Financial vanguard 04052015

MAY 4, 2015

‘External reserves can't pay for more than 3 months of imports’

BY OMOH GABRIEL

Drops 1% from $29.8 billion to $29.5 billion by April 28

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HE nation's foreign exchange reserves fell one per cent month-on-month to $29.5 billion

by April 28, from $29.8 billion a month earlier, the central bank said weekend.

This implies that the reserves at the current rate of importation can support just three months of import.

The reserves were down 22.6 per cent year-on-year when they stood at $38.14 billion. The apex bank, Central Bank of Nigeria has used its foreign exchange reserves to support the local currency in the wake of falling global oil prices.

At the foreign exchange market last week despite dollar auction sales worth $91.2 billion by international oil companies on Monday, the Naira closed flat at N199.10/$1.00 at the interbank market. This rate was maintained throughout the week. Similarly, the CBN’s clearing rate steadied at N197.00/$1.00 for the week.

As a follow up to the CBN’s withdrawal limit on overseas card holders to $50,000 (from $150,000) per annum and daily cash withdrawals to $300, the apex bank has further clarified that customers’ cards linked to domiciliary accounts overseas are not affected. Demand for the dollar by travelers may increase locally as a result of this decision, market operators say they expect exchange rate to continue to trade within the current level at the inter-bank segment of the foreign exchange market in the coming week.

However, at the BDC segment of the foreign exchange market, the Naira depreciated by N3.00 or 1.3 per cent to N220.10/$1.00 from N223.10/$1.00 The national economy, pre-general elections was facing huge financial haemorrhage as politicians, corporate bodies and foreign investors moved funds massively out of the country as well as from Naira to dollar. In January 2015, data available at CBN showed that the sum of $2,196,805,444.97 was

paid out by the CBN as international remittances on behalf of Nigerians. In February, the sum of $1,273,415,392.55 went out as payments.

In a survey of payments made by the CBN on behalf of the public in 2014, a total of $22.1 billion went out of the country in five weeks, an average of

$4.5 billion a week. While about $3.083 billion went out in the week ending 31st July 2014, the amount of foreign exchange flowing out of the country rose to $4.2 billion for the week ending 30th August. It however dropped to $4.1 billion on the 30th of September and moved astronomically to $5.29 billion for the week ending 31st October 2014.

The foreign exchange outflow went further up to $5.35billion for the week ending November 30th. This capital flight has resulted in the crash of the naira exchange rate which had remained stable before the election and the crash of the international crude oil price.

CBN defends Naira with $4.7bn The Central Bank of Nigeria in the bid to raise the value of the local currency has spent $4.7 billion so far this year to defend the naira even as the nation’s external reserve fell further to $29.6 from $29.6 billion at the middle of April 2015. Data published by the CBN on its website show that the external reserve fell by $189 million from $29.778 billion on April 2nd to $29.589 billion on April 9th.

Consequently the reserve has fallen by $4.879 billion since December 31st 2014.

Commenting on developments in the nation’s foreign exchange market in the first quarter of the year, Managing Director/Chief Executive, Financial Derivative Company Limited, Mr. Bismarck Rewane had said that the apex bank had so far spent $4.7 billion to defend the naira this year, adding that the nation’s external reserve import and payments cover has fallen to 4.8 months, 1.2 months below the international standard for healthy external reserve.

Rewane also stated then that the 13 per cent appreciation of the naira in the parallel market in the last two weeks to N197 per dollar from N225 was due to election sentiment and elimination of fear premium. He predicted that the appreciation would soon be reverse and Continues on page 22 C M Y K

22 — Vanguard, MONDAY, MAY 4, 2015

Economy 11 ships arriv e Lagos por ts arrive ports with petroleum products

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leven ships laden with petroleum products had arrived at the Lagos ports weekend, the Nigerian Ports Authority NPA said. This is contained in 'Shipping Position,' a daily publication of NPA. It said that the vessels conveyed petrol, kerosene and base oil, adding that two other ships with rice consignment had also sailed into the ports.

The publication also stated that 37 ships were being expected at the ports from April 30 to May 23. According

MEETING - From left: Mr. Kolawole Olayinka ,Regional Commercial Manager, British Airways, West Africa; Prince Adeyemi Adefulu President Nigerian-British Chamber Of Commerce (NBCC); Mr. Alan Davies Managing Director, James Cubbit Architects and Mrs. Joyce Akpata, Director General NBCC at the Chamber’s Breakfast Meeting held in Lagos.

‘External reserves can't pay for more than 3 months of imports’ Continued from page 21 the naira would depreciate further because the fundamentals remain unchanged. “At the parallel market, the naira will trade at N215-N220 against the dollar again”, he said”.

Rewane advised the incoming government of the General Mohammudu Buhari to allow the naira find its true value, calling for reduction in interest rate and easing of monetary policy stance.

Nigerian stocks rally as Kenya sinks in 1st divergence since ’13

At the Capital Market Nigerian equities posted the biggest gains in sub-Saharan Africa in April, helped by a reversal of investor flows that’s seen the market benefit at Kenya’s expense for the first time in 16 months. The Nigerian Stock Exchange All Share Index rallied 9.3 per cent in April, the most among 14 gauges on the continent, and the steepest gain since May 2013. The FTSE NSE Kenya 25

Index is down 0.6 per cent in April, its first retreat in six months. It marks the first time since December 2013 that the measure has declined while Nigeria’s index has risen.

Nigerian assets soared after President Goodluck Jonathan conceded defeat to former military ruler Muhammadu Buhari on March 31, soothing fears of a dispute in Nigeria, which has a history of electionrelated violence. “The clear, peaceful, and seemingly fair conclusion of Nigeria’s presidential, legislative, and state elections has boosted investor sentiment,” John Ashbourne, an Africa economist at Capital Economics Ltd. in London, said. In contrast, confidence toward Kenya soured with the decline in tourism and surging imports that’s pressuring the country ’s current account deficit, he said.

The Kenyan shilling weakened 0.2 percent to 94.70 per dollar by 4:49 p.m., the lowest since November 2011 on a closing basis. It dropped 2.5 percent in April, the second straight 30-day loss.

Nigerian Gains Nigeria’s All-Share Index rose 1.9 percent to 34,708.11 in Lagos, the commercial capital, to erase this year’s losses. In Nairobi, Kenyan equities rose 0.4 percent to 229.81 for a 2015 advance of 6.2 percent.

The Nigerian naira strengthened 0.1 per cent per dollar to 199, paring the loss this month to 0.1 per cent. The naira has been trading around 200 per dollar after the central bank in February extended trading restrictions introduced since mid-September to control the currency ’s value. It dropped 21 per cent to a record low of 206.32 between the end of June and Until the election results were announced at the end of last month, Nigerian equities were the world’s worst performers, with investors deterred by uncertainty over the vote and a 40 percent plunge since June in the price of crude oil, which accounts for about two-thirds of government revenue and 90 percent of export earnings. Feb. 12 as oil prices slumped.

Insurance brokers seek abolition of operational bidding fees Lagos that such charges were “ So they should not be also

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he Nigerian Council of Registered Insurance Brokers (NCRIB) has condemned payment of bidding fees as prerequisite for offering insurance broking services.

Mr Ayodapo Shoderu, President of NCRIB, said in C M Y K

highly exploitative. He said that some companies and government institutions were charging members before they could render services.

According to Shoderu, insurance brokers as professionals, provide services like lawyers, architects, and accountants.

placed under such burden,” he said He said that the council had ordered its members to stop paying such charges.

“The council management had already dissuaded members from paying such exploitative fees.

to it, 13 of the ships will sail into the ports with food items, including rice, buckwheat, bulk sugar, salt and frozen fish. It disclosed that containers were expected to be brought in by 12 ships, while seven others would berth at the ports with general cargo. It added that the remaining five ships would arrive at the ports with petroleum products, which would include diesel and petrol.

Okonjo-Iweala denies appointing PWC to audit NNPC accounts

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INISTER of Finance, Dr Ngozi OkonjoIweala has denied a p p o i n t i n g PricewaterhouseCoopers (PWC) to conduct the Nigerian National Petroleum Corporation (NNPC) audit.

This is contained in a statement issued by the Special Adviser to the Minister on Media, Mr Paul

Nwabuikwu, in Abuja.

According to the statement, a group of three accounting firms filed a suit against the minister before a Lagos High Court with the allegation.

“The group is alleging that she appointed the global audit firm, PwC to conduct the recently concluded forensic audit of the NNPC against the provisions of the Local Content Act.

Cobham appointed NACCIMA's new D-G

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r Emmanuel Cobham has been appointed as the new Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA). A statement by Mrs Rosemary Agweven, the Public Relations Manager, NACCIMA, says Cobham is a lawyer, journalist and “administrator par excellence”.

The statement also said that Cobham had “ wide and varied experience which he amassed working at senior

levels in the state, national and international organisations”.

Cobham was a former Correspondent of NTA who served four different Military Administrators and one civilian Governor of Cross River as Chief Press Secretary and Director of Press Affairs from 1992 to 1999. He worked briefly at the African Union Commission, AU, as Legal Officer in the Security Arrangements and Ceasefire Commission.

Chamber urges Anambra to address multiple taxes, levies

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r Tim Anosike, the President, Onitsha Chamber of Commerce has urged Anambra Government to address multiple taxes and levies in the state. Anosike, who gave the advice in Onitsha, said unless the problems were addressed, they would drive away potential investors to the state. “Addressing the issue of multiple taxes and levies in the state, which will include streamlining/publishing the approved regime of taxes and

the authorised collection agencies, is very essential.

The measure will not only improve the revenue base of the state government, but will also checkmate incidence of illegal tax/levy collection in the state. Let this problem be tackled once and for all in this state,” he said.

The chamber boss, however, lauded the state government for pursuing its four-point agenda, adding that the effort was gradually yielding the needed dividends to residents of Anambra.

Vanguard, MONDAY, MAY 4, 2015 — 23

Institute open judicial probe into NNPC T

he forensic audit conducted by PWC on NNPC to ascertain the veracity of the alleged missing $20 billion from the Federation account is to say the least, very damaging to the already poor image of the officials of the out-going PDP-led Federal Government. The report was supposedly a fact-finding one but what came out was a smokescreen the government wanted to use to whitewash a very filthy cup for Nigerians to drink with.

PWC had qualified the audit saying it did not obtain needed information from NPDC, a subsidiary of NNPC. The qualification of the audit report has cast doubt on the reliability of the report. The auditors have tacitly put a disclaimer on the report saying it was for the use of the Auditor-General only.

Interestingly, there are now denials from principal actors in the saga. Blame game has started as the AuditorGeneral is quoted as saying he did not act on the report as the Presidency has vested interest in it. The Minister of Finance has denied commissioning the firm to carry out the audit.

From the content of the report, the government briefed the auditors of what it needed and what it intended to achieve which was not to find out if the nation was losing resources by lack of

adequate control in the oil and gas operation of NNPC and its subsidiary. In the real sense, the Minister of Finance who instituted the probe, the Auditor-General who received the report and the Minister of Petroleum resources have questions to answer. The Finance Minister must tell Nigerians details of the briefing she gave PWC even though she has denied setting up the audit. Did the firm of auditors meet her expectations? If yes, she is culpable of cover up. If no, who was she desperately trying to cover up?

The Auditor-General must explain to Nigerians when he received the report as an internal auditor, what recommendations he made to government knowing full well that by practice, the audit report was qualified. The Minister of Petroleum Resources must explain knowing full well that by the caveat the auditors put on the report, it was not useful for anything but the waste paper bin. She should also answer for the fact that lots of the nation's scarce resources were wasted in a report that ab-initio was not meant to find out anything.

The fact that the auditors said “When you are given a job, there are procedures for doing the job based on agreement with the client, the out-going government must tell Nigerians what agreement it

The Minister of Petroleum Resources must explain, knowing full well that by the caveat the auditors put on the report, it was not useful for anything but the waste paper bin

reached with PWC on the socalled forensic audit. The auditors, to excuse themselves from behind-thescene scandals going on in government put a caveat on the audit so that others would not use the so-called forensic audit of the NNPC account in search of the missing $20 billion or rely on it for decision-making. It is also to protect the company from any legal action that may arise from the job.

PricewaterhouseCoopers in their introductory letter addressed to Nigeria’s Auditor-General, the audit firm said findings in its 199page report were limited to available information and did not constitute a review in accordance with generally accepted standards. The report said: “The procedures we performed did not constitute an examination or a review in accordance with generally accepted auditing standards or attestation standards.

“Accordingly, we provide no opinion, attestation or other form of assurance with respect to our work or the information upon which our work was based”. PWC said that the report “ was solely for the Office of the Auditor-General of the Federation, for their internal use and benefit and not intended to, nor may they be relied upon, by any other third party.

The report did not give strong and independent opinion of its findings despite government claim the investigation was carried out using forensic techniques.

Many Nigerians may not understand what a qualified account stands for.

A secondary school friend of mine, who had distinction in ICAN examinations and practised auditing before his appointment as a Commissioner in Nigerian Insurance Commission asked that I read the content of INTERNATIONAL STANDARD ON AUDITING 705 to understand why an auditor will qualify an audit report. The Audit guide 705 for auditing showed that an auditor ’s report is a formal

opinion, or disclaimer thereof, issued by an auditor as a result of evaluation performed on a legal entity.

The Guideline said that an auditor’s report is considered an essential tool when reporting financial information to users, particularly in business. Since many third-party users prefer, or even require financial information to be certified by an independent external auditor, many auditees rely on auditor reports to certify their information in order to attract investors, obtain loans, and improve public appearance.

A qualified opinion report is issued when auditors encounter one of the two types of situations which do not comply with generally accepted accounting principle.

The two types of situations which would cause an auditor to issue this opinion include Single deviation from GAAP when one or more areas of the financial statements do not conform to GAAP or are misstated and Limitation of scope when the auditor could not audit one or more areas of the financial statements. The auditors in this case did not agree with what the government wanted. The government had wanted a misrepresentation of facts to placate the Nigerian public.

The NNPC cover up is a game that has been on for decades.

There have always been double entry for subsidy claim, there have been crude oil lifting without records. What all of these mean is that NNPC is a rotten egg and a home of looters.

What is needed is an open judicial probe of the operations of NNPC right from inception.

Economy Association urges DISCOs to invest more in embedded power projects

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he Electricity Meter Manufacturers Association of Nigeria has urged electricity distribution companies (Discos) to invest more on embedded power generation projects to stabilise power supply in the country.

Muyideen lbrahim, Executive Secretary of the association, gave the advice in Lagos.

Ibrahim said that embedded power generation remained one of the most vital ways of solving the nation’s electricity problem. He said that the dwindling power situation in

the country posed serious worries since the privatisation of the Power Holding Company of Nigeria (PHCN).

Embedded power generation

is the process through which the Discos obtain power supply from independent power generating firms. The scribe also urged the Discos

to explore the use of renewable energy because it was environmental-friendly.

He attributed the current challenges of the transmission

network to long years of neglect and urged the government to ensure the Transmission Company of Nigeria tackled the issue.

MTN woos Nigerians with easy, faster internet applications

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TN Nigeria Ltd has urged Nigerians to buy into an APPtitude campaign that would enable subscribers to access the internet easily, faster and smarter.

MTN Chief Marketing Officer Olubayo Adekanmbi made the appeal

at a news conference to herald the inauguration of the APPtitude campaign in Lagos.

“The journey to BetterMe continues and in a quest to become a better me, the journey must be easier, faster and smarter.

“In order to democratise the

access to the internet, Apptiude is the new attitude,” he said. He said that 90 per cent of internet access in Nigeria was via mobile devices and as such, there was need to simplify access in order to grow uptake and consumption.

Adekanmbi said that

Nigerians could transform this by using apps which were permanently on their device homepage and self-updating with latest information.

According to him, the main objective of the campaign was for Nigerians to be able to access the internet through a short cut.

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24 — Vanguard, MONDAY, MAY 4, 2015

Business & Economy

Nigerian named among six high performing world’s entrepreneurs

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he Chief Executive Officer of BAU Research and Development Nigeria Limited, Gossy Ukanwoke, has been selected alongside five other entrepreneurs, spanning six continents, as high performing entrepreneurs.

For this feat, Ukanwoke will join his counterparts from around the world to participate in Ernst & Young (EY)’s prestigious entrepreneurship program tagged ‘accelerating entrepreneurs’.

The programme, run by Ernst & Young (EY), gives six high-potential entrepreneurs from around the world support to scale up their business by receiving one-toone expert guidance, networking and insightsharing opportunities at the 15th EY’s annual Global World Entrepreneur Of The Year event in Monaco, between 3-7 June 2015 as well as on-going support from EY. The final six participants, who were selected by an independent judging panel of ‘Growth Coaches’, assessed through criteria such as entrepreneurial spirit, social impact, innovation and leadership, are Sarah Kauss (S’well Bottle, US); Stefanie Kurniadi (NasiGoreng Mafia, Indonesia), Idriss Al Rifai (MENA 360, United Arab Emirates), Bulent Tekmen, Ininal, Turrkey and Gossy Ukanwoke, BAU Research and Development, Nigeria Limited).

According to Bunmi Akinde, EY Entrepreneur of The Year Leader for West Africa, the selection of Gossy Ukanwoke is only African, points to the level of innovation and entrepreneurial spirit embedded in the country.

“Nigerians have always been entrepreneurial people, innovative and enterprising even under difficult circumstances. They find solutions to the problems we face as Africans and reinforce that the Africa growth story is a narrative we are writing ourselves. This is definitely true of his entrepreneurial drive and we are proud to showcase him on a global stage,” says Bunmi Akinde.

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Guinness Nigeria establishes N10bn commercial paper programme

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uinness Nigeria Plc, h a s announced that it will be establishing a N10 billion Commercial Paper (“CP”) programme with the view to launching its inaugural CP issue under the programme in a week’s time.

The announcement was made at the signing ceremony which held at the company’s headquarters in Ikeja, Lagos.

Speaking at the signing ceremony, Mr. John O’Keeffe, the Managing Director/CEO of Guinness Nigeria, said “We are very pleased with the successful launch of this Commercial Paper programme for Guinness Nigeria Plc and the support received from our advisors to get us to this point.

“This will be the first corporate CP programme to be established in recent times, following the new CBN guidelines coming into effect, and we are pleased to

be the first company to take advantage of this opportunity.

We look forward to a robust uptake of this inaugural issuance imminently, whilst retaining the flexibility offered by the programme to tap into the CP market again in the nearest future.”

Witnessing the signing ceremony were representatives of the transaction advisors which include Stanbic-IBTC Capital Limited and Standard Chartered Securities Nigeria Limited as Joint Arrangers, Aluko & Oyebode as Legal Counsel, KPMG as Auditors

to the Issuer, and Standard Chartered Bank Nigeria Limited as Issuing Calculation and Paying Agent. Also in attendance were officials of FMDQ OTC, a Securities and Exchange Commission licensed overthe-counter market operator for fixed income securities.

Also speaking at the event, Kobby Bentsi-Enchill, Head Debt Capital Markets, of Stanbic IBTC Capital stated that Guinness Nigeria has shown industry leadership in taking up the CP. He said “This transaction is a unique milestone event, and

represents the first CP Programme to be established by a non-financial institution corporate issuer following the new guidelines on commercial paper from the Central Bank of Nigeria, published in 2009. In that regard, Guinness Nigeria has again clearly demonstrated its innovative approach towards executing the company ’s financing strategy, in an increasingly competitive market environment. We at Stanbic IBTC are also proud to have partnered with Guinness on this landmark achievement”

AXA Group of France acquires Mansard Insurance Plc

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he Nigerian Mansard Insurance Plc has been acquired by the France based AXA, one the international leading insurance and asset managment groups.

The acquisition of Mansard followed the earlier control of Assur Africa Holding (AAH) that holds 77 per cent in the Mansard Insurance Plc. Mr Victor Osibodu, Chairman of Mansard Insurance, said that the development would force the company to change its name to AXA Mansard Plc. The chairman told shareholders of the company at their recent Annual General Meeting (AGM) in Lagos that AXA was a global insurance player in insurance and asset management with 160,000 employees serving 102 million clients in 56 countries.

“In December 2014, AXA group, in a bid to actualise its Sub-Saharan African expansion, acquired 100 per cent equity in AAH. AAH before its acquisition, holds 77 per cent stake in Mansard Insurance PLC, thereby making AXA the beneficial owners of Mansard,” he said.

PARLEY - From left: Ronke Fasalayo, Corporate Communications, Meadow Hall Foundation; Kemi Adewale, Head, Meadow Hall Foundation; Kehinde Nwani, Group Managing Director and Ola Opesan, Head of School during the Meadow Hall Foundation media parley in Lagos.

Lafarge Africa's Q1 revenue up by 15%

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afarge Africa Plc, has recorded a revenue of N57 billion in the first quarter of 2015, which is 15 per cent higher than first quarter, Q1 2014.

It also recorded a Profit After Tax, PAT of N8.6 billion and N14.6 billion of cash was generated from operations.

The company’s and Group’s revenues increased by 25 per cent and 15 per cent in Q1 2015, when compared to last year. Wapco Operations had a strong quarter with 16% volume growth and a favorable mix and pricing, leading up to its overall 25 per cent growth. The Ready-Mix revenue grew by 40 per cent and South Africa by 7 per cent. Ashaka was affected by the insecurity in the North and heightened election

apprehensions in March, 2015, and saw a temporary revenue dip in Q1.

Meanwhile, the board of directors of Lafarge Africa granted approval for a Mandatory Tender Offer to all qualifying shareholders of Ashaka Cement Plc in 2014.

Consequently, the Tender Offer is now concluded and regulatory approval has been obtained for the approval of the shares transferred. Lafarge Africa ownership stake in Ashaka Cement has increased to 82.46% from 58.61%. We expect final regulatory approval in the coming weeks.

In his statement, the Chairman, Board of Directors, Chief Olusegun Osunkeye , said “Our company has delivered a good performance in spite of the general elections and

market uncertainty. We remain highly committed to delivering a strong result in 2015 in line with our ultimate objective of improving value to our shareholders”.

Commenting on the results, the Chief Executive Officer, Lafarge Africa Plc, Mr. Guillaume Roux mentioned that ‘’We have achieved stability in our operations, marked by our solid performance.

The consolidation of our businesses and expansion projects presents an excellent foundation for future growth.

Our management team is fully mobilized to deliver operational excellence whilst also leveraging on the strength of the Lafarge Group”.

Vanguard, MONDAY, MAY 4, 2015 — 25

26 — Vanguard, MONDAY, MAY 4, 2015

Banking & Finance

Union Bank finances PNG Gas’ plant with N4bn

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nion Bank of Nigeria Plc has signed a N4 billion agreement to finance Egboama Gas Plant owned by PNG Gas Limited.

The loan facility will provide the required funding for the refurbishment and upgrade of gas plant located in Delta State.

Commenting on the agreement, the Executive Director, Corporate Banking at Union Bank, Mr. Emeka Okonkwo said: “Union Bank is pleased to be supporting PNG with the financing of Egboama plant which is expected to produce about 101 tons of liquefied petroleum gas per day. This project will no doubt enhance efforts towards increasing domestic utilization of gas in the country and reducing dependence of oil.”

In addition to producing 101 tons of liquefied petroleum gas per day, the Egboama gas plant is also expected to produce 38 tons of propane gas per day, 750 barrels of natural gas liquids as well as 25 million standard cubic feet of lean gas per day.

The lean gas would be piped into the national gas grid to support power generation.

Union Bank is a key player in oil and gas financing and is resolute in promoting and developing industries in the sector as part of its transformation programme.

UNIC foundation grants over $2.8m scholarships

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ver seven hundred (700) graduate and undergraduate students have been granted scholarships ($4, 000 each) worth more than $2.8 million to pursue various courses leading to the award of bachelors and masters degree certificates.

Addressing awardees at the award /convocation ceremony held at the old auditorium of the Lagos State University on Wednesday, the president of UNIC foundation, Engineer Christopher Imumolen said the awardees has the unique advantage of automatic scholarship with Presley University, USA, leading to the award of an international Degree (B.sc, Msc, PHD).

He further stated that UNIC has dedicated personnel that monitor the program to ensure that standards are complied with.

SYMPOSIUM - From left: Representative of Director-General, Nigerian Institute of Medical Research (NIMR), Dr. Nkiruka Odunukwe ; Chairman of the occasion, Prof. Olubunmi Otubanjo; Lagos State Commissioner for Health, Dr. Jide Idris; and Category Manager, Pestcare, Healthcare, and Aircare, RB, West Africa, Qaiser Rashid, during a symposium in commemoration of World Malaria Day 2015 at NIMR Auditorium, Yaba in Lagos.

Forex limit on naira debit card: CBN to set BVN trap for multiple card holders Stories by BABAJIDE KOMOLAFE

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ery soon, bank customers that have multiple naira debit cards linked to different banks accounts would not be able to spend more than $50,000 for

overseas transaction through their cards.

This is because, the Central Bank of Nigeria (CBN) is set to meet electronic payment service providers to devise measures to ensure that banks customers are not able to have access to more than the

$50,000 limit for on foreign exchange that could be accessed through naira debit cards for overseas transactions.

Recently, the apex bank reduced this limit to $50,000 per annum per person from $150,000. It also reduced limit of daily foreign exchange withdrawal while

abroad to $300 per day from $12,000.

The reduction followed an exclusive report by Financial Vanguard which revealed that foreign exchange users were circumventing the foreign exchange limit on naira debit cards. This is done by obtaining multiple naira debit cards linked to different bank accounts, and thus have access to foreign exchange above the limit stipulated by the CBN. Financial Vanguard reliably gathered the CBN intends to check this abuse by using the ongoing Biometric Verification Number (BVN) enrolment exercise. It was gathered the BVN of every bank customers would be linked to the cards issued to the customer by banks. By doing this, the apex bank would be able to use the BVN to enforce the limit on foreign exchange that each bank customer can access for overseas transaction irrespective of the number of naira debit cards issued to the customer by banks.

It was further gathered that the apex bank is set to meet with the major electronic payment service providers like Nigeria Interbank Settlement System (NIBSS), Visa International, MasterCard, Interswtch to discuss how to link the BVN to payments card issued to customers for the purpose of enforcing the foreign exchange limit for overseas transaction through naira debit cards.

Heritage Bank moves to consolidate leadership status *Appoints three top bankers as directors

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eritage Bank has appointed three top bankers as directors to consolidate its emergence as one of the leading banks in the country.

The three new directors are Mrs. Adaeze Udensi, appointed as Executive Director, South Directorate, Mr. Ola Olabinjo, appointed as Executive, Lagos, SouthWest and Corporate Banking Directorate, and Mr Jude Monye, appointed as Executive Director, Risk Management/Chief Risk Officer.

Managing Director/ Chief Executive, Heritage Bank, Mr. Ifie Sekibo, said that the a p p o i n t m e n t s demonstrates Heritage Bank’s commitment to offering the best and safest banking services by

employing highly competent and experienced bankers with proven track record of performance.

“The successful acquisition of Enterprise Bank has projected Heritage Bank into the leadership rank of the banking industry with huge expectation of quality, fast and efficient banking services from our customers and members of the banking public.

“We intend to consolidate on this leadership status and exceed expectations by ensuring every customer of the enlarged Heritage Bank enjoys fast and efficient services irrespective of their location in the country. The three new directors are bringing to Heritage Bank, over 50 years of banking experience among them, spanning various aspects of banking services across the industry, and these would contribute greatly to the

achievement of this goal”, Sekibo said.

Prior to joining Heritage Bank as the Executive Director, South Directorate, Mrs. Adaeze Udensi worked at Zenith Bank Plc where she earned various awards for top performance. She holds a Bachelor ’s degree and Master’s degree in Banking & Finance and Business Administration respectively from Rivers State University of Science and Technology, and has over 17 years of rich banking experience.

Mr. Ola Olabinjo, Executive Director in charge of Lagos, South-West and Corporate Banking Directorate, joined Heritage Bank from FCMB where he was Senior VicePresident and Divisional Head. He has over 18 years of banking experience spanning Investment Banking, Corporate Banking, Transaction Banking, Risk Management, Treasury and

Operations. He holds a Bachelor ’s and Master ’s degree in Economics from the University of Ife and the University of Lagos respectively and is also an alumnus of Lagos Business School.

Jude Monye, the Executive Director, Risk Management/ Chief Risk Officer, joined Heritage Bank from Wema Bank Plc where he was the Chief Risk Officer and Head Enterprise Risk Management division. Monye has over 25 years experience in various areas including Risk Management, Finance, Credit Administration, Regulatory Compliance; Control, and System Audit; Structured Finance in Upstream Oil sector, SME Development and Project management. He holds a B.Sc in Chemistry, MBA and M.Sc degrees from University of Nigeria and Ibadan respectively.

Vanguard, MONDAY, MAY 4, 2015 — 27

Banking & Finance

Why incoming govt should not raise tax rates - Analysts BABAJIDE KOMOLAFE

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conomic analysts have cautioned the i n c o m i n g administration of General Muhammadu Buhari against increasing the tax rate as a way of generating additional revenue to cover declines in crude oil revenue.

Speaking in the Bi-monthly Economic Bulletin of the Financial Derivatives Company Limited, they said that efforts to show up government revenue through tax increase could backfire by encouraging tax evasion and avoidance.

Analysing the challenges before the new government, they said, “A top priority of the new federal government administration will be how to cover the huge fiscal gap created by the plunge in oil revenues and massive election spending in the 2015 general elections.

“This must be addressed in order to finance development programs and facilitate the day-to-day running of government and economic activities. To shore up government revenues, options available to the government include: raising the tax rate, blocking existing leakages and borrowing.

While many have agreed that there is need for borrowing, there are differing views when it comes to blocking leakages and increasing taxes.

“With an estimated population of 170 million and gross domestic product (GDP) of $568.5 billion, Nigeria’s tax to GDP ratio was 5.23 percent in 2014. This is quite low compared to tax-to-GDP ratio of over 20 percent in most countries. In fact, the tax revenues collected in Nigeria in 2014 was lower than in 2013 despite an 11.3 percent in- crease in GDP. “A high level of tax leakage, the difference between tax potential and tax collections, accentuated by the nontransparency of the current tax structure, has often been cited as one of the reasons for low tax revenues in Nigeria.

The Minister of Finance noted that blocking leakages is expected to add several millions to Nigeria’s revenues while the new federal administration expects over N1 trillion to be recovered.

“In addition to leakages, Nigeria also has one of the lowest VAT rates (5%) in the

world. The IMF recently advised, in its Article IV report, that there is an urgent need for Nigeria to increase its VAT. It is believed that increasing the VAT rate will boost revenues, which will help to create the fiscal space necessary to implement developmental projects in spite of declining oil revenue.

“While increasing tax rates will go a long way in boosting government revenues, we

believe it should be done with caution to prevent a backfire.

Higher taxes have often been found to encourage tax avoidance and evasion. This is all the more likely in an environment where a lack of transparency with the tax structure discourages people to trust the taxation system or voluntary comply with payment.

“Hence, it seems more reasonable that the

government block leak ages as an immediate step to recovering revenues rather than increasing the existing tax rate. In the medium to long term, we believe as the government undertakes more developmental projects and put a better tax structure in place that encourages transparency, it can convince the people to accept a higher tax rate.”

AGM - From Left; Mr Ityoyila Ukpi, Company Sec , Dangote Cement Plc, Alhaji Aliko Dangote, Chairman, Dangote Cement Plc, Mr Onne Van der Weijde, Group Managing Director, Chief Executive Officer, Dangote Cement Plc, and Mr Devakumar Edwin, Group Chief Executive Officer, During the 2014 Annual General Meeting of Dangote Cement Plc, held IN Lagos.

PHOTO: Kehinde Gbadamosi

IoD should sanction erring directors, says StanChart chair

BY PROVIDENCE OBUH

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hairman, Standard Chartered Bank Nigeria Limited, Sir Remi Omotosho, has called on the Institute of Directors (IoD) Nigeria, to adopt zero-tolerance for malpractice by sanctioning directors that flout corporate governance codes Speaking at the Institute’s New Members’ Evening in Lagos, Omotoso said that the institute must enforce mechanisms to sanction any erring members from established rules and standard.

He said, “IoD Nigeria is the guiding beacon in corporate governance teaching and development in Nigeria. Its members are among the best

known practitioners. Iod has a duty to ensure that its members practice what the institute preaches. It must devise and enforce mechanisms to sanction any erring members from established rules and standards. The role of IoD in national life of Nigeria is a critical one particularly in leadership development and all of us who are members must support the institute to play this role diligently.”

In a separate interview, he state: “We are not where God has purposed us to be as a country because of selfishness which is the main driver of corruption.

People are working to enrich themselves owning billions of naira piled up not legitimately earned, if we deal with corruption, every sector of the Nigerian economy will benefit.

Also speaking, President IoD, Mrs. Eniola Fadayomi, explained that the institute holds induction of new members twice in a year but owing to increasing demand, the council approved an additional induction to be held within the year.

Commending the inductees, she encouraged the inductees to be available for services, saying, “Membership of the IoD should not be mistaken for a jamboree. Rather it is a call and admission into being part of global network of respectful group of people that champion positive changes in the business environment of their organisations and the economy at large.”

Ecobank unveils Advantage Banking service

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cobank Nigeria has unveiled Advantage Banking, a dedicated service for the mass affluent and upwardly mobile segment of society.

Advantage Banking by Ecobank offers convenience and ease in carrying out banking transaction for customers within the category. The Advantage Banking initiative which suggests the redefinition of banking service in Nigeria is characterized by the design of special products that suit the life style of people within the segment.

This would make banking much simpler, friendlier, more engaging and more personalised.

Unveiling an Advantage Service Lounge in Lagos on Tuesday, Deputy Managing Director, Ecobank Nigeria, Mr. Anthony Okpanachi, said Advantage Banking Service is an extension of the bank’s strategy to offer its customer dedicated banking service across all customer type. According to Mr. Okpanachi, Advantage Banking Service is designed in such a way to “ensuring our customers get the quality of service they desire. We have a bouquet of lifestyle enriching products available to address their day-to-day banking needs. We provide them a dedicated relationship manager, who follows them, providing all their banking needs where ever they may be or in whatever they do.”

Also speaking, Executive Director, Ecobank Nigeria, Mr. Kingsley Umadia, said the vision to create Advantage Banking Service by Ecobank follows continuous interaction with the average bank customer in Nigeria which reveals the dire need to personalize engagement with the individual. He emphasized that the customer would rather be treated as a separate entity having his/ her individual and peculiar needs resolved in a tailor made fashion to get maximum satisfaction and endearment to the brand.

Mr. Umadia emphasized that Advantage Banking by Ecobank is about building a rewarding partnership with customers by meeting their financial, investment and lifestyle needs when it matters most.

28 — Vanguard, MONDAY, MAY 4, 2015

Corporate Finance

Custodian and Allied records 40% growth in first quarter

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ustodian and Allied Plc a wholly owned Nigerian investment holding company quoted on the Nigerian Stock Exchange NSE has recorded a 40 per cent growth in its Profit Before Tax,PBT for the first quarter ended March 31, 2015.

It also recorded significant investments in general and life insurance, pension fund administration, trusteeship and property holding businesses, as shown in its unaudited consolidated results for the three months period ended 31 March, 2015. The results further demonstrate the diversity of Custodian’s revenue base and its resilience in a challenging operating environment.

The Custodian Group’s Profit Before Tax for the three months period rose by 40% to N1.87 billion over that of the corresponding period of 2014 while the Group’s asset base rose to N50.6 Billion from N48.9 Billion as at 31st December, 2014.

Barring unforeseen circumstances, the Board of Directors stated that the trend would be maintained for the remaining period of the financial year.

Transcorp announces N2.57bn PBT in quarter 1

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ransnational Corporation of Nigeria, Transcorp Plc, has announced N2.57 billion profit after tax for its first quarter ended 31 March 2015. The results showed that revenue for the Group stood at N9.92 billion, which represents a slight drop of five percent from quarter one 2014 results of N10.54 billion.

The company’s revenue increased by 39 percent to N736 million from N528 million recorded in the corresponding period of 2014.

Group PBT for the period was N2.57 billion, while the company made a profit before tax of N761.35 million compared to the loss before tax of N573.95 million in 2013.

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FORUM - From left: Chief Medical Director, University of Benin Teaching Hospital, Prof.

Michael Ibadin; Chief Executive Officer, Bufferzone Limited, Mr. Akin Fadeyi; Zonal Coordinator, South West, National Health Insurance Scheme, Mrs. Olajoke Balogun; and CMD, Muhammed Abdulahi Wase Specialist Hospital, Kano, Dr. Munkaila Yusuf, during the Health Access Season II Talk Show of the NIHS in Lagos.

CIS records N64 million surpluses after six years of losses ... Approves President’s request to step aside

BY PETER EGWUATU

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he Chartered Institute of Stockbrