Financial Vanguard

JANUARY 28, 2013

From left, President, Association of Primary Aluminum Producers and Chairman, Qualitec Industries Limited, Chief Yinka Kufile; Director, Special Duties, Mr. George Okere and Director-General, Dr. Joseph Odumosu, both of Standard Organization of Nigeria (SON) during an interactive stakeholders meeting between the SON D-G and members of the Association of Primary Aluminum Producers held last Wednesday in Lagos.

World Economic Forum in Davos, Switzerland that the world economy will slow down again in 2013. The International Monetary Fund, she said, has cut its global growth forecasts and now projects a second year of contraction in the euro region as progress in battling Europe’s debt crisis fails to produce an economic recovery. The world economy, she said, will expand 3.5 per cent this year, less than the 3.6 per cent forecast in October, in an update of its World Economic Outlook report. While the fund projects growth this year increasing from last year’s 3.2 per cent pace, it expects the 17-country to shrink 0.2 per cent in 2013, instead of growing 0.2 per cent as forecast in October. If Nigeria oil is to seek market in Europe, it certainly will have a hard job to do. To buttress why the budget may not be realisable in its present form, available data indicates that as at the middle of January 2013, the United States gets so much crude from its own shale deposits that Canadian exporters to US are compelled to sell as far afield as Europe, showing how deeply the U.S. energy revolution is transforming global oil flows.

According to EIA, as recently as 2011, close to 100 per cent of Canada's crude exports went to its neighbour, the United States. But January

Continues on page 18

2013 budget in trouble before endorsement

BY OMOH GABRIEL, Business Editor

I

ndications are that the 2013 budget is already facing challenges and may not be fully implemented. The budget may have to be reviewed with the oil bench assuming a far lower benchmark than the $75 proposed by the executive.

This is because Nigeria crude oil sale is facing difficulty finding market. The United States of America which takes a huge chunk of Nigeria crude will from this month, January add about 900,000 per day to its daily production of 6.5million barrel per day thus raising its total output to 7.4 million

barrel per day.

Already on the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $96.04 a barrel in the Globex electronic session. Also March Brent crude on London's ICE Futures exchange fell $0.14 to $113.14 a barrel.

The crude oil production in the US, according to the latest monthly report of US Government's Energy Information Administration (EIA, averaged

about 6.5 million barrels per day in September 2012.

The EIA predicts the US to overtake Saudi Arabia and Russia as the world's biggest producer of oil by 2017. Also, on the anvil: US becoming self-sufficient in oil by 2035 and

North America trudging on to become a net oil exporter sometime around the year 2030. , for its part, expects North America as an exporter of oil and gas 'by the middle of the next decade.'

Both these reports, if you care, are closely monitored by oil investors. If you're one, do factor the EIA prediction of oil production at 6.8 million barrels per day in 2013, which will put in the at about $3.44 per gallon next year as against the 3.64 gallon in 2012. Yet, from the longterm perspective this is definitely a good time to be in a region with immense potential for growth.

This is coming on the heels of the warning issued by IMF Managing Director, Ms Christine Lagarde at the

147.65

1.1

2,167.00

-28.00

18.41

-0.08

113.40 +0.12 95.93

--0.02

CURRENCY BUYING CENTRAL DOLLAR POUNDS EURO FRANC YEN CFA WAUA RENMINBI RIYA KRONA SDR

154.73 244.0092 207.8952 167.4024 1.7003 0.2959 236.6431 24.8725 41.2569 27.8537 237.4022

155.23 244.7977 208.567 167.9433 1.7058 0.3059 237.4078 24.9533 41.3903 27.9437 238.1694

SELLING 155.73 245.5862 209.2388 168.4843 1.7113 0.3159 238.1725 25.0342 41.5236 28.0337 238.9365

CBN Exchange rate as at 25/01/2013

18 — Vanguard, MONDAY, JANUARY 28, 2013

Cover Story

Youth restiveness and unemployment in Nigeria: The Way Out - Part 4

New Managing Director of Nigerite Limited and his predecessor in office paid a courtesy visit to the group Headquarters of Odu’a Investment Company Ltd, Cocoa House, Ibadan.

From left Chairman Nigerite ltd; Dr Femi Orebe, New MD Nigerite ltd; Mr Alberto Tenorio, Chairman Odu’a Investment; Chief Sharafadeen Alli, GMD Odu’a’ Mr Adebayo Jimo and Outgoing MD of Nigerite limited, Mr Jean-Luc Viatour, during the visit.

2013 budget in trouble before endorsement trade and shipping sources said more than two million barrels of light crude from Canadian offshore oilfields have gone to Europe in the last month, in a taste of what is to come. The change is due to technological advances the U.S. expects will bring 900,000 barrels per day (bpd) record jump in its oil output to 7.3 million bpd in 2013, from places like the Bakken shale deposit in North Dakota that now feeds U.S. East Coast refineries served by Canada.

According to international oil market reports, US refineries' traditional suppliers, Nigeria, is to seek alternative customers and is feeling the pinch of the new Canadian competition in its established Informed Presidency sources said this is probably why the President is yet to sign the 2013 budget and may ask for a review of the budget benchmark to accommodate the new reality in the international oil market in order to edge against a foreseeable crash of oil prices.

Looking at the global economic outlook from the IMF perspective, there is no hope that Nigeria may have the financial muscle to achieve the 2013 budget outlay. Mr. Olivier Blanchard, chief economist at the International Monetary Fund, speaking at a news conference about an update of the IMF’s World Economic Report said the IMF cut its global growth forecasts and now projects a second year of contraction in the euro region as progress in battling Europe’s debt crisis fails to produce an economic recovery.

Blanchard said “In particular, the growth numbers are not enough to make a dent to the unemployment rate in

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Continued from page 17

According to international oil market reports, US refineries' traditional suppliers, Nigeria, is to seek alternative customers and is feeling the pinch of the new Canadian competition in its established

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advanced economies.” The IMF foresees Spain leading the contraction in the euro area, while growth slows in the region’s largest economy.

Economic Contraction The IMF forecast for a second year of economic contraction reflects “delays in the transmission of lower sovereign spreads and improved bank liquidity to private sector borrowing conditions,” as uncertainty remains over ending the turmoil that has engulfed nations from Ireland to Cyprus, according to the report. The fund expects the region’s outlook to improve, forecasting a return to 1 per cent growth in 2014. It sees the world economy expanding 4.1 per cent next year, 0.1 percentage point less than in October.

In the U.S., “underlying economic conditions remain on track,” the IMF said as it cut its forecast for the world’s largest economy to 2 per cent from 2.1 per cent in 2013 and raised it 0.1 percentage point to 3 per cent next year. The priority is for Congress to avoid too much deficit reduction too soon, reach an agree-

ment between Republicans and Democrats to raise the debt ceiling and craft a plan to reduce debt over the medium term, according to the report.

Japan Forecast While the forecast for was left unchanged at 1.2 per cent this year amid fiscal and monetary plans to stimulate its economy, the fund cut the 2014 prediction by 0.4 percentage point to 0.7 per cent. Fiscal expansion is “going to help growth in the short run, no question,” Blanchard said. At the same time “when you start with such a level of debt and without a medium term credible fiscal consolidation plan, increasing the fiscal deficit in the short run is a very risky thing to do.”

Commodities exporters will feel the pinch of falling prices, with oil now seen slipping 5.1 per cent instead of 1 per cent, according to the report. While supportive policies have helped buoy growth in some emerging market countries in recent months, there’s less space for such action now, it said. Growth forecasts for were cut to 3.5 per cent this year from 4 per cent and to 4 per cent from 4.2 per cent in 2014. was lowered 0.1 percentage point to 5.9 per cent this year and was left unchanged at 6.4 per cent in 2014.

China Forecast

The IMF didn’t change its forecast for seen growing 8.2 per cent this year and 8.5 per cent in 2014. “It’s not the rates that we saw before the crisis, but these rates are long gone,” Blanchard said of emerging countries. “Things in general are fine.” He also dismissed concerns about “currency wars” raised by last week as “very much overblown.”

European

Continues on page 19

create employment, we need to create a gas industry that is completely private. If 50-60 % of Nigerians cook their food with LPG or propane we can spurn an industry that changes our oil and gas economy from being an extractive industry into an industry that is domesticated and generating employment and commerce for our people. Imagine how many Nigerians will be employed in pumping, processing, filling and distributing 2050 million cooking gas cylinders per month. So rather than just extract our oil and gas assets, we should take them through our own domestic commercial process. That is how you create jobs.

•Nigeria’s teledensity has grown from less that 10% to over 50%. Today, over 70 million Nigerians have at least one phone, most have two, yet there is not a single phone

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urning the dead assets most Nigerian home owners are sitting on into immediate capital which can quickly trickle down to create thousands of skilled and unskilled jobs like, carpenters, painters, plumbers, roofers, bricklayers, carpet installers etc. create or revamp their mortgage industry and create a secondary market to trade mortgage securities. This means the homes are assets that can be converted to cash or capital. If the government can help most Nigerian home owners to access the capital locked in their homes, the Nigeria government can create several trillion Naira in capital instantly. This new capital can filter through the economy and be recycled several times while creating between 500,000 to over 1 million jobs.

According to a report in 234next.com, Ismail Ridwan, a senior economist with the World Bank, said, “The amount of credit needed to take Nigeria into the top 20 economies by the year 2020 would have to be generated internally.”

JOB CREATION STRATEGIES •The U.S. needs 25 million barrels of oil daily, and pumps about 8 million of those barrels domestically.

The U.S. oil and gas industry provides employment directly or indirectly to 9.6 million Americans. By proportion, since Nigeria pumps 2.8 million barrels of oil daily, we should have 2.8 million Nigerians employed in our oil and gas industry. The question is how many Nigerians are employed in our oil and gas industry, and how can we increase the number?

•Sometime ago, President Jonathan spoke about the deforestation of Nigeria’s forests. Our solution to this problem can help develop our gas industry and create thousands of jobs in the process. Nigeria currently exports most of the gas we generate, and the rest that are not exported is burned off.

Nigeria burns $2 billion worth of gas yearly. That is enough to build 2,000 mega watts of power that can light up two million homes. Multiply that by ten or twenty years, and we have lost an opportunity to build 40,000 megawatts of power and create employment for millions of Nigerians. Therefore, to reduce deforestation and

If the government can help most Nigerian home owners to access the capital locked in their homes, the Nigeria government can create several trillion Naira in capital instantly

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manufacturer in Nigeria that makes the handsets used by Nigerians. There are no battery manufacturers that make batteries for those phones, and there are no Nigerian manufacturers that make cords for the hand sets.

No Nigerian software industry is involved in writing software for the phones, and I don’t even think any of the handsets are assembled in Nigeria.

Vanguard, MONDAY, JANUARY 28, 2013 — 19

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igerians whose pastime is bickering over oil resources may soon find out that what they consider as the goose that lays the golden eggs will no longer give them the resources to steal from. Oil may soon be selling for far below the 1982 price level. No thanks to President Barack Obama who, during his first term inauguration urged Americans to find a solution to the country ’s continued dependence on external oil.

Five years down the line, America is almost selfsufficient in oil production and is now turning down offers from traditional suppliers.

America is one country where when the government decides on a line of action, it follows through. But in Nigeria, for over two years (EIA).

But trade and shipping now, the issue of the sources said more than two Petroleum Industr y Bill million barrels of light crude passage has been with us from Canadian offshore without progress. While oilfields have gone to Europe others are busy finding in the last month, a taste of alternative to crude oil as means of energy, Nigeria’s what is to come. The change is policymakers are busy due to technological advances stealing the little resources the U.S. expects will bring available to diversify the 900,000 barrels per day (bpd) economy. Shamefully, just last record jump in its oil output to week, former President of 7.3 million bpd in 2013, from Botswana said at Daily Trust places like the Bakken shale Forum that it amounts to deposit in North Dakota that criminal negligence for now feeds U.S. East Coast Nigerian leaders to continue refineries served by Canada.

While this revolution is to steal the people’s resources taking place in the entrusted to them through international oil market, corrupt practices.

Last week, the news wire Nigeria's federal executive services were awash with arm of government is at war reports that the United States, with federal legislators on the the highest importer of right budget benchmark for Nigeria's crude now gets so crude oil, but the oil market much crude from its own shale equation is fasting changing deposits that Canadian against Nigeria. While the exporters to US are selling as executive favours the use of far afield as Europe, showing $75 per barrel, the legislators how deeply the U.S. energy pegged the budget at $79. revolution is transforming Both parties will soon discover global oil flows. As recently as that they have been too about the 2011, close to 100 per cent of optimistic international oil market.

From Canada’s crude exports went to its neighbour, the United the look of things, both sides States, according to the U.S. should review the budget and Government’s Energy reduce the benchmark to $60 Information Administration per barrel.

US refineries’ traditional

Dark cloud over 2013 budget as Nigeria loses US crude oil market

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supplier, Nigeria, is to seek alternative customers and is feeling the pinch of the new Canadian competition in its established European markets.

Besides Canada, other traditional suppliers to US market will seek customers in Europe and Asia. If most suppliers of crude are now to face a shrinking market in Europe, one thing is sure, the price of crude will nosedive southward, meaning a crash in prices of crude. This apparently will derail the 2013 budget, no doubt. Hitherto, US oil reserves have been too expensive to recover using old technology. New technology of a drilling technique called hydraulic fracturing, or fracking, in which water, sand and chemicals are forced deep underground to drive out trapped oil and gas, have allowed access to millions of barrels of U.S. oil that were previously unattainable. This shale oil is sweet - meaning it has low sulphur levels and is suitable for U.S. refineries - like the Canadian and Nigerian oil it is supplanting.

To the average American oil trader, Shale oil is making its way to the east coast of the United States by rail instead of shipping from long distance, so

Besides Canada, other traditional suppliers to US market will seek customers in Europe and Asia; if most suppliers of crude are now to face a shrinking market in Europe, one thing is sure, the price of crude will nosedive southward, meaning a crash in prices of crude.

This apparently will derail the 2013 budget, no doubt

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this is backing out offshore sweet east coast Canadian and Nigerian production. For oil traders, the profit margin had widened sufficiently for arbitrage as it allowed for a nominal profit of nearly $1 million on 600,000-barrel

shipment.

The question is, where is Nigerian NNPC seeking new markets? Apparently as it is with Nigeria, they have gone to sleep until one day, they find that there is no market for Nigeria crude. What then will happen? Federal allocation to states will dwindle, salaries will remain unpaid, Federal Government will borrow and borrow to finance the budget, the deficit will grow wider and the private sector will be crowded out of access to credit. The scary thing is that rising U.S. shale oil output has already started re-routing flows of Nigerian and Algerian light sweet crude oil which used to flow regularly to the United States. U.S. imports of light, sweet crude will fall to virtually zero by 2014, an executive of French energy company, Total’s trading arm predicted in October. This progressive upheaval in crude oil patterns has prompted European refiners to look at changing their slates - lists of suitable crude oil grades for use as feedstock — to adapt. Traders said that the extra volumes of Canadian crude arriving in Europe have depressed prices for Nigerian grades, which have fallen around $1 since early December.

Nigeria's Federal Government functionaries, governors and legislators who have been feeding fat on the proceeds of crude sales should be ready to drink the crude when it returns unsold.

Business & Economy

2013 budget in trouble before endorsement Continued from page 18 policymakers had joined Japan in bemoaning the economic cost of rising exchange rates.

“Countries have to take the right measures to get their own economies back to health,” with measures including monetary and fiscal policies, Blanchard said. “To the extent that we think the policies are appropriate, then the implications in terms of exchange rates are also appropriate.” In , German growth was cut by 0.3 percentage point to 0.6 per cent in 2013 and is seen accelerating to 1.4 per cent next year, from 1.3 per cent.

Spain Contraction Spain will contract 1.5 per

cent this year, compared with 1.3 per cent in October and is seen growing 0.8 per cent in 2014, 0.2 percentage point less than before. Italy will shrink 1 per cent in 2013 rather than 0.7 per cent seen in October, and expand 0.5 per cent in 2014, unchanged from three months ago, according to the IMF report released today.

Here at home, a Nigerian financial expert, Managing Director, Financial Derivative Company Limited, Mr. Bismark Rewane, said; “There is high potential of recovery in major sectors after 2012’s slow output. There will be improved power output; inflation would decline to about 9.5per cent, food prices to trend downwards

and declining interest rate.

Furthermore, Nigeria’s nominal GDP is estimated to reach $300 billion in 2013. Gross Domestic Product (GDP) rebasing is expected to take place this year and as such, would alter the base year to 2008 from 1990.” He said that by carrying out the exercise, Nigeria will be emulating Malaysia and South Africa which rebased their GDPs from 2000 to 2005 each and Ghana- from 1993 to 2006. He said rebasing the GDP would make the rich richer and poor poorer while the country’s growth trajectory will decline.

Professor Akpan Ekpo, Director-General, West African Institute of Financial and

Economic Management (WAIFEM), said, “Nigeria has potentials for growth. If things are right in this country, foreign investors will come into the country in 2013.

There is no need for government to lavish money unnecessarily by taking government officials abroad to spend huge sums of money on accommodation, feeding and other allowances just to woo investors. Nigeria is a sleeping giant and there are potentials.”

Prof. Ekpo, however, called on the government to urgently address security problem, saying, “Foreign investors cannot come to Nigeria when the security of

their lives is not guaranteed. “ Another issue bedeviling the country is governance. The issue of governance and leadership should be looked into.

Our value system is not helping us where people worship corrupt leaders. I expect the CBN to reduce the interest rate so as to attract the manufacturing sector to borrow from the banking sector and also the inflation to fall so as to increase the purchasing power of the people. ” Bade-Ajidahun noted that the trend so far in the Nigerian foreign exchange market has been quite disappointing.

This, according to him, was caused largely by the poor economic performance of the country, insecurity issues, and poorly implemented economic policy.

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20 — Vanguard, MONDAY, JANUARY 28, 2013

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Vanguard, MONDAY, JANUARY 28, 2013 — 21

Business & Economy

*From left: Brand Operations Integration Leader, P&G, Mokutima Ajileye; Celebrity Endorser, Sidney Esiri (aka Dr. SID); and Brand Operations Integration Manager, P& G, Titilola Adetunji at the ongoing Oral-B mobile dental clinic programme organised to support oral health by Procter and Gamble Nigeria held in Lagos recently.

Africa, Latin America, Caribbean witness positive FDI growth in 2012 – UN

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new UN report has shown major decline in Foreign Direct Investment (FDI) in 2012 while Africa, Latin America and the Caribbean witnessed positive growth. The FDI report, Global Investment Trends Monitor, was published by the UN Conference on Trade and Development (UNCTAD) last week.

It stated that macroeconomic fragility and policy uncertainty for investors led to an 18 per cent decline in

global FDI inflows last year to an estimated $1.3 trillion, the UN said in the report.

The report added that the 2012 figure was close to that of 2009 when FDI flow reached its lowest level of just slightly more than $1.2 trillion.

Global FDI had started to recover, reaching $1.6 trillion in 2011, according to the agency, which noted that it peaked in 2007 when it was close to $2 trillion.

“We thought it was a healthy, steady recovery and

now we feel that it will take longer than we expected for the recovery of FDI,” the report quoted James Zhan, Director of UNCTAD’s Division on Investment and Enterprise as saying.

Zhan added that there was “cautious optimism” for the year and next.

“Our estimate is that in 2013, global FDI may grow by around 7 per cent to 8 per cent and in 2014, something like 17 per cent.

“We really feel that the risks

are quite strong; many macroeconomic problems have been contained but not resolved, and they can pop up anytime,” he said.

The report, which covered FDI trends in developed, developing, and transition economies, as well as in major developing regions and recipient countries, stated that FDI flows fell “drastically ” in developed countries to values last seen almost 10 years ago.

“FDI declined sharply both in Europe and in the U.S, in Europe, Belgium and Germany saw large declines in FDI inflows,” the report stated.

According to the report, FDI flows to developing economies remained resilient in 2012, reaching $680 billion, the second highest level ever recorded.

It stressed that developing economies absorbed an unprecedented $130 billion more than developed countries.

“FDI inflows to developing nations in Asia fell by 9.5 per cent as a result of declines across most sub-regions and major economies, including China, India, Republic of Korea, Singapore and Turkey.”

It, however, explained that 2012 inflows to Asia were still at the second highest level recorded, accounting for 59 per cent of FDI flows to developing countries.

“FDI flows to China declined slightly but the country continues to be a major FDI recipient, the second largest in the world,” it said.

PFAs post N140bn profit from pension fund investment in 2 yrs

By PETER EGWUATU

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ension Fund Administrators (PFAs) have recorded a profit of N140.19bn from trading with funds in the Retirement Savings Accounts (RSA) of contributors under the Contributory Pension Scheme in the last two years, according to information obtained from National Pension Commission.

According to PenCom’s latest annual financial figures, the PFAs made returns of N53.42bn and N86.77bn in 2010 and 2011, respectively.

A breakdown of the figures showed that interest from investment income was N50.8bn in 2010 and N83.4bn in 2011, while dividends were N2.62bn and N3.37bn, respectively.

“Interest/coupons received during the year was N83.40bn C M Y K

in 2011, which was 60 per cent higher than the N50.8bn received in 2010.

“This resulted primarily

from the relatively higher yields on fixed income securities, especially FGN securities. The dividends

received on investment in ordinary shares amounted to N3.37bn in 2011, while dividends received in 2010 were N2.62bn.”

Revive moribund companies, industrialist urges F.G

By AKOMA CHINWEOKE

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he managing director of Falcon Petroleum Limited, Prof. Joseph Ezigbo has said the only way to guarantee rapid growth of the nation’s economy was for the Federal Government to invest in the people and reactivate dozens of industries that are moribund.

He stressed that the very moment there is industrial explosion in all parts of the country, the idle hands that engage in destructive tendencies would stop.

“The very moment we can

take gas pipeline to the north and that there is industrial explosion in the north, you will find that the idle hands that engage in destructive tendencies would stop and I will be willing anytime that the opportunity arises, to invest in the region because I believe in this country as I know the country has the capability to do anything and every thing,” he said. Prof.

Ezigbo who disclosed this in Lagos at the kick-off of the company”s corporate social responsibility initiative for the women of Ikorodu phase 11 pipeline host communities said his company was set to

actively drive the economic empowerment of women within Ikorodu, Lagos State by providing extensive vocational skills training to selected female participants from across several communities within Ikorodu.

This initiative, according to him, is in line with the collective agreement between the company and her host communities within Ikorodu, that empowering the citizens to become self-sufficient and thus financially capable of sustaining self and family, will go a long way to improve their standard of living. .

BRIEFS CBN ranks Anambra third in Deposit mobilisation

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he Central Bank of Nigeria has rated the economy of Anambra as among the strongest in the country. The Branch Manager of the bank in A w k a , Mr Okoro Azubuike, announced the rating i n Awka on Thursday when he received the Minister of Information, Mr. Labaran Maku, who was on good governance tour of the state.

Azubuike said the deposit mobilisation of the state was third in the country behind Lagos and Kano, while it ranked fourth in terms of the presence of commercial and microfinance banks. He said the commercial cities of Onitsha and Nnewi were large and had made the state the commercial base of the South-East region.

In his remarks, Gov. Peter Obi of Anambra said the bank was crucial to the commercial activities of the state, adding that the government had resolved to fasttrack the construction of its permanent building.

NRC increases Friday train ser vices on services Lagos-Kano route

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irector of Operations, Nigerian Railway Corporation (NRC), Mr Niyi Alli has said that the corporation has commenced two train services on Fridays on its Lagos-Kano passenger train services. Alli said in Lagos that the first train would leave Iddo for Ilorin by 9:00 a.m. while the second train would depart Iddo for Kano by 12:00 noon. He said that the first train (Lagos/ Ilorin route) would stop at all stations along its route, while the second train (Lagos–Kano route) would only stop at the state capitals along its route. He said that the two train services would ease the congestion usually experienced on the Lagos/Kano route and reduce the arrival time in Kano. The Lagos-Kano train initially arrived Kano between 7:00 p.m. and 8:00 p.m. on Saturdays.

22 — Vanguard, MONDAY, JANUARY 28, 2013

Banking & Finance BRIEF East Africa Exchange debuts

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he East Africa Exchange was introduced to the international community at the World Economic Forum in Davos, Switzerland.

President Paul Kagame of Rwanda, Nicolas Berggruen of Berggruen Holdings and Jendayi Frazer of 50 Ventures also representing Heirs Holdings, presented the project at a press conference last week EAX Rwanda is the first part of a regional exchange intended to increase transparency in the region’s commodity markets.

Through private-sector-led investment and under the terms of an agreement signed with the Government of Rwanda, the East Africa Exchange aims to increase regional market efficiency and liquidity as well as giving the region’s population of 130 million, especially smallholder farmers, better access to markets. The exchange will initially focus on establishing an auction facility and spot trading for agriculture and non-agriculture commodities, but will also develop futures trading across East Africa. Its investors are Berggruen Holdings, Heirs Holdings, a pan-African investment company, The Tony Elumelu Foundation, 50 Ventures and Rwandan led Ngali Holdings.

The chairman of Heirs Holdings, Tony O. Elumelu, C.O.N., said, “The East Africa Exchange showcases our desire to embrace global opportunities and practices, while ensuring that much of the value adding aspects of Africa’s resource wealth stays on our continent.”

EAX will complement the East Africa Community ’s (EAC) goal of regional economic integration as set out by the Common Market Protocol, increasing liquidity and sustainability of regional financial and commodity markets, supporting the EAC’s competitiveness globally. EAX will also uplift national and regional economies by reducing market barriers to trading, providing a transparent regional economy through a secure mechanism that facilitates financing to farmers and traders.

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From left: Adeolu Bajomo, Executive Director NSE; Jingdong Hua, Vice President, IFC; Jalo Waziri Haruna, Head Business Development NSE and Leke Ogunlewe, CEO Standard Chartered Securities Nigeria Ltd, at a courtesy call and Bell Ringing at the Nigerian Stock Exchange, during a roadshow for the IFC’s “Naija” Bond in Lagos. Photo by Lamidi Bamidele

Banks battle rising fraud on electronic transfer platforms

BY BABAJIDE KOMOLAFE

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anks have started introducing new measures to battle with a new wave of fraud on their electronic transfer platforms.

Vanguard investigations revealed that some banks now require that customers issue cheque as part of requirements for using their electronic instant transfer platform to transfer money to customers of other banks.

The customer will first issue a cheque to the bank, which would be attached to the transfer form filled by the

customers.

Further investigations revealed that this measure was prompted by cases of customers’ complaint of electronic money transfer from their accounts, which they did not authorise.

“There were cases whereby customers would fill form for electronic money transfer, only to come back to deny ever authorising such transfer”, a bank staff told Vanguard on condition of anonymity.

Investigations revealed that the situation was so severe in an old generation top five bank that it has to shut down its own electronic transfer

platform for days. In addition, some banks suspended instant electronic money transfer services to customers of banks considered to be very prone to such fraud.

A report presented at one of the monthly meetings of the Nigeria Electronic Fraud Forum (NEFF) indicate that fraudsters have created ways of infiltrating electronic transfer platform of banks to make fraudulent withdrawals from customers’ account. The report however said that this was made possible by banks’ staffs who agree to collaborate with the fraudsters.

But

investigations show that some customers have devised means of using the electronic platforms to defraud banks.

The situation however is been aggravated by the confidential approach of banks to incidences of fraud.

According to a staff, whenever such incidence arises, the customer is allowed to go, while the staff is made to bear the consequence.

This is despite threat of sanction from NEFF over inaccurate reporting of fraud incidence.

Speaking at the August monthly meeting Forum, Chairman of the Forum, Mr Emmanuel Obaigbonna said many banks are not giving accurate report of fraud cases because they see it as demarketing but doing so is saving the industry.

He said by giving accurate report of fraud cases banks will help their colleagues to learn from their experience and this will go a long way in reducing fraud in the industry. He said this is in line with the aim of the Forum, which is to be proactive in the fight against electronic fraud, by nipping in the bud likely fraud attempt before they occur. “Our aim is to have a centralised data base for fraud incidences, review such incidences to learn from them to make sure they don’t reoccur”, he said.

Obaigbonna said that the Forum will soon introduce sanctions to compel banks to make accurate report on fraud incidences. “We have set up a subcommittee to look into the issues of sanctions for inaccurate reporting,” he said.

He said in addition to introducing sanctions, the Forum is working with the Nigeria Interbank Settlement System to change the reporting format for electronic fraud by banks.

Merchant Banking: FSDH to leverage on strong risk management

BY MICHAEL EBOH

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irst Securities Discount House Limited, FSDH, has commenced merchant banking operations, promising to leverage on its strong risk management framework to grow in its new line of business.

Speaking during the official unveiling of FSDH Merchant Bank Limited, in Lagos, Managing Director of the company, Mr. Rilwan Belo-Osagie, said the company will, in addition to performing its former functions, now undertake new businesses, such as foreign exchange trading, foreign currency

security transactions, give term loans and advances among others.

“Over the years,” he maintained, “we have built a strong and veritable institution founded on trust, integrity, innovation and professionalism, which our customers testify to.”

He said the company plans to improve on its customer service, especially as the commencement of merchant banking operation will enable it offer a broader range of services to its clients thereby, deepening its client relationships and expanding its frontiers.

According to him, while the company does not

underestimate the challenges that lie ahead, it is prepared to confront them as opportunities to demonstrate its mettle and to succeed.

“Our vision remains clear, ‘to be a leader in our chosen markets,’ and that is what we will continue to strive for. Our mission is to be a bank of choice creating value for stakeholders through innovation and professionalism.

Belo-Osagie maintained that whilst the company does not underestimate the challenges that it will face, it is however confident that with its corporate culture of customer orientation, high

performance, image building, collaboration and learning, all obstacles that may come its way can be surmounted.

He said, “In continuation of the company’s tradition as a pioneer in the finance industry, FSDH has become one of the first merchant banks to be awarded a licence in Nigeria since the repeal of Universal Banking by CBN in 2010.

“Since March 1993 when FSDH began operations as the first discount house in Nigeria, the company has become a financial services group focused on delivering expert financial services to its select clientele, thereby assisting them in achieving their financial goals.

Vanguard, MONDAY, JANUARY 28, 2013 — 23

Corporate Finance

Flour Mills plans merger with Niger Mills NKIRUKA NNOROM

F

lour Mills Plc has announced its intension to merge its business with Niger Mills limited.

Niger Mills produces a wide range of goods, including flour, pasta, cement, fertilizer, bags and other packaging materials. In Cross River, Niger Mills’ main focus is on producing high quality wheatflour.

Flour Mills already holds 99.97 percent equity stake in Niger Mills. The scheme of merger will be achieved by the transfer of liabilities and undertakings of Niger Mills to Flour Mills, while the entire issued share capital of Niger Mills will be cancelled.

In a notice filed with the Nigerian Stock Exchange, NSE, Flour Mills explained that the boards of both companies have been in discussion and negotiations with regard to merging their respective businesses.

The company noted that the proposed scheme of merger would be undertaken pursuant to part XII of the investment and securities Act No. 29 of 2007.

It further stated that in exchange for Niger Mills’ liabilities transferred to Flour MIlls, ordinary shares of Flour Mills would be issued to the minority shareholders of Niger mills or alternatively a cash consideration in lieu of the allotment of the said Flour Mills shares to the minority.

According to statement, the proposed merger would facilitate the consolidation of the companies’ operations and

BRIEF NSE facilitates workshop on fixed income market making

By CHINEDU IBEABUCHI

T

L-R: Mr. Femi Niyi, ED Project Strategy $ Research; Prof. Robin Baker; Lord Faconett, chairman, Ravensbourne College; Mr. Adebola Akindele, GMD, Courteville Business Solution, CBS, & Dr. Vince Cable MP, at the CBS lounge at African Caribbean Business Expo (AACBE) organised in London by CBS

processes into a single enlarged entity, while positioning them to create particularly administrative costs relating to maintaining two distinctive entities. “The board of Flour Mills believes that the enlarged entity will consolidate accessing positive economies of scale and realizing significant synergies through enhanced operational and administrative efficiency, thereby providing immense benefits to the shareholders and customers of Flour Mills.

