JULY 28, 2014
MODERN RAIL: Nigeria Railways bids to sustain N4bn investment By JONAH NWOKPOKU
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OLLOWING the rehabilitation of the railway by the Federal Government 30 years after it was abandoned, the Nigerian Railway Corporation resorted to the refurbishment of old rolling stocks to return to tracks. The locomotives and coaches were vestiges of colonial rail infrastructure. And so, despite their efforts, the rolling stocks simply fell short of the expectations of modern train users. The trains were far behind in terms of technological innovations in modern rail transportation. The implication was that despite the noble efforts, the use of archaic rolling stocks meant that technical hitches became unavoidable, resulting in untold suffering by commuters. A Lagos to Kano journey which ordinarily should last 24 hours, lasts for 35 hours and sometimes, 40 hours. In addition, due to the nature of the trains and overcrowding resulting from limited rolling stocks, the trains could not help but be brazenly unhygienic and so patronage had to be limited to certain class of people. In a bid to address this challenge, management of the Nigerian Railway Corporation, NRC, recently acquired two sets of modern trains, Diesel Multiple Units (DMU) and six 68-seater coaches. Vanguard investigations revealed that each set of the DMU is made up of three cars and one motor car at each end. The DMU is powered by two sets of 1200 HP Cummins Diesel Engine and one 166HP Cummins Generator for auxiliary power. The trailer cars are fully
automated with electronic centrally controlled doors, and a passenger information system comprising cameras, LED Information Display and loudspeakers. They are also equipped with roof-top integral air-conditioning system which produces effective cooling in all cabins. They are also designed for a maximum speed of 100km/ hr with an air brake system and carrier-type couplers. The corporation said it invested
about N4.1 billion in the acquisition of the train sets. NRC Managing Director, Engr. Adeseyi Sijuade described the investment as a major milestone in the corporation’s strategic quest for modern rail transportation in the country. He also disclosed that five of such coaches are expected by August this year and would be used to flag off the first segment of the Eastern line, running from Port Harcourt to Enugu.
However, industry analysts fear that at the speed with which events are unfolding, the corporation may soon be overwhelmed and relapse to inefficiency which characterised the railway will become inevitable. Their argument boils down to the fact that without a conscious effort to maintain the infrastructure, the investment would have amounted to Continues on page 19 C M Y K
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Vanguard, MONDAY, JULY 28, 2014 — 19
N
IGERIA is a nation where everybody is an expert. Experts in football coaching, experts in financial matters and economy, just name it. It is a nation of garrulous people. Nigerians talk about everything on mother earth but do nothing about anything. People like to hear themselves talk. Some months ago, the nation was awash with the fact that about $49.8 billion was not remitted into the federation account. The mere fact that it came from the former CBN governor was enough for it to count as true. Everybody that was
Reconcile, publish go govvernment account regularly meeting. Such inter-agency meeting will allow each arm of the revenue-generating body to table what it earned, what has been remitted and what is outstanding. This will ensure that no agency is having any backlog of receipts unattended.
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he CBN as the banker to the Federal Government is in a good stead to carry out this assignment as it is the body that keeps government fund, local and international. In the ordinary run of business, account officers on monthly basis undertake bank reconciliation with their bankers to know the true cash position of the company. Bank reconciliation is undertaken because there may have been cheques drawn by the company to its customers that may have not been presented to the bank, cash payments lodged with the company that may not have been presented to the bank or some customers may have paid into the company ’s bank account that are not reflected in the company’s cash ledger among other reasons. Nigeria as it is today, does not
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anybody in Nigeria wanted to be heard on how to deal with the situation. Months after, the Senate committee that was raised to investigate the matter submitted the report of its findings with the conclusion that no money was missing but that about $20 billion was yet to be reconciled. Nigerians since the Chibok unfortunate incidence have pretended that the issue of $49.8 billion un-remitted funds by NNPC has ever occurred. Why are we a nation of people who take pleasure in talking and not finding a permanent solution to problems before jumping into another? The Senate committee recommended that there should be a periodic and inter-agency reconciliation of the inflow and outflow from the federation account to avoid the annual bickering over the NNPC not making full disclosures of how much it earned on behalf of the nation and shortchanging Nigerians of their legitimate income. This column had, before the Senate committee recommendation, asked the new CBN governor to set up a machinery to ensure that all revenuegenerating ministries, departments and agencies of government meet regularly with the CBN to reconcile the federation account before the Federation Account Allocation Committee
Those in position of governance are not the masters; they must regularly give account to ordinary Nigerians. Nigerians must stop talking about everything and doing nothing about anything
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know how much it earns from the various sources of revenue. All the President knows about the nation’s finances is what those handling and manning the various revenue posts want him to know. The process is neither transparent nor open. This gives room for massive corruption and ripping off of the nation. But the government in an attempt to safeguard the interest of investors, set up the Financial Reporting Council to monitor and regulate the private sector accounting procedure. This council recently alleged that the CBN account is in a
shambles and not prepared according to International Financial Reporting Standard.
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hat was what brought trouble to Lamido S a n u s i - l e d management of the CBN. The question is; why are all ministries, departments and agencies of government at federal, state and local government levels made to render account in IFRS? Why are Nigerians not insisting that federal revenue be made known to the public? Why is it that government, every year, states how much it intends to spend but never render full
account of how much it earned and how it is spent? Are Nigerians not entitled to know? If this government is serious about fighting corruption, the first place to start is in rendering account to Nigerians of its income and expenditure. It is in preparing its account in an internationally acceptable format. This government must insist that the Nigerian public have the right to know how much came into the nation’s coffers and how the representatives of the people spend the money. Just like in a company where the board and management give account to shareholders, the elected and non-elected officers of government must give account to the electorate. It is the ordinary Nigerians whose voted were sought by the president, governors and local government chairmen to be elected that are the stakeholders and masters, not the other way round. Those in position of governance are not the masters; they must regularly give account to ordinary Nigerians. Nigerians must stop talking about everything and doing nothing about anything. Nigerians must stand up for their rights. Government must give the nation a detailed audited account published on regular basis.
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nothing; as fleeting investment always meant that little room is left for sustainability. These fears are not unfounded. Over the years, investments in the rail sector have been bereft of any sustainability plans. The implication is the poor technical skills which results in poor maintenance of rolling stocks. These further lead to poor service delivery, leaving a situation that makes it obvious that although the corporation desires huge investments, they are not entirely prepared for the business of rail transportation. But speaking to Vanguard recently, Sijuade allayed such fears. He argued that strategic initiatives are being adopted by the corporation to ensure sustainability of its
Nigeria Railways bids to sustain N4bn investment current investment especially in the modern rail infrastructure. While acknowledging that no substantial arrangements had been made in the past to sustain investments after cutting the red tape, he said part of the arrangement for the sustainability of its recent investment, is the retention of technical skills needed to maintain the newly acquired trains. According to him, “We have a two -year maintenance deal with the manufacturers of these DMUs and the six coaches, that is, the China Southern Railways, CSR. We have a two-year deal with them for maintenance of these coaches and the DMUs. What makes this deal unique is that it is a residential deal. This
means that the company has posted six technicians to NRC to live here with us. “This is very innovative in that I can tell you that one of the major problems that Nigerian Railway, not just Nigerian Railway
but all other sectors that are doing similar things in Nigeria have had, is that in this country, we take delight in celebration of projects. However, we don’t put much emphasis on maintenance. What happens after? So, you
find out that when you move around the various locations of Nigerian Railways all over the country, you see all our rolling stocks littered all over the place. Most of them were purely on two Continues on page 21 C M Y K
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Cover Story
Entrepreneurial Education Revolution:
An Imperative for Sustainable De Devvelopment in Nigeria: Part 1
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*From left; Group Head, Coral Banking, Heritage Bank, George Oko-Oboh; Executive Secretary/ CEO, National Health Insurance Scheme (NHIS), Dr. Femi Thomas and Executive Director, Heritage Bank, Niyi Adeseun during the launch of the NHIS Mobile Health Insurance Scheme in Lagos.
Nigeria Railways bids to sustain N4bn investment factors; inadequate provision of spare parts and inadequate provision for maintenance and that is poor maintenance culture. So we all come, eat and dance and then cut the red tape and the project is not given a thought as to how it could be maintained. It is not just the railways; it applies to roads and other infrastructural projects. "But we have learnt a lot of lessons from such failures and that is why on this particular occasion, we are engaging the company on two-year deal for those six technicians. “Their duties are simple, they wake up everyday and go into our carriage and wagon workshop, mix up with our technicians and any issues they may have would be attended to by them while our technicians learn. The bottom line is that it is a day-to-day transfer of technological skills,” he added. He explained that the corporation is working seriously to establish a maintenance facility by partnering with manufacturers who are willing to establish a base in Nigeria. He said they have been in discussions with General Electric and a number of Chinese firms that are also interested in picking any of their workshops that are underutilized and upgrading them to a standard where they
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Things are moving rapidly and we realised that we need to be on top of the game; I say things are moving rapidly in terms of passenger traffic, types of trains and even cash handling and security
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cannot only maintain but also commence assembling of rolling stocks in Nigeria. He further explained that with the rate at which events are unfolding, the corporation may easily be overwhelmed with challenges but they are adopting an outsourcing strategy that would enable them concentrate on core competencies and leverage expertise outside the corporation to deliver more efficient service. “Things are moving rapidly and we realised that we need to be on top of the game. I say things are moving rapidly in terms of passenger traffic, types of trains and even cash handling and security. There are so many things, and it is one thing to say we are making progress but that comes with a lot of challenges that need to be addressed and managed. And that is
why we are not resting on our oars and on daily basis, there are strategic meetings where how to cope with these challenges are discussed. We also have tink-tanks who are engaged to conduct some kind of risks analysis and management. Otherwise we may become overwhelmed. “One of the strategies we are adopting is outsourcing. Before now, how we handle security and ticket is through raiders who move from coach to coach checking tickets but we have realised that the way things are going, things can no longer be left in the hands of NRC staff because it is not our area of core competence. So what we did was that all the areas that are not our core competence are outsourced,” he said. He added that the outsourcing strategy is also the corporation’s transitional strategy into concession. “We have constraints with the railway bill that is still in the National Assembly, hindering instant concession but we have realised that railway bill or not, concession or no concession, we can’t just fold our arms, things are unfolding very fast and we need to adopt any strategy that we could to keep delivering better services,” he said.
LBERT Einstein once defined insanity as doing the same thing over and over and expecting different results, while the French classical author, Francois de la Rochefoucauld said ‘ the only thing constant in life is change’. This paper stresses the importance of entrepreneurship education towards enhancing sustainable development in Nigeria. The problems facing the country ranging from incessant strike action in our academic institutions, high rate of poverty, youth and graduate unemployment; overdependence on foreign goods and technology; Low economic growth and development; among others. This paper therefore argues that entrepreneurship education will equip the students with the skills with which to be self-reliant. The objectives and strategies for re-designing entrepreneurship education are also discussed. The paper also recommended that educational programmes at all levels of education should be made relevant to provide the youth the needed entrepreneurial skills. It is also recommended that the government should give adequate attention to entrepreneurial development in the country through the provision of good economic environment. So it is on this premise I would like us to see the Nigerian educational system in light of current realities in the 21st century. A careful look of the current state of affairs in Nigeria reveals that we are in a 21st century economy with a 19th century education system. A system whereby much emphasis is still placed on the conventional classroom environment with much reverence for certificate for graduates who in most cases are trained to be job seekers as evidenced in present high unemployment rate in the land. However, we must accept the fact that times have changed and we must adjust by transiting from the old styled era of Adam Smith inspired concept of the ‘industrialized specialist’ which has outlived its usefulness to a more dynamic, resourceful and I.C.T based model where skills and creativity takes precedence. Without deviating from the topic of my article which is Entrepreneurial Education Revolution in Nigeria, I would like to briefly define some of the concept in the topic. WHO IS AN ENREPRENEUR? n entrepreneur is a person who is driven to establish a business to take advantage of the financial opportunities and personal fulfilment offered, by pursuing their own dreams and shaping their own destiny in local, national and global economies. I personally define an entrepreneur as anyone who can convert
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what he loves doing to a moneymaking venture. Entrepreneurship on the other hand is said to be the process of planning, operating and assuming the risk of a business. It has also been seen as a process of creating a unique value. For the purpose of this speech, I would be limiting education to the activity of teaching about a particular subject. Revolution on the other hand has been defined by The Macmillan English dictionary as a sudden or major change, especially in ideas or methods. A revolution signifies a drastic turn around, a new way of thinking and acting. So at this juncture, what then is Entrepreneurial Education? Entrepreneurial Education is a lifelong learning process, starting as early as elementary school and progressing through all levels of education, including adult education. Entrepreneurial Education focuses on developing understanding and capacity for pursuit, of entrepreneurial behaviours, skills and attributes in widely different contexts. It can be portrayed as open to all and not exclusively the domain of the high-flying growth-seeking business person. The propensity to behave entrepreneurially is not exclusive to certain individuals. Different individuals will have a different mix of capabilities for demonstrating and acquiring entrepreneurial behaviours, skills and attributes. These behaviours can be practiced, developed and learned; hence it is important to expose all students to entrepreneurial education. Therefore, from the above definitions, we can safely deduce that entrepreneurial education revolution is a change in educational system which embraces an all encompassing strategy in introducing and instilling entrepreneurial attitudes into students. Just as we had the G.S.M revolution in Nigeria, an entrepreneurial education revolution is aimed at making entrepreneurial studies readily available anywhere with relative ease. Our educational institutions keep churning out graduates’ year in- year out and close observers have questioned the kind of training and education these young people are receiving in this 21st century. Recent statistics from the Nigerian bureau of statistics shows that the unemployment rate in Nigeria is 23.9%.
