in Nigeria and the world. Born into relative poverty, never mind the gloss that Juju musicians later attempted to put on his humble beginning. Yet, those who knew him remember the young Kashimawo as very likeable. What he lacked in physical charm, for he was far from handsome, he made up for by having the warmest personality anybody can possess. Despite not having a lot of money, he was still generous with the little he had.

His best attribute was his brain; because he was reputed to be a brilliant student.

Later, he studied Accountancy and might have remained an obscure accountant until fortune beckoned on him to apply for

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The inheritors: Why Nigerian one-man companies never last –2. Chief M.K.O. Abiola

•M.K.O. Abiola a job with the International Telephone and Telegraph, ITT, then headed by a fellow called Hal Genene who ran the company by the numbers and who treasured “bean counters”, as Accountants were called and number crunchers, as Financial Analysts were dubbed. Very quickly, ITT climbed the corporate league ladder to become a Fortune 500 company. Thousand of MBA students in the USA, at the time wanted to be like the ITT President. One of my classmates in Boston had his

room pasted all around with pictures of the ITT President.

Soon after landing the job, M.K.O, was promoted to the position of Financial Director. This position was to bring him enormous good fortune. As it turned out, the Federal Government was owing ITT a lot of money which nobody had been able to collect and which ITT in the US wanted collected.

So MK went to the office of the Federal Commissioner for Communications, late General Murtala Mohammed, then a Colonel, to collect the debt owed. The Commissioner was not in the office when MK arrived; so he decided to wait – with over a hundred others.

When Murtala finally arrived, everybody stood up but MK. Murtala was curious; so

stopping in front of the only man sitting, he asked: “Don’t you know I am here?” MK replied, still sitting, “Yes, I know but you are my debtor and I have come to collect.” On that demonstration of hutzpah or unmitigated gall, friendship started between MKO Abiola and the top ranks of the military. When Murtala became military Head of State, the nation’s treasury was virtually opened to M.K.O. Abiola to take as much as he wanted.

One big, and questionable contract followed another; such that by 1980 Abiola was perhaps the richest man in Nigeria. ITT continued to obtain contracts; indeed, ITT got whatever it wanted and at its own price. Later M.K started to diversify his business to include a newspaper, a bakery, bookshop, radio station etc. but, the Federal government was still the cash cow.

Simultaneously, the man was squandering the money almost as fast as it came in. He was generous to a fault and well-

liked even by people who never received a kobo from him. t was his legendary philanthropy which eventually got him elected by a wide margin in 1993. If his opponent, Alhaji Tofa, a Kano indigene, wants to know why MK won even in Kano, he need not look beyond the launching of the Kano State Investment Fund, which occurred a few years earlier.

While other were donating five hundred thousand or one million, Abiola stood up and announced N10 million donation; and while a deafening standing ovation was still ringing in everybody’s ears, he grabbed the microphone and said, “And that is a first installment.”

While he was busy accumulating great wealth and building his financial empire, it was not clear then that Abiola had failed to groom a successor who would keep the “Flag flying” after his death – which came in the least expected manner.

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Vanguard, MONDAY, JANUARY 27, 2014 — 33

Tax Matters

Tax enforcement: Investigation and litigation under Nigerian Tax Laws:

Raising the standards and protecting rights and responsibilities 2 INVESTIGATION OF TAX OFFENCES BY FIRS: he Black's Law Dictionary defines the verb •'Investigate' as: •"to inquire into a matter systematically; to make a suspect the subject of criminal inquiry...to make an official inquiry". It is often said that a good investigation begets a good prosecution and vice versa. Therefore it is best practice for the investigator to compare notes from time to time with the Prosecuting Counsel in course of his investigation. Generally, Tax Investigation is undertaken by the Tax Investigation & Special Enforcement Department (TISED) of the Service.

Specific offences arising from petitions to the Executive Chairman•fs office are investigated by the Special Enforcement Unit (SEU) of the Service. Apart from regular staff of FIRS, Special Purpose Tax Officers (SPTOs) are also utilized by the Service to undertake its investigations.

The Investigation process entails review of Petitions or Information received from the ECFIRS or Whistle Blowers, interviewing Witnesses and suspects, recording of statements from witnesses and suspects under caution, writing of letters to authenticating bodies and writing Investigation Reports (Interim and Final reports) and applying for approval of appropriate authority to prosecute the allegations arising from the said Petitions or Complaints. At the conclusion of investigation, the duplicate copy of the case file is sent from TISED to the Legal Department while the SEU refers its Duplicate case files to its Legal Section for Vetting, Legal Advice and possible Prosecution. By virtue of the current organogram of the Service, all criminal prosecutions are supervised by the Legal Department which is under the Direct Reports Group in the office of the Executive Chairman.

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nature as opposed to a Full trial before the State High Courts or the High Court of the Federal Capital Territory as the case may be. The prosecution is also required to comply with the Federal High Court (Criminal Procedure) Practice Directory 2013 to engage the

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PROSECUTION: ection 47 of the Federal Inland Revenue Act provides for the prosecution of offences by the FIRS as follows; "The Service shall have powers to employ its own Legal officers which shall have powers to prosecute any of the offences under this act subject to the powers of the Attorney-General of the Federation."

Where the Legal Department arrives at a conclusion that investigation is conclusive and offences are disclosed by the investigation and the proof of evidence, then Counsel reviewing the case subject to the approval of the Executive Chairman, prepares and prefers charges against the named Accused persons before the Federal High Court of Nigeria. Note that by virtue of Section 33(2) of the Federal High Court Act Cap F12, Laws of the Federation of Nigeria 2004 (As Amended) Criminal trials before the Federal High Court are Summary in

• Kabir-Mohammed-Mashi , Ag DG, FIRS

It is best practice to do an internal memo to the SEU notifying the IPO of the date of arraignment in order to facilitate the appearance of the Accused persons through their Sureties before the court

case in full throttle and minimize unnecessary preliminary objections from the Defence.