It would be recalled that Flour Mills had recently

secured approval-in-principle from the Securities and Exchange Commission, SEC, for a proposed business combination with Nigerian Bag Manufacturing Company Plc (Bagco) and its subsidiaries – Northern Bag Manufacturing Company Limited and Bagco Morpack Nigeria Limited.

The companies had said that they wanted to undertake the merger in order to streamline their operations and reduce administrative costs.

Other reasons adduced by the companies include the need to improve operating

efficiency and capture the full synergies arising from the merger, which, in turn will result in a significant enhancement of shareholders’ value.

According to Flour Mills, the acquisition confirmed the company’s unalloyed support for the Federal Government’s Agricultural Transformation Agenda having already commenced major agro-allied investments in the areas of rice cultivation and milling; Sugar growing, milling and refining; maize and Soya beans growing; palm oil cultivation and refining; and production of animal feeds.

he Nigerian Stock Exchange, NSE said it has concluded plans to introduce Market Making Initiative for the fixed income securities with a workshop to deepen market stakeholders’ understanding of its rules and operational guidelines.

In a statement by the NSE, the workshop will take place on January 29, 2013.

The NSE said the Fixed Income Market Making (FIMM) programme is a follow up to the successful introduction of market making on equities and aimed at deepen the capital market and its focus on product diversity, According to the Head, Product Management of the NSE, Mr Dipo Omotoso, the workshop will bring together experts in Fixed Income Market Making with other key capital market participants such as broker/dealers, settlement banks, Pension Fund Administrators, Insurance companies and regulatoryauthorities. About 400 participants are expected to take part in the workshop.

Offering an insight on the initiatives, Omotoso said that The NSE FIMM programme will operate a ‘hybrid’ market which will allow Fixed Income Market Makers to provide two way quotes and licensed broker/dealers of The Exchange to submit orders as it is currently done. “These quotes and orders interact on the order book to “discover’ the best price for a security”.

C&I Leasing Q3 profit down by 48% NKIRUKA NNOROM

C

& I Leasing has announced 47.7 percent decline in its profit after tax for the third quarter ended st 31 October, 2012.

The result released to the investing public by the company through the Nigerian Stock Exchange, NSE, was in contrast to the promises made by the company’s chairman at the 21st annual general last year where he pledged management’s readiness to employ resources available to

improve on the preceding year’s financial performance.

During the year ended 31st January 2012, C & I Leasing had made a profit before tax of N184 million as opposed to a profit of N201 million in the prior year, which was a decrease by 8 percent from the previous year, though revenue increased by 35 percent from N6.2 billion to N8.4 billion.

A peep into the financial statement released on Wednesday showed that the profit slumped to N170.78 million as against N326.52 million posted in the

equivalent period of 2011, which represents 47.7 percent decrease over the previous period. Profit before taxation and minority interest also headed southward, falling by 42.9 percent to N242.15 million from N424.147 million. While operating expenses rose by 42.5 percent to N2.202 from N1.615 million, transfer to general reserves fell to N117.78 million from N275.88 million, also representing 57.3 percent decrease over the previous result.

However, the gross income rose to N9.17 billion as

against N7.41 billion recorded in comparable period of 2011, while the net assets stood at N2.09 billion compared to N1.92 billion recorded in 2012, which represents 8.9 percent increase.

It would be recalled that the chairman AVM (rtd.) Abdul Bello had said while addressing the shareholders of the company at the 2012 annual general meeting that “Our Company will continue to be organised to take advantage and explore opportunities provided by the local content policy and other relevant regulations.

The Board and its various committees remain focused on seeing that the opportunities available to the company are harnessed profitably, while strengthening the company’s risk management processes.”

He further stated that the company would continue to deploy marine vessels to support Shell’s operations during the last quarter of the year in furtherance of the Federal Government’s laudable local content policy, adding that he was optimistic that the efforts would lead to additional business opportunities for the company in future.

C M Y K

24 — Vanguard, MONDAY, JANUARY 28, 2013

Corporate Finance

Investors gain N209bn on NSE

By CHINEDU IBEABUCHI

T

he Nigerian Stock Exchange, NSE, maintained its upward trend last week as value of listed equities (market capitalisation) rose by N209.93 billion.

From N9.89 trillion the previous week, market capitalisation rose by 2.12 per cent to close at N10.10 trillion Another market indicator, the All-Share Index also rose by 2.12 per cent to close at 31,583.49 points from 30,927.18 points The appreciation was driven by price gains on the equities

of forty nine companies as against thirty-one equities that suffered price decline while the prices of 117 equities remained constant.

When compared with the preceding week, sixty-eight equities recorded price appreciation while nine equities recorded price depreciation and 118 equities remained constant.

Nestle Nigeria Plc recorded the highest share price gain, appreciating by N13.00 to close at N753.00 per share from N740.00 per share. This was followed by Julius Berger Nigeria Plc with a price gain of N12.80 per

share to close at N51.52 per share, while Dangote Cement Plc rose by N7.00 to close at N147.00 per share, among others.

On the contrary, Guinness Nigeria Plc recorded the highest share price loss, depreciating by N6.00 to close at N285.00 per share from N291.00 per share it opened. This was followed by Nigerian Breweries Plc that lost N4.90 per share to close at N153.60 per share and Ashaka Cement Plc declined

by N1.28 to close at N20.51 per share, among others.

The NSE experienced sell pressure on Monday, losing

0.27 per cent to open the week on negative note. The key benchmark indices gained 0.46 per cent on Tuesday on the back of improved optimistic trading occasioned by value investors towards the blue chips.

Furthermore, market sustained the rally as the key benchmark indices climbed further on Wednesday by 1.47 per cent despite the prolonged sell pressure witnessed during session as investors sustained strong commitment towards blue chips.

Subsequently, equities sustained healthy breadth on Friday as market traded above the line to end the

week with aggregate gain of 2.12 percent.

Meanwhile, the total volume of equities traded in the week under review depreciated by 19.85 per cent, recording 2.61 billion shares valued at N19.51 billion exchanged in 27,186 deals as against 3.25 billion shares valued at N21.63 billion.

The Financial Services sector emerged the most traded sector in the week under review trading 1.97 billion shares valued at N11.08 billion and exchanged in 16,303 deals.

The volume traded in the sector accounted for 75.37 per cent of the entire market transaction.

The Consumer Goods sector followed with 194.03 million shares valued at N4.33 billion and exchanged in 4,766 deals.

Access Bank appoints former NCC boss as Director

A

ccess Bank Plc has appointed Dr. Ernest Ndukwe to its Board as a Non-Executive Director.

In a statement by the Bank, the appointment was ratified by the Bank’s Board of Directors and the Central Bank of Nigeria.

Speaking on the appointment, the Bank’s Chairman, Mr. Gbenga Oyebode said “Access Bank is taking giant strides to increase shareholders value and we are quite delighted to have Dr. Ndukwe on board. His exposure and experience will add impetus to our institutional aspiration of becoming Africa’s most respected bank.

Mr. Emmanuel Chiejina, Chairman of the Bank’s Governance and Nomination Committee remarked that the Committee was impressed with Dr. Ndukwe’s record of achievement at the highest level of the private and public sector governance noting that having reviewed a broad range of highly qualified candidates , the Committee enthusiastically recommended his appointment as an Independent Director to the

C M Y K

Board.

This appointment has also been described by industry observers as a strategic corporate action aimed at elevating Access Bank’s industry leadership in corporate governance beyond the aspiration of competitors.

This view is not unconnected with the Dr. Ernest Ndukwe’s widely acclaimed leadership experience, a statement by the bank said.

Dr. Ndukwe is an Electrical/ Electronics Engineer, with over 36 years experience in the Telecommunications Industry. A former Chief Executive Officer of the Nigerian Communications Commission (NCC) between 2000 - 2010, he was responsible for the level of transparency recorded at the NCC, which resulted in the liberalization of the Telecommunications Industry and significant investment in the sector.

His Board level experience dates back to 1988 when he was appointed Commercial Director at General Telecom Plc, where he was later made the Managing Director in 1989.

It was from his position as MD of General Telecom Plc that Dr. Ndukwe was appointed to lead the Nigerian Communications Commission as CEO a position he retired from in March 2010. He also served on the Presidential Committee on Job creation, and is current Co-Chair of the Presidential Committee on Strategy and Roadmap for universal broadband access in Nigeria.

C M Y K

1.98

1.53 5.42 1.04 5.81 50.00

46.84 10.07

Livestock/Animal Specialities Livestock Feeds Plc

CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc SCOA Nigeria Plc Transnational Corporation Chellarams Plc UACN Plc

CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc

10.03 34.39 3.90 2.88

30.60 44.91

10.85 0.64 0.57 6.16 11.98 3.30 0.50 15.05 4.91 24.50 1.07 0.70 1.15 5.72 0.88 7.30 2.80 6.30 7.80 0.66 0.67 20.40

0.80 0.86 0.50 0.50 0.50 1.60 0.50 0.50 0.50 1.55 0.50 0.61 0.50 0.50 0.50 0.50 0.50 0.50 0.73 0.50 0.50 0.53 0.50 0.50 0.50 0.50 0.50 0.50

0.50 0.50

0.50 2.02 0.56

Household Durables Beta Glass Co Plc Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

FINANCIAL SERVICES Banking Access Bank Plc Afribank Nigeria Plc Bank PHB Plc Diamond Bank Nigeria Plc Ecobank TRANSNATIONAL INCORPORATION Fidelity Bank Plc FinBank Plc First Bank of Nig. Plc First City Monument Bank Plc Guaranty Trust Bank Plc NPF Micro-Finance Bank Plc Intercontinental Bank Plc Oceanic Bank International Plc Skye Bank Plc Spring Bank Plc Stanbic IBTC Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc

Insurance Carriers, Brokers and Sector AIICO Insurance Plc Continental Reinsurance Plc African Alliance Insurance Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guaranty Trust Assurance Plc Guinea Insurance Plc Intercontinental Wapic Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Universal Insurance Plc

Mortgage Carrier, Broker and Sector Aso Savings and Loans Plc Resort Savings & Loans Plc

Other Financial Institutions Crusader (Nigeria) Plc Deap Capital Management & Trust Plc Royal Exchange Assurance

0.50 2.02 0.58

0.50 0.50

0.79 0.86 0.50 0.50 0.50 1.66 0.50 0.54 0.50 1.60 0.50 0.61 0.50 0.50 0.50 0.50 0.50 0.50 0.76 0.50 0.50 0.55 0.50 0.50 0.50 0.50 0.50 0.50

11.13 0.64 0.55 6.70 12.80 3.39 0.50 15.08 4.91 24.75 1.07 0.70 1.15 5.90 0.88 7.30 2.81 6.54 7.73 0.72 0.70 21.10

31.50 44.91

10.03 33.96 3.90 2.88

33.75 753.00

0.50

32.48 750.01

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

8.60 7.40 73.49 2.98 9.62 0.79

0.50

8.40 7.58 70.00 2.41 10.00 0.79

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

45.00

0.50

44.50

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

4.15 285.00 23.89 153.60 0.89

0.50

100.00

15.86

51.52 10.07

1.50 5.42 1.11 5.71 52.00

2.07

0.50 53.60 26.20

0.50

Closing Price (N)

4.70

4.15 285.00 21.72 153.99 0.89

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

0.50

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

100.00

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

15.86

0.50 53.60 25.50

1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc

Real Estate Development UACN Property Development

0.50

Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc

Company

Opening Price (N)

Capital Market

386,456

102,000

22,000 5,000,000 155,493

2,000 10,000,000

9,050,570 1,830,915 500 2,107,456 200 3,476,000 50,000 62,500 3,200 1,698,475 100,000 1,172,778 1,164,122 1,670,890 500,000 20,000 352,000 900 9,976,146 1,000 2,000 584,766 100 4,218,438 309,020 154,000 1,488 1,034,800

24,663,657 646,608 13,287,533 22,730,835 10,836,368 25,746,657 1,000 16,944,327 15,092,384 69,667,706 56,000 73,200 91,000 9,819,365 1,006,032 173,300 19,414,210 26,034,585 573,077 48,742,473 9,795,176 35,003,480

509,281 144,794

225 1,730 2,436,324 2,000

2,611,350 121,972

11,509,148 5,726,916 855,088 7,000,046 1,443,193 160,158

66,182

11,000 897,288 788,159 2,899,303 1,000

2,100

2,000,000

445,157

243,615 200

99,600 540 18,635,994 200 695,505

1,969,062

10,000 108,548 472,785

100

Quantity Traded

0.50

10.54

0.61 2.02 0.66

0.50 0.50

1.06 1.20 0.50 0.50 0.50 3.51 0.50 0.69 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.90 0.50 2.50 0.50 0.50 0.50 0.50 0.50 0.50

11.10 3.39 2.30 9.27 4.30 3.20 9.50 16.12 8.30 20.50 1.78 1.78 13.50 10.17 2.18 11.38 2.91 11.70 5.38 1.92 1.75 16.70

43.50 31.25

15.58 42.66 6.75 3.67

29.20 470.00

19.90 16.20 95.00 6.60 6.70 0.88

51.49

4.63

255.00 7.10 100.00 1.01

0.50

100.00

20.15

62.26 8.28

2.54 8.28 1.82 7.60 42.50

0.66

0.50 24.58 8.30

0.50

Year High

0.50

9.52

0.50 2.02 0.50

0.50 0.50

0.50 0.85 0.50 0.50 0.50 2.00 0.50 0.50 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.90 0.50 0.50 0.50 0.50 0.50 0.50

4.26 0.64 0.53 2.05 1.65 1.20 0.00 7.95 3.60 11.64 0.00 0.87 0.00 3.90 0.73 6.30 0.95 2.17 1.96 0.50 0.52 11.45

27.00 22.56

12.71 36.19 4.78 2.66

10.17 367.83

4.31 4.02 57.00 2.31 3.80 0.50

,39.00

2.23

186.00 5.23 72.50 0.93

0.50

97.00

11.59

32.96 3.01

1.45 5.52 0.50 6.43 28.70

0.48

0.50 14.53 6.40

0.50

Year Low

0.00

0.00

0.00 0.00 0.13

0.02 0.00

0.05 5.85 0.00 25.00 0.00 0.22 0.00 0.00 0.00 0.08 0.00 0.00 0.00 0.02 0.00 0.01 0.03 0.10 0.37 0.14 0.02 0.06 0.04 0.10 0.00 0.00 0.00 0.00

1.42 0.00 0.00 0.90 2.81 0.43 0.00 2.03 0.00 2.10 0.00 0.18 0.00 0.71 0.47 0.47 0.54 0.67 0.00 0.00 1.34 2.09

0.70 1.44

3.90 1.61 0.54 0.00

1.35 25.43

0.00 0.91 4.09 0.39 1.01 1.13

2.69

9.95 0.41 5.08 0.00

0.00

0.00

11.75

1.69

4.11 4.73

0.16 0.35 0.24 0.26 6.89

0.11

0.10 7.33 2.75

0.09

E.P.S.