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Banking & Finance
Diamond Bank donates office block to Nigerian army
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iamond Bank Plc, has donated a ten-room, fully furnished, office block to the Nigerian Army, as part of its Corporate Social Responsibility drive to assist the Army carry out its task of safe guarding the nation. Speaking during the handover of the Charlie & Support Company building donated by the Bank to the 65 Battalion, Bonny Cantonment of the Nigerian Army in Lagos, Dr. Alex Otti, Group Managing Director and CEO, Diamond Bank, said that the donation was a corporate social responsibility intervention to support the efforts of the Nigerian Army. According to Otti, “One day, the Commanding Officer of the 65 Battalion showed up at my office with pictures of the structure that used to be here. My colleagues and I were surprised at the state of the building and decided to help out. I must commend the courage of the Commanding Officer in reaching out because this place is not readily accessible to the public so charitable minded citizens may not readily consider it in their interventions.
Reserve Bank of India fines 12 banks over loan default
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he Reserve Bank of India (RBI) has fined 12 banks, including ICICI Bank, Axis Bank, Canara Bank and Corporation Bank, a total of Rs 1.5 crore in relation to the Deccan Chronicle Holdings Ltd (DCHL) loan default case. This fine has been levied as a result of not following proper procedures while lending to DCHL. “After considering the facts of each case and the individual bank’s reply, as also, personal submissions etc., by some of the banks before its Committee of Executive Directors, the Reserve Bank came to the conclusion that some of the violations were substantiated and warranted imposition of monetary penalty as determined above,” RBI said. The banks collectively had a total exposure of around Rs 4,000 crore. ICICI Bank, the second largest lender of the country, has been slapped with a fine of Rs 40 lakh, the highest penalty in this case.
*PARLEY: Mr. Philip Ikeazor, Managing Director/CEO, Keystone Bank (middle) flanked by Dr. Shehu Muhammad, Executive Director, North (l) and Mr. Hafiz Bakare, Executive Director, Corporate Bank and Treasury during a press parley held in Lagos.
CBN orders AMCON to conduct fresh bids for Enterprise Bank By BABJIDE KOMOLAFE
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he Central Bank of Nigeria (CBN) has ordered the Asset Management Corporation of Nigeria (AMCON) to conduct fresh final bids for the sale of Enterprise Bank. Investigation revealed the apex bank doubted the integrity of the process that led to the outcome of the final bids submitted by the five shortlisted financial institutions last month. It was gathered that some top CBN officials believe that the result of the final bids submitted by AMCON to the CBN Governor was interrupted to favour a particular local bank with strong ties with a former Governor of a South Eastern state. This suspicion was aggravated when AMCON suddenly changed one of the rules for the sale of the Bank shortly after the final bids were submitted. It was gathered that the result of the final bid submitted by AMCON was inconclusive, with attempt to focus on criteria that would influence the outcome in favour of the particular bank. This, it was gathered, in addition to earlier changes, tantamount to changing the goalpost in the middle of the game, observed by the management of the apex bank, prompted the CBN Governor to order AMCON to conduct fresh final bids, based on some specific criteria that would be used to adjudge the bids submitted by the contesting
institutions. Investigations revealed that three banks are in top contention for Enterprise Bank. Two of them are local banks with head offices in Victoria Island, Lagos. One of the local banks, it was gathered, had been using its strong connections to the former Governor of a South East State to sway the outcome of the sale in its favour. Investigation further revealed that the decision of the CBN rattled the board of the bank and this prompted the former governor to visit the CBN
Headquarters last week Thursday to argue the case of the bank as the best for Enterprise Bank. AMCON commenced the sale of Enterprise Bank on September 22nd, 2013 last year when it formally invited interested buyers to express interests in acquiring its 100 per cent stake in the Bank. The audited financial statement of the Enterprise Bank Group as at 31 December 2012, show that the Group’s Total Assets stood at N263.5 billion, Customer Deposits at N208.4 billion and
Total Equity at N31.9 billion The invitation by AMOCN prompted interests from some Nigerian banks namely Diamond Bank Plc, Fidelity Bank Plc, Sterling Bank Plc, Stanbic IBTC Bank Plc, Standard Chartered Bank, Skye Bank, Heritage Bank Limited and other investment groups. Others include investors like Taunus Holdings, Sahara Energy, Obat Oil and about 12 private equity firms backed by experienced bankers as well as financial and investment analysts.
Sterling Bank posts N48.7bn half year earnings By
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PETER EGWUATU
terling Bank Plc has recorded gross earnings of N48.7 billion in the half year period ended June 30, 2014, representing a growth of 16.3 per cent over N41.86 billion recorded in the corresponding period of 2013. The interim report and Accounts of the Bank for the six-month period ended June 30, 2014 released at the Nigerian Stock Exchange, NSE weekend shows that net interest income rose by about 40.2 per cent, underlying significant improvement in its core banking operations. This also impacted on the operating income, which rose by 25.4 per cent. The top-line was driven by interest income, which rose from N31.08 billion in the first half of 2013 to N37.44 billion in half year 2014. Net interest income leapt to N21.28 billion in 2014 as against N15.17 billion in 2013. Non-interest income also increased to N11.3 billion in first half 2014 compared with N10.8 billion recorded in the comparable period of 2013. Operating income thus rose from N25.95 billion to N32.54 billion. However, the Bank’s
operating expenses increased by 28.5 per cent to N23.8 billion in first half 2014 as against N18.5 billion in first half 2013, driven by on-going investments in branch refits and expansion, and rollout of alternative channels. This moderated the bottom-line. Profit before tax rose slightly from N6.27 billion in 2013 to N6.34 billion in 2014. With a 131 per cent increase in income tax from N350.15 million to N809.73 million, net profit after tax stood at N5.5 billion. Commenting on the results, the Managing Director/ CEO of Sterling Bank Plc, Mr. Yemi Adeola, said that the performance in the first half of the year further demonstrated the underlying strength of the Bank’s core business. He noted that in spite of the challenging operating environment, the Bank achieved a 130 basis points improvement in net interest margin to 7.7 per cent resulting from a 60 basis points reduction in cost of funds and a 70 basis points increase in asset yield. He explained that the increase in cost-toincome ratio by 180 basis points to 73 per cent due to ongoing investments in the upgrade of the bank’s physical infrastructure and the rollout of alternative channels.
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Banking & Finance
Performance of ECOWAS economies inadequate for single currency, says Emefiele Stories by Babajide Komolafe he economic performance of countries within the Economic Community of West African States (ECOWAS) is inadequate for the proposed single currency for the region. Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele disclosed this at the 31 st meeting of the Committee of Governors of the West African Monetary Zone (WAMZ). He said a recent study to appraise the preparedness of Member States has revealed lack of performance. In his keynote address delivered at the meeting Emefiele said, “The results of the state of preparedness study commissioned by the 32nd meeting of the
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Convergence Council showed that the performance of Member States’ on the convergence scale relative to that required for the establishment of a monetary union is still inadequate. “Also member countries’ business cycle synchronization in terms of real GDP, inflation, broad money and interest rates remained weak, and their level of institutional preparedness for the monetary union remain inadequate. “The study, noted that member countries continued to make remarkable progress towards the establishment of a common market and the implementation of the ECOWAS Trade Integration Protocols and Convention as well as significant progress towards the reforms of their
financial systems. “Over the years, our appraisals have continued to show that the level of macroeconomic convergence in the Zone remained inadequate relative to the set targets. Since 2009, no two countries satisfied all the four primary convergence criteria consistently for two consecutive years. Accordingly, we have missed several launch dates for the monetary union. “This may have informed the decision of the Heads of State and Government to approve the Modified Gradualist Approach to monetary integration by 2020. Our role, therefore, is to honestly appraise this directive and design strategies to ensure a sustainable monetary union in the zone . In doing this,
we may have to think outside the box realistically assessing and providing innovative options as well as the costs and benefits of Implementing the Modified Gradualist Approach. “It is important that we remind ourselves of the need for the buy-in of all Member States in the WAMZ Project. We need to constantly update ourselves with the level of progress made, challenges and level of cooperation required. In this regard, there is need for the intensification of efforts in the area of sensitization of all stakeholders. "We must individually endeavor to evaluate, sign and ratify the various WAMZ Protocols and strive to implement them accordingly.”
Bank of Russia raises key interest rates
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he Bank of Russia has raised it key interest rate to 8.0 percent annual citing risks arising from aggravation of geopolitical tensions. A statement issued by the Bank said, “Inflation deceleration in July 2014 has been slower than expected. At the same time, inflation risks have increased due to a combination of factors, including, inter alia, the aggravation of geopolitical tension and its potential impact on the ruble exchange rate dynamics, as well as potential changes in tax and tariff policy. The build-up of these risks will lead to inflation expectations remaining heightened and creates threats of inflation exceeding the target in the coming years. The adopted decision is aimed at slowing the consumer price growth to the 4.0% target level in the medium term. If high inflation risks persist, the Bank of Russia will continue raising the key rate.
Access Bank rewards customers in mobile banking app promo BY WILLIAM JIMOH LAUNCH: From left: Mr Tola Adeyemi, Partner and Head, Audit Services, KPMG; Dr Babatunde Fowler, Executive Chairman, Lagos State Internal Revenue Service; Madam Onene Obele-Oshoko, Rivers State Internal Revenue Service and Mr Sunday Ogungbesan, Coordinating Director, Standards and Compliance Group, Federal Inland Revenue Service at the KPMG CFO Survey Launch in Lagos. Photo Lamidi Bamidele
CBN slams six-year time bar on consumer complaints T
he Central Bank of Nigeria (CBN) is set to impose a six year time bar on customers' complaints. This was disclosed in circular to banks and other financial institutions on Exposure of Draft on Recommendation for Time Bar on Consumer Complaints issued by the apex bank on Friday. “Pursuant to the inputs received from stakeholders, study of what obtains in some other jurisdictions, some regulatory agencies in Nigeria and the provisions of relevant Nigerian Legislations in respect of document retention and commencement of legal action, a time bar of six (6) years from date of transaction was recommended, after which complaints against FSPs would not be entertained. The proposed time limit
does not preclude the right of a complainant to seek redress in the court of law”, the CBN said. According to the circular, “The Central Bank of Nigeria (CBN) in implementing its consumer protection initiatives observed that timely resolution of complaints from consumers against Financial Service Producers (FSPs) within the regulated timeline has been a major challenge for the Bank, FSPs and consumers. Amongst other issues, availability and access to supporting documents were identified by stakeholders as a major setback for the timely resolution of complaints. The CBN identified the need to have in place, adequate measures to ensure that consumers are diligent in their financial transactions by making\prompt claims on transactions as they occur, to
ensure that FSPs are able to resolve same with the required resources. Accordingly, vide a letter dated 1 st November, 2013 stakeholders were requested to make submissions on the desirability of placing a time bar for managing complaints in the industry. In line with the tradition of the CBN to carry its stakeholders along as developments evolve, we are exposing the above recommendation for your comments. These can be forwarded in hard or soft copies. Hard copies should be addressed to the Director, Consumer Protection Department, Central Bank of Nigeria, while soft copies captioned “Comments on the proposed recommendation for time bar on consumer complaints” should be emailed to monwedi@cbn.gov.ng and doakoma@cbn.gov.ng within two (2) weeks of the date of this letter.”
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ccess Bank Plc has rewarded the first set of winners in its mobile banking application promo, in a bid to promote the use of mobile banking applications by its customers. The 18 winners emerged most active users of the platform, form the six geo political zones of the country having performed different activities including money transfer, purchase of air ticket, payment of bills among other transaction between May and June 2014. Head of Mobile Money Services of the bank, Rita Eromosele who presented the winners with their prizes said the promo was born of a desire to ensure all customers sign up for the mobile banking application, which provide them convenient transactions, once they have Wifi enabled mobile phone. Her word, “We encourage our customers to download and activate Access Mobile Banking App to win phones and instant airtime.
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Corporate Finance
Diamond Bank to raise N50.4bn rights issue
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iamond Bank Plc has concluded plans to raise N50.4 billion by way of rights issue to boost its working capital and operations. The Bank released details of its long awaited rights issue on the Nigerian Stock Exchange and subsequently its website. The bank is looking to issue 8,685,145,863 ordinary shares of 50 kobo each at NGN5.80/share. Qualification date for the rights issue was 13 June. In total, the bank is looking to raise N50.4billion to improve its capital adequacy ratio and support business growth. In its analysis of the offer, Renaissance Capital stated: Factoring in the rights issue we cut our Target Price, TP 9 per cent to N8.24. We view this as a step in the right direction by Diamond, the fastest-growing Nigerian bank over the past three years, and recommend qualifying investors should take up their rights.” On deal dynamics, Renaissance Capital add “Diamond Bank is in effect looking to issue 60 per cent of current shares (50% if convertibles are included).
Customer service cannot be faked CUSPA
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ustomer Service Practitioners Association,CUSPA, an umbrella body of customer service providers in Nigeria has said that there is no hiding place for any service provider faking customer service. The association stated that customers' experience is the blueprint to any organisational culture that makes it customer friendly or not. This was the opinion of stakeholders at a recent forum on Customer Service Experience across industries held in Lagos. Mr. Nduka Mba-Uzuokwu, Head, Customer Service Management, Enterprise Bank representing the Customer Experience function during the debate stated that not all organizations’ truly understand Customer Service. Most businesses mimic customer service and customer satisfaction, to them Customer Service is just one of those things and not a culture and this reflects in the way they manage the customers and the customer’s complaints. He pointed out that most organizations are driven by profit making and not by creating positive Customer Experiences.
Keyst one Bank tto o div est subsidiaries bef ore ystone divest before sale tto o core in or invvest estor BY PETER EGWUATU
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EYSTONE Bank Limited has concluded plans to divest its subsidiaries before the sale of the bank to core investor, even as it returns to profitability. The bank is divesting its subsidiaries in Uganda, Sierra Leone and Liberia because of the bad loans on their books Managing Director, Keystone Bank Limited, Mr. Philip Ikeazor, revealed this
to newsmen in Lagos, saying “ We don’t have N50 billion in the head office to maintain subsidiaries as required by the Central Bank of Nigeria, CBN. So we have to divest to maintain our core business which we have the capital requirement.” Ikeazor stated that Asset Management Corporation of Nigeria, AMCON plans to begin the sale of Keystone Bank before the end of the year after new owners take over Mainstreet Bank and
Enterprise Bank. Before the core investor comes in we would be divesting from insurance healthcare unit, and other non-core businesses. Continuing, the Keystone Bank boss said, “We are targeting an increase of about 15 per cent growth in loan book this year. We intend to achieve this by aggressive customer acquisition and loyalty programme, use of technology via Point of Sale, POS Terminal, Debit and Credit cards, internet banking etc. We already have
ANNIVERSARY - From left: Chairman, Board of Directors, Fidelity Bank Plc, Dr. Christopher Ezeh, former Governor of Anambra State, His Excellency, Mr. Peter Obi, former President, Nigeria Stock Exchange, Dr. Raymond Obieri and the MD/CEO, Fidelity Bank Plc. Nnamdi Okonkwo at an event to mark the 53 birthday anniversary of Obi in Lagos.
Briscoe shareholders okay N10bn fresh capital issue BY PETER EGWUATU
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HAREHOLDERS of R.T. Briscoe (Nigeria) Plc have authorised the board of the company to raise N10 billion fresh capital through debt instruments, preference shares, ordinary shares or a combination of these options by way of rights issue, private placement or offer for subscription. The shareholders endorsed a special resolution proposed by the board to raise the fresh capital at the 2014 yearly general meeting of the company held last week in Lagos. In a bid to accommodate the impending fresh capital, the shareholders also increased the authorised share capital of the company to N2 billion divided into four billion shares of 50 kobo each to
N3.250 billion divided into six billion, five hundred thousand shares of 50 kobo each. Addressing the shareholders at the meeting, the chairman of the company, Mr. Clement Olowokande said, “Rather than dwell on the handicaps that the company had to face in the current difficult business environment, your board has been strategising on how to optimize the use of available resources and opportunities for maximum returns. “In order to raise the much needed capital for business expansion and working capital, your board is exploring the possibilities of recapitalizing through debt instruments, additional equity or a combination of both,” adding that the board will on behalf of the shareholders, carefully select auspice time and modality for implementing these options.
He enjoined the shareholders to support the resolution empowering the board to implement the initiative which will be tabled before at the meeting. The chairman also observed that, “the automobile industry in Nigeria, particularly for motor dealers and distributors like us (R.T. Briscoe), is currently in a development phase that requires significant capital outlay for stock, after sales infrastructure and implementation of development phase for the future.” He said the competition in the market place has become more severe as all major brands in the world are now present in the country. On the future prospect of the company, the chairman the recent rebasing of Nigeria’s GDP confirmed enormous business opportunities in the
2000 customers, 229 locations and 384 POS. The core bank has returned to profitability, while we are planning to diversify from non banking core and African subsidiaries which is currently impacting negatively on the group performance.” While commenting on the financials, Ikeazor stated “ The bank’s gross earnings grew by 3 per cent from N40.2 billion in 2012 to N41.5 billion in 2013. A testimonial to the improved operational activities is the increase on risk assets by 28 per cent. The bank’s deposit liabilities increased by 13 per cent from N267 billion in December 2012 to N301billion in December 2013. This indicates an increased market share and improved customer service. Loans to deposit ratio is 22 per cent while industry average is 65 per cent. “ It will be recalled that the CBN fired the Chief Executives Officers ,CEOs of eight of the country’s lenders and bailed them out with 620 billion naira ($3.8 billion) after a debt crisis caused by loans to stock speculators and fuel importers threatened the industry in 2008 and 2009. The government set up Asset Management Corp. of Nigeria to take over Keystone Bank, Mainstreet Bank, and Enterprise Bank in August 2011 after regulators deemed them unable to meet requirements for banking.
country for a company like R.T. Briscoe. Olowokande observed that contrary to prior economic data before the rebasing, that the oil and gas sector represented 32 percent of the economy, under the new set of data, that sector only contributed 14 percent while much of the balance came from previously unreported, consumer-driven sectors. He also said that a report by the World Bank that the Nigerian had expanded by an average of six percent annually since 2006 and which according to IMF data is expected to achieve a rate of seven percent this year, gives much room for optimism and confidence in the business outlook, adding that this is further bolstered by reports that the population is growing by more than two percent per year, indicating a growing market for the company’s goods and services.
Vanguard, MONDAY, JULY 28, 2014 — 25
Corporate Finance
African portfolio investors driving shares of multinationals to undeserving high — Report By NKIRUKA NNOROM
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FRICAN portfolio investors' patronage of shares of multinational companies trading on African Exchanges has over time aided in driving their share prices to an undeserving high, said Mr. Jude Fejokwu, Principal analyst at Thaddeus African Research. In a research report titled, “The craze for multinationals by institutional investors in Africa: Lazy or Smart?”, Fejokwu noted that the price surge usually recorded on the shares of the multinational companies rarely reverse, even with their disappointing results in recent years. Regretting the high demand by portfolio managers for the shares of multinationals despite their poor performances in relation to their PE ratios, he stated that the local stocks get punished more when they disappoint and get rewarded miserly or not at all when they perform creditably. He argued that local stocks supported by retail investors offer more return than the multinationals, saying, “This is why in Nigeria the companies ranked by market capitalisation from 26 - 50 will generate better price performances on average than companies ranked one - 25 every year barring the negligible anomaly. Most of the multinationals in Nigeria are in the top 25.” He said, “Africa and Frontier funds have continually over the years invested their funds in multinational companies operating in Africa and not African companies operating in Africa in comparison. This phenomenon is even more strongly felt once you exclude the banking industry from the equation across the continent. “By continually purchasing the shares of multinationals over the years because they are familiar with the parent companies, Africa institutional investors have driven up the prices of these stocks to expensive levels. “Their repetitive and persistent actions over time have led to overly generous and sincerely undeserving stock price increases in these stocks across African stock markets; this further strengthens their desire to continue investing in more multinational companies.” Accessing the performance of some multinational companies listed on the Nigerian Stock Exchange, NSE, and Ghana Stock Exchange, GSE, based on their P/E multiple, year-to-
date price performance and year-on-year net income changes for each company’s most recent earnings release as at July 21st, 2014, he stated that Unilever Nigeria and Unilever Ghana, which have PE ratio of 39.5x and 78.2x, are both doing poorly presently. “Despite this, their price performances are much better than their net income performances. Unilever Ghana has even performed better than the Ghanaian stock market index whose performance is in the red in double digits and has a P/E of 78X and a net income decline of 211 percent.
Its stock price has only declined 2.8 percent as at July 21st, 2014. Unilever Nigeria has declined only seven percent despite its net income declining 47 percent at the half-year mark.” “In reality, our analyses reveal that Unilever Nigeria should be trading below N33.22 presently for its fair value and at N33.22 during Q1 2014 based on its actual 2013 audited performance,” he stressed. Continuing, he said, “Flour Mills is not a multinational as we know it and in the context of the others we assessed but, it is majority owned by a Greek
company. Despite this, it still reflects the behaviour of the other multinationals. Net income has declined by 32 percent and its price performance has only declined by 10.5 percent.” On the contrary, he said that CCNN’s net income rose 87 percent during Q1 2014 (32 percent tax rate) and its stock price has only risen 2.5 percent; Lafarge WAPCO’s net income rose 34 percent (five percent tax rate) and its stock price was still able to rise 3.5 percent. Lafarge WAPCO has still done better than CCNN based on year-to-date price performance despite, CCNN having better net income growth and a lower P/E.
LAUNCH: From left: Kola Oyeyemi, General Manager, Consumer Marketing, MTN Nigerian Limited, Ernest Ndukwe, Executive Chairman of Salt and Einstein MTS and Kehinde Oyesku, Head, Business Development and Sales, Avon HMO, during the official launch of Nigerian Mobile Health Insurance Scheme in Lagos.
SEC issues new rules on complaints management By NKIRUKA NNOROM
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HE Securities and Exchange Commission, SEC, has issued new rules that will govern complaint management in the Nigerian capital market, mandating all the SEC recognised capital market trade groups and Capital Market Operators (CMOs) including listed public companies to establish a clearly defined complaints management policy to handle and resolve complaints from their clients. According to the SEC in the rules published weekend, it stated that complaints against unlisted, delisted, wound up, liquidated or ailing companies are not covered by the new rules. The Commission further
stated that complaints that are incomplete or not specific, allegations without supporting documents, disputes arising from private agreement with companies or intermediaries, non-listing of private offers of securities by private companies, as well as complaints seeking explanation for non-trading of shares or illiquidity of shares should not be considered as complaints for deliberation by ‘Competent Authorities’ within the capital market. Under the proposed complaint management framework, complaints against Competent Authorities, operators by SROs/Regulator and trade manipulation, accounting frauds, Ponzi scheme should be lodged at first instance with the
Commission. On receipt of complaint from a client, “CMOs and public companies shall have two working days to acknowledge receipt of complaints received by email. Where complaints are received by post, the CMO and public companies shall respond in writing within five working days of the receipt of the complaint. Copies of the complaint and the acknowledgement letter shall be forwarded to the relevant Competent Authority. “All complaints shall be resolved by the capital market operators within 10 working days from the date the complaint was received. The Competent Authority shall be notified of the resolution of the complaint within two working days,” the Commission said.
Allegations of GSK corruption spread to Syria
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laxoSmithKline (GSK.L) faces new allegations of corruption, this time in Syria, where the drugmaker and its distributor have been accused of paying bribes to secure business, according to a whistleblower ’s email reviewed by Reuters. Britain’s biggest drugmaker said on Thursday it was investigating the latest claims dating back to 2010, which were laid out in the email received by the company on July 18. The allegations relate to its former consumer healthcare operations in Syria, which were closed down in 2012 due to the worsening civil war in the country. “We have zero tolerance for any kind of unethical behaviour. We will thoroughly investigate all the claims made in this email,” GSK said in a statement. GSK has been rocked by corruption allegations since last July, when Chinese authorities accused it of funneling up to three billion yuan ($480 million) to doctors and officials to encourage them to use its medicines.
Unilever Nigeria rewards promo winners
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s a way of expressing gratitude to consumers who are loyal to it, Unilever Nigeria Plc has redeemed its promise to winners in the just concluded ‘Naija Shopper Reward’ activity in collaboration with Shoprite. At the prize draws and presentation ceremony held at Unilever’s Ikeja Office, Manoj Dadcani, an Indian national based in Lagos, emerged from the South draws (Shoprite Lagos, Ibadan and Enugu Stores) as the winner of a brand new Mitsubishi car. Also, another shopper in Abuja, David Matthew Ochola, a security operative in Abuja emerged from the North draws to win a car too. Kalpesh Parmar, Customer Marketing Director, said the programme was a way of rewarding loyal customers. “The shopper reward activity is to celebrate ‘Naija Shoppers’ reward and excite our shoppers and deliver great value for money,” he said.
26 —Vanguard, MONDAY, JULY 28, 2014
Vanguard, MONDAY, JULY 28, 2014 — 27
E-Commerce
Swatch Group denies working with Apple on smartwatch
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wiss watchmaker Swatch Group has denied a media report saying it was working with technology company Apple on a smartwatch, a wearable device with interactive functions. Technology website VentureBeat said in a report on Wednesday that Apple was working with “at least one partner, Swatch” on a smartwatch project, citing an unnamed source. A spokeswoman for Swatch Group said on Thursday the report was unfounded. She said the only business relationship Swatch Group had with mobile phone makers was as a supplier of integrated circuits and other electronic components. Signs are mounting that Apple, which landed huge successes with its iPhone mobile phones and iPad tablets, is preparing the launch of an iWatch, following the commercialisation of smartwatches by rivals such as Samsung and LG Electronics. Swatch Group shares rose 2 percent to 510 Swiss francs last week outperforming a 0.2 percent higher European sector index.
Microsoft’s quarterly profit hurt by Nokia acquisition
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icrosoft Corporation reported profit that fell short of estimates in the fiscal fourth quarter, weighed down by the acquisition of Nokia Oyj’s handset unit, where about 12,500 jobs will be cut. Net income in the period that ended June 30 was $4.61 billion, or 55 cents a share, including adjustments related to Nokia, the company said in a statement today. Analysts were predicting, on average, profit of 60 cents a share, according to estimates compiled by Bloomberg. Excluding the Nokia-related items and taxes, profit would have been 66 cents a share, beating the average prediction for 64 cents. Chief Executive Officer Satya Nadella, who took over in February, is struggling to cut costs at Nokia after Microsoft completed its 5.44 billion euro ($7.33 billion) acquisition of the mobile-phone operations in April.