By a letter of application to the Registrar pursuant to Section 47 of FIRS Act, a Charge is filed along with the Proof of Evidence and the list of Prosecution Witnesses. Every filing done by the FIRS is official and need not be accessed or paid for at the Registry of the Federal High Court. For case of service, the Prosecution also prepares another letter applying to the Registrar to allow it serve the Charge on the named Accused persons who are usually in contact with the Investigation Police Officer (IPO). It is best practice to do an internal memo to the SEU notifying the IPO of the date of arraignment in order to facilitate the appearance of the Accused persons through their Sureties before the court.

ARRAIGNMENT OF ACCUSED PERSONS AND PRELIMINARIES OF BAIL PENDING TRIAL: rraignment and Plea of persons standing Criminal Trial is for

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provided under Section 215 of the Criminal Procedure Act Cap C41, Laws of the Federation of Nigeria. On a date fixed by the court, the Charge is read to the Accused person(s) and they are asked by the Court to take their pleaGuilty or not Guilty. However there are exceptions to this rule where an Incorporated Company is involved.

Where the Accused persons plead guilty to the Charge, the Prosecution reviews the facts of the case, tenders CTCs of relevant documents in support of the facts as Exhibits and applies for a Conviction. The Court will thereafter consider the facts and Exhibits tendered and give Judgments; Convicting the Accused Persons and sentence with appropriate punishments ranging from fines or imprisonment or both. Where however as in most cases the Accused persons pleads •gnot guilty•h to the Charge, the Prosecution applies for a date for trial to prove the case against the Accused person(s). At this point the Accused person(s) through their Counsel applies for bail of the Accused persons pending trial. It is always good practice for the Prosecution to insist that all applications for Bail pending trial be brought formally. This would afford the Court the opportunity to hear the Bail application on the merits of the Affidavit evidence filed by the parties.

But note that once a person has been

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properly arraigned before the Court, the Accused Persons shall be remanded in prison custody pending the Hearing of the application for Bail.

However, in exceptional cases where the Charge was served late on the Accused person(s), the Courts have been minded to consider Oral Applications for Bail. In such circumstance, the Court restricts Counsel to Oral arguments on points of Law. LAWS RELEVANT IN CRIMINAL PROCEEDINGS: riminal trials before the Federal High Court of Nigeria is regulated by four major legislations; Constitution of the Federal Republic of Nigeria 1999 (As Amended), the Evidence Act Cap E14, Laws of the Federation of Nigeria 2004 (As Amended), the Criminal Procedure Act Cap C41 Laws of the Federation 2004 (As Amended) and the Federal High Court Act Cap F12, Laws of the Federation of Nigeria 2004 (As Amended). There is in addition the

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Federal High Court (Criminal Procedure) Practice Directory 2013 which creates responsibilities for the Prosecution and the Defence. Note that Section 34 of the Federal High Court Act provides that the Court shall give priority to Revenue causes and matters.

A community reading of FHC Act, the EFCC Act and the FIRS Act reveals that Revenue matters have been placed in Accelerated Hearing by these statutes and Prosecuting Counsel must be alert in drawing the Courts attention to relevant Sections of these Laws in course of Trial.

OREDR OF TRIAL:PROSECUTION WITNESSES: hese are persons; the Complainant- Federal Republic of Nigeria- intends to call to give evidence as Prosecution witnesses in proof of the Charge before the FHC in a Criminal trial. These must be persons who are very conversant with the facts of the case particularly the areas they are to testify.

It is good practice for the Prosecuting Counsel to have pre-trial meetings with the intended witnesses and prepare them properly for trial. On a named date for Trial, the Counsel for the Prosecution calls his witnesses to lead evidence in order to prove the various counts on the Charge against the Accused person(s). This process is called Examination-in-Chief. At the end of the Examination–in-Chief of each Prosecution witness, the Court inquiries from the Defence Counsel whether he has any questions for the Prosecution Witness who has testified. If the Defence Counsel does, he will engage the witness in a process of CrossExamination. There is no limit to questions asked by way of CrossExamination. The sky is the limit.

Where the Cross-Examination brings out issues that are nebulous or ambiguous in Evidence, the Court will allow Counsel for the Prosecution to ReExamine the Witness and/or thereafter start the entire process all over with another witness until all the Prosecution Witnesses are taken. Note that there is no limit as to the number of witnesses for the Prosecution, but it is good practice to include all material witnesses.

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DEFENCE WITNESSES t the close of the case for the Prosecution, the Court shall call upon the Defence Counsel to commence the defence of the Accused persons.

However, the Defence Counsel has one of several options; He may take a date to address the Court on a No Case Submission that the Accused person(s) have a no case to answer; urging the Court to discharge him/her. Note that if the Defence Counsel makes a •eNo Case•f Submission and relies on it, the decision of the court shall be a judgment on the merit. If the no case submission fails and Defence Counsel does not rely on it, the Court will ask the defence to call its witnesses.

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34 — Vanguard, MONDAY, JANUARY 27, 2014

Insurance

NCRIB advocates support for WAII

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he Nigerian Council of Registered Insurance Brokers, NCRIB, has advocated the support of all insurance constituent bodies for the West African Insurance Institute (WAII), to allow it meet the mandate of producing the required qualitative human resource for the industry in the West Africa sub region.

The President of the NCRIB, Mr. Ayodapo Shoderu made the appeal during the visit of the new Director General of the Institute, Mr. Frederick Bowen-John to the Council in Lagos. Shoderu opined that the insurance industry in West Africa had not been able to live up to its expectations because of insufficient human resource or professionals who will render creative and dynamic insurance services to meet with changes in consumer’s expectations.

“For the dire challenges of human resources to be met in the Nigerian insurance industry, like its peers in other West African countries, all training institutions of which WAII is inclusive, must be given required support and patronage by reputable professionals and bodies in the sector,” Shoderu stated.