0.00

0.00

0.00 0.00 16.67

0.00 0.00

5.56 10.20 0.00 0.00 8.33 4.88 0.00 0.00 0.00 17.25 0.00 0.00 0.00 25.00 8.33 5.00 0.00 1.39 1.39 50.00 50.00 6.43 16.67 7.14 0.00 0.00 0.00 0.00

5.83 0.00 0.00 0.00 25.91 6.68 0.00 6.96 6.20 8.74 0.00 5.44 0.00 5.07 5.44 14.81 4.68 19.23 0.28 4.82 0.43 7.83

20.93 20.46

3.26 22.48 7.34 0.00

37.57 27.96

16.91 14.38 16.89 16.92 5.75 8.83

13.92

0.00

19.98 16.29 22.22 0.00

0.00

8.51

7.33

10.11 2.26

5.18 15.77 3.64 20.74 4.14

15.00

50.00 2.77 4.37

P.E. Ratio

15.20 2.41

IT Services NCR (Nig) Plc Tripple Gee and Company Plc

0.50

4.90 5.50 8.40

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

0.51

2.80 1.92 4.20 4.56 Road Transportation Associated Bus Company Plc

0.50 Printing & Publishing.

Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press

6.50 0.87

0.50

3.32

1.97 1.63

Media/Entertainment Daar Communications Plc

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

Courier/Freight/Delivery Red Star Express Plc Employment Solutions C & I LEASING PLC

Automobile/Auto Part Retailers Incar Nig. Plc RT Briscoe Plc

Afromedia Plc

SERVICES

0.50

20.50 0.50 22.00 3.82 13.14 120.44 22.58 136.40

Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Eterna Oil and Gas Plc Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc Hospitality Tantalisers Plc

0.64 14.40

Intergrated Oil and Gas Services Oando Plc

3.98 10.47 13.28 4.30 1.05 2.92 0.66

INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service

1.44 0.50

Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans

1.55 0.50

0.50

Processing Sysetms Chams Nigeria Plc Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

0.50

1.38

Non-Metalic Mineral Mining Multiverse Plc

Paper/Forest Products Thomas Wyatt Nig. Plc

6.55 10.55

Metals Aluminium Extrusion Ind Plc

7.85

1.99 2.44

20.20 9.90 31.97 9.29 150.00 0.50 1.26 65.00 4.20 1.89 10.93

NATURAL RESOURCES Chemicals BOC Gases Plc

Tools and Machinery Nigerian Ropes Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc

0.50

0.50

ICT Telecommunications Starcomms Plc

0.50

Computers and Peripherals Omatek Ventures Plc

5.05 0.98 1.15 46.68 1.92 0.98 8.17 2.47

ICT Computer Based Systems108 Courteville Investment Plc

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

Opening Price N

4.97 8.79

4.90

0.51

2.80 1.92 4.20 4.35

0.50

6.27 0.91

0.50

3.32

1.97 1.65

0.50

0.50

20.50 0.50 22.00 4.01 13.79 120.44 23.70 139.00

14.00

0.63

3.98 10.00 12.98 4.30 1.05 2.78 0.66

1.44 0.50

1.60 2.40

0.50

1.32

0.50

10.55

6.55

7.85

1.99 2.44

20.51 10.00 33.56 9.75 147.00 0.50 1.26 65.01 4.20 1.96 10.93

0.50

15.20 2.29

0.50

0.50

5.05 0.98 1.19 47.01 1.94 0.98 8.17 2.24

Closing Price N

2,356,307 5,544,055

20

43,100

52,966 3,317 4,322 130,396

20,000

100 1,161,733

254,000

160,000

240 558,665

101,000

50

82,191 404,000 19,155 567,447 1,014,564 3,863 119,076 302,473

6,244,396

3,643,705

6,888 147,604 11,087 29,198 200 84,311 2,749,340

2,000 1,000

240,458 1,017,000

687,256

621

1,510,000

100

55,518

40

2,000 1,245,204

2,771,549 127,923 205,919 1,737,334 303,861 26,000 524,182 2,172,768 5,000 5,000 1,000

2,307,692

600 800

1,002,200

4,000

1,000 96,840 3,769,166 160,972 1,144,686 60,000 29,000 483,274

Quantity Traded

5.15 2.78 11.75

1.57 6.50

4.90

0.50

4.60 3.60

8.00 6.82 0.80

3.17

0.48

3.00 1.33

0.90

2.65

1.97 1.30

3.68

0.50

400 2.07

1.64

3.67

4.33 3.65

0.72

0.51

141.00 63.86 195.50

163.50 2,100 240.00 200

0.50 0.50 5.71 3.89

27.99

0.87

3.98 12.71 13.97 3.60 1.05 2.92 0.63

1.33 0.50

1.62 2.58

0.50

1.38

0.50

10.70

6.80

8.26

5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

0.50

3.25 3.25

0.50

0.50

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

Year Low

0.60 12.53

0.00

0.00

0.25 0.30 0.00 0.54

0.00

0.34 0.92

0.04

0.60

0.00 0.21

0.00

0.01

6.11 2.98 14.63

4.93 0.00 4.25 0.61

1.73

0.19

0.00 3.90 0.90 1.22 0.30 0.07 0.00

0.03 0.00

0.11 0.00

0.00

0.00

0.01

0.13

0.78

0.00

0.5 0.25

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00

0.00

0.00 0.01

0.00

0.10

0.19 0.44 2.62 0.20 0.09 0.00 0.00

E.P.S

4.22 8.75

0.00

0.00

0.00 27.69

12.19

0.00

34.09 2.12

11.25

4.91

0.00 8.19

12.75

11.11 19.23 17.07

6.99

7.40 0.00

4.17

6.06

0.00 3.26 0.00 3.52 6.18 41.71 0.00

28.80 0.00

13.15 0.00

0.00

0.00

0.00

85.77

7.37

0.00

39.60 9.16

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

0.00

1.43 0.00

12.50

10.00

9.05 14.13 0.00 0.00

88.50 0.00 3.07

P.E Ratio

as at January 25, 2013

37.10 0.70 32.60 5.59

78.97

0.97

3.98 15.58 15.03 4.30 1.86 2.92 0.63

1.51 0.99

2.50 2.58

0.50

1.38

0.50

12.39

9.20

8.69

6.91 3.60

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

1.47

9.31 3.59

0.50

0.52

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

Year High

Daily Stock Market Report

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Homes & Housing Finance

A seaside estate

Housing development to create 2.8m jobs annually —Report Stories by YINKA KOLAWOLE

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report has highlighted the importance of housing development to national economic growth, indicating that as many as 2.8 million jobs would be created annually in the country, if 1,000 housing units are built in each of the 36 states of the federation including the Federal Capital Territory

(FCT).

The report attributed to the National Economic Management team was highlighted at the 3rd Annual National Social Housing Seminar held recently in Abuja, and hosted by the Forum of Advocates for Social Housing. It noted that if 1,000 housing unit estates are built in each of the 36 states of the federation and FCT, a workforce of 2,815,000 per annum would be created.

“An example is that the construction of a medium sized, two or three - bedroom bungalow is capable of directly creating employment for an average of 76 workers.

The number goes up significantly when the forward and backward linkages are factored into the process.

Therefore for a 1,000 housing unit scheme of two bedroom bungalows, up to 76,000 workers will be engaged for a period of between 12 and 18

NHF collections hit N1.3bn F

ederal Mortgage Bank of Nigeria (FMBN) recorded an improvement in the collection of the stautory 2.5 percent deductions under the National Housing Fund (NHF) scheme last yearfrom N950 million to about N1.3 billion monthly.

Managing Director, FMBN,.

Ya’u Kumo,said that refunds to contributors by the bank also increased from N70 million previously to N1.5 billion.He added that the apex mortgage bank willsoon complete the computerisation of its operations to make it easier for over 3.7 customers to access its products and services. According to him,the process has become necessary to conform to globally accepted standards and also serves the bank’s customers better.

"When we came in, we saw that the entire operations were C M Y K

being done manually and we reasoned that there was no way we could carry out effective and efficient banking

operations if we continued to operate manually. That led us to award some contracts that will entail

months,” the report stated.

It noted that the required labour force consists of all professionals in the built environment as well as skilled and unskilled labour, such as bricklayers, plumbers, carpenters, tillers, iron benders, painters, diggers, excavators, electricians, suppliers of materials, furniture makers, food vendors, block moulders, security men, drivers, horticulturists, gardeners, etc.

Organisers of the seminar noted that the report means that about 14 million jobs would be created if 5,000 housing units are constructed in each state of the federation and the FCT every year, which they noted is achievable.

The report further noted that the housing sector of the economy has a tremendous impact on job creation, employment, security, socio-political stability, effective economic growth and development of societies, adding that governments, the world over, device various strategies to meet this all important concern. ”Our vision 20:2020 and financial system strategy 2020 (FSS2020) have assigned special roles to the housing sector, expecting it to drive the financial system and contribute not less than 20 percent to the GDP by the year 2020,” it stated.

computerisation of our entire banking operations and in doing that, the operations of the bank is now easier and customers have better services," Kumo said.

Delta partners FMBN, private developers on housing delivery

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elta State government is working with Federal Mortgage Bank of Nigeria (FMBN) to build owneroccupier housing estates for civil servants in the state.

The state’s Commissioner for Housing, Chief Paulinus Akpeki, who disclosed this in Asaba, said the move is part of steps being taken by the state government to improve housing delivery in the state.

He also said the government has worked out arrangements to engage private developers

under its public private partnership (PPP) programme to meet the housing needs of the people.

Akpeki listed some of the projects completed by his ministry in the past 18 months, dating back to July 2011, to include 14 housing estate projects across the state, the new government house and the new secretariat currently occupied by six ministries. He added that work had also been completed on the state’s government house in Lagos,

which would be commissioned in February.

The commissioner further disclosed that that the state’s 15-storey Abuja Towers built at a cost of N3 billion will also be ready for commissioning next month (February). “The Abuja towers, a 15-storey building will serve as administrative office and a guest house to raise revenue for the government,” he said.

BRIEFS Kebbi approves N2.5bn for housing projects

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ebbi State government has approved the release of N2.5 billion for the construction of 400 housing units in Birnin Kebbi, the state capital and Dakingari town.

Commissioner for Lands and Housing, Alhaji Hussaini Raha, said the houses will be made of 150 three-bedroom flats and 150 two bedroom flats to be constructed along Birnin Kebbi-Kalgo road.

According to the Commissioner, the remaining 100 units to be constructed in Dakingari town is made up of 50 three-bedroom flats and two bedroom flats to support the take-off of the newly established Kebbi State Polytechnic, adding that the houses would serve as its staff quarters.

Raha also said the Executive council has approved the payment of compensation for landlords who were affected by the township road dualisation in Dakingari town.

Oyo, Wemabod seal PPP auto mart deal

O

yo State government has entered into a a public-private partnership (PPP) arrangement with Wemabod Estates Limited for the construction of an ultramodern automobile market in Ibadan, the state capital.

Commissioner for Trade, Investment and Cooperatives, Mr. Bayo Olagbenro, said this after an inspection tour of some of the neighbourhood markets under construction at Sango are of the city. He said that when completed, all automobile dealers within the metropolis would be moved to the new market.

Olagbenro said the move was to further clean up Ibadan and sanitise the operations of automobile dealers. He also assured the people of speedy completion of the neighbourhood market at Scout Camp in Challenge, which is currently being constructed for traders who were moved away from Molete under bridge.

The commissioner further said that work had commenced on other neighbourhood markets in Ibadan to create a conducive and neat environment for traders. He said plank sellers currently at the Temidire Market on New Ife Road, Ibadan, would soon be relocated to a new place in Egbeda in order to pave way for the construction of an ultramodern market near the new motor park.

28 —Vanguard, MONDAY, JANUARY 28, 2013

Homes & Housing Finance

BoE lending scheme boosts UK mortgage

T

he Bank of England’s cheap billions on offer through its Funding for Lending scheme continue to flood into the mortgage market, pushing lending to an 11-month high in December.

Mortgage approvals rose for the sixth month in a row to 33,636, slightly up on November and 9 per cent above the same month a year earlier, the British Bankers’ Association said.

David Dooks, BBA statistics director, said consumers remain cautious, with outstanding personal loans at little more than half their peak in 2007-08. But he added: “Credit availability increased and pricing reduced towards the yearend as banks developed product offerings using the Funding for Lending scheme, which is expected to bring further benefits to households and businesses in 2013.”

The initiative is helping to push down mortgage rates, and lenders are poised for a further “significant” increase in credit availability.

But experts remain skeptical of a long-term boost for the housing market.

Citi goes top in REIT equity deals

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itigroup Inc. became the top equity underwriter for real-estate investment trusts (REITs)in 2012, grabbing the top spot from Bank of America Merrill Lynch, the longtime leader of the business.

Citigroup, which was in sixth place in 2011, vaulted to the top position partly by using its balance sheet.

Bank executives say one strategy they used to get their foot in the door with new customers was increasing Citigroup’s lending to REITs through credit facilities and other bank loans. “We decided we were going to increase our capital commitment to the REIT sector because we felt confident we could manage the risk,” said Thomas Flexner, global head of real estate for Citigroup.

REITs are big customers of investment banks because they are required to pay at least 90 percent of their income as dividends to maintain their special tax status. REITs raised nearly $40 billion in equity in 2012, a record.

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Government challenges in housing urban poor T

his paper by J.O. Basorun and G. Fadairo examines the activities of Ekiti state government in housing the poor in Ado-Ekiti within the framework of the policies on housing reform in Nigeria Housing issues and policy problems are both global and inherently, local –specific to a given time and place. Two broad approaches to public housing in the city were identified –direct government housing provision and government-sponsored housing. The former involves large-scale direct production and ownership of housing that is further from market rents, more strictly allocated according to need and more directly managed by governments. The latter approach is one that is nearer market rents under various kinds of independent landlords (housing associations, cooperatives and private landlords).

Direct government housing provision The Ekiti State government has attempted to reduce the incidents of accommodating the poor by embarking on feasible residential estates in Ado-Ekiti. At the estates, government designed, built and delivered three categories of houses (2-bedroom, 3bedroom and 4-bedroom) to the people.

The main requirement for allocation of building to prospective occupants is the deposit of 10 percent of the value of structure. After allocation, the balance is deducted in installments over a period of time not exceeding 20 years. Analysis reveals that only 10.03 percent of the housing units are meant for the low class. Evidently, the government has the political will, but limited financial resource and low priority to build enough housing to meet a tangible fraction of the housing needs of the city poor. Funding of housing is capital-intensive and almost beyond the reach of the average poor. Achieving sustainability in housing provision for the urban poor requires adequate understanding of the urbanisation process and restructuring of institutions and management approaches

•Use of local technology is required in providing housing for urban poor (Olotuah, 2005).

Major challenges Public housing in Ado-Ekiti is confronted by a number of challenges; these can be categorized into four key areas:

Administrative, institutional and management challenge Paucity of up-to-date and detailed records of housing affordability, demographic transition and culture has been the bane of housing provision in the city. Housing affordability records reveal information on income, saving profile and indices.

Demographic transition trend will produce rates and volumes of demographic growth attributable to earlier ages of marriage (Pugh, 2001), thus, prompting housing demand. Culture, in most cases, determines social acceptability of housing based on expectations and the exact needs of the target population.

Financial and economic challenge - The last two decades have witnessed substantial cut in funding to operate, improve and maintain public housing in Nigeria. The effect is felt more in Ekiti State (new generation state) with low government allocation and revenue base. The financial sector of the economy (banks and insurance companies) is hesitant to invest in the National Housing Fund as

sub-optimal level of return is envisaged. The contributions of self-employed persons were irregular due to lack of interest in the scheme.

Physical Challenge - This is manifested in two folds. First

,

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The strategy of cooperative housing in the National Housing Policy should be encouraged and supported

,

is the older public housing units confronted with the critical needs and comprehensive rehabilitation and improvement in the face of insufficient revenue.

Second is the land tenure and administrative and policy issues hampering housing provision, particularly for the low income group in the informal sector of the economy for which appropriate land reforms would be necessary panacea. A review of the current land tenure system to favour private-led development is, therefore, a priority.

Local participatory challenge - The neglect of perceptions and capabilities

of the low-income earners often render most public housing programmes unsustainable.

Local communities are in the best position to identify their needs and priorities in housing. They have adequate knowledge of the local building resources and the way of making best uses of them (Olotuah, 2009) to minimize construction cost.

They can easily organise themselves into groups and partners with government to contribute significantly to sustainable housing.

Conclusion The unilateral imposition of discriminatory, restrictive and culturally - insensitive public housing to address shelterrelated problems faced by low-income families in the developing world has been unsuccessful. A review of current approach is important to favour private-led initiative in housing development and assure access to land and mortgage loans by people.

The development of culturally appropriate space planning, housing and building standards that better reflect and meet the needs and resources of users are feasible options to government direct housing provision. * Basorun & Fadairo are of the School of Environmental Technology, Federal University of Technology, Akure, Nigeria

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Interview As Franklin Roosevelt once said: “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little

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,

*Christine Lagarde...

Excessive inequality is corrosive to growth; it is corrosive to society

By Christine Lagarde, MD, International Monetary Fund Priorities for 2013 I know we are all still deeply concerned with the state of the global economy. Where do we stand? Well, thanks to policy actions taken over the past year, we have seen some respite and some stabilization in financial conditions. But it is not all good news. The recovery is still weak, and uncertainty is still high.