Huawei invests N80m to empower African youth in ICT Stories by JONAH NWOKPOKU
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lobal information and communications technology, ICT, solutions provider, Huawei has announced it would invest N80 million to empower young talents in the ICT industry.Huawei made the announcement at an event held in Abuja recently to mark this year ’s Nelson Mandela International Day. Out of this amount, N4 million will be provided to the Nelson
Mandela Institute, NMI which will invest it in its affiliate, the African University of Science and Technology, AUST in Abuja as a scholarship for students who have been admitted.The remaining N76 million will be provided in form of Computer Training equipment. NMI will then put it at the disposal of AUST on the basis of identified needs of the institution.Huawei will also provide access to its Abuja training center to AUST for the computer science students on the basis of proposals to be developed
jointly by AUST computer science faculty and Huawei engineers. AUST will invite Huawei engineers and researchers to organize workshops or specific classes to the students.Speaking on the move, Huawei’s Deputy Managing Director, Abuja office, Mr. Osita Iweze said, “Bridging digital divide is Huawei’s global strategy. Huawei has set up an ICT scholarship in University of Lagos since 2012. A 1,000 girls training program with Federal Ministry of Communication
RIGHTS ISSUE: From left: Group Managing Director/Chief Executive Officer, Dr. Alex Otti; Obi of Onitsha and Chairman, Diamond Bank PLC, HRM Nnaemeka Achebe and Company Secretary/Legal Adviser, Ms Nkechi Nwosu at the formal signing ceremony for Diamond Bank’s N8.68 billion rights issue at the Bank’s headoffice in Lagos
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TAKEHOLDERS in the technology sector have called for a stronger collaboration between technological solution providers, the Organised Private Sector, OPS and Independent National Electoral Commission, INEC to improve the electoral process in Nigeria. The stakeholders said INEC, Orgnaised Private Sectors and technology solution providers need to collaborate to ensure effective communication between the body and the electorate in order to make for a positive and significant impact in the conduct of the elections. The stakeholders who included the representatives of INEC, civil society organisations, youths, political parties, traditional and new media and ICT experts made the call during a one-day stakeholder workshop organised by a tech innovation centre, Co-creation Hub, in conjunction with National Democratic Institute in Lagos, to explore technology solutions that will improve electoral processes in Nigeria, with a particular focus on the 2015 general elections. At the forum, the
Technology was launched in 2013 and until now about 500 girls have finished their training courses. In 2014 Huawei has kept expanding the investment on young ICT talents education and we are glad to work with AUST to ensure the graduates could be ICT industry leader in Nigeria and other Sub-Sahara African countries.” On his part, NMI’s Chief Executive Officer, Mr. Bonaventure Mbida-Essama, said, “The African University of Science and Technology is the first of the Nelson Mandela Institutions (NMIs). It was established as a centre of excellence in science and technology with a focus on African development. Since its inception, the AUST has more than 300 of PhD and M. Sc students from 19 African countries in five disciplines (computer science and engineering, pure and applied mathematics, theoretical physics, petroleum engineering, and materials science and engineering). “NMI is willing to collaborate with Huawei, which is the world leading ICT solutions provider, not just with its affiliate in Nigeria, AUST, but also with the other institutions affiliated to NMI in Africa.
Tech stakeholders advocate increased collaboration to improve electoral process stakeholders reviewed the Nigerian electoral process with a view to identifying concrete technology solutions that can be deployed to identify bottlenecks. During the boot camp session, the participants were divided into different groups and each assigned to identify problems
with the electoral processes and develop solutions to the problem. At the end, increased awareness of existing technological solutions being deployed for elections in Nigeria to drive synergy in the deployment was recommended.
At the end of the event, it is expected that some new technology solutions that clearly addressed identified bottlenecks in the electoral process will be built by ICT experts, with civil society organisations stepping forward to champion the deployment of the solutions.
Lamudi’s global property portal now available on iOS I N a bid to capture the rapidly expanding Smartphone market in Nigeria, online real estate firm, Lamudi.com.ng has launched an iOS app for iPhones. The launch comes after the successful rollout of the company’s Android app last month. The Lamudi’s Android app is currently accessible on iOS devices in 16 countries – among them in Africa, Latin America and Asia. Speaking at the launch, CEO of Lamudi West and Central Africa, Allie Morse, said she was excited by the prospects of the iOS app, as it would enable property seekers to surf from their mobile devices of over 1000 properties listed by Lamudi. On his part, Managing Director of Lamudi Nigeria, Sacha Poignonnec said, “Lamudi is
all about constant evolution. Some months back we launched the YouTube channel and Android app and today we are launching the iOS app making certain that we get Lamudi Nigeria in the hands of more than 30 million estimated Smartphone users in Nigeria.” A fundamental feature of the app is its customized search function that permits users to filter results simply by country. Additionally, the app offers match alerts, with users being notified as soon as a property that matches their needs hits the market. House-hunters can also bookmark their preferred properties to access on any device at any time. The Lamudi iOS app is also available in Kenya, Ghana, Morocco, Uganda, Tanzania, Nigeria, and Ivory Coast. Others are Tunisia, Colombia, Mexico, Zimbabwe, the Philippines, Pakistan, Bangladesh, Peru and Indonesia.
28 —Vanguard, MONDAY, JULY 28, 2014
Homes & Housing Finance
Shelter Afrique, REDAN seal N32bn housing deal Stories by YINKA KOLAWOLE & FAVOUR NNABUGWU
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EAL Estate D e v e l o p e r s Association of Nigeria, REDAN, has signed a $200 million (about N32 billion) pact with Pan African housing finance institution, Shelter Afrique, for development of housing units in Nigeria within the next five years. Director Business Development, Shelter Afrique, Mr. Mouhamadou Gueye, disclosed this when he visited REDAN office in Abuja, following the signing of a Memorandum of
Understanding, MoU, between the two organisations last month in Nairobi, Kenya. He commended the existing relationship between the company and the association while pleading for a stronger synergy in order to help boost housing delivery in Nigeria. “We have some strong relationship with REDAN which has been formalised in the MoU signed in Nairobi last month. We will continue to implement the MoU and strengthen our relationship. Shelter Afrique is spread across 44 countries with a commitment to provide affordable mass housing to middle and low income people. We are committing $200 million into housing units in
Nigeria within the next five years. “Also our mission is to actively support Nigeria’s government’s programme of building 10,000 housing units and we cannot do that without the support of REDAN. Shelter Afrique believes that Nigeria is one of the strong markets to help the government in the implementation of the 10,000 housing units. We believe that in this project REDAN is one of our main partner that will help in the implementation of this project in Nigeria and that was why they were in Nairobi last month to sign the MoU. We are focusing on affordable and mass housing development. Those are our two key aspects of our strategy
INTERACTION - From left: Ebi Bozimo, Project Manager, RTDL; Ikechi Odigbo, MD/CEO, DDB Lagos; Chima Ucheya, MD/CEO, Rainbow Town Development Limited (RTDL); Bode Adedeji, Principal Partner, Bode Adedeji & Partners; and Cliff Oparaodu, Company Secretary, RTDL, at a Media Interaction hosted by RTDL in Port Harcourt
in Nigeria,” he stated. REDAN President, Chief Emmanuel Afolayan, in his remarks, said the association will render the necessary support to the finance institution in housing development in the country. He said it is required for any institution or individual willing to participate actively in housing development in the country to be a member of the association to enjoy all the benefits, support and cooperation that will speed up collective growth “Except you are a member of REDAN, you cannot take Estate Development Loan, EDL, from Federal Mortgage Bank of Nigeria, FMBN. We are working with EFCC and the Financial Reporting Standard to make sure that our members abide and comply with rules and regulations of real estate business in Nigeria except you are a member of REDAN. We don’t dabble into individual business operations, but we guide them in such a way that they will not abuse the system and as a member of the association, it is mandatory and obligatory for us to provide our members with all the assistance required of us. We believe that the survival of individual members of the association is paramount and the development of the sector is based on the financial institutions that are providing financial leverage for members in the sector hence it is a collective growth,” he stated. Afolayan disclosed that REDAN groups its members according to their financial muscle and capability. “The categorisation is basically an appraisal of classifying developers in line with their financial capacity and capability. We have the category A which are the lower cadre class of developers who are just coming on board hence the need to encourage them.
N82bn Rainbow Town: Developer sets 2015 completion date R
AINBOW Town Development Limited, RTDL, developers of the new Rainbow Town in Port Harcourt, the Rivers State capital, has set the third quarter of 2015 as the completion time for the first phase of the project. Managing Director/Chief Executive Officer (CEO) of the company, Chima Ucheya, disclosed this during the formal unveiling of the project. In a statement, Ucheya noted that the construction of the first phase commenced in 2009, with an estimated budget of N82 billion. He said the project is already approaching substantial completion with
construction progress at about 60 per cent in the three distinct residential building types, adding that properties around the area are already witnessing rebound and upsurge in value. Ucheya explained that the project comprises of 1,181 residential units located in terraces, detached houses and 25 high-rise condominium, with recreational, business, educational, security, healthcare and retail facilities. He said prospective buyers can now approach a consortium of real estate agents and RTDL marketing groups, adding that a mortgage scheme has also been dedicated for access by investors and prospective
purchasers. He pointed out that the project was anchored on public private partnership aimed at achieving substainable urban renewal, housing and economic development, noting that First Bank Plc, which is a partner in the project, has provided mortgage facilities for access by investors and purchasers. The developer asserted that the Rainbow Town is creatively positioned to offer a total wellbeing experience compromising of a medical clinic, primary school, outdoor recreational facilities, clubhouse, security post, fire station and shopping arcade.
In addition to these, the Rainbow estate is going to be serviced from Eco-centre, a supply hub of power, water and sewer plant, broadband wireless internet connectivity, phone and data services. According to him, the estate’s master plan reflects some of the livework -play ideals of new urbanism communities worldwide. He noted that the estate has been designed to have lush green vegetation with trees, lawns and shrubbery that addresses the global warming challenges and incidence of high greenhouse gas emissions.
Mortgage bank creates account for Diaspora Nigerians
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ESORT Savings and Loans (RSL) Plc has unveiled a mortgage account for Nigerians in Diaspora. Managing Director, RSL, Mr. Abimbola Olayinka, said in a statement that the Resort Mortgage Account for Nigerians in the Diaspora would cater for the needs of citizens who were economically empowered but had no means of accessing mortgages in the country as the information about available mortgage products was not readily available to those abroad. “This product has unique features and affordable interest rates based on the affordability test conducted on Nigerians in the United Kingdom,” he added. Olayinka said the target was the provision of mortgages for those in the Diaspora to acquire homes either for their parents and loved ones or invest in them for capital appreciation. “The bank is set to make an introductory product presentation during the Nigeria Trade and Investment Summit/Exhibition, which is holding in Reading, UK.
US mortgage rates hold steady
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verage U.S. long-term mortgage rates were stable to slightly higher this week, remaining near their lows for the year. Mortgage company Freddie Mac said that the nationwide average for a 30-year loan was 4.13 percent, unchanged from last week. The average for the 15year mortgage, a popular choice for people who are refinancing, edged up to 3.26 percent from 3.23 percent last week. Mortgage rates are below the levels of a year ago, having fallen in recent weeks after climbing last summer when the Federal Reserve began talking about reducing the monthly bond purchases it was making to keep long-term rates low. The government reported Thursday that sales of new homes in the U.S. plunged by 8.1 percent in June, a sign that real estate continues to be a weak spot in the economy. Home sales had been improving through mid-2013, only to stumble over the past 12 months due to a mix of rising prices, higher mortgage rates and meager wage growth.
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Company Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc 1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc Livestock/Animal Specialities Livestock Feeds Plc CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc Chellarams Plc John Holt Plc SCOA Nigeria Plc Transnational Corporation UACN Plc CONSTRUCTION/REAL ESTATE Building Construction/Structure ARBICO Plc Constain (WA) Plc CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc Real Estate Development UACN Property Development Real Estate Investment Trusts Skye Shelter Funds Union Homes Real Estate Investment CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc
Opening Price (N) 0.50
Daily Stock Market Report Closing Price (N) 0.50
Opening Price N
Quantity Traded 2,500
Year High 0.50
Year Low 0.50
E.P.S.