NAICOM says insurance coys Gross Premium Income close higher in 2013

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he National Insurance Commission (NAICOM) on Friday said that the enforcement of ‘No Premium, No Cover ’ policy impacted positively in Gross Premium Income (GPI) of Insurance companies in 2013. The “No Premium, No Cover” policy was introduced by NAICOM to ensure that all insurance policies are backed by payment for premium.

Mr Rasaq Salami, NAICOM Director, Corporate Affairs, told the News Agency of Nigeria (NAN) in Lagos that the insurance companies’ unaudited quarterly reports submitted to the commission showed great improvements.

“The exact figure of the industry GPI will be released after the accounts have been audited. The quarterly reports helped the commission to assess how each of the companies is doing and when to intervene if any company is having problems. “So far, the commission has not sanctioned any company for defaulting in the enforcement of “No Premium, No Cover” policy.

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“Poverty is no excuse to shun insurance” Stories by ROSEMARY ONUOHA

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mmediate past President of the Chartered Insurance Institute of Nigeria, CIIN, Mr. Wole Adetimehin has said that Nigerians should stop using poverty as an excuse for shunning insurance.

Adetimehin said that people should rather organise themselves and cultivate the habit of savings.

Adetimehin, who stated this in an interview with Vanguard, said that poverty could be a factor but cannot be a tenable excuse, adding that the poorest class would be the ones that need insurance most.

He said, “Poverty shouldn’t be an excuse for not having insurance, rather we should be preaching to people to get better organised as well as to be operating a plan in whatever they do.

“Yes poverty could be a factor but cannot be a tenable excuse. The poorest class would be the ones that need insurance most, because should anything happen to them, should they suffer a loss, chances of their recovery is lean, that is, if they will ever recover. But if they have insurance, their hopes are high.”

According to Adetimehin, some of these things have to do with the literacy level, adding, “What is the level of education and knowledge that people have? The insurance

industry operators will need to do a lot more in educating the Nigerian public. Even the so called elites hardly can appreciate how insurance works or the benefits, and this may be peculiar to our environment because some of these elites, when they travel abroad or have anything to do overseas they comply with the demands over there. So maybe a lot have to do with our belief, trust and faith in the sector.

“I was reading a book and it had to do with the richest man in Babylon. The lesson taught in that book has to do with the fact that from whatever income you earn, there must be a planned pattern of managing and

spending, and such plans must include a level of saving from which you can always do more investment or do so many things, compared to somebody that will be waiting for manner from heaven or until he can access loan or facility from the bank or a finance house before he could start a business or any venture. So for noncontingencies, for emergencies there must be a reserve.”

Adetimehin said that people should cultivate the habit of savings, adding, “So if your salary is paid to you and you could cultivate the habit of savings, then you could consider insurance because that’s a way of saving. So, if

you do that you are saving for the future, for the training of your children (education insurance). If people could cultivate that habit, in a way, you are inculcating insurance culture. So my advice and appeal to the general public is that we should shun our apathy towards insurance. It is one of those services in modern times that can always provide a relief or a solution to some of our problems and I can say emphatically, even within the African continent Nigeria cannot be seen as where we have the poorest set of people. How come that insurance penetration or awareness in some African states is a lot better than Nigeria? Poverty cannot be a factor, so we should deemphasise poverty,” Adetimehin said.

(L-R): Captain Richard Hill, Chief Operations Officer of Etihad Airways; Jeffrey Johnson, President of Boeing Middle East; Fareed Mohammed Al Jaberi, Vice President Supply Division at Takreer; Bernard Clément, Senior Vice President at TOTAL New Energies; and Dr. Fred Moavenzadeh, President of the Masdar Institute of Science and Technology.

GNI achieves PAT of N900m in 2012 G reat Nigeria Insurance Plc has declared a profit after tax of N903 million in its 2012 financial year, according to the approval that was recently received from the industry regulatory authority; National Insurance Commission, NAICOM. In a statement, the company said that it is a commendable achievement when compared to the previous year PAT result which stood at N399 million, adding that the 2012 performance represents 119 per cent leap for an insurance company.

The statement maintained that it is also remarkable when it is considered against the backdrop of the challenging business climate experienced in year 2012 and the need for strict compliance with the International Financial Reporting Standards, IFRS, which had only taken off that year.

According to the statement, the result also showed a sustained growth by the Cecilia Osipitan led organisation when appraised by business analysts since the approval of the result was released and have been commenting positively on it; that the result showed an efficiently managed company that was able to make this profit with this level of gross premium income.

GNI’s gross premium as at 31st December, 2012 stood at N2,881,139 billion as against the turnover of N2,403,889 billion of 2011, this shows a 16.5 per cent comparative increase.

Meanwhile, the total assets also experienced similar growth of 13.8 per cent at N8.432 billion as against the 2011 figure of N7.265 billion.

Noteworthy also, is the fact that within the same period of year 2012, the company paid out N833,122 million as claim to its various customers.

In the same vein the retail products of the company which are sold under its eBusiness platform has also started growing; one of which is Fireproof to cover against possible loss of properties through fire, another is Great Savers Delight; which is a savings investment scheme, Motorflex is an improved version of third party motor insurance policy and GNI Personal Accident Insurance product is for injuries sustained in accidents. Only few weeks back the company paid N1.6 million insurance claim to a fire victim customer; Victor Okosieme after he had purchased a Fireproof Insurance product from the Company with a premium of N4,000.

Commenting on the company’s performance, the Managing Director/CEO, Mrs. Cecilia Osipitan said “This is a testimony to the process re-engineering and customer centric focus of the organisation and the consistent human capital development of our staff.” She said that the company had ensured that strict compliances to ‘business ethics was paramount to the sustainability of all our goals.’

She revealed further that the company has initiated series of plans which includes changes in the company’s IT software, adding that a new software has been purchased with staff undergoing both local and international trainings to guarantee positive turnaround time impact.