As the IMF announced just a few hours ago in our World Economic Outlook, we expect global growth of only 3½ per cent this year, not much higher than last year. The short-term pressures might have alleviated, but the longer-term pressures are still with us. As I have said recently and it bears repeating: we have avoided collapse, but we need to guard against any relapse. 2013 will be a makeor-break year.We all know the imperative—keep up the momentum on the policy actions needed to put uncertainty to rest.

What does that mean? For the Euro area, it means making firewalls operational; pushing ahead with banking union; continuing with the difficult but necessary fiscal adjustment at the country level; and supporting C M Y K

A new global economy for a new generation demand, especially with further monetary easing. For the United States, it means pulling together in the national interest and avoiding further avoidable policy mistakes, such as failing to agree on increasing the debt ceiling—and, for the United States and Japan, reaching agreement on medium-term debt reduction.

For the emerging and developing economies, faring better despite their concerns about continued turmoil and lack of decisive action in the advanced economies, conditions differ greatly.

Some are more vulnerable than others, but they need to rebuild the policy space that has been used up in alleviating the crisis in recent times. So these are the shortterm priorities as I see them.

The broader view But here in Davos, I would

like to take a somewhat broader view—looking to the longer horizon, to the new global economy taking shape before our eyes. Over the past few months, I have visited all of the major emerging regions of the world—Africa, Asia, the Middle-East, and Latin America. And I must say, the world looks very different from their vantage point. It is a world of challenges, yes, but it is also a world of “resilient dynamism.”

The burning question is this: how we can make sure that all regions grow strongly, converge rapidly, and succeed in meeting the aspirations of their people? To answer this question, we need to reflect upon some of the megatrends shaping the future. Many thought leaders are pondering this issue, including here at the World Economic Forum. I would

submit the following four pivot points: •First, a growing demand for individual empowerment, including for women, and a growing sense of a single global community.

•Second, a reallocation of political and economic power across the world. By 2025, for example, two-thirds of the world’s population will live in Asia. This can lead to greater cooperation or to greater tension and competition.

•Third, a seismic shift in demographics, as the “ youth bulge” in various emerging regions rubs up against the “graying” populations elsewhere. Sixty per cent of the population in the Middle East and North Africa is under 30. It is 70 per cent for subSaharan Africa. Again, either a great opportunity or a source of instability.

•Fourth, increasing vulnerability from resource scarcity and climate change, with the potential for major social and economic disruption. This is the real wild card in the pack.

So how can we successfully navigate our way into this future world? There are no easy answers.

So where to begin? I think it starts with the new generation on the march—in a world that is flatter, more closely-knit, more interconnected than ever before in history.

This new generation thinks differently. It is a generation weaned on immediacy, democracy, and global reach of social media. Consider the scale: Facebook and Twitter have about one billion and 500 million users respectively. If they were rd countries, they would be the 3 and th 4 largest nations in the world!

Perhaps, we can lay the groundwork for future success by embracing some of the emerging values of this new generation. Let me touch on three of these in particular: (1) greater openness; (2) stronger inclusion; (3) better accountability.

Greater Openness Let me begin with openness. This generation is a global generation and an open generation. Open to the world, and to the idea of a common global community. In a sense, this is really an old lesson for a new era— that when countries transcend the narrow national interest and come together for the global good, everybody wins. This was the reason the IMF was founded in 1944— and it remains our guiding principle.

In fact, this principle is more important today than e v e r before.

Christine Lagarde

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Interview

In this era of globalisation, cooperation needs to be hardwired into the psyche of policymakers.

Why? As we saw clearly during the crisis, this is a world where economic jitters in one region or market can have instant repercussions all across the globe. In a flat world, there is no room for economic silos.

But old instincts die hard. At the first hints of improving sentiment, countries are enticed to retreat to the alluring comforts of their own backyards. They face the perennial temptations to look only at the national interest—with competitive devaluations, barriers to trade, and a zeal to protect their own financial institutions at the expense of others.

This is an anachronistic mindset illsuited to a modern global economy.

On the contrary, opening up and removing barriers has proven to be more efficient. I am thinking, in particular, about trade and financial integration. Look at Asia, for example, this is a region that has made tremendous progress in trade integration—trade within Asia tripled over the past decade, and regional trade among emerging Asian nations grew even faster. But it has lagged behind in financial integration. It is not investing enough of its own savings in its own future.

And yet, the advantages of financial integration in Asia are clear.

It can lift people up by boosting domestic demand and helping small firms get access to credit. It can m a k e economies safer, by providing m o r e insurance a g a i n s t a d v e r s e developments.

It can reduce inequality, by h e l p i n g financial inclusion.

O t h e r

regions too can benefit from more integration, including the Middle East and Africa.

These regions will gain from opening up—knocking down barriers to trade and welcoming investment. In this way, they can set in train a virtuous circle of higher productivity, enhanced economic diversity, and greater resilience against external turmoil. Take the Maghreb, for example. On its own, each country in the region is small. But together, they form a vibrant market of 90 million people, offering limitless possibilities.

Possibly the greatest integration of all comes from Europe. If you look behind the daily headlines related to the Eurozone crisis, you see a region in the midst of a historic process of integration. It is really the culmination of centuries-long search for peace and prosperity, with the understanding that by linking arms you are unlocking swords—and also unlocking a million avenues for mutual gain.

Yes, the European economy faces serious issues that need to be addressed—deeper banking and fiscal union, for example. But destiny beckons through the smoke and the fog. And I, for one, am optimistic about Europe’s future, especially if it stays on the path of reform, integration, and renewal.

Stronger inclusion Let me turn to what I see as the second major aspiration of the new generation and the new global economy: stronger inclusion. Our close-knit world is a participatory world.

The new generation demands opportunities for all and insists on tolerance, respect, and fairness for all. Just look at some recent examples—from the yearnings on the Arab Street for greater dignity and opportunity, to the brave cry of young women for education and equality, and to the

,

Christine Lagarde

heartfelt urge of Indian women for greater respect and justice. These demands must be met.

What does it mean for economic policymakers? It means that we need more fairness in economic life, more inclusion. This has numerous dimensions. At its core, it relates to growth.

Surely we have all learned by now that it is no longer enough to focus on growth alone. We need all people to share in rising prosperity— and, by the same token, share fairly in any economic adjustment needed to achieve or restore prosperity.

As Franklin Roosevelt once said: “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”

Inclusive growth is certainly a top concern of policymakers.

The message is resonating widely. I was not surprised, therefore, to see that the World Economic Forum’s most recent survey puts “severe income disparity” at the very top of global risks over the next decade.

Excessive inequality is corrosive to growth; it is corrosive to society.

I believe that the economics profession and the policy community have downplayed inequality for too long. Now all of us—including the IMF—have a better understanding that a more equal distribution of income

24. Relieving this sense of desperation must be the overriding goal of everything we do.

Inclusion has other dimensions too.

Gender inclusion is critically important, and, frankly, too often neglected by policymakers. In today ’s world, it is no longer acceptable to block women from achieving their potential.

Think about it: women control 70 per cent of global consumer spending. All studies point to the economic benefits of full female participation in the labour force, in the economy, in society. One recent study estimates that by simply raising women’s employment rates to the level of men, GDP would jump significantly—by 5 per cent in the United States, 9 per cent in Japan, 10 per cent in South Africa, 27 per cent in India, and 34 per cent in Egypt.

The evidence is clear, as is the message: when women do better, economies do better. So policymakers and economic leaders must do better in supporting women. That means we must tear down all obstacles in the path of women, even the subconscious obstacles of the mind. One other point on inclusion: we need a greater sense of solidarity across generations.

We need to be cognizant of the legacy we are leaving for those who will come after us. One such legacy is public debt, which now hovers around 110 per cent of GDP among the

Institutions must be accountable to citizens, but citizens must also have the knowledge, education, and training needed to hold them accountable

allows for more economic stability, more sustained economic growth, and healthier societies with stronger bonds of cohesion and trust. The research reaffirms this finding.

What is less clear is how we achieve more inclusive growth in practice. Certainly, universal access to decent education is the nonnegotiable starting point.

Beyond that, I believe policies such as robust social safety nets, extending the reach of credit, and—in some cases— minimum wages, can help.

Above all, inclusive growth must also be job-rich growth.

This is really a symbiotic relationship—we need growth for jobs and jobs for growth.

Right now, 202 million people are looking for work, and two in five of the jobless are under

,

advanced economies—the highest level since World War II. We owe it to the next generation to put in place credible plans to reduce this burden on them.

Even more important is the issue of climate change, which, in my view, is by far the greatest st economic challenge of the 21 Century. The science is sobering—the global temperature in 2012 was among the hottest since records began in 1880. Make no mistake: without concerted action, the very future of our planet is in peril. So we need growth, but we also need green growth that respects environmental sustainability. Good ecology is good economics. This is one reason why getting carbon pricing right and removing fossil fuel subsidies are so important. This too is an

element of inclusion.

Better accountability Let me turn to my third and last principle for the new global economy: better accountability. The new generation demands transparency. They demand good governance. We must deliver. Just look at the role of information technology in forcing change. It was the citizen power of social media that sparked a peoples’ transformation in the Middle East, put pressure on U.S. policymakers to compromise on the fiscal cliff, and prompted Chinese policymakers to publish frequent updates of pollution levels.

These forces for greater accountability will only get stronger.

Of course, governments can try to push back and restrict access to information technology. But this is like King Canute ordering the tide not to come in! Accountability is really a two-way street—institutions must be accountable to citizens, but citizens must also have the knowledge, education, and training needed to hold them accountable. It is mutual responsibility.

What does this all mean for economic life—in the public sector, the private sector, and international institutions too?

Beginning with the public sector, we have learned that good governance is the bedrock of economic success.

Without strong institutions, good policies cannot be developed and implemented.

Zero tolerance for corruption must be foundational. The state must be the servant rather than the master of the people—meeting their basic needs and providing an enabling environment for the private sector to thrive.

But the private sector also needs to be accountable. The goal of the private sector cannot be only profit; it must also be to add value, create jobs, develop the new ideas that drive an economy forward. Vested interests and arbitrage typically hinder the accountability principle. One has in mind the financial sector, which turned out to be insufficiently accountable—to its clients, its shareholders, and to society in general.

As we all know, the global economic crisis was, in many respects, a governance crisis originating in the financial sector. It hid too much activity in murky and dark corners, and put its own short-term gain ahead of supporting the real economy.

As Plato said long ago, “Excess generally causes reaction, and produces a change in the opposite direction.”

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Aviation

Families of Dana crash victims get waivers on payment of compensation

By LAWANI MIKAIRU

F

amilies of victims of Dana Air crash at Iju Ishaga, Lagos State, on 3rd June 2012 have been granted waivers by the Lagos State government on some major requirements for the processing of Letter of Administration, LOA, for the purpose of payment of full compensation to them. This LOA is a requirement requested by the reinsurance of the airline to pay the balance 70% compensation to victims families.

It will be recalled that 85 victims families have been paid the initial 30% compensation which was paid by the airline insurance and there has been delay in the payment of the balance 70 percent which will complete the full 100,000 dollars insured amount. At a news conference recently, which had in attendance some members of victims families, the Director General of Nigeria Civil Aviation Authority, NCAA, Dr Harold Demureen said the intervention of Lagos State government has been sought to facilitate the payment of full

compensation to families of victims as only 14 families have been paid the full compensation of 100,000 dollars. According to Nigeria Civil Aviation Authority, NCAA. “The Lagos State Government via the Probate Registry’s letter Ref. No. PHC/DAN01/VOL.1/12 of 11th January, 2013 conveyed the Chief Judge of Lagos State’s waivers on some major requirements for the processing of LOA. For the purpose of payment of compensation to the victims’

families” Some of the waivers granted by the state government include waiving the 10% statutory fees payable on LOA, the administrative fee for processing has been put at a flat rate of N6,000 (Six thousand Naira only) ,numbers of sureties has been reduced to 1 (one) and officials of the Probate Registry have been requested to bring the necessary forms on the LOA/POG to NCAA so as to assist the families in the

completion of the necessary documentation for LOA and POG .

NCAA said “The Probate Registry of Lagos State has designed special forms for the families of the DANA Air crash. Waiver has been granted on the 10% statutory fees payable on LOA, Administrative fee for processing has been put at a flat rate of N6,000 (Six thousand Naira only) Numbers of sureties has been reduced to 1 (one).”

Planes out of service

2012 was a challenging year — Skyway MD

By LAWANI MIKAIRU & DANIEL ETEGHE

M

anaging Director, Sky Way Aviation Handling Company (SAHCOL), Mr. Olu Owolabi, has said that despite the giant stride recorded in 2012, the company faced a lot of challenges because of the turbulence witnessed in the aviation industry.

Though the company had new clients like Etihad, MedView, the crash of Dana Air in June and the collapsed of Air Nigeria resulted in loss of confidence in aviation industry and subsequent loss of revenue by the company compared to 2011.

Mr. Owolabi made these revelations while briefing aviation reporters on the planned activities of the company for the year 2013 and reviewing the operations of the company in the preceding year.

He said that the company recorded major successes in terms of acquiring new C M Y K

equipment that will enhance their operation for the coming years.

He further revealed that the multimillion naira warehouse project the company is building is 70 percent near completion.

Though he did not give the exact amount the company had spent so far on the project, sources revealed that the company has put in hundreds of millions of naira into the construction of the

warehouse that will be one of the biggest and best in West Africa.

According to him, “I can’t give the exact amount so far spent because the project is still on-going. Millions of naira has been put into the project and until it is completed, one cannot say for certain how much it has cost” Mr. Owolabi further said that emphasis will be on staff training and retraining this year so as to position the

company to meet the challenges of providing efficient handling services to their existing clients and the new entrants into the aviation industry this year. ‘’So staff will be sent on training programmes to South Africa, United Kingdom and United States of America on how to handle the new equipment the company has purchased to enhance its operation and render efficient services.

AERO commences daily flight operations from Lagos to Sokoto

By DANIEL ETEGHE

A

ero Contractors has announced the commencement of daily flight operations between Lagos and Sokoto via Abuja for transit passenger drop-off and pick-up today.

The flight to Sokoto will originate from Lagos at 06:05 to Abuja , and depart Abuja at 08:00. Departure from Sokoto is 10:00 daily to arrive Abuja at 11:15 and then onward to arrive Lagos at

13:15 The Acting Managing Director of Aero, Obaro Ibru , said: “We are excited to launch a new service to Sokoto which gives our customers more options and also widens our domestic network. Sokoto is an important historical city, and Aero is committed to its growth and development”.

“Flying can never be easier than we have made it for our customers. We have launched leading customer focused

products into the Nigerian market and we are proud to be a market leader in this sector. We are determined to continue to offer excellent customer service and maintain reliable and high safety standards.” Obaro added.

Sokoto’s economic and cultural wealth makes it an investment haven for both locals and foreigners and Aero is making it easier for people to connect to such business opportunities.

BRIEF NCAA introduces revised NCARs

By LAWANI MIKAIRU & DANIEL ETEGHE

T

he Volume 11 of the newly promulgated Nigerian Civil Aviation Regulations ,NCARs, has been introduced by the Director General of the Nigerian Civil Aviation Authority,NCAA , Dr Harold Demuren. The new NCARs Vol 11 covers the Aerodrome and Consumers Rights.

The introduction of the new Regulations was done by the DG at the Boardroom of the Authority in Lagos with all the management staff in attendance.

Speaking at the occasion, Dr Demuren said that the introduction of the Regulation would further boost the provisions of the Civil Aviation Act 2006 and help to standardize the operational procedures, implementation and enforcement in the industry in conformity with Standard and Recommended Practices ,SARPs, contained in the annexes to the Chicago Convention.

This is the second amendments of the Nigerian Civil Aviation Regulations since its promulgation in November 2006.The first was amended in 2009 to bring into conformity with ICAO model Regulations and comprises of 11 parts, which has general administrative rules governing testing, licenses, certificates, exemptions,investigative and enforcement procedures. Before now, the Industry only had the NCARs July 2009 that covers all areas of aviation practices, except the Aerodrome and Consumers Rights. Dr Demuren who was highly elated, said the amended regulation came at the right time to address certain conflicting issues in the civil aviation legislation saying, ‘’ when there is no law, there is no offence’.

The new Regulations titled: Nigerian Civil Aviation Regulations 2012 [NCARs 2012 vol 11 comprising of parts 12 to 20 is promulgated to repeal and replace NCARs 2006, part 12 t0 18.”

38 — Vanguard, MONDAY, JANUARY 28, 2013

Micro-Finance BRIEFS World Bank lender pledges $2m for Myanmar microfinance

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World Bank development lender has said it would provide $2 million for a new microfinance bank that aims to help small businesses in impoverished Myanmar.

International Finance Corporation (IFC) said in a statement that the loan would be its first investment in the country also known as Burma, which is wooing foreign donors as it emerges from decades of military rule.

It said it would work with German and French partners, as well as Cambodia’s ACLEDA Bank, to help the microlender to be called ACLEDA MFI Myanmar to begin operations this year.

IFC said Myanmar’s banking sector was one of the world’s most underdeveloped financial services industries “as a result of the country’s decades of isolation”.

Microfinance institutions urged to embrace IT

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icrofinance institutions should embrace the use of information technologies (IT) if they want to be helped by the central bank to monitor and manage their financial operations.

“We want to help our people manage their financial affairs. We have a financial inclusion policy and strategy that sets out our approach to promoting financial inclusion,” the Rwanda National Bank governor, Claver Gatete, said.

Rwanda has already started a long-term plan to develop modern IT infrastructure that will accelerate financial inclusion in the country, he added.

The governor was addressing managers of financial institutions and local leaders in Eastern Province over the weekend.

The Eastern Province Governor, Odette Uwamariya, pledged to assist SACCOS embrace information technologies in their operations.

NAMB 2014 framework to aid CBN’s supervisory roles Stories by PROVIDENCE OBUH

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s soon as the new policy framework for National Association of Microfinance Banks (NAMB) is in place, it would help the Central Bank of Nigeria (CBN) in its supervisory role for Microfinance Banks (MFBs) in the country.

The South-West Zone NAMB made the statement in a communiqué where it expressed shock over the new rule of the apex bank, describing it as a regulation targeted to ruin the subsector.

The zone maintained that the sub-sector is still at its recovery stage from the financial meltdown of 2008 and so does not expect such rule to be coming at the moment.

According to the zone, “By the year 2014, the apex association would have put in place, very firmly our self regulation and supervisory structure which will assist the regulatory authorities in their supervisory roles.”

However, the zone believes that if the banking watchdog could consider the apex association’s regulation, it will help restore the lost confidence of the sub-sector.

The communiqué signed by the Chairman of the zone, Mr. Olufemi Babajide stated; “We have no problem with

capitalisation. It is a continuous process in all sectors, including the banking industry. Categorisation is also a welcome development.

“MFBs with branches should be accessed on the basis of N20, 000, 000 capital base/shareholders' fund per branch (I.e. MFB with a head office and one branch will be required to have N40,000, 000 capital base/shareholders' fund and not N100, 000, 000).

Loans have been disbursed by the various branches to

customers whose tenor varies from 30 days to 720 days, if such branches are closed, that will automatically result into bad debt.

“Nigerians have been employed to man the branches and if they are closed, they will automatically lose their jobs.

Branch closure will reduce the reach out to extend financial services to the poor and underbanked in Nigeria.

This will further compound the crime rate in the country.

The sub-sector is not presently attractive to existing and new investors in

view of the economic meltdown of year 2008, the licence revocation of year 2010.

Mergers and acquisition, outright sales are going on in the sub-sector but the pace is slow in view of lack of funds and the need to carry out due diligence which requires time. By the year 2014, the CBN support fund, Nigeria Incentive-Based Risk Sharing-System for Agricultural Lending (NIRSAL) and other donor funds would have been disbursed to MFBs. This will make the sub-sector very attractive to investors.”

*Olumide Emmanuel presenting a cheque to a beneficiary of OEF Economic Empowerment grant in Lagos.

OEF graduates 143 entrepreneurs as 6 get N1m grant

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bout 143 entrepreneurs have graduated from “The Entrepreneurship Academy” (T.E.A), put together by the Olumide Emmanuel Foundation (OEF) and the Common Sense Training & Seminar, an arm of Common Sense Group, even as six persons received N1,000,000 empowerment grant. Also, OEF pointed out that microfinance industry in Nigeria is still at its infancy, saying “the challenges they have initially is that what the microfinance banks (MFBs) are doing, the big banks are doing and there was confusion, now that there is reorganisation, I believe it will get better, people should just be patient, it would get better.”

The grants were disbursed during the monthly school of money mega summit held in Lagos in collaboration with

the graduation ceremony of 143 students of the academy, just as N200,000 each was given to three persons, two got N150,000 each and one person a N100,000, totalling N1,000, 000.

Speaking at the event, Founder, OEF, Mr. Olumide Emmanuel explained that the deplorable state of the economy and human development mentally and socially in Nigeria, underscores the need to set up an academy such as T.E.A. “The academy is one of the things we put together in collaboration with the foundation and the company as our own corporate social responsibility to help people.

We put money together to set up a one week intensive business school to train people.”

In order to combat business challenges, Emmanuel

hinted; “We give grants and interest-free loans to people that we know can succeed.

For instance, the foundation is all about eradicating poverty and there are people with good businesses and all they need is just N50,000, N30,000 etc. God has blessed

me, I just feel somebody needs N50,000, you can give them interest-free loan, but some people will give them the money out-rightly, it is not a loan. But there are some people we give loan, if we are not sure of their integrity and capacity, we test them first with loan.

Visa warns ATM users

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isa Nigeria, one of the leading payment networks has advised users of the Automated Teller Machine (ATM) to beware of characters who loiter around in pretending to carry out transactions.

The card giant raised the alarm in an article entitled: Don’t skimp on security at the ATM. Visa pointed out that users should be wary of

ATMs in suspicious locations, cash trapped in the machine and also ‘shoulder surfing’ at the site.

According to Visa, “While electronic transactions are on the rise, many of us still regularly go to the ATM to withdraw cash for smaller transactions like buying airtime for your mobile phone.

Vanguard, MONDAY, JANUARY 28, 2013 — 39

Insurance BRIEFS

How government, insurers can collaborate against flooding

Royal Exchange pays N1.6b claims

By ROSEMARY ONUOHA

By ROSEMARY ONUOHA

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ast week some parts of the country witnessed the first rain of the year. Judging by the intensity of the downpour, stakeholders in the insurance sector have renewed calls for collaboration between government and the sector to mitigate losses that could arise as a result of the impending flood

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Fom left: GMD Odu'a Investment; Mr Adebayo Jimoh, Outgoing Nigerite MD; Mr Jean-Luc Viatour and the Incoming Nigrite MD Mr Albberto Tenorio during the visit.

Pix by Dare Faasube

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The flood disaster that ravaged many parts of the country last year revealed the low level of insurance patronage in the country.

Consequently, insurance operators took it upon themselves to enlighten the general public and government at all levels about the importance of insurance in disaster management.

Most importantly, insurers canvassed the need for collaboration between government and the insurance sector to join forces to ensure that flood disasters don’t leave such massive devastation as experienced last year.

Despite these various enlightenment programmes, the government is yet to make any attempt to collaborate with the insurance sector.

This year, some parts of the country have witnessed the first rainfall, and from the intensity of the downpour, there is the tendency that this year ’s rain is going to be heavy. Hence the question, “What plans for prospective displaced citizens after the floods?

It will be recalled that many victims of last year flooding are still homeless as the floods carried away their homes while others lost their sources of livelihood. It is in this regard that experts have canvassed that the flooding and cases of related environmental hazards make insurance the way to go for Nigerians.

According to the President of Chartered Insurance Institute of Nigeria, CIIN, Mr. Wole Adetimehin, insurance remains an essential index for measurement of national development although lacking in its expected degree of presence in both individual and national consciousness, especially in developing countries like Nigeria.

For Managing Director of

Despite these various enlightenment programmes, the government is yet to make any attempt to collaborate with the insurance sector

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Lasaco Assurance Plc. Mr. Olusola Ladipo-Ajayi, the service which the insurance industry renders to the economy and Nigerians is not just about making money for insurers but also preventing losses in the economy and the country at large.

Need for collaboration ccording to insurance experts, there is need for collaboration between the insurance sector and government more than ever before, because Nigerians are presently exposed to all kinds of disasters both natural and man-made.

According to the Executive Vice Chairman of Industrial & General Insurance Plc. Mr. Remi Olowude, there is need for immediate introduction of flood insurance and a catastrophe fund coupled with the fact that the industry needs to collaborate with the Federal, State and Local Governments to set up a National Flood Insurance Fund Programme.

Olowude said that the scheme will provide

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insurance coverage against property loss from flooding, landslide, rainstorm, etc. and protect insurers from illiquidity arising from massive claims.

“It is imperative to seek government involvement in the project because the perils covered are more or less fundamental, and when they occur, the poor are usually the dominant casualties.

Unfortunately, this segment of our society can least afford the cost of conventional insurance,” Olowude said.

According to Olowude, the frequency, intensity and spread of these disasters have placed an enormous responsibility on insurers to create special pools that will not only cover certain fundamental risks of oil spillage, transportation, tanker explosions, etc., but will also address the phenomenon of climate change and the associated tragedies caused by flood, landslide, earthquake and vagaries of weather.

However, Managing Director of Linkage Assurance Plc. Mr. Gus Wiggle said the attitude of the public of waiting on government to carry all risk that emanates from flooding while not making any effort of their own to safeguard their lives and property against peril is wrong. He said, “You know our character towards insurance in Nigeria, we are not proactive enough in wading off disasters because we don’t have the insurance culture and this has been to the detriment of Nigerians.”

Adetimehin on his part said

that these environmental hazards are of great concern to insurers as they constitute threats to the insured and potential insured.

Ladipo-Ajayi however added that most Nigerians are averse to insurance because they don’t see any value in insurance; however, if some of the property destroyed by flood last year had been covered under any household policies, their owners would have received adequate compensation from the insurance industry.

The way forward ast year ’s floods no doubt left massive devastation in its wake; however, with insurance the level of loss and destruction can be greatly minimized. To this end therefore, the general [public must deem it fit to embrace insurance in order to adapt and mitigate risks associated with flood and other natural disasters, experts have cautioned.

Lead Strategist Medialogistix Limited, Dotun Adekanmbi, said insurance remains one of the best ways to adapt and mitigate risks.

Managing Director of Consolidated Hallmark Insurance Plc. Mr. Eddie Efekoha said that there is no gainsaying the obvious that the country is threatened by these events, adding, “We have had this flooding incident and there were a lot of temporary camps for many of our brothers, sisters and friends in affected areas, and this is a major challenge for government and the insurance sector.”

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oyal Exchange General Insurance Company, (REGIC), said it has paid out N1.58 billion as claims settlements to its clients at the end of the 3rd quarter, 2012.

This amount represents a 54.75 per cent increase over the corresponding period of year 2011, which stood at N1.02billion.

In a statement to Vanguard, Managing Director of REGIC, Mr. Olutayo Borokini said that his company’s focus is the prompt settlement of genuine insurance claims and this will continue to be the business philosophy of the company in years ahead.

According to Mr. Borokini, “the importance of customer satisfaction is the fulcrum of insurance business and this inevitably builds customer loyalty.

NCRIB appeals to online media for insurance awareness

BY RITA OBODOECHINA he Nigerian Council of Registered Insurance Brokers, NCRIB, has implored the various online media to utilize its platform in enhancing awareness of insurance in Nigeria through effective reportage of the industry Speaking at the presentation of the 2012 Insurance Person of the Year Award held in Lagos by inspenonline media, the President of the Council, Mrs. Laide Osijo, said the internet platform used by online media , has positioned the industry to reach out to greater segment of the population, to promote insurance growth in Nigeria At the presentation of the award to her as the 2012 insurance person of the year, Osijo said she is dedicating the award to the entire registered insurance brokers in the country for their support, and dedication to ethics and professionalism.

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40 — Vanguard, MONDAY, JANUARY 28, 2013

“Nothing is more wasteful than doing with great efficiency that which should not be done”. Theodore Levitt, in Harvard Business Review, March-April 1933.

(VANGUARD BOOK OF QUOTATIONS p 270).

MINISTRY OF AGRIC: From food stock to laughing stock

he Minister of Agriculture, once a brilliant prospect for his position, is gradually giving his Fellow Nigerian s more jokes than food with every announcement coming out of that Ministry. His latest joke about supplying ten million GSM phones to farmers has received a lot of attention in the media; there is no need to over-flog the issue. It is only necessary to make a few observations and ask some pertinent questions – as someone who had been engaged in farming before. I watched as the Minister briefed selected media practitioners recently and made a brave attempt to mislead those present. He could get away with the answers he gave to, admittedly, mundane questions.

“From the sublime to the ridiculous there is only one step”, said Napoleon Bonaparte, 1769-1821; after the retreat from Moscow in 1812. At least the one-time Emperor of Europe had enough sense to retreat when he was beaten. Nigeria’s Minister of Agriculture, credited with great intelligence, had not yet seen the wisdom in turning back from a road leading nowhere.

Instead he had taken two more steps which have increasingly separated him from the sublime and are leading him to the ridiculous destination which supplying 10million phones to farmers represents. That, of course, is not strange. David Halberstam, the author of best

selling THE BRIGHTEST AND THE BEST, had demonstrated how the bright young Harvard professors assembled by President Kennedy, 19171963, led the USA into the disastrous Viet Nam war.

David ended up by describing the whole lot of them as “intelligent but not wise”. No doubt, Nigeria’s Minister of Agriculture is brilliant, so brilliant he falls into the same trap like other gifted people – he thinks he is the only one with brains. From the ongoing controversy about 10 million phones he strikes one as being most unwise. He might have his way; but he will carry very few people, except Reuben Abati , along with him.

Second, having failed to persuade with logic and reason, the Minister, illadvisedly and amusingly, went straight into the Holy Bible to borrow the cloak of Jesus. The problem with that step is that it overlooks the fact that about 70 percent of Nigerians are not Christians and have no knowledge of who Pilate is and what he represents. But, a proposal to spend public money on a monkey business, like 10 million phones concerns all Nigerians and should be explained drawing from our common experience. The NATION in its back page HARDBALL section of Monday January 21, 2013, advised the Minister to “quietly and sensibly shelve it”. But, there is a risk in shelving it; the idea might be taken from the shelve when

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But, there is a risk in shelving it; the idea might be taken from the shelve when our collective attentions are distracted and quietly implemented

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our collective attentions are distracted and quietly implemented. At Unijankara, we hold another view. We think somebody should SHOVE IT. Still, the proposal to supply ten million farmers in Nigeria and invest N60 billion is fundamentally an economic and investment decision.

Certainly, a study must have been conducted, either by the Ministry or by consultants, in order to arrive at a decision to undertake such a major investment. The first question is: where is a copy of that study? Related questions include, but are not limited to, “ who undertook the study?”, “ when was it undertaken?”, “ when were the results published?”

These questions are pertinent because it would amount to monumental folly for any public servant, especially one internationally exposed as Dr Adewunmi, to

champion a great decision based on guess-work. Surely, nobody would ask the International Institute for Tropical Agriculture, IITA, to spend such a colossal sum without a study and a report to support the proposal. It would also be important to know, in quantitative terms, the returns on investment which the nation should expect from such an investment project. Even then, the questions are not exhausted.

The Nigerian government, like all governments, is operating with severely limited financial resources; so funds have to be allocated between competing needs – even in the Ministry of Agriculture. Surely, erudite Dr Adewunmi has heard of opportunity cost. Given all the other options for increasing agricultural productivity, Nigerians, and indeed the world, definitely would like to know how the returns on investing in phones will stack up against other options available for increasing agricultural output.

In a bid to make what is obviously a comical proposal more acceptable, the Minister, “informed” his audience that the Federal Government will not bear the total cost. The good intention of government is to subsidise the procurement of the phones.

Apparently, a government which abhors “subsidy” for the consumption of petroleum products for 167 million Nigerians is eager to subsidise 10 million unidentified farmers. They

remain unidentified because, it is certain that the Ministry of Agriculture has no list of ten million potential beneficiaries of this give-away programme.

The lack of a list of potential beneficiaries, which must satisfy several conditions, is the greatest indictment of the proposal.

Any subsidy programme represents, essentially and fundamentally, redistribution of revenue – it takes funds from a group (this time the rest of us) and gives to another group (the favoured 10 million). Surely, a Minister, as intelligent as Dr Adewunmi, must appreciate the fact that the rest of us (157 million) would want to know that the funds to be allocated to this scheme, or scam, would be equitably distributed with regard to states, senatorial districts, ethnic groups within multi-ethnic states, religion, gender, age, and without political bias.

The last point is the most important because unless the distribution of the benefits is non-partisan, it might amount to a PDP programme to steal funds from the national purse to fund its 2015 campaign irrespective of who is the presidential candidate.

Surely, the Minister, when he was in the various institutes of agricultural research, knows that the bulk of food in Nigeria, as in all third world countries, is produced by women. The percentages defer from nation to nation. If he cares to go into his bookshelf, he will also find abundance evidence that the typical farmer in Nigeria is a woman over 45 years of age, illiterate, and living on subsistence farming. To such an individual N4,000 or $250 is a fortune not easily accumulated in one year.

Even, half of that sum represents a windfall for the vast majority of farmers.

Business Economy

Nigeria railway battles hooliganism, arrests 300

By JONAH NWOKPOKU & WILLIAM JIMOH

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he Nigeria Railway Corporation, NRC, has arrested over 300 people in bid to step up efforts to combat activities of hooligans on its trains.

The Assistant Director, Public Relations, NRC, Mr. David Ndanusa Ndakotsu made this known on in response to enquiries from Vanguard last week.

The NRC official in reaction to the problem of

overcrowding on the trains in Lagos where some passengers hang and some sit on the roof, described the act as hooliganism and said the authority has been arresting and prosecuting those involved.

“Those who hang on the trains are hooligans. And we have been using the police to arrest and prosecute them. We charge them with attempted suicide. Last year alone, we arrested and charged to court over 300 people. Some of them have been convicted and

fined.”

Mr. Ndanusa noted that the overcrowding of the trains is because of the inadequacy of the coaches and said the corporation is making effort to provide more coaches.

“We are aware that the coaches get crowded and that some passengers even hang on the train but we understand that is because the trains are not enough and we are making effort to increase the number of coaches.”

Ndanusa said.

“We are increasing the

number of coaches gradually.

Within the last one month, we have increased it from 10 to 16.” He added.

He however noted that no arrests have been made this year because the authority is still persuading and sensitizing the people through the media on the dangers of hanging on the train.

“While we are trying to curb this hooliganism through arrests and prosecution, we are also giving the fight a human face by persuading the

people through the media and community leaders on the dangers of hanging on the train. That’s why we have not made any arrests this year.

After we have done that, it is only then that we will begin to arrest and prosecute the extremely stubborn ones.”

The railway has over time played critical role in transportation in Lagos but the recent ban on commercial motorcycle has led to a surge in the rail patronage, leading to overcrowding in the trains that sometimes result to suffocation of passengers.

Vanguard, MONDAY, JANUARY 28, 2013 — 41

People in Business

Need to reduce malnutrition led me into this business —Israel Ajide STORIES BY EBELE ORAKPO

while our birds go for between N1,500 and N1,800 per bird depending on the size."

In a bid to grow fast, Ajide teamed up with a friend of his.

He said; “Along the line, I had to bring in a friend on board for the project to grow fast. His name is Akintolami Adeleye, we both graduated from the same university. We needed to grow so we had to join forces to expand.”

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r. Israel Ajide is the Managing Director of Gudugba, Ifo, Ogun State-based Vigour Farms, an outfit that is into livestock production. In this chat with Financial Vanguard, the 2008 Microbiology graduate of the University of Ilorin, said he was motivated to go into the business because of his passion for livestock production among other things. Excerpts:

*Vigour Farms

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In 2008 when he left the university, Mr. Ajide went for his mandatory one year service to the nation between 2008 and 2009 in Kastina State as a biology teacher in Government Senior Secondary School Rimi, Rimi Local Government Area.

Between 2010 and 2011, he served as an Administrative Associate at Health Benefit Limited – Cancer Clinics and in January 2012, he decided to follow his passion.

Challenges: On the challenges they face in the business, Ajide who presently has four employees comprising a farm manager, two farm attendants, and a security man, mentioned inadequate infrastructure like good roads linking the farm and market, electricity for cold rooms, inadequate space due to the cost of acquiring land, lack of agricultural loans and subsidy as some of the challenges.

He, however, noted that despite the challenges, “the business is very lucrative provided you pay attention to details and you have a good management."

Asked where he wants to see the business in the next five to ten years, he said; “In five-ten years from now, we want to be able to feed the nation (Nigeria), by leveraging on our youthful strength and intellectual abilities in tackling the problem of food crisis,” he said.

We want to feed the nation (Nigeria), by leveraging on our youthful strength and intellectual abilities in tackling problem of Businessthe Economy food crisis

Motivation: According to Ajide who had his secondary education at the Command Secondary School, Kaduna in Kaduna State, apart from his passion for livestock production, “I was also motivated by the need to create employment for myself and the increasing population of unemployed youths, and the need to contribute to food production in the country so as to reduce the level of malnutrition posed by food crisis,” he said.

Initial capital: He said he started the business with N250,000 which he raised from his house rent.

“My start-up capital was N250,000. I raised the cash from my house rent. I had paid about N300,000 to rent a room self-contained apartment in Lagos for two years.

After spending about three months in the house, the inspiration to go into farming came so I decided to move to a suburb town called Ifo to start the farm with the refund I got from my remaining rent.

It was N110,000 per year for two years plus agreement and agency fees,” he said.

“My boss at Health Benefit Limited, Dr. Obinna Nwaneri, was very helpful at every point.

He kept paying me monthly salary for about three months

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after I stopped working with him fully to go into farming.”

Continuing, Ajide said; “This was used to secure the poultry pen and 250 day-old chicks plus the feed to feed them to the point of laying eggs.

I am into poultry and pork production.

"We diversified into pork production when the birds started laying eggs.

“In the poultry, we raise layers for egg production; we also raise cockerels and broilers for meat production, but this we do during festive periods alone. size.

"In our piggery, we have more of male pigs known as boar.

This is because of the highly prolific nature of pigs and due to our limited space, we do not want to stock too many female pigs," he stated.

Cost of products: "We sell a crate of eggs for N650,

*Mr. Israel Ajide

Entrepreneur calls on govt for more aid to SMEs

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he Managing Director, Bona Chuks Chemical Industries Limited, Nnewi,Mr. Ikechukwu Okeke, has called on government at all levels to do more for Nigerian entrepreneurs if they want to get the best out of them.

Speaking with Vanguard recently, Okeke praised the efforts of the present administration but says more needed to be done. "I

love President Jonathan's government because they go direct to the people but we want them to do more.

"I w a n t g o v e r n m e n t t o motivate us, assist those that should be assisted, get to know what they are doing and what they can contribute to the GDP of the country and assist them. Once we are assisted, we will do all in our power to empower our y o u t h s because t h e r e i s

nothing we gain in this world if we do not transfer these technologies. That is why the entire nation mourns when a professor dies because a lot of things die with him. You don’t need to die with your technology, government should help us," he said, adding; "We have over 2,000 technologies in different areas that are still untapped."

42 — Vanguard, MONDAY, JANUARY 28, 2013

Agric

FISON plans aquaculture development for job creation, export

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isheries Society of Nigeria in collaboration with Winrock International, facilitators of the Farmer to Farmer (FtF) program, has concluded plans for developing Nigeria’s shrimp production potentials.

The program according to the National President of FISON, Dr. Abba Abdullah, is aimed at aquaculture development, diversification of the finish mono-product base; generating jobs; stemming rural migration, contribute to rural development, and bring about integrated aquaculture programs.

“It will also diversify Nigeria’s export base to generate foreign exchange and increase employment in the rural sector,” Abdullah said.The FtF program scheduled to hold in Lagos and Cross Rivers is a United States for International Development (USAID) funded program with special focus on Aquaculture in both states.

Expert tasks farmers on cassava production

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Samuel Afolayan, the Acting Executive Director, Agricultural and Rural Management Training Institute (ARMTI), Ilorin, has charged farmers to boost the production of cassava and rice.Afolayan told the News Agency of Nigeria (NAN) in Ilorin that this would improve the income of farmers as well as boost the agricultural transformation agenda of the Federal Government.He said the need to encourage massive production of rice and cassava by local farmers had become imperative order to reduce dependence on importation. “There is the particular need to raise production of cassava tubers in the campaign to substitute wheat flour with high quality cassava flour for use in bread production and other confectioneries.

Balance should be maintained on issue of GMO — Prof. Dunwell P

rof. Jim Dunwell, a Plant Biotechnologist at University of Reading, UK, in this interview with Abdallah el-Kurebe at Biosciences for Farming in Africa, B4FA Media Fellowship workshop, which took place at IITA, Ibadan recently,took time to react to some issues raised by the President and Founder of Slow Food Movement, Carlo Petrini on reasons to say “NO” to Genetically Modified Organisms (GMOS).

Excerpts: Some researchers and scientists in many countries observe that cultivating GMOs safely is impossible because of lack of adequate natural barriers to protect organic and conventional crops. Do you share these views?

GM crops are subject to detailed regulation prior to their approval for commercialisation. This testing includes a rigorous assessment of any effects on the environment. This includes effects on other organisms and on soil conditions. Those GM crops that are grown commercially are considered to interact with the biotic (biological) and abiotic (non-biological) environment in a manner that is similar to conventional crops.How can organic, biodynamic and conventional farmers be sure that their products are not contaminated?

The term “contamination” has obvious associations, and implications of harm, or potential harm. There is no evidence of such harm from the cultivation of GM crops.

Certain types of organic and biodynamic farmers are fundamentally opposed to any cultivation of GM crops but others are less inclined to oppose their growth.

“Conventional” farmers in many countries, principally North and South America, have adopted GM crops on a large scale.

In Europe, growth of GM is much more limited, but some farmers would like the opportunity to test such varieties.

In summary, there should be a balance between the rights of those farmers opposed to the technology, and those who would welcome the crops. None of the groups should have the right of veto;

Prof. Jim Dunwell and a compromise should be developed. Likewise the rights and preferences of consumers should be taken into account. Is it true that there are proofs that animals that are fed with GMOs can develop health problems, let alone humans?

There have been several published reports claiming that animals fed on GM material suffer health problems. However, in all cases detailed analyses of these results by international experts and regulatory authorities have failed to substantiate the findings.

What do you have to say on the allegation that GM seeds are owned by multinationals to which the farmer must turn every new

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BRIEFS

The genetic performance of hybrids, whether or they are not GM, is not maintained beyond the first growing season, and seed is purchased each year.

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season?

For the last century farmers in most countries, particularly in developed countries, have not improved and selected

their own seed. Instead, they have relied on the purchase of seeds developed by plant breeding companies.

It is these seed companies that have developed those GM varieties that are on the market.

The genetic performance of hybrids, whether or they are not GM, is not maintained beyond the first growing season, and seed is purchased each year.

As mentioned, farmers for the last century have made this decision to pay for improved performance in order to maximise their economic return. Payment of royalties will depend on the precise term and condition under which a farmer bought their seed.

Don’t you see that introducing anonymous products with no history would weaken a system that also has close links to the tourism industry?

In general terms and in most areas agricultural tourism is not a significant issue. Where such systems are present farmers can grow the varieties of choice. There is no compulsion in any situation for a farmer to grow GM varieties.

It has equally been observed that GM crops impoverish biodiversity because they require large surface areas and an intensive monoculture system. Growing only one kind of corn for human consumption will mean a reduction in flavors and knowledge. What it your take on this?

It is not correct that GM crops need to be grown in any

particular agricultural system.

Also, farmers grow specific varieties that are adapted to their particular region, or environment. No single variety, GM or not, can be grown in all regions. There is no automatic effect on biodiversity, or reduction in flavour or quality attributes.

Will GMOs affect crop rotation?

Crop rotation is still important in many regions and will not be affected by GM crops. However, rotation cannot remove the need for protection against insects.

Such protection is offered by insecticides, and the need for some insecticides is reduced because of the use of GM crops. This has economic and other advantages for the farmer. The cultivation of GM crops that are tolerant to herbicides does not mean an inevitable increase in the use of herbicides.

For the 30 years since GMOs began to be studied, results in the agricultural sector concern only three crops (corn, rapeseed and soy). Some scientists have posited that the plants do not support the genetic modifications very well and that this science is still rudimentary and partially entrusted to chance.

GM Cotton varieties are also widely grown, and have led to significant economic advantages for farmers in countries such as India and Pakistan.

It is 30 since the first GM plants were developed and it is not correct to describe the science as “rudimentary and entrusted to chance”.

As information on the genetic composition of crop species becomes more extensive, then GM and related techniques will become even more precise.

Your take on the need for modern research to support sustainable agriculture and its needs?

Crop yields have increased significantly over the last century and it is estimated that genetic improvement has played a large role in these increases. GM techniques represent one aspect of this improvement but in long term it is important that all approaches should be employed to develop sustainable agricultural systems in the long term.

Vanguard, MONDAY, JANUARY 28, 2013 — 43

ICT

SCIENCE AND TECH SCHOLARSHIP: A cross section of pioneer graduates who benefited from MTNFoundation Science and Technology Scholarship Scheme at a career development and enterprise workshop organized by MTN foundation at the After school Graduate Development Centre in Ikoyi, .recently

NCC draws operators, consumers to Abuja on QoS solution STORIES BY PRINCE OSUAGWU

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erennial poor quality of telecom services has drawn the telecom operators, the regulatory agency, Nigerian Communications Commission, NCC and the subscribers closer to seek ways of getting out of the wood.

They met at a two-day workshop organised for Information and Communication technology journalists by the Nigerian Communications Commission in Abuja recently.

Meanwhile, stakeholders were allowed to highlight their problems and probably suggest ways of making the problems lighter. Speaking at the forum, the President of the Association of Licensed Telecoms Operators of Nigeria, Mr. Gbenga Adebayo noted that, “While the nose bleeds, the eyes should still be clear enough to look at the causes of the decline in quality of services,” which is not the design of the operators.

According to Adebayo, despite the brilliant regulation provided by the NCC, challenges in the sector remain enormous, ranging from insecurity of telecoms infrastructures, a phenomenon that manifested prominently in the last year terror attack on telecoms infrastructures in some parts of the country.

It was gathered that no fewer than 30 base stations were bombed in the last year terror attack on telecoms facilities. However, the facilities are yet to be rebuilt because of lack of access.

Other environment

challenges facing telecoms operators include vandalism and stealing of telecom facilities, especially those located in remote areas.

Corroborating him, the Corporate Services Executive, MTN Nigeria, Mr. Wale Goodluck disclosed that, like other telecoms firms, MTN records a minimum of 70 cases of vandalism of its infrastructure scattered across the country on a monthly basis.

Adebayo had also highlighted problems of multiple taxation, multiple regulations and right-of- way problem, saying that more than ever before, every tier of government - state and local councils see telecoms as money spinner and impose all kind of fees and in some cases about N3 million per base station, ostensibly to boost their Internally generated Revenue (IGR).

In fact Adebayo contended

that “the imposition process is often fraught with litigations and argumentations which slow down network expansion roll out a service upgrade,” Another monster against improved quality of service which was highlighted at the meeting was that of multiple regulations. Apart from the NCC, ALTON also said that a number of organisations like the National Environmental Standards Regulatory Enforcement Agency (NESREA) were imposing their laws on the sector.

Adebayo said that NESREA’s laws of environmental impact analysis (EIA) and safety is at variance with that of the regulator and the international community.

He said of the Agency: “On their own, they decommission base stations. Some councils are also decommissioning base stations for which according to them, the operators don’t have certificate of occupancy. While some hardly respond to request for permit to build base stations,” Adebayo lamented. The problem of right-of-way was also raised and discovered as making it very expensive for operators to deploy fibre optic cables within the cities and rural areas.

Meanwhile representative of the subscribers association at the event noted that as subscribers there was every right to complain about the poor quality of service but however cautioned that there was also need to realise that adequate security was not provided for the facilities of the operators by the government.

Information management: Good planning, poor implementation put companies at risk —Symantec

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nformation Security company, Symantec said that in 2012 the percentage of organizations without a formal information retention plan dropped by half from the 2011 survey on how enterprises manage their ever-growing volumes of electronically stored information (ESI) and prepare for the eventuality of an eDiscovery request.

Symantec said that its findings in the 2012 report however, revealed that even with this improvement, organizations struggle with implementing their information retention plans as only a third of organizations report that their plan is fully operational.

Nearly two-thirds (60 percent) of organizations say they have a formal retention plan, yet only 34 percent report those plans are fully operational. The perceived cost of implementing their plans is reported to be the most common reason why

organizations are lagging in plan implementation. The survey found that only 7 percent of organizations don’t have any plans in place, a 50 percent drop from 14 percent of organizations reported in the 2011 survey.

Even more concerning is that while they received on average 17 requests for electronically stored information, these requests failed 31 percent of the time.

This is significantly higher than the 20 percent of failures reported in 2011. Each time a failure occurs, the organization is at risk. Fortythree percent reported the inability to make decisions in a timely fashion as the biggest consequence of these failures.

Other consequences reported include damage to reputation, compromised legal position, fines, raised profile as a litigation target and court sanctions.

Director, Information Intelligence Group,

Symantec, Trevor Daughney said that “the survey highlights that, although there is a reduction in the number of organizations without an information retention plan, organizations haven’t fully funded and implemented their plans,” said, “With the number of ESI requests and failures to obtain requested information increasing, organizations face risks that are much more costly in the long run than implementing their plans.”

There is still a substantial gap between beliefs and practices in retention policies, which has not significantly changed year over year.

Eighty-one percent of respondents believe that a proper information retention plan allows organizations to delete information on an ongoing basis. However, 42 percent of backups are indefinitely retained by organizations.

BRIEFS Oracle Infrastructure now comes as service

BY AMAKA UGWU & QUADRI SHODIYA

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or the first time, customers can get the unmatched performance, scalability and reliability of Oracle Engineered Systems behind their firewall, for a monthly fee.

This was disclosed recently by the senior vice president, Software Development of the company, Juan Loaiza.

According to Loaiza, Oracle Infrastructure as a Service with elastic compute capacity on demand, makes it possible for customers to use, and pay for peak processing power only when they need it and get the highest level of support with the new Oracle PlatinumPlus Services.

Adding to its comprehensive and flexible cloud portfolio, Oracle has announced Oracle Infrastructure as a Service, Oracle IaaS, with Capacity on Demand.

Glo offers free 6-month data on Samsung Galaxy S3, Note II

BY GABRIEL AMADIEGWU

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lobacom, has bundled a free sixmonth data plan with Samsung Galaxy S3 and Samsung Note II for its subscribers, giving them a unique opportunity to enjoy instant internet connection from the smartphones.

Globacom’s Marketing Coordinator, Mr. Niyi Olukoya said the unique benefits for subscribers who opt for the twin Samsung Smartphone offers from Glo include 500MB free data on activation, 100MB free data every month for 6 months and discounted tariffs for voice calls at 9k/ sec to nine Friends and Family and 18k/sec for other calls to all Networks.

The subscriber will enjoy all the benefits once he recharges with N1000 airtime monthly.

44 — Vanguard, MONDAY, JANUARY 28, 2013

Advertising, Media & Marketing BRIEFS PR C AN of PRC offfer erss ser vices in 221 1 services areas of PR

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ublic Relations agencies under the auspices of Public Relations Consultants Association of Nigeria (PRCAN) has offered to clients services on 21 public relations specialties.

The lecture reflects the depth of offerings of PRCAN members.

PRCAN says its survey of member firms shows that the services range from advocacy through brand building to issues management, corporate communication, and community relations and includes trade promotion, strategy and the traditional media engagement and event management.

Other subsets are Content Development, Corporate Social Investment, Crisis Management and Communication, Documentation, Government Relations, Internal Relations and Investor Relations.

Camora: Business side of enter entertt ainment debuts

BY ESTHER ONYEGBULA

A

Lagos based entertainment Production Company, D58 production has launched an entertainment project, Camora, which has potential of becoming Africans biggest entertainment brand.

Camora is a four day multi leveraging entertainment business platform. The event which will draw exhibitors, participants and visitors from every subsector of the Nigerian entrainment industry will incorporate a trade exhibition, live artiste performances, both from established and budding acts and business seminars. The theme of the project is more….giving the entertainment industry and Africans something more to experience at Camora.

Network glitches continue after yuletide, amidst tariff crash ...call centres, cyber cafe operators lament

STORIES BY PRINCEWILL EKWUJURU

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month after the yuletide, network congestion witnessed before and during the Xmas period has continued The media over the last few months has witnessed a barrage of campaigns by network providers scrambling for the share of voice in the market in the midst of crashed tariff and low quality service.

For example many subscribers in the last few months have complained of increased number of drop calls, SMS charged without delivery, re-bounce call clash, charges without calls and data operation and re-vibrated calls.

A cursory look into the telecommunications industry shows that network providers are not making efforts to do it right even in the face of serious network congestion which has led to abortion of some contractual agreements.

These reasons have led to subscribers giving for more in order to escape the ordeal of network failure, yet its the same, no network provider has been able to escape mouth wagging from subscribers.

The Nigeria Communications Commission (NCC) recently banned promotional campaign to help improve the networks, yet this has not helped matters even though some business owners have complained of the ban which they claimed has affected their business, thus leading to drop in their daily sales.

Charles Egwu, a business center operator wrote to this reporter in a letter titled;........

Before now, it was reported that the attack on communications facilities by the Boko Haram sect in Borno State was responsible for the congestion of the network.

The three masts destroyed in Borno state during the period in question belonged to MTN, Glo and Airtel mobile service providers. The masts belonging to the three network providers destroyed by the sect has create communication problem for telecommunication operators, cyber cafe, and banks in these area. In Lagos in the past one month and half, services have been terrible, likewise in banks, last week Friday (21-

12-12) many banks customers could not make withdrawals over the or with their Automated Teller Machine (ATM) cards. If Borno facilities were attacked does it affect Lagos, and other Western States, The East and the South South queried George Akporo, a businessman who lost a contract of N500,000 as a result of the lull in communication.

Efforts made to speak to a communications engineer to ascertain the telecommunications model operated by the telecommunications companies proved abortive as no one can be located.

A major dealer in MTN, Glo and Airtel products in

ASPAMDA, Lagos spoken to find out if the attack in Borno has any direct bearing on the Lagos network, told Vanguard and described the attack as an attack on the economy, but noted that patronage of telecommunication services in Lagos had dropped by over 30 percent particularly at Christmas when business is expected to flourish.

He however blamed the slow nature of business on the ban placed on promos and the congestion in network, pointing to the fact that subscribers having been losing a lot and do not want to waste their hard earned money.

Another dealer on the same product in Lagos said before the present network situation

he used to sell between N105,000 to N125,000 daily but that has dropped to between N96, 000 to N110,000.

Febian Okwuchukwu, a recharge card dealer in Lagos said the poor service has affected patronage of his business. He noted that the worst hit by the network failure is MTN, Glo and Airtel recharge cards. Subscribers to Airtel services were bitter over the rate at which the telecommunication company remove money from their account where they did not make calls. First to complain was Femi Okulaja, a teacher with a private school in Lagos, said Airtel just removes money from my account without notice. A call to confirm the complain by subscribers, the company said that the subscriber may be using a 3G phone which invariably means that money will be charged on such phones.

Fans of Super Eagles signing on the largest Super Eagles Jersey’ after the unveiling by Guinness Nigeria in Lagos recently.

Commitment, loyalty give PEA to Unilever’s Close-Up

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onsumers have varying degrees of loyalty to specific brands. Thus this influences the commitment to re-buy or repatronise a product or service despite situational influences or marketing efforts by competing brands. This gives credence to the works of Kelvin Clark in his book ‘Brandscendence’ where he highlighted the factors responsible for brandscendence which he listed as Relevance, The Firm, and Product’s enduring relevance to customers.

To this end, it is expected that brands must adapt to cultural shifts or changing economic needs of customer overtime where invariably mutual benefit that results in

customer relationship from stakeholders perceived mutual benefits must create goodwill to nurture future interactions.

It is also proper that enduring brands must adapt to customer needs, yet stay true to its original purpose, all these put together gave Close-Up the much desired impetus from the perspective of consumers to vote immensely for the brand’s clinching of the Product Excellence Award (PEA) of the Nigerian Consumers Award (NiCA) organised by Consumer Protection Council (CPC).

In determining brands that carried the day was done via an online voting process, which result was verified and

authenticated by a verification panel constituting of reputable Nigerians drawn from a cross section of the economic strata, The Organised Private Sector, The Media, The National Association of Nigerian Students (NANS), Standards Organisation of Nigeria (SON) and others.

For Mrs. Ify Umenyi, Director General of CPC explained that the agency as a federal government institution responsible for encouraging trade, industry and professional Association to develop and enforce in their various fields quality standards designed to safeguard and interest of consumers, the CPC instituted the NiCA which will be a annual event

Vanguard, MONDAY, JANUARY 28, 2013 — 45

46 — Vanguard, MONDAY, JANUARY 28, 2013

Vanguard, MONDAY, JANUARY 28, 2013 — 47

48 — Vanguard, MONDAY, JANUARY 28, 2013

Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com

Tel:0817 002 3569

again reinstate the existing poisonous and ultimately destabilizing framework of naira substitution, with the inherent liberal opportunities for corrupt practices!

The excuse that President Yar ’Adua stopped Soludo’s Naira Agenda because it was unconstitutional is quite untenable, because CBN’s autonomy in such monetary matters was clearly enshrined in the 2007 CBN Act. What is possibly nearer the truth will be Yar ’Adua’s consternation that naira redenomination, as proposed

by Soludo, entailed fresh commitment of billions of naira to production and promotion of a new currency profile to replace all the new denominations, which the CBN introduced only eight months earlier with equally great production and publicity cost! Ultimately, late President Yar’Adua threw away the baby with the bathwater without a whimper of protest from Prof. Soludo, who chose the continued enjoyment of the enormous perks attached to his office rather than adherence to professional integrity!

In truth, until we accept the obvious good sense in stopping the substitution of naira allocations for dollarderived revenue, poverty will deepen even with rapidly increasing dollar revenue, as is currently the case, but Central Bank autonomous dollar harvest will continue to bloom!!

Central Bank’s lion-share of foreign reserves while costs of our foreign loans still exceed the cost of such loans to distressed economies elsewhere.

Paradoxically, while federal government goes cap-inhand seeking for both domestic and international loans at outrageous costs for such risk-free sovereign debts, our own CBN sits

,

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he Central Bank Director of Research, Charles Mordi, at the Save Nigeria Group (SNG) forum recently in Lagos, claimed that CBN owns $30bn out of the total reserve of about $43bn.

Mr. Mordi explained that since CBN had paid constitutional beneficiaries naira values in place of distributable dollar revenue, the apex bank had become the owners of the dollar balance!!

Thus, the bigger the distributable dollar revenue, the bigger will be the burden of huge naira allocations and excess liquidity, and the greater also will be the challenges of inflation, cost of funds, rising national debt and a weaker naira! But guess what, the bigger the naira substitutions, the bigger will also be CBN’s dollar profits from its currency transactions!!

These CBN dollars caches may have funded the serial looting of the treasury in the last 30 years, as both military and civilian presidents had access to a pool of dollars that belonged to no one, but CBN, who exercised absolute authority over disbursement.

The billions of dollars power contracts and the Paris club debt payments may have also found this unencumbered dollar pool quite handy!

CBN claims to also deploy its ‘autonomous’ reserves to support the naira and also serve as collateral to reduce cost of foreign loans to our government. Inexplicably, naira rate continues to depreciate in spite of increasing dollar income,

major beneficiaries of CBN’s unfettered dollar allocations to BDCs! The CBN explained that it also deploys the ‘captured’ dollars to modulate critical aspects of our economic and social welfare; examples of such interventions include the selective millions of naira cash donations to victims of

These CBN dollars caches may have funded the serial looting of the treasury in the last 30 years, as both military and civilian presidents had access to a pool of dollars that belonged to no one, but CBN, who exercised absolute authority over disbursement

pretty with tens of billions of dollars, which exist outside the federation’s consolidated revenue account! Indeed, it is inexplicable that the CBN would also liberally allocate billions of dollars to Bureaux de Change (BDCs) at face value, while our government borrows the same dollars externally at a great cost!!

The apex bank is obviously unconcerned that looters of the treasury and smugglers of contraband, which destroy our local industries, are the

,

violence in Northern Nigeria and N1bn donation to a certain ‘beloved’ university.

Furthermore, a recent advertisement suggests that CBN is also embarking on interventions in secondary, tertiary and other public schools. The establishment of six Enterprise Development Centres in each of the geopolitical regions and N2tn cash injection to debt crippled AMCON are also all part of CBN’s fruitless and inappropriate efforts at

ameliorating the adverse impact of its failed monetary strategy.

Besides, the equity and yardstick for selecting beneficiaries for such interventions, even in areas where established ministries and agencies with statutory allocations should have appropriate structure for better service delivery, remain as hazy as its shroud on its expenditure and staff remuneration budget.

For over a decade now, we have decried the totally inappropriate structure within which CBN captures the dollar earnings and substitutes monthly naira allocations; this arrangement has created serious dislocations and disruptions in our economy.

The CBN Directors at the SNG forum readily admitted that former CBN Governor, Soludo’s Strategic Agenda for the Naira, which was in sync with our observation, was the product of professional judgment, but unexpectedly, implementation was summarily truncated by President’s Yar ’Adua’s rejection of the proposed naira redenomination and a restructured payment system. Regrettably, Soludo, lacked the courage to stand by his professional judgment, and backpedalled to once

SAVE THE NAIRA, SAVE NIGERIANS!!

Business & Economy

DDB Lagos bags Ad industry’s first international award

BY AKOMA CHINWEOKE

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he jinx of Nigerian Ad agencies not getting their due in terms of global laurels has finally been broken. In a feat that can only be described as recordbreaking, foremost marketing communication firm, DDB Lagos bagged Silver at the recently concluded Epica Awards: a first for any Nigerian based agency.

This award would however come as no surprise to those familiar with DDB’s track record. The firm’s continued dominance on the home-front is exemplified by her enviable position as the most awarded agency in the history of the Lagos Advertising and Ideas Festival, LAIF. Add that to DDB’s ground breaking work and strategic insight for brands such as telecom giants C M Y K

MTN and FMCG powerhouse Unilever, and it was only a matter of time before international award shows took note.

The award winning work ‘Speechless’ was done for Girl Hub a non– governmental organization to highlight the plight of the girl child in parts of Northern Nigeria. The work had previously been featured prominently in September as print ad of the week in the Luerzers archive – the foremost compendium of work in the advertising world.

The Epica awards were created in 1987 to reward outstanding creativity and help communication agencies, film production companies, media consultancies, photographers and design studios to develop

their reputation beyond their national borders. Originally, an European Competition, the event was for the first time in its 25 year history open to entries from all over the world. commenting on what this award meant for the Nigerian Ad industry, Tunde Sule the agency Creative Director said the win was a great milestone not only for DDB Lagos but the entire Creative Industry in Nigeria. This win has now proven that it can be doneand this will no doubt serve as a major catalyst for the entire industry. It is really the beginning of bigger things to come and I foresee a situation where in the not too distant future, DDB and other Nigerian agencies would feature regularly and prominently on the roll call of winners at International

Award shows.

DDB Lagos is a full-service marketing communications firm managing a rich array of local and global brands

spanning all major industries.

The firm is the West Africa hub of DDB Worldwide and part of the Omnicom Group.

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

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Group Business Editor Acting Finance Editor Energy Editor Head, Capital Market Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Capital Market Reporter Energy Reporter Industry/Agric. Reporter Money market Reporter Energy Reporter Maritime Reporter

CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT

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Media/Marketing Industry Micro Finance Graphics Department