P.E. Ratio
HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers Union Diagnostics & Clinicals Services
0.09
0.50 33.01 37.50
0.50 33.01 38.01
200 130,978 275,470
0.50 24.58 8.30
0.50 14.53 6.40
0.10 7.33 2.75
50.00 2.77 4.37
3.10
3.10
920,371
0.66
0.48
0.11
15.00
1.33 3.95 1.20 4.91 5.18 62.50
1.34 3.95 1.20 4.91 5.51 62.40
193,222 876 43,029 512 48,955,544 277,897
2.54 7.60 8.82 8.28 1.82 42.50
1.45 6.43 5.89 5.52 0.50 28.70
0.16 0.31 0.00 0.35 0.24 6.89
5.18 20.74 0.00 15.77 3.64 4.14
5.30 1.22
65.00 8.46
5.30 1.16
375 862,780
4 2,720,390.38
Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital 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
63.00 8.46
125,866 200
62.26 8.28
32.96 3.01
4.11 4.73
10.11 2.26
17.90
17.46
549,392
20.15
11.59
1.69
7.33
95.00 47.59
95.00 47.59
93 70
100.00 -
97.00 -
11.75 -
8.51 -
9.31 3.59
3.25 3.25
0.00 0.01
1.43 0.00
50,000
0.50
0.50
4,000
1.47
0.50
0.00
0.00
33.00 9.00 40.10 14.17 240.00 0.50 1.20 119.00 5.40 1.40 10.00
30.27 8.60 41.00 14.17 232.00 0.50 1.20 118.95 5.22 1.47 11.00
832,833 119,231 136,106 2,961,810 87,094,842 5,000 24,369 706,037 428,140 50,000 123,564
30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40
12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93
2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00
7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00
1.69 2.70
2,811 2,717,101
6.91 3.60
7.46
500
8.69
ICT Telecommunications Starcomms Plc 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
62,495
51.49
,39.00
2.69
13.92
Tools and Machinery Nigerian Ropes Plc
4,838,723 2,498,279 217,815 1,607,786 2,038,397 50
19.90 16.20 95.00 6.60 6.70 0.88
4.31 4.02 57.00 2.31 3.80 0.50
0.00 0.91 4.09 0.39 1.01 1.13
16.91 14.38 16.89 16.92 5.75 8.83
NATURAL RESOURCES Chemicals BOC Gases Plc
Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc
74.25 1,120.00
74.25 1,120.00
61,473 75,170
37.27 840.10
8.33 400.00
20,356,042 20,382,667 1,692,057 14,784,464 865,336 155,222,147 5,437,327 15,697,526 9,599,673 758,934 814,009 5,942,922 11,081,618
12.39 7.51 14.04 3.47 5.70 26.09 6.50 3.05 7.69 10.60 1.22 1.75 21.49
4.70 1.92 9.90 1.13 2.90 13.02 2.65 0.80 1.64 2.34 0.50 0.52 11.96
1.42 0.90 2.81 0.43 0.00 2.10 0.71 0.54 0.67 0.00 0.00 1.34 2.09
8.73 8.34 5.00 7.93 0.00 12.39 9.15 5.43 11.19 0.00 0.00 0.43 10.24
0.50 0.82 1.12 0.50 0.50 2.00 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 2.56 0.54 0.82 0.50 0.50 0.53 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.89
0.50 0.81 1.13 0.50 0.50 2.06 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 2.54 0.54 0.82 0.50 0.52 0.52 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.90
10 5,043,697 4,907,667 129,035 3,000 9,054,578 40,733 93,000 1,000,000 500 807,433 1,670,890 288,000 500 24,992 1,558,306 1,558,306 3,853,104 1,174,650 3,488,000 221,110 55,000 1,000 1,000 62,337 25,000 100 55,000 13,532,795
0.50 1.11 1.03 0.54 0.50 2.44 0.50 0.68 0.50 0.50 0.50 0.50 0.50 0.60 0.50 2.59 0.54 0.81 0.61 0.50 1.01 0.50 0.56 0.50 0.50 0.50 0.50 0.50 1.08
0.50 0.50 0.58 0.50 0.50 1.08 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.06 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50
0.00 0.50 0.14 0.02 0.50 0.28 0.01 0.00 0.03 0.01 0.00 0.02 0.00 0.00 0.03 0.16 0.00 0.37 0.02 0.03 0.06 0.04 0.09 0.00 0.00 0.00 0.02 0.00 0.07
0.00 22.20 6.79 27.30 10.00 7.43 50.00 0.00 16.67 50.00 0.00 25.00 0.00 0.00 16.67 16.19 0.00 2.19 26.00 16.67 15.50 12.50 5.65 0.00 0.00 0.00 25.00 0.00 15.43
5.96 1.10
5.96 1.00
200 201,500
6.00 1.18
0.00 0.92
0.04 0.92
150.00 10.56
1.30 0.50 0.50 0.50
1.35 0.50 0.50 0.50
80 500 220,000 16,218
1.57 0.50 0.50 0.50
1.37 0.50 0.50 0.50
0.19 0.02 0.00 0.00
47.6 7 25.00 0.00 0.00
Insurance Carriers, Brokers and Sector African Alliance Insurance AIICO Insurance Plc Continental Reinsurance Plc Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guinea Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mansard Insurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Unity Kapital Plc Universal Insurance Plc Wapic Insurance Plc Microfinance Banks Fortis Micro-Finance Bank Plc NPF Micro-Finance Bank Plc Mortgage Carrier, Broker and Sector Abbey Building SOC Aso Savings and Loans Plc Resort Savings & Loans Plc Union Homes Savings Plc Other Financial Institutions Africa Prudential Plc Crusader (Nigeria) Plc Deap Capital Management & Trust Plc FBN Holdings Plc Nigeria Energy Sector Fund Royal Exchange Assurance
3.41 0.50 0.91 16.00 552.20 0.53
3.26 0.50 0.91 15.22 552.20 0.52
2,009,573 22,000 20 7,386,805 9,930 600,000
0.75 0.50 2.02 20.00 250 0.78
0.00 0.50 2.02 8.57 552.20 0.50
0.19 0.00 0.00 2.03 12.68 0.13
9.16 0.00 0.00 9.85 43.55 6.00
9.05 14.13 0.00 0.00
3,000
7.61 9.20 73.98 4.25 10.59 0.50
9.92 6.70 16.90 1.98 4.75 31.00 3.20 2.26 7.90 8.91 0.50 1.06 25.23
0.19 0.44 2.62 0.20 0.09 0.00 0.00
0.00 88.50 0.00 3.07
1,850 25,449
100.03
10.00 6.72 17.23 2.04 4.75 30.10 3.20 2.32 7.85 9.01 0.50 1.11 24.95
5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28
0.50
8.01 9.08 77.87 4.49 10.59 0.50
FINANCIAL SERVICES Banking Access Bank Plc Diamond Bank Nigeria Plc Ecobank Transnational Incorporated Fidelity Bank Plc First City Monument Bank Plc Guaranty Trust Bank Plc Skye Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc
5.31 1.45 3.20 23.11 5.61 1.96 12.91 200
15.20 1.97
100.03
4.39 32.91
162 509,212 690,907 99,127 405,241 269,437 17,256 51,000
0.50
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
0.82 1.44
3.72 2.06 3.18 68.99 1.70 1.21 7.36 1.72
15.20 1.88
Beverages-Non-Alcoholic 7-UP Bottling Company Plc
21.02 27.60
0.00
0.00
12.50
0.00 19.98 16.29 22.22 0.00
41.02 47.39
0.00
0.50
10.00
0.00 9.95 0.41 5.08 0.00
382,682 304,764
9.52
0.50
0.00
2.23 186.00 5.23 72.50 0.93
39.00 49.00
10.54
40,000
0.10
4.63 255.00 7.10 100.00 1.01
39.00 53.00
100
0.50
0.50
100,599 407,194 313,258 1,911,728 500
Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc
1.91
0.50
9.17 197.15 28.05 178.00 0.77
2.44 7.07 0.00
9.71 18.03 6.71
0.50
9.67 197.10 28.05 178.20 0.77
13.89 0.61 0.00
10.56 0.87 0.21
0.52
0.00
33.96 2.91 2.88
103.50 10.64 0.03
200
0.00
36.19 5.54 2.88
103.50 15.69 1.41
708,905
0.50
100, 412,718 100
15,358 11,329,056 5,330,917
0.54
0.50
32.27 4.15 1.44
3.72 2.31 3.01 69.99 1.72 1.24 7.36 1.50
P.E Ratio
0.50
840,712
32.27 4.15 1.44
0.50
E.P.S
0.57
0.50
Household Durables Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc
1.91
Year Low
0.50
0.50
27.61 32.84
98.33 29.09 2.17
Year High
Computers and Peripherals Omatek Ventures Plc
Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc
1.35 25.43
103.50 27.26 2.24
Quantity Traded
ICT Computer Based Systems Courteville Investment Plc
IT Services NCR (Nig) Plc Tripple Gee and Company Plc Processing Systems Chams Plc
20
Closing Price N
as at Friday, July 18, 2014
Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company
1.69 2.74 7.46
5.94 1.47 8.26
0.5 0.25 0.00
0.00
5.76
5.76
10,000
9.20
6.80
10.50
10.50
10
12.39
10.70
Non-Metalic Mineral Mining Multiverse Plc
0.50
0.50
200
0.50
0.50
0.01
0.00
Paper/Forest Products Thomas Wyatt Nig. Plc
0.79
0.79
4,050
1.38
1.38
0.00
0.00
Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc
1.82 0.50
1.90 0.50
446,655 10,000
2.50 2.58
1.62 2.58
0.11 0.00
13.15 0.00
1.44
1.44
2,000
1.51
1.33
Metals Aluminium Extrusion Ind Plc
Mortgage Carriers, Brokers and Se Abbey Building Society Plc INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc
0.78
39.60 9.16
0.13
7.37 85.77
0.03
28.80
3.98 16.30
3.98 16.30
6,888 1,361
3.98 15.58
3.98 12.71
0.00 3.90
0.00 3.26
Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc
4.30 1.05 2.92 0.63
4.30 1.05 2.78 0.66
29,198 200 84,311 2,749,340
4.30 1.86 2.92 0.63
3.60 1.05 2.92 0.63
1.22 0.30 0.07 0.00
3.52 6.18 41.71 0.00
OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service
0.58
0.51
9,409,406
0.97
0.87
0.19
6.06
Intergrated Oil and Gas Services Oando Plc
25.65
25.47
17,150,043
78.97
27.99
1.73
4.17
20.50 0.50 65.60 238.00 154.50 62.43 180.20
20.50 0.50 62.32 216.00 161.41 61.99 175.45
82,191 10,000 173,105 95,646 84,543 12,880 93,011
37.10 0.70 5.59
0.50 0.50 3.89
4.93 0.00 0.61
7.40 0.00 6.99
163.50 2,100 240.00
141.00 63.86 195.50
6.11 2.98 14.63
11.11 19.23 17.07
Hospitality Tantalisers Plc
0.50
0.50
100
500
SERVICES Afromedia Plc Automobile/Auto Part Retailers RT Briscoe Plc
0.50
0.50
30
0.72
0.51
0.00
1.00
228,400
3.65
1.30
0.21
2.65 0.25
0.60 11.12
Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc
Courier/Freight/Delivery Red Star Express Plc Trans-National Employment Solutions C & I LEASING PLC Hotels/Lodging Capital Hotel Ikeja Hotel Plc
1.05 4.67 0.50 4.50 0.75
5.00 2.06
969,710 1.97
3.67 4,000
0.52
6,479,926
1.64
4.50 0.80
100 1,701,300
400 2.07
Media/Entertainment Daar Communications Plc
0.50
0.50
50,000
0.50
Printing & Publishing. Academy Press Plc Learn Africa Plc Studio Press Nig. Plc University Press
1.71 1.65 2.40 4.40
1.71 1.63 2.40 4.32
500 326,799 20 590,142
3.68 0.00 6.82
0.89
Road Transportation Associated Bus Company Plc
0.01
0.90 3.00 1.33
0.04
12.75 8.19 4.91 11.25
0.34 0.92
34.09 2.12
0.48
0.00
0.00
3.17 0.30 0.00 3.60
0.25
12.19
0.54
27.69
0.00
0.00
0.87
1,255,000
0.80
Speciality Interlinked Technologies Plc
4.90
4.90
6
5.15
4.90
0.50
0.00
0.00
Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company
2.23 4.87
2.19 4.90
430,566 947,981
2.78 11.75
1.57 6.50
0.60 12.53
4.22 8.75
38 — Vanguard, MONDAY, JULY 28, 2014
Capital Market
Vanguard, MONDAY, JULY 28, 2014 — 39
Micro-Finance
Group canvasses ministry for small business
...says BOI, NAFDAC, Police, biggest challenge
Stories by PROVIDENCE OBUH ssociation of Micro Entrepreneurs of Nigeria, AMEN, has called for establishment of Ministry of Small Businesses in the country, decrying unfair treatment meted against it by the Bank of Industry (BOI), National Agency for Food and Drug Administration and Control (NAFDAC) and Nigerian Police. The association has also threatened to withdraw from the market, products manufactured by its members. President, AMEN, Prince Saviour Iche, made the threat during a media briefing in Lagos. Some of the treatments highlighted by Iche includes; strict requirements from BOI, high cost of registration from NAFDAC, arrest and extortion of money from members by the police. He said, “We are determined to industrialise Nigeria, but we need somebody with business background in the Ministry of Industry, we need Ministry of Small Business that will understand what we are facing. “For the police, Nigerian producers cannot carry ordinary plastic along the street without the police harassing them, asking them to go and bring NAFDAC registration number. But our members in Benin Republic will come to Nigeria to source for their materials
A
and when the police arrest them they will show them their resident permit, showing they don’t stay in Nigeria and they will leave them, if the police arrest a Nigerian with the same product, they will take him to their station. Sometimes they demand for N40 thousand where as the product they are carrying is not up to that amount, as a result, so many have left the business. “In Lagos alone we have about 300 members, we have spread across other states, if they refuse to listen to us and by October nothing is done, we will not hesitate to withdraw our members product from the market and we will be forced to respond to foreign invitation. “NAFDAC is our friend but they are not friendly to us because what multinationals pay for registration is what we pay. The condition of renting four bedrooms flat before product registration is not fair to us because some of us are leaving either in one room or two, we are micro producers not multinationals. “We are pleading with Agency to be micro entrepreneurs friendly, they should bring down the cost of registration so that we can produce. He noted that news making the rounds shows that BOI has expended billions on micro entrepreneurs
Foundation trains youths on skill acquisition T
he Ovie Brume Foundation, a N o n - G o v e r n m e n t a l Organisation is set to train young Nigerians on skill acquisition with a view to engaging and improving continued learning during the summer holidays. In a statement, Executive Director of the Foundation, Mrs. Iwalola AkinJimoh, said that the initiative is part of efforts to help reduce the number of youth involved in social vices, and fight the detrimental effect of learning loss that might arise as a result of a long holiday and subsequent idleness. “The Ovie Brume Foundation is committed to ensuring that every young person is adequately empowered, exposed and has access to qualitative education to enable them take their rightful place in the society. “As part of the programme, children will have the opportunity to interact with other young people within a safe and controlled environment, for increased learning and networking. “The Youth Center ’s Summer Programme will provide a mix of opportunities from closed camps by Hope Youth Corp Camp and YMCA to open camp-based vocational training sessions and excursion all aimed at equipping the youth with practical skills that they can use to express themselves in creative and productive ways that will ultimately bring about transformative change in their communities,” she said. The summer program is created to keep the youth engaged during the
summer holidays and it is targeted at youths between the ages of 12 and 18, it will run between July 27 and August 31. It is designed to empower the youth to acquire vocational and creative skills for their future.
Capacity building: AMfB partners Frankfurt business school
A
s part of capacity building drive, Accion Microfinance Bank, AmfB has entered into partnership with Frankfurt School of Finance & Management (Bankakademie HfB) to train management team on business skills acquisition. The training is targeted at strengthening and retaining the middle management team and it is made possible through the Regional MSME Investment Fund for SubSaharan Africa (REGMIFA). The training facilitated by the Frankfurt includes a mini-MBA, business skills acquisition and management training, relevant soft skills such as leadership, management and supervisory skills as well as relevant technical skills that will enable a sustainable growth plan for the participants. The training presently ongoing, is scheduled to hold over a period of three months and participants will receive certificates on completion.
40 — Vanguard, MONDAY, JULY 28, 2014
Aviation
Passengers' demands determine our routes —Dana Air By LAWANI MIKAIRU
D
ana Air has revealed that its route plans are entirely a function of customers’ demand and convenience. The airline's Head of Commercial, Mr. Obialor Mbanuzuo, stated this in an interview with Aviation reporters on the recommencement of the Lagos—Uyo route in a bid to reinforced its domestic flight operations. This is an additional route to its existing route network from its hub at the Lagos Murtala Mohammed Airport Terminal 2 (MMA2). Announcing the introduction of the additional routes in Lagos, Mbanuzuo, said “Dana Air route plans are entirely a function of customers’ demand and the airline is consolidating its operations on the Lagos, Abuja and Port Harcourt axis following extensive market research that has shown strong customer demand for the additional Uyo route recommencement .” It will be recalled that Dana Air was plying the Uyo route before the unfortunate crash of one of its planes at IjuIshaga on the 3rd of June, 2012. What the airline is doing, according to Mbanuzuo, is to reopen the old routes the airline was flying before the crash . On the in flocks of new airlines into the market, and consequent crash of airfare, he said the new airlines have brought in healthy competition which is good for the industry as the already existing airlines are now forced to sit up He however said the entrance of these new airlines has not affected the passengers volume of Dana Air as the airline has its selling points like prompt departure and good customer relation. According to Mbanuzuo “ with superior performance, services and creativity, Dana Air is uncompromising in its commitment to excellence and safety as it is currently the only Nigerian carrier to have successfully undergone an operational audit conducted by the Nigeria Civil Aviation Authority Flight Safety Group in partnership with their foreign counterparts.”
New aviation minister: Stakeholders react By LAWANI MIKAIRU
P
resident Goodluck Jonathan on Wednesday swore in and deployed the former Corp Marshal of the Federal Road Safety Commission, Mr Osita Chidoka as the new Minister of Aviation. It will be recalled that the Aviation ministry has been without a substantive minister since February when the former minister, Princess Stella Oduah was removed. A supervising minister, Dr Samuel Ortom has been overseeing the ministry. The appointment of Chidoka has attracted reactions from aviation stakeholders. The Deputy General Secretary of the National Union of Air Transport Employee (NUATE), Mr Olayinka Abioye said the union welcomes the newly confirmed Minister for Aviation “ w i t h m i xed feelings”. Speaking in Lagos, Abioye said it was the prerogative of the President to choose whoever he wants as a minister. He, however, said that the Minister should continue with the transformation project being executed by the former minister. According to him: “ the new minister should complete the ongoing projects started by the former aviation minister. We hope funds will be made available by the
Federal Government for the speedy completion of these projects.” Abioye also said the sector would have preferred somebody from the aviation industry, adding however that he hoped the new minister would learn quickly from the sector. “An aviation professional would have quickly adjusted and get on with the work at hand. We hope the new minister will learn fast and get on with the challenges in the industry.” Reacting also, the former
Lagos Airport Commandant , Retired Group Captain John Ojikutu said the new minister should focus less on constructing or remodeling of airport terminal building which is for private investors. He said: “ first, he should focus less on constructing or remodeling of airport terminal building which is for private investors like Babalakin did at Murtala Muhammed Airport terminal 2. It is a waste of public funds.” “ He should focus on critical safety and security
infrastructures like airport perimeter and security fences; runway and approach lighting and navigational aids; aeronautical information services communication, fire and rescue equipment and fire personnel , ATC S personnel, NCAA inspectors etc. “ Ojikutu also said the minister should critically look into the exploitation of BASA by ministry officials to benefit foreign airlines and the recent abolishing of royalties and commercial agreement. “ To deprive the country of a revenue of over $200m from foreign airlines that are benefiting more than we do from BASA , are yet, giving them multiple landings thereby depriving our private airlines the benefit of domestic market.
UNVEILING - rom left: Aggreko’s Managing Director, Nigeria, Mr. Alaba Owoyemi ; Regional Managing Director, David Taylor-Smith and Wole Adeleke Non-Executive Chairman Aggreko Nigeria at the unveiling of Agrreko in Lagos.
Peacock wins corporate travels award By LAWANI MIKAIRU
P
eacock Travels and Tours, a subsidiary of Peacock Group of Companies, has won the United Kingdombased Acquisition Magazine’s 2014 edition of ‘Sustained Excellence in Corporate Travel’ award. According to a statement by the company ’s office in London, the award presentation was done by the Mayor of London Borough of Richmond, Cllr. Jane Boulton. The Mayor, the firm said, presented the award during the opening of Peacock’s new office complex in King Street, Twickenham in London. Other senior travel executives and players in the travel industry were in attendance at the special event. While presenting the award, the statement quoted Boulton as remarking “This award is a result of the hard work of Peacock Travel staff ”. She expressed happiness in having such a forwardlooking establishment in her Borough and pledged her
support at all times. Commenting on the ward, the Executive Chairman of Peacock Group of Companies, Aare Segun Phillips, said he would like “ to dedicate the award to the glory of God and to the entire customers of the company worldwide”. He said the gesture was a
testimony of the world- class service that had been the trade mark of Peacock Travels, both within and outside the shores of Nigeria. Phillips said, “For a subsidiary of the company to win such a reputable award in the United Kingdom, it means the core value of the
company in rendering qualitative and unparallel service will continued to be maintained to the joyous satisfaction of our local and international customers’ Peacock Travel’s offices were formerly in North East London, before it moved to the High Street.
Clearing agents to shut down airports across the country By DANIEL ETEGHE
M
embers of the Association of Nigeria Licensed Customs Agents, ANLCA, on Thursday, declared that the association would shut down business activities across all the international airports in the country following the continuous collection of documentation charges from it’s members. According to ANCLA, the decision was borne out of the fact that some of the foreign airlines were still collecting documentation charges noting that the association will soon begin another round of protest if the situation was not resolved. The group noted that despite the agreement reached last week between ANLCA, the Association of Foreign Airlines Representatives of Nigeria, AFARN and other
stakeholders in the sector to stop the collection of the charges, some foreign airlines were still collecting the same documentation charges.Vanguard gathered that while other major scheduled international airlines operating into the country have suspended the collection of the charges, Ethiopia Airlines still insists on the collection of N7 per kilogramme as documentation fees, a situation, which did not go down well with ANLCA members at all the international airports across the country. Based on this, the Nigerian Civil Aviation Authority, NCAA, was planning to summon the airline and other international carriers who still flout the order in concordant with it’s letter to the foreign carriers in 2011, which nullified the charges was still relevant.
Vanguard, MONDAY, JULY 28, 2014 — 41
42 — Vanguard, MONDAY, JULY 28, 2014
$1b loan to procure weapons: Matters Arising
A
lthough the President of Nigeria had pointed out the “urgent need” (underlining mine) to upgrade equipment to fight the Boko Haram insurgency, the Senate President and the National Assembly, controlled by the Peoples Democratic Party, PDP, still proceeded on their annual leave on schedule. Obviously, Senator David Mark and the National Assembly don’t share the President’s sense of urgency. They will resume in September and at the rate Boko Haram is slaughtering people in the Northeast, close to 100 per day, about 4,000 Nigerians would have been sent to their graves. That to the NASS is not an urgent matter. I must state quite clearly that President Jonathan is right to have described the matter as “urgent.” In fact, urgent might be an understatement. The situation is near catastrophic as the Nigerian Armed Forces are being shown to be facing challenges for which they were not fully prepared. When one of the Service Chiefs, on his appointment a few months ago, proclaimed that Boko Haram would be defeated in three months or so, Nigerians knew we have, as our first line defenders, some people who were living in a world of fantasy. Today, it is over three months since those appointments were made and Boko Haram has become more murderous. The situation had gone from bad to very bad, and now, to desperate. That explains the sense of urgency the President attaches to the matter. And, if indeed, the President nurses a second term ambition, he is aware that it would be an uphill task if the insurgency in the Northeast is not contained by the
time Nigerians go to the polls next year. For starters, certainly nobody would represent INEC in those areas controlled by Boko Haram. The Nigerian Armed Forces really need more and better weapons to prosecute this war – for the simple reason that what they have is not turning the tide of conflict in our favour. But, having agreed that our armed forces need to be better equipped, there is still the need to address the President’s request to borrow $1 billion from abroad. The first and most obvious, of course is: will $1 billion be sufficient, or will it constitute a first installment in a series of loans to fight the war? Second, the President, one hopes, would have provided the details supporting the $1 billion (N160 billion) loan – including the interests, terms of repayment, sources of the loan, etc. While on the sources of the loan, it would appear to me to be a cardinal mistake for Nigeria to want to raise a loan for a mere N160 billion and not turn to Nigerian banks, first, to syndicate the loan and benefit from the interest instead of foreigners. Surely, Nigeria’s top 10 banks can each provide N16 billion without going under.
S
econd, N160 billion to procure equipment, mostly weapons of destruction, which can and some of which will also be destroyed, is not an investment to promote growth. The returns on investment on this expenditure are totally negative. We are going to repay the loans from funds generated from other sources. That makes it important for us to ensure that the entire $1 billion is needed and there has been no inadvertent or deliberate inflation of the need.
T
hird, since some of the equipment would not be things that can be taken off the shelf and installed, one again hopes that our armed forces will
•President Jonathan
,
“For this reason, I seek the concurrence of the National Assembly for external borrowing of not more than $1 billion..” President Jonathan in the letter to the Senate President, David Mark on July 15, 2014.
The fact that a particular surgeon had performed two operations which resulted in death does not mean that he cannot perform the next one – if he is the Chief Surgeon
,
be adequately trained to use them. Nigeria has for a long time become the graveyard of equipment and machines imported to serve particular needs but which had never been installed or used because nobody was trained to use them and no spare parts to maintain them when they failed. For instance, the Lagos State inherited four giant incinerators from the military in 1979 which the government of Governor Jakande could not operate. They remain
largely useless till today. Yet, a foreign loan was taken to install them. Most of the equipment and systems which Chief M.K.O. Abiola’s ITT imported, in the 1970s, to upgrade Nigeria’s telephone system, were never installed – among other reasons because nobody could operate them. Perhaps the best argument in support of the request for the $1 billion loan is the cost/benefit analysis. Unquestionably, the longer the war persists, the more it will hurt the Nigerian economy. And, if Boko Haram succeeds in spreading its influence to other parts of Nigeria, then the damage will be immeasurable. Against such an eventuality, $1 billion appears to me like a small price to pay to prevent further damage to the economy, for the restoration of normalcy to a wide area of Nigerian territory and to bring peace to those directly involved. In fact, the continuation of the conflict has prevented us from assessing the refugee situation, the damage done to people whose means of livelihood had been impaired or destroyed for ever and families that had been scattered never to re-group again. Everyday the conflict continues represents another day to add to the tragedies which the war has inflicted on millions of our countrymen and women. I am aware of the crippling and endemic corruption with which our country had become known. Some would assume that the N160 billion constitutes another avenue for selfenrichment, for inflated contracts (over which we will argue later). That may be true. But, as I pointed out to one of my friends who took this position, using analogy borrowed from medicine, “The fact that a particular surgeon had performed two operations which resulted in death does not mean that he cannot perform the next one – if he is the Chief Surgeon.” Jonathan is our “Chief Surgeon”, at the moment. Let us give him the support and the chance to perform his duty. The NASS should lead by example. They should approve the loan before going on leave. Visit: www.delesobowale.com or Visit: www.facebook.com/biolasobowale
Business & Economy
Toy business, an emerging market — Auldon boss By PRINCEWILL EKWUJURU & RICHARD UDOFIA
B
EFORE now, toys were seen as commodities meant for children, appreciation material meant to show love to loved ones, as they were seen as materials meant for children and displaying of aesthetics. Toy business like in previous centuries did not have any monetary value in the market before now as brands currently play down the aesthetic nature of it and focus more on the business angle to investing capital in this form of business. At the 2nd Lagos State Enterprise day recently,
organised to send forth graduating technical and vocational students from various Technical Colleges in Lagos state, Chief Executive Officer of Auldon Toys Limited, Mr. Paul Orajiaka, said that as a Toy branding outfit, the brand remains the most respected and innovative toy company in the country. Orajiaka in one of his messages at the event, advised the graduating students to incorporate their skills in building their own brands while investing also investing in it as a profit yielding ventures. He said toy business is relatively expensive and advised the graduants to plough their resources towards such an enterprise.
As a brand that has over seventeen years in the creation of innovative and imaginative products, Oriajiaka said that these toys aids and develop children’s IQ in today’s fast changing world. “Despite the inherent
volatility of the promotional toy industry, Auldon Toys remains a market leader, guided by the operating principles of creativity, flexibility and simplicity, these toys continue to build upon a strong and focused brand
portfolio”, he said. The CEO admitted that by maintaining discipline, exhibiting quality control, product mix, and service delivery, Auldon Toys would successfully navigating the cycles inherent to the promotion of toy industry in Nigeria.
Embattled marketing institutes sign MoU
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ruce has finally come the way of the embattled marketing institutes; Nigeria Institute of Marketing, NIMN and Chartered Institute of Marketing of Nigeria, CIMN, as Memorandum of Understanding, MoU, is signed. Speaking on what is contained in the agreement, Coordinator of the signing programme, Dr. Ify Urai, said that the parties have agreed that in all the committees of
the institute more members will be included to boost and balance the committees, while the institute aims to align itself to the status of other international professional bodies. According to him, “both parties have agreed to integrate two members of both institute into committees as a new council for the institute will be constituted as a result of the brokered peace between both parties, even as two others will join at the AGM later in the year.”
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Appointment & Promotions vicahiyoung@yahoo.com 08033348923
Alo named Berger Paints board chairman
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erger Paints Nigeria Plc has announced the appointment of renowned Human Resource practitioner, Dr. Oladimeji Alo as Chairman of its Board of Directors. The appointment was sequel to the retirement of Mr. Clement Olowokande from the Board. Alo, who holds a PhD degree in Industrial Sociology from the University of Ife (now Obafemi Awolowo University, Ile-Ife), is a scholar, management consultant and a corporate governance enthusiast. His career in academics saw him serve as Lecturer/Visiting Lecturer at the University of Ife, Nigeria, the University of Benin, Nigeria, and the University of California, Los Angeles, USA. “I consider it a great honour to have been appointed as the new chairman of this great company. I feel humbled by the appointment considering the great strides the company had recorded under some of the best minds in corporate Nigeria in its 55 years of existence. In accepting the appointment, I commit to working with my colleagues on the Board to give the
corporate governance and human resource management which will be very beneficial to the next phase of growth which the company is currently going through. I have no doubt in his capacity to steer this company in the right direction, especially at this period. Dr. Alo has had a distinguished career as a University Lecturer, a Management Consultant and a C o r p o r a t e Executive. He started his consulting career with Price *Dr. Oladimeji Alo Wa t e r h o u s e Associates in 1985, from where he moved on to company the guidance and Coopers & Lybrand the direction it needs to Associates in 1987. regain its leadership position He rose through the ranks in its sector,” Alo said. to become an Executive According to Mr. Director of that firm in 1990. Olowokande, Dr. Alo had Dr. Alo became the Directorbeen very instrumental to the General of Financial re-engineering of Berger Institutions Training Centre, Paints since he joined the a leading training and Board in 2012. consulting firm owned by He brings to the table, his Nigeria banks in 1996, where wealth of experience in he contributed actively to the
series of reforms in the Nigerian banking sector over a period of thirteen years. He has had the privilege of directing consulting engagements for a wide range of clients across all sectors of the economy, with particular emphasis on issues of strategy, leadership and governance. It was from the wealth of this experience he authored a book – Human Resource Management in Nigeria (1999) and edited another book - Issues in Corporate Governance in Nigeria (2003). Alo was a member of the Executive Council of the Chartered Institute of Bankers of Nigeria, a past President of the West African Bankers Association, WABA, and a Director of the Nigeria Capital Market Institute. He is a fellow the Chartered Institute of Personnel Management of Nigeria (CIPM), and served as the President and Chairman of the Council of that Institute for three years. Presently, he is the Managing Director/Chief Executive Officer, MD/CEO of Excel Professional Services Ltd, a leading management consulting firm in Nigeria; and a non-Executive Director of ARM Life Plc.
Mordi now member of GACC
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Nigerian and Chief Executive Officer, CEO, of the National Competitiveness Council of Nigeria, NCCN, Chika Mordi, has been appointed to the World Economic Forum’s Global Council on Competitiveness, GACC. The GACC is one of the most influential bodies in world business and policy. The World Economic Foru m Founder and Executive Chairman, Klaus Martin Schwab, noted that Mordi’s invitation/appointment was in the light of his position as one of the world’s most relevant and knowledgeable thought leaders in Competitiveness. Mordi is honoured by the appointment and sees it as “a veritable platform to strengthen the private-public policy nexus and drive African growth. ”The focus of the Global Agenda Council on Competitiveness in the upcoming term will be: “Highlight and help leverage innovative competitiveness practices developed at the city level so decision-makers in other domains can better manage and develop the principal drivers of modern global growth.”
SeaRay appoints Bras luxury boats distributor for West Africa
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ras Marine and Yacht Services has been appointed sole distributor across the West African subregion by SeaRay, the luxury boat builder based in Knoxville, USA. According to a statement by Yomi Sonuga, Chairman, Bras Marine, the appointment will empower the company to market, order and import a range of SeaRay exotic boats on behalf of discerning customers within the West African sub region, with special consideration for Nigeria. He explained that SeaRay designs, builds, supplies and maintains a range of boats from a host of offices worldwide. “Chief among which are its Knoxville, USA office, which looks after the US and Canadian markets, the Merritt Island, Florida, and Amsterdam offices which oversee operations in Latin America and Caribbean and Europe, African and Middle East markets, respectively,” he said. Sonuga assures its customers of flawless after sales services with huge stocks of genuine spare parts. He noted that with the appointment, SeaRay brand
holds a strong promise in Nigeria and West Africa, adding that the brand will assume a more focused marketing approach and Nigerians will be able to purchase their preferred models hassle-free. He said, “We are poised to
satisfy the yearnings of all Nigerians who desire the good life, and a life of luxury as provided by SeaRay boats. Each boat is built with modern technology and parades an array of creature comforts that will delight each customer. ‘Indeed, our boats are a new
breed that breaks the rules especially with our very competitive pricing and standard warranty. “The burgeoning Nigerian economy has seen more and more Nigerians appreciate leisure provided by boat cruises and voyages in the
pristine waters of Lagos and indeed, the West African Atlantic Ocean open seas. “Thus, the new emergent Nigerian nouveau riche who desire the good life, acquire boats of all kinds of designs and sizes to complement the eleisure lifestyles they crave.
FG, ASCN reach agreement on appointment of PCC secretary validity of the appointment of Mr. Peter HE Federal Government and Nwakpa as Secretary of Public T Association of Senior Civil Servants of Complaints Commission.” Nigeria, ASCSN, have reached agreement over the dispute concerning the appointment of Mr. Peter Nwakpa as the Secretary of the Public Complaints Commission, PCC. The umbrella body for senior civil servants in the country had on July 9, commenced an industrial action at the PCC with an intention to extend the strike nationwide if the dispute was not addressed. After a meeting between the PCC and ASCSN called by the Ministry of Labour and Productivity, it was decided to set up a committee to examine the validity of the appointment of the Commission’s secretary. According to the communiqué, membership of the committee shall comprise one person each from the Federal Civil Service Commission, Office of the Head of the Civil Service of the Federation, Public Complaints Commission, Association of Senior Civil Servants of Nigeria, and Federal Ministry of Labour and Productivity.
•Chief Emeka Wogu, Minister of Labour and Productivity The committee shall be given 30 days from the day of the commencement of its sitting; the Federal Ministry of Labour and Productivity shall act as the Secretariat and provide the chairman of the committee; the term of reference of the committee shall be to look at the
While communiqué noted that in view of the development, the ultimatum given by the union is hereby suspended, said: “no worker shall be victimized as a result of the present industrial relations dispute in the Public Complaints Commission.” Signatories to the communiqué are the Permanent Secretary of Federal Ministry of Labour and Productivity, Dr. Clement O. Illoh; Secretary-General of ASCSN, Comrade Alade Bashir Lawal; a Commissioner of PCC, Hon. Chijioke Uwa; a Commissioner of FCSC, Rt. Hon. V. A. Olabimtan; and a Deputy Director (IR) from the OHCSF, Mr. Gideon S. Mitu. Earlier, the ASCN had, by a letter dated July 9, 2014, commenced an industrial action at the PCC with an intention to extend the strike nationwide if the dispute was not addressed.
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Advertising, Media & Marketing
Africa, new pride for marketers — Blyth, TBWA GMD Stories by PRINCEWILL EKWUJURU & RICHARD UDOFIA
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ROUP Managing Director of Yellow Wood company, Mr. David Blyth has said in a programme in Lagos tagged: “The fundamentals of marketing across Africa,” that Africa remains the new promise land for marketers. Blyth admitted that in Africa, and Nigeria exclusively, over 54 viable markets exist and are driven by three fundamental marketing principles, price, product and people. He advised Nigerian brands to have a sense of purpose when developing advertising ideas, as consumers are not just members, but have heritage, feelings and believe in a good product. The GMD said that
aside firms building on more innovations and channels to enlighten consumers, Lack of infrastructures in any given society would end up slowing down the rate of product multipliers in markets. Chief Executive Officer of Magna Carta Reputation Management Agency, Mr. Vincent Magwenya in his presentation, “effective leadership in delivering effective communication in digital era,” maintained that controversies in the line of communication is so important any where in the world. Carta said that Political leaders in Africa do not communicate well with the people, but business leaders communicate better in all spheres of human Endeavour’s even in the market chain. He said that with the penetration
of Internet facility today, people still prefer face-to- face form of communication as most consumers prefer to see and feel the product they are about consuming. “However, with communication channels, integrity of information is better enhanced and protected”, he said. Although he admitted that in Africa, communication is well managed in areas of security challenges, political paradigm and social interaction where audience could be talking about brands differentiation. Meanwhile, Executive International Strategist, Mrs. Jamieson spoke on “More bang for marketing busk,” in the marketing and advertising world, a situation whereby platforms are created for others to work.
Leader vice Leaderss and Ser Service
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HINK of any organisation that has excelled in serving customers. Wal-Mart. The Container Store. Southwest Airlines. Guaranty Trust Bank. Nordstrom. Bergstrom Hotels. Amazon.com. Zenith Bank. There are many others. Whatever else they may have in common, one point sticks out – service orientation is not a slogan meant to drive the frontline. It flows from the very top and permeates the entire organisation. At those organisations that have been acknowledged for their focus on service, the top leaders themselves get involved in delivering great service. They create a service-friendly environment. They craft and sustain a service-supporting organisational culture. They show by their own example that customers are very important to the organisation. In fact, the top leaders, including the Chief Executive Officers (CEOs), possess a near-fanatical zeal for serving customers. And how do they do it? In addition to what has been said in the foregoing section, leaders in excellent organisations spend time on the frontline meeting, serving or listening to customers. They often read and respond to customer mail. They call customers on the phone. They interact regularly with customers, using various communication channels. Leaders with ire service orientation hire staff whose values and attitude are in sync with those of the organisation; reward them adequately; monitor their performance; train, develop and motivate them, while driving a never-ending continuous improvement programme. Because their companies operate open and flat organisations, the leaders are usually accessible to both customers and frontline staff.
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ENTERPRISE DAY - From left: Deputy Governor of Lagos, Adejoke Orelope Adefulire, Group Managing Director, Ruff “N” Tumble, Nike Ogunlesi, and Chief Executive officer, Auldon Toys Limited, Paul Orajiaka during the 2nd Lagos enterprise day in Lagos.
Chivita Premium now Chivita 100% C
HIVITA premium from the stable of Chi Limited has changed its name to Chivita 100%, a reason the company says is to communicate a clear and effective brand message that will instantly resonate with consumers. The company in a self-styled name rechristening and repackaging said that a clear brand message is about capturing the right language that embodies a brand so that it distinguishes itself from the pack. For effectiveness, the company noted that for a name to resonate with consumers it must be simple, short and above all memorable, and must also parade instantly attractive packaging.
Speaking with a distributor of product and Managing Director of Global investments Limited in Lagos, while conducting a survey on why brands change their names, Mr. Maxwell Iwunna, said the challenge of communicating a clear and effective brand message that will instantly resonate with consumers has always been an intimidating task for brand managers. “This is because very few brands are able to effectively match the message with each and every component of their brand or product,” said Mr. Iwunna. According to Immersion Business Concept, Mr. Mike Nze-Opara, said that operating in a challenging economy like Nigeria where marketing a
brand is a complex and highly competitive task, finding a clear message that works with the consumer may be the most difficult part of building a brand identity. But by renaming Chivita to reflect the most crucial idea at the heart of the brand which is the 100% pure fruit juice that contains no added sugar, no preservative and no added colours, Chivita has solidified its market leadership. Continuing, he stated: “truly, in an increasingly health conscious society, consumers are most likely to choose a brand that lays emphasis on natural ingredients instead of products containing synthetic or genetically modified components.
uch leaders take time to listen to the ideas, challenges and complaints of the frontline people. More importantly, they empower their staff to do what seems appropriate for customers at any point. An emasculated team is of no use to anybody – neither to the company nor the customer. In great organisations, customer service is not run by the use of thick rule books peppered with dos and don’ts. Although the rules do have their place, people go beyond rules to imbibe values: those lasting guideposts that remain firm after the rule books have been revised. It’s not a question of “you go and do it.” Everybody does it. And service becomes a way of life. Even leadership mindset is different. The top guys know that to create an effective organisation, management should be focused on service, not just control. They know that external service mirrors internal service. So they pull down the bureaucratic walls that hinder service. Everyone is made to know how their work impacts on service delivery. So the customer takes the centre stage. In the final analysis, an organisation is a reflection of its leadership. If the leadership is visibly not committed to giving customers a great service experience, it just won’t happen. If, in deed, the key function of an organisation is to create and keep customers (according to Peter Drucker), who is best suited to be at the vanguard of it except the leadership? Delivering long sermons on service, launching pet improvement programmes or knocking people for not “doing it” will not make a difference. That is mere executive grandstanding. Executives who really want their organisations to deliver great service get out of their cosy offices and lead the charge. They go beyond telling to doing. They walk the talk. They take responsibility for whatever their organisations become. Over time, employees begin to pattern their behaviour after their leaders. They begin to see what is really important to their leaders – and do it. If they are convinced that their leaders mean to create a customer-focused organisation, soon enough they will begin to work toward it. In summary, leaders should •View service as their job. •Create an environment that supports service. •Spend a lot of time with customers. •Model the behaviour they want to see. •Reward excellent service. •Empower their teams if they don’t want zombies.
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Business & Economy Nigeria seen by McKinsey in World's top 20 economies by 2030
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has the potential to be one of the world's top 20 economies by 2030 with a consumer base exceeding the current populations of France and Germany, according to McKinsey & Co. Africa's biggest economy may expand about 7.1 per cent a year through 2030, boosting gross domestic product to $1.6 trillion, possibly pushing it above Netherlands, Thailand and Malaysia , the New Yorkbased company said in a report weekend. About 60 percent of Nigeria's estimated population of 273 million by then may live in households earning more than $7,500 a year, fueling a consumer boom, McKinsey said. "Nigeria has a very positive outlook," Acha Leke, coauthor of the report, said in an interview with BloombergTV Africa in Johannesburg. "The most important thing that needs to be done to get it there is execution of government policies. As Africa's largest oil producer with a population of about 170 million, Nigeria has consistently posted annual growth rates in excess of 4 percent over the past decade. That's spurred foreign investors such as Unilever Plc , Nestle SA and Shoprite igeria
to expand operations despite an upsurge in violence by militants in the north. Based on McKinsey's growth estimates for the economy, annual sales in consumer goods could more than triple to $1.4 trillion by 2030 from $388 billion currently, it said. The retail and wholesale trade industry will probably become the largest contributer to Nigerian growth by then and 35 million households are expected to earn more than $7,500 a year, according to the report. While oil accounts for 70 percent of government Holdings Ltd. (SHP)
revenue and most of Nigeria's export earnings, its share of the economy has waned. After the statistics office overhauled its GDP data in April, oil's contribution to economic growth between 2010 and 2013 was 5.1 percent, compared with 14 percent for manufacturing and 20 percent for trade, according to McKinsey. Nigerian Stock The Exchange All-Share Index
has gained 2.9 percent this year, adding to its 47 percent surge in 2013. The naira has dropped 1.1 percent against the dollar since January.
McKinsey's estimate of Nigeria's growth potential comes with significant caveats. The government needs to address poverty, lower the cost of basic services, such as housing and energy, expand electricity supply and boost productivity in farming, according to the report. "If execution doesn't happen there's actually a big risk for the country, even from a security stability perspective, to create jobs and lift millions of people out of poverty," Leke said. "That has to be a big focus, to grow in a way that is inclusive."
The most recent poverty survey by Nigeria's statistics agency, published in 2012, showed that 61 percent of Nigerians were living on less than a dollar a day in 2010, up from 52 percent in 2004. Life expectancy is 54 years, eight years lower than in Ghana and 20 years below Brazil , according to McKinsey. "In the policy world, economists can build all manner of scenarios," Folarin Gbadebo-Smith, Managing Director for Lagos-based Center for Public Policy Alternatives, said.
BOI rejects funding SMEs cluster By Franklin Alli
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he Bank of Industry, has turned down request by the Nigerian Association of Small and Medium Enterprises (NASME) to fund its proposed SMEs cluster at Imota in Ikrodu area of Lagos State, saying “it is not part of our core mandates.” The bank, however, reaffirmed its commitment to increase funding of genuine SMEs, especially those that are adding value to the economy
in terms of jobs creation. NASME led by its National Deputy President, Prince Orimadegun Agboade, had during a courtesy visit to the newly constituted Board of BOI, requested among other things, funding of its cluster project and assistance to implement its programmes capable of transforming SMEs in the country. In his response, Rasheed Olaoluwa, Managing Director /CEO, BOI, said, “We will be part of your international conference and
we will see how we can support you.Like I said earlier funding cluster is not what we do; the bank finances long-term plants and machinery while the SMEs friendly banks provide the working capital loans. “For SMEs, our emphasis is on the genuine SMEs that add value in Nigeria. Experience has shown us that we have a lot of SMEs that are not really genuine. That is the truth. There are SMEs that just incorporated to chase contracts in various
ministries; there are SMEs incorporated to chase supply contracts, construction contracts, SMEs that are into trading and exporting activity. “We are very keen to support only SMEs that will add value to the economy by adding value I mean, by going into processing and manufacturing activities. That is how we can really increase the contribution of manufacturing to Nigeria’s GDP.That ration is currently peaking at 6.8 percent in the recently rebased GDP C M Y K
48 — Vanguard, MONDAY, JULY 28, 2014
Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997
The strategic blunders of CBN’s Monetary Policy Committee spending within the economy and expectedly trigger inflation as more money becomes available for relatively less goods and services; clearly, unbridled inflation spells doom for all income earners; consequently, the Central Bank would step in to reduce the cash balances with banks so as to constrain their ability to liberally expand credit to their customers. Thus, the larger the Naira allocations to the three tiers of government, the more buoyant also will be the cash positions and credit capacity of banks and the more urgent will therefore be the need for CBN to subsequently remove the excess cash in order to reduce credit expansion and restrain spending and the threat of inflation. Ironically, part of CBN’s strategy for reducing the systemic surplus cash is to offer to borrow some of the perceived excess Naira by selling treasury bills on which it offers to pay unusually high interest rates, which are considered inappropriate for risk free sovereign debts. Late in June 2014, the CBN borrowed over N134bn with treasury bills; similarly, the CBN again borrowed N70bn and another tranche of thover N134bn between the 9 and 23rd of July, 2014. It needs emphasizing that the N340bn loans incurred by the CBN within three weeks will not be deployed towards the remediation of our severe infrastructural deprivations nor indeed, can these funds be applied to remediate any shortfall in the recurrent expenditure of government, because such spending would only increase the pressure of already surplus
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he Federation Accounts Allocation Committee last week approved the sum of over N755bn for sharing among the three tiers of government. Ordinarily, the distribution of this relatively sizable revenue would elicit hope that the economy will become positively impacted, as the various tiers of government would be funded to achieve their budget expectations. In reality, however, Nigerians may not understand why the disbursement of this allocation would bring in its train, a host of adverse consequences to our economic and social welfare. Indeed, the economic dislocation attributable to such allocations begins with the deposit of the allocated sum of N755bn into the bank accounts of the federal, states and local government including, ministries, departments and other agencies. Invariably, the government deposits become fresh Naira supply which swells the cash levels in the banking sector; expectedly, the bountiful cash inflow is sweet music to the banks as it enables them to leverage on the fresh Naira inflow to expand their capacity to give loans to their customers. The extent of additional credit expansion will be determined by the prevailing ratio of cash to total assets specified from time to time by the Central Bank in line with its mandate to maintain benignly stable prices and exchange rates in the economy. Thus, if for example, the mandatory cash reserve ratio specified by CBN is 10%, then every Naira above this limit becomes surplus cash on which a bank could leverage almost tenfold to expand credit to its customers if required. Inevitably, however, such expansion in bank credit would promote increased
The larger the Naira allocations to the three tiers of government, the more buoyant also will be the cash positions and credit capacity of banks and the more urgent will therefore be the need for CBN to subsequently remove the excess cash
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cash in the money market. Technically, therefore, the N340bn loan would simply be warehoused as idle funds in the accounting records of CBN, notwithstanding that the banks would still receive an average interest rate of about 10% on the sums borrowed by the CBN. In recognition of this reckless and destructive practice, former CBN Governor, Lamido Sanusi, last year, belatedly decried this inexplicable strategy and government’s apparent folly for placing its deposits at zero per cent with banks only for the same government to return thereafter to borrow from the banks and pay oppressively high interest rates. Ironically, in better managed and more successful economies elsewhere, such practice would be totally condemned; for example, the
Business & Economy Emefiele promises adequate country’s economic and social funding of SMEs pyramid at a maximum of nine per cent interest rate. icro, Small and Medium report by the International He also said 60 per cent of E n t e r p r i s e s Financing Corporation and the funds would be given to M (MSMEs) have the potentials McKinsey indicated that women, adding that they turned to boost production, create jobs, reduce poverty and ensure inclusive economic growth and development in the country. The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, said this at the signing of Memorandum of Understanding (MoU) with the 36 State Governments on “MSMEs Development Fund” in Abuja. The CBN boss said that in spite of global recognition, MSMEs in Nigeria had not received adequate financing needed to play their pivotal roles as development trajectories. He said a joint
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financing gap of the critical sector of the Nigerian economy was N9.6 trillion as at 2010. Emefiele said CBN initiated the funds as an innovative way of improving access to finances at single digit interest rates by MSMEs in order to unlock their potentials. He said the state governments would be able to access up to N2 billion each for on-lending to eligible beneficiaries through participating financial institutions in their states. Emefiele said CBN would ensure that the funds got to people at the bottom of the
out better yields than men. According to him, the CBN will be committing considerable human and material resources to monitoring the disbursement and utilisation of the funds in a robust and verifiable manner. “Participating financial institutions will be required to submit periodic returns on disbursement as well as analysis of the social impact of these funds on our people”, he said. The CBN boss implored the state Governors to assist the apex bank to achieve its goals by ensuring that the funds were deployed in an efficient manner.
European Central Bank actually charges banks about 0.25% rather than pay interest on any surplus cash held by banks. Conversely, in view of our CBN’s feeding bottle strategy for addressing excess liquidity, it makes eminent business sense therefore for banks to shun lending to the risk prone private sector with its myriad challenges of infrastructure, multiple taxation, constrained consumer demand, etc and for banks to readily embrace the farcical business model where government borrows back its own money at such generous cost. Incidentally, the CBN’s Monetary Policy Committee (MPC) recently maintained its monetary policy rates (MPR) at 12% for the umpteenth consecutive time. The MPR is another major CBN weapon for controlling bank lending so as to curtail spending and also control inflation. The MPR is therefore a ‘punitive’ rate at which banks will be forced to borrow from the Apex bank to cover their occasional cash shortfalls. Invariably, like Central Banks everywhere, the CBN will set its monetary policy rate at the level that would engender the objective of minimal inflation. Thus, CBN’s MPR will be high if the objective is to make borrowing expensive and reduce spending; conversely, the MPR would be set much lower if CBN decides to encourage banks’ credit expansion in order to induce both capital and consumer spending to stimulate production and increasing job creation in the economy. In successful economies in Europe and America, Central
Bank controls rates are usually less than 2%, so that commercial banks could also lend to their customers at single digit interest rates. Conversely, if Nigerian banks borrowed from the Central Bank at 12% MPR, they would in turn have little option than to lend to their own customers at the economic destabilizing rate of over 20% as is currently the case. The question therefore, is why CBN’s MPR is so high, especially when its product of high cost of loans is bad for the growth of all economic subsectors and the attendant need for increasing job opportunities. From the preceding narrative, it is evident that so long as monthly allocations continue to instigate the spectre of surplus Naira, it would be inappropriate for CBN to further stimulate spending with low interest rates or the promotion of liberal expansion of commercial bank credit because of the danger of inflation getting out of hand. Instructively, however, if CBN restrains itself from creating fresh Naira supply as allocations for the dollar derived portions of monthly distributable revenue, the erstwhile shackles of unyielding excess liquidity will be broken, and a new dawn of rapid and inclusive economic recovery will begin. If however the Monetary Policy Committee remains in denial of this reality, unfortunately, not even a thousand more of its meetings will burnish their legacy of complicity and failure to do it right for our fatherland! SAVE THE NAIRA, SAVE NIGERIANS
Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Michael Eboh Franklin Alli Ebele Orakpo Ifeyinwa Obi Rosemary Onuoha
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CONTRIBUTORS Princewill Ekwujuru Nkiruka Nnorom Jonah Nwokpoku Naomi Uzor Providence Obuh LAYOUT
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