Vanguard, MONDAY, JANUARY 27, 2014— 35

Micro-Finance

Industrialist advocates proper verification of import waivers Stories by PROVIDENCE OBUH

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he Managing Director of Nigeria Gas and Steel Limited, Mr. Hasib Moukarim, has called on the Ministry of Finance and the Ministry of Industry, Trade and Investment, to properly verify applicants for import waiver before granting them concession.

Moukarim said: “For waiver and concession to be given to any applicant, thorough investigation must be carried out by the Federal ministries of finance and trade and investment to verify the authenticity of the items in respect to which applicant is seeking waiver or concession.

Moukarim said that the federal ministry of finance must contact relevant sectors like Manufacturers Association of Nigeria for expert opinion on the issue and Quantity Surveyors and Civil engineers to determine the actual materials needed for the project in question.

He also advised that the waiver and concession should not be on imported finished goods that have local substitute in Nigeria.

He stressed that the issue of waiver and concession given to importers of imported finished products which are locally manufactured in the country must be stopped if custom service is to actualize the

projected revenue.

His words: "When foreign finished goods are brought into the country duty free, we are directly creating employment for workers of the foreign companies because goods imported with waivers will be cheaper than locally produced goods and this will escalate the demand here and sales of the foreign manufacturers will increase."

He continued: "Since the locally produced goods will become more expensive, demand for them will shrink and consequently result to

loss of sales which could threaten the continued existence of the local manufacturers due to recurring of losses and this is poised to worsen the menace of unemployment in the country.

He lauded the Comptroller General of the Nigeria Custom Service, Alhaji Diko Inde Abdulahi for his intention to generate the sum of N1.2 trillion in 2014.

According to Moukarim, the decision to generate the sum of money is a welcome positive development from

custom service if the amount can be generated as announced by the service boss stressing further that all genuine manufacturer should prepare to support the initiative to achieve the targeted revenue.

For the custom service to achieve their target, Moukarim said all stakeholders in the economy especially federal ministry of finance, Budget office and federal ministry of trade and investment should cooperate fully with the custom service to achieve the target revenue.

FRom left: Director, Brands & Communications, Etisalat Nigeria, Enitan Denloye; Acting Chief Executive Officer, Etisalat Nigeria, Matthew Willsher; Faces of Etisalat Easyflex, Genevieve Nnaji and Hakeem Kae Kazim; Etisalat Ambassador, Olamide; Head Consumer Segment, Etisalat Nigeria, Idowu Adesokan and Director, Consumer Segment, Etisalat Nigeria, Oluwole Rawa, at the Etisalat Easyflex New Bundles for High Value Segment, held in Lagos.PHOTO;AKEEM SALAU.

Nutricima rewards customers with mega cash promo Nutricima Limited, makers of Nunu, Coast and Olympic milk has unveiled Mega Cash Promotion, in order to reward its loyal customers across the country.

Speaking at the launch of Nutricima Mega Cash Promo in Lagos, Managing Director of Nutricima Limited, Mr. Suneel Vasudevan said that line with the company’s vision to reward its new and existing consumers, came up with the mega cash promo as a way of expressing our appreciation to millions of its loyal customers, including kids, youths and adults who deserve nutritious milk and food drinks which nutricima provides.

We all know that the festive period has just ended and many Nigerians have expended so much during

the season. But they need to have some money to refill their accounts. So Nutricima through this mega cash promo endeavour to enrich millions of our consumers by giving them opportunities to win millions of naira through this initiative.

Apart from that, we partake in various CSR and engage the communities through various platforms like grassroot sporting activities, healthy living campaign in neighbourhoods, partnership with Lagos State Government to drive drink milk campaign, partnering with schools for kids with special needs like Down Syndrome Foundation of Nigeria (DSFN).

To participate, Milk Categor y Manager, Mr. Ralph Agbaje, said that consumers stand the chance of winning gifts and millions

of naira after purchasing any of Coast evaporated milk, Olympic evaporated milk and family pack of Nunu powdered milk which has the promo label.

Under the label, consumers would find a unique six digit code and serial code number which is to be sent to a dedicated phone number 08093377802. The sender then gets an auto response which informs the consumer about what he or she has won.

Instant prizes to be won in the Mega Cash Promo include N50 airtime e-topup for thousands of consumers, cash prizes of N500, N1, 000, N5, 000, N10, 000 each.

Aside from the instant prizes, consumers can also qualify for a monthly raffle draw where they have the opportunity to win between

N50, 000 and one million naira.

CBN earmarks N132bn for women entrepreneurs

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he Central Bank of Nigeria (CBN) on Friday said that 60 per cent or N132 billion of the N220 billion Micro, Small and Medium Enterprises Development Found (MSMEDF) had been earmarked for women. The Gombe Branch Controller of CBN, Mr. Ishaku Jatau, disclosed this at a sensitisation workshop in Gombe.

He said that the objective of the programme was to reach out to more than two million operators of MSMEs. “The revised microfinance policy, regulatory and supervisory framework provides that the women access to financial services should increase by 15 per cent annually in order to eliminate gender disparity. In order to achieve this, 60 per cent or N132 billion of the fund, has been earmarked for providing financial services to women,” he said.

According to him, the CBN launched the MSMEDF on Aug. 15, 2013 with a take-off seed capital of N220 billion for the programme. He said that the peculiar challenges being faced by women in accessing financial services in Nigeria made it imperative.

Mrs Huraira Sabo, CBN Deputy Director (Development Finance), said that the programme was for the 36 states and the Federal Capital Territory (FCT). According to her, the aim of the programme was to expose stakeholders to modalities of accessing the funds. ”We want them to look at the guideline and see where it affected them to try as much as possible to access this fund when it is ready after the sensitisation,” he said.

Accion MFB retains ‘best microfinance bank’ award

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

The MD/CEO of AMfB, Ms. Bunmi Lawson describes this “3rd consecutive win as a pointer to AMfB’s commitment to financial inclusion, its high standards of corporate governance and staff devotion to our mission.

According to a statement

released by Oluwayemisi Mafe, the company ’s External Communications Officer “Going forward, AMfB will continue to expand its services aided by technology as we are driven by the passion of ensuring a brighter future for our customers.”

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

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36 — Vanguard, MONDAY, JANUARY 27, 2014

E-Commerce

E-commerce stakeholders commend Konga’s litigation move •Calls for legislation to protect local firms •Rocket internet shuns press, remains silent

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n the 20 th of January, 2014, Vanguard published the photograph of the former Director of Department of Petroleum Resources, DPR, Augustine Olorunsola against the name of the current director, George Osahon.

We are sorry for the embarrassment this must have caused the current director. The error is regretted.

By JONAH NWOKPOKU

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Sim Shagaya, CEO, Konga.Com that it is set to engage Rocket Internet in litigation over domain name ownership, a move many say would set a judicial precedence for online business in the country.

Rocket Internet which operates several online businesses in Nigeria including, Camudi.com, Jovago.com, Kaymu.com, Vamido.com, EasyTaxi.com and HelloFood.com is also the parent company of the popular online retailer, Jumia.com.

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onga has alleged that Rocket Internet registered Konga related domain names in ten different countries, areas that it would possibly establish should it decide on expansion outside of Nigeria.

According to a document made available to Vanguard, the list of the domain names and the countries they are registered include: Konga.cd for Cote D’Ivoire, Konga.cm for Cameroun, Konga.ly for Libya, Konga.mu for Mauritius and Konga.ma for Morocco. Others include: Konga.mw for Malawi, Konga.sc for Seychelles, Konga.sh for Saint Helena, Konga.co.ke for Kenya and Konga.co.za for South Africa.

The implication of this is that if Konga decides to set up shop in any of these countries, Rocket Internet has effectively deprived them of the benefit of domain localisation. The only option that they may have left would be to buy the domain

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perators in the ecommerce space in the country have commended Nigeria’s online retailer, Konga.com for considering legal action against the German based internet conglomerate, Rocket Internet, over domain ownership.

They said that legal action appears to be the last resort, adding that the development shows a lack of legislation to protect the strongly emerging tech scene in the country.

The Managing Director/ Chief Executive Officer, Mobile Enterprise Technology Nigeria Limited, Peter Akporume, told Vanguard, “If it is true that Rocket has indeed done what Konga is accusing them of doing then it is very wrong of them. The legal means is their last option as according to Konga they have contacted Rocket who hasn’t responded which if true means that, they are left with no other line of action than this.”

“They may or may not win but at least it will shed light on the state of intellectual property protection for technology startups in Nigeria. I always argue that innovation for Africa belongs to Africans as nobody knows our clime better than us, so we are best suited to solving our problems,” he added.

Another operator, Johnson Benjamin, said, “It is good that Konga is taking this up. And I want them to pursue this to a logical conclusion as it will definitely set the pace for other issues that will emerge in online business in the future.

“But it is also important that governments wade into this matter or probably begin to think of putting up strong legislations to protect local tech firms or else we may keep having this kind of issue in the future.”

On his part, another operator who preferred anonymity said, “the matter is entirely a legal business issue and it will be up to the lawyers to determine who is at fault here. But ethically speaking, what Rocket has done is wrong but may be business wise, they may be right, and that is why I said the court would have that decision to make.”

Last week, Nigeria’s online retailer, Konga.com announced

CORRIGENDUM: Our error in DPR Director caption

Oliver Samwer, CEO, Rocket Internet

They may or may not win but at least it will shed light on the state of intellectual property protection for technology startups in Nigeria

occupying an abandoned or unoccupied space or building that the squatter does not own, rent, or otherwise have permission to use.

Cybersquatting, however, is a bit different in that the domain names that are being “squatted” are (sometimes but not always) being paid for through the registration process by the cybersquatters.

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names from Rocket Internet, for which, should Rocket Internet decide to sell at an exorbitant price, Konga may not be able to operate in that country as Konga.

In internet business, this practice is called cyber squatting and many countries, especially the United States has enacted a law against it.

According to the United States federal law known as the Anticybersquatting Consumer Protection Act, “It is registering, trafficking in, or using a domain name with bad faith,intent to profit from the goodwill of a trademark belonging to someone else.

The cybersquatter then offers to sell the domain to the person or company who owns a trademark contained within the name at an inflated price.”

The term is derived from “squatting”, which is the act of

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nvestigation has further revealed that Rocket Internet registered all the domains in June, 2012 through one Arnt Jeschke on behalf of Rocket Internet GmbH in Berlin, Germany. However, the intention of Rocket Internet over the move remains unclear as the company has refused releasing the names to Konga despite subtle persuasion and had even gone into renewal snatching of some of the domain names like Konga.co.za which it renewed in June, 2013.

The date of these registrations is important to note as it was just one month before Konga officially launched in Nigeria by July.

Following this development, some analysts have argued that Rocket’s snapping up ten Konga domains across Africa just one month before the launch of an ecommerce brand that would compete with one of their subsidiaries will obviously be interpreted as a preemptive strike to contain a business threat.

George Osahon, DPR Director

Etihad Airways to support development of aviation biofuel industry in UAE

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tihad Airways, Takreer, Total and the Masdar Institute of Science and Technology have announced they will collaborate on a new initiative, BIOjet Abu Dhabi: Flight Path to Sustainability, to support a sustainable aviation biofuel industry in the United Arab Emirates.

BIOjet Abu Dhabi was announced a day after Etihad Airways conducted a demonstration flight with a Boeing 777 powered in part by the first UAE-produced biokerosene from an innovative plant biomassprocessing technology. The biofuel was partially converted from biomass by Total and its partner Amyris.

Takreer, a wholly owned subsidiary of Abu Dhabi National Oil Co. (ADNOC), did the final aviation biofuel distillation, adding the UAE to a handful of countries that have produced and flown on their own biokerosene.

Vanguard, MONDAY, JANUARY 27, 2014— 37

Aviation

NCAT acquires 360 degree Visual Tower Simulator for ATC training Stories By LAWANI MIKAIRU

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he Nigerian College of Av i a t i o n Technology, NCAT, Zaria has acquired a 360 degree Visual Tower Simulator for Air Traffic Controllers training. This was disclosed by the Spokesman of Aviation Parastatals, Mr Yakubu Dati, as one of the milestones recorded by

the college in the outgoing year.

Dati also said that another achievement attained by the college is the reaccreditation of the institution to train industry professionals in accordance with international standards.

•To foster the smooth training of professionals, several aircrafts and aircraft engines lying unserviced have been overhauled and are now back in operation. This

development has increased the training capacity for the college.• According to him , before the current Minister of Aviation, Princess Stella Oduah came into office, the college had no Visual Tower Simulator for Air Traffic Control training, but in 2013, a 360 degree Visual Tower Simulator for ATC training was purchased and installed.

Also, a Boeing 737-200 for cabin crew training

was also procured in 2013.

• In addition to the positive changes made in NCAT, EADS SOCATA TBM 850 single engine turbo prop trainer aircraft, two No Bell 2061-iv helicopters and Gas

Turbine Trainers which were unavailable before July 2011were procured in 2013 for the institution for the first time ever. An ARTMACS Pc-Based Radar Simulator and an Auto pilot Training station has also been procured

and installed in the institution.

Another commendable milestone recorded in NCAT is the renovated briefing room for pilots which has been in a deplorable state for many years.

Aviation Committee assures Nigerians of proactive aviation oversight

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he Chairman, House of Representative

Committee on Aviation, Hon Nkeiruka Onyejeocha, has said that

the committee will be more proactive in its oversight function in the aviation sector in 2014.

Speaking in her home town, Isiochi, in Abia State shortly after presenting some gift items to the people of her constituency, Hon Onyejeocha declared that there were so many complaints from Nigerians about the aviation sector in 2013 and this will be drastically reduced by the committee through oversight functions in 2014.

She disclosed that the aviation committee will identify areas where the industry has faired well and also failed with a view to repositioning the sector.

"Nigerians should expect more proactive oversight meaning that what most people complained about in 2013 would be drastically reduced in 2014 God willing. So by this January we will go back to the field and go on oversight. Once on oversight, we will point out those things that we think are not right and things they have done well, so give and take Nigeria aviation sector would come out to be the best," she said.

While commending the Initiative of the aviation minister for embarking on the remodeling of airports across the country, Hon Onyejeocha noted that a lot needed to be done adding that passengers still sweat at the Murtala Mohammed International Airport Ikeja stressing that it was not the right thing.

• "I know that many people even this last Christmas they entered this international airport in Lagos, people were still sweating, so it is not right, how much will it take us to get our air-conditioning system right and so many other things, we have a lot of pluses and few minuses, but I know that

by God’s grace in 2014 C M Y K

38 — Vanguard, MONDAY, JANUARY 27, 2014

C M Y K

Vanguard, MONDAY, JANUARY 27, 2014— 39

Advertising, Media & Marketing

Yoghurt market: Deepening penetration through promo & reward system …As Hollandia, others stir competition Stories by PRINCEWILL EKWUJURU

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ompetition they say is good for the market, because of its tendency to boost economic activities and provision of job opportunities for the citizenry.

The present competition in the Yoghurt market in Nigeria is revealing an interesting scenario in that segment, going by the array of Yoghurt products seen in the market is a sign that the market is buoyant for the manufacturers.

One thing is for the brand (s) to retain visibility on the shelves, another thing is for the manufacturers to register the brand (s) on consumers mind.

What manufacturers do to retain consumer loyalty is another thought, for the brands to be accepted is another job for the marketing communications arm of the manufacturers. The Integrated Marketing Communications, IMC tools employed by competitions in the market has given much credence to the nature of competition brewing in the sector.

Recently, Fan and Super Yoghurt from the stable of Fan Milk Nigeria Plc, Sena Yoghurt and various other imported brands have heightened tempo in the market which invariably has brought out the creative ingenuity in the local brands.

For instance, Hollandia Yoghurt from the stable of Chi Limited has gone hay wire with its ongoing pomo, Refresh ‘n’ Win, which began in December 2013 to end February 28, 2014, has virtually increased the market penetration of the brand with its 360 degree ad creativity, likewise that of others.

According to the company, the promo is aimed at promoting and deepening the market presence of the brand across the country. While also creating awareness for the brand’s value propositions.

The Managing Director of Chi Limited, Mr. Deepanjan Roy said: “Hollandia Yoghurt Refresh ‘n’ Win promo was conceived to reward the growing population of consumers across Nigeria that have made the Yoghurt their loyal brand.”

On mechanics of the promo, he said that consumers are to buy two 1-litre or 500 ml packs of Hollandia in any variant of Strawberry, Plain Sweetened or Pineapple Coconut to get one scratch card at the point of purchase, even though

Beyond “Happy New Year!”

(Part One)

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From Left: Category Manager Oral Care, Mrs Oiza Gyang, Winner Close-Up Herbal Natural Naija Smile Contest, Idowu Azeez, and Assistant Category Manager, Oral Care, Mrs. Grace Onwubueneli during the prize presentation of a Hyundai i10 in Lagos recently. consumers are allowed to participate as many times as possible.

He assured participants that it will take less than five minutes for them to get a response after sending the text while presentation of a form of identification and the original scratch card by prize winners will enable them to claim their respective prizes.

Continuing, he stated that consumers can also visit the Hollandia Yoghurt Facebook page to monitor progress on the promo and leave any message on the page to enable the company provide a prompt response. A grand prize of a trip to London or Paris would

be announced at the end of the promotion, he enthused.

An ipad winner, Pius Joy from Enugu, shared her joy on how she won: ‘I have always loved the unique taste of Hollandia Yoghurt. When I saw the ad of the promo on TV, I said may be this is my time. So, I started scratching and texting. When I was invited for the draws, I didn’t believe that I will win but I still came. So, when I was announced as one of the winners of an ipad, I was shocked.”

Also, Kalagbor Ruhoma from Rivers says that now that she has won, she would not stop drinking Hollandia Yoghurt. “I used to drink Hollandia Yoghurt once in a while, but now that I have won an ipad, I will drink more and more Hollandia Yoghurt until I win a trip to London.

Pepsi, Airtel promo rewards consumers with free airtime

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epsi, a brand from Seven-Up Bottling Company, SBC Plc, in partnership with Airtel Nigeria, said that any consumer who purchases a glass bottle of either Pepsi, Mirinda, 7Up, Teem and Mountain Dew in the next 60 days will get a free airtime.

According to both companies the promotion is to reward consumers for their loyalty and ensure they begin the New Year on a high note.

Head of Marketing, SBC, Mr. Norden Thurston, said the partnership with Airtel is aimed at giving the Nigerian consumer the best of two worlds: refreshing with Pepsi, talking with Airtel.

Thurston said Pepsi’s consumer-centricism led to the

continuosly ttriving of the company to delight its consumers.

“Consumers are becoming more discerning and are beginning to lose interest in promotions because they believe there is little chance of winning.” Thurston said. While adding, “with Pepsi/Airtel Promo, no try again, games of chance, lotteries or lucky draw.”

Commenting on the partnership promo, the General Manager, Value Added Services Airtel Nigeria, Mr. Victor Bannerman-Chedid, said “the partnership between Pepsi and Airtel, is one of the most exciting things to happen to the Nigerian consumer in recent time.

We are happy to begin the New Year on a very promising and positive note for the good of the Nigerian consumer.

We recognize their importance and the immense roles they play in the success or our businesses.”

et me to begin this write-up by wishing you a (belated?) Happy New Year! I wish all our readers a wonderful year. I must also thank those who have kept faith with this column, especially those who have found time to send feedback on the issues discussed here.

Once again, it’s that time of the year when people make resolutions and renew their commitment to certain things they hold dear. For us here, one of the things we hold dear is, of course, excellence in serving the customer. We’re totally committed to offering you tips to help you improve customer experience in your organization and, thereby, improve profit. Hence, in our next three write-ups, we shall consider a few things you may wish to do a bit differently to improve customer experience. It’s a sort of 2014 agenda for you. Going through the write-ups, you’d probably think that we’re addressing decision-makers only. I think everyone whose work touches on customer experience will, most likely, find our advice useful.

Customer Focus There’s no doubt that “customer focus” is a corporate mantra that has gained much currency since the 1980s.

It manifests in expressions such as “the customer is the king,” “the customer is always right,” “the customer is our greatest asset,” and so on. Indeed, it is politically correct to talk about customer focus. If you wish to confirm this, you may randomly scan through the mission statements of some Nigerian companies. Many of them have something to say about their commitment to offering superior products and services to customers.

After all, customers are the reason every organization is in business. But beyond the great mission statements, what happens in reality?

Customer focus means that you put the customer first.

It means that the business is built around the needs of the customer. It means less red tape and more service.

It means that everybody in the organization considers serving the customer as number one job. After all, the customer is the business – to borrow that gnomic expression from Liz Jackson and Mick Spain (used in their book for entrepreneurs, Start Up!) Please note that we’re talking about customer (not prospect) focus.

Too many of us are so obsessed with pursuing prospects that we ignore current customers.

How do you get everybody to focus on the customer?

One way is to launch service improvement initiatives, but you need to realize that little improvements here and there will have a greater long-term impact than some fancy, flash-in-the-pan projects.

Lead by example. Don’t just preach customer focus.

Do it!

To put the spotlight on customers, some organizations participate in the Customer Service Week (CSW), usually celebrated in the first full week in October each year. Ever since the International Customer Service Association (ICSA) in 1988 came up with the idea of a CSW, the event has gained acceptance across the globe.

In 1992, even the US Congress formally recognized it as a national celebration.

The CSW is usually a great time to put customer experience issues on the front-burner, raise companywide awareness on such matters and reward outstanding performers. It could be both serious and fun. But, wait a minute…October is still far off! Who says you can’t celebrate yours earlier? It may be smart to make every interaction with the customer a celebration of sorts by making them feel welcome. Let’s celebrate our own customer service week every day!

To be continued

C M Y K

40 — Vanguard, MONDAY, JANUARY 27, 2014

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

Futility of increasing CRR on government deposits condoned borrowing back their own personal ‘idle funds’ with double-digit interest rates for whatever reason.

Nonetheless, the recent increase of CRR for public deposits to 75% will ultimately be largely as ineffective as if CRR across the board remained at the existing level of 12% for private deposits. Instructively, if public sector deposits remained stagnant in bank accounts, CBN’s attempt to reduce excess cash and ‘injurious’ credit expansion by the banks may be successful; however, if the MDAs rapidly drew down the cash balances

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he Monetary Policy Committee (MPC), at its meeting last week, retained Central Bank’s benchmark interest rate at the industrially destabilising level of 12%, to avert the threat of inflation. Furthermore, the MPC raised the Cash Reserve Requirement (CRR) for government deposits with banks from 50% to 75%, in order to control systemic surplus cash and suppress a discomforting price spiral.

The huge leap in public sector CRR from 12%, six months ago, was the result of CBN’s belated recognition of the folly of sustaining the monetary strategy, which enabled banks to profitably leverage on public sector deposits in their custody, to lend hundreds of billions of naira back to the same government every month, with double-digit interest rates.

This patently suicidal monetary strategy has, according to some reports, rapidly increased our domestic debt burden from N1tn to beyond N7tn, with close to N5tn as debt service charges in the last decade. It is regrettable that even after Lamido Sanusi’s unforced confession of such monetary mismanagement, neither organised civil society nor Labour nor indeed, the legislature, as elected representatives of the people, raised an eyebrow at such enduring reckless misapplication of public funds.

In countries where public officers are accountable, there would be immediate demand for investigation to determine how such an antisocial system transcended the tenures of Joseph Sanusi, Charles Soludo and the incumbent, Lamido Sanusi, as CBN Governors.

Certainly, these eminent gentlemen would never have

untenable as the funds will ultimately end up in private sector accounts, when MDAs begin draw down their account with CBN. Similarly, even a 100% cash reserve requirement for public funds would regrettably also neither reduce systemic surplus cash, and restrain inflation nor would it diminish government’s borrowing to fund contrived budget ghost deficits and to mop up unyielding systemic surplus cash.

Indeed, despite the increase of CRR for government deposits to 50% in July 2013, evidence suggests that CBN still mopped

The recent increase of CRR for public deposits to 75% will ultimately be largely as ineffective as if CRR across the board remained at the existing level of 12% for private deposits

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in their accounts and paid employees’ salaries, or contractors’ bills, the erstwhile sequestered public sector deposits automatically transit to private sector accounts, and will, expectedly, ultimately still instigate surplus cash in the hands of the banks, with the attendant threat of liquidity expansion, which could push inflation rate uncomfortably beyond tolerable limits.

Consequently, suggestions that government deposits should be domiciled directly with CBN may equally be

up well-over N200bn from the money market, while the DMO (read as Debt Creation Office) also borrowed billions more at over 10% interest from the money market. It is worrisome that the hundreds of billions of naira loans for which CBN actually pays double-digit interest rates will never be put to productive or critical infrastructural enhancement, as they are simply warehoused from use, to reduce so-called excess liquidity from the system, and avoid a worsening scenario, where too much money chase

increasingly fewer goods to push up inflation rate.

Incidentally, it is this belated recognition of gross folly in monetary management that spurred Lamido Sanusi and the MPC to adopt an equally foolish strategy to reduce the scourge of ever present surplus cash in our system, with increases in CRR for public deposits, when in fact, a flat rate increase of CRR to 25 or 30% for both private and public sector deposits would have been certainly easier to control, with less possibility of abuse and would also be more effective for reducing excess liquidity.

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onetheless, a much more elementary and sensible approach to our monetary predicament would be to first identify the cause of continuously surplus cash in the system, and examine why such surplus cash exists, simultaneously with the inability and/or disinclination of the banks to lend to the real sector at lower interest rates, which induce industrial and entrepreneurial expansion with attendant increasing job opportunities?

Indeed, a layman could also ask “How can we complain of too much money, and yet we do not have enough money to build better schools and hospitals or even to repair our roads?” In truth, CBN and MPC’s strident monetary policy propaganda may be seen as subterfuge to distract public attention from failure to bring about low cost of funds to stimulate real sector growth plus low inflation rate

Business & Economy Brent oil holds above $107, set for biggest gain in five weeks

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rent rose above $107 a barrel on Friday as bitter cold in the U.S. boosted demand for oil and drew down the country’s crude stockpile and distillates. Distillate stocks plunged three-and-a-half times more than expected, driving US ultra low-sulfur diesel futures, or heating oil, futures to their highest this year.

The situation helped the U.S crude benchmark towards its best week in seven.

Brent, poised for its biggest gain in five weeks, also climbed as European refiners shipped diesel to the world’s biggest oil consumer. Brent crude rose eight cents to $107.66 dollars a barrel, ending 69 cents lower in the C M Y K

previous session following weak factory activity data from China.

U.S oil increased 18 cents to $97.50 dollars, extending gains after settling 59 cents up.

“The U.S benchmark is drawing support from the fall in heating oil stocks as a result of the severe winter,” said Tetsu Emori, a commodities fund manager at Astmax Investment.

“It may be helping Brent as European refiners export heating oil to the United States, to the East Coast.” Refiners in Asia, Europe and Russia are shipping around half a million tonnes of heating oil and diesel to the U.S this month.

At least a dozen tankers are booked so far in January to

ship gas oil and diesel to the U.S. East Coast, according to traders and shipping data.

U.S distillate stocks fell 3.21 million barrels in the week ended Jan. 17, the Energy Information Administration (EIA) said, compared with analysts’ expectations of a 900,000 barrel draw. Distillate demand over the past four weeks rose 5.2 per cent from a year earlier to 3.46 million barrels, the EIA said.

“Distillates stocks decreased by more than expected, with stocks remaining below the bottom of the five-year range,” analysts at BNP Paribas said in a note. These supporting factors may result in the US benchmark rising towards 98 dollars a barrel and Brent

inching higher to around 108.50 dollars, said Emori of Astmax Investment.

to preserve the purchasing value of otherwise relatively paltry incomes of workers Nonetheless, the solution to our monetary predicament has been in public domain for over a decade, yet, our economic experts have inexplicably refused to recognize the ineffectiveness and oppressive folly of the existing monetary management practice.

Evidently, the unyielding burden of surplus cash is the product of CBN’s possibly “inadvertent” expansion of money supply, whenever it creates and substitutes fresh naira supply in place of dollar allocations for dollar revenue.

Thus, the more dollars we earn, the greater will be the threat of surplus naira, which, paradoxically, cannot be productively applied for infrastructural enhancement or for the reduction of our galloping debt burden.

However, the adoption of dollar certificates for the payment of dollar revenue would not only save us from the unnecessary oppressive burden of excess liquidity, but it would, in fact, become totally unnecessary for government to borrow back its own idle, noninterest yielding funds, at ridiculously high interest rates, while simultaneously crowding out the real sector’s access to cheaper funds, and thereby stalling the creation of increasing job opportunities and real economic growth. So long, therefore, as the CBN and MPC remain in denial of this reality, our economic strategy will remain incapable of instigating industrial and economic growth that will support improved social welfare of our people, with increasing employment opportunities.

SAVE THE NAIRA, SAVE NIGERIANS.

In addition to the weekly EIA data, a monthly report from industry group American Petroleum Institute also showed a rise in the U.S petroleum product demand.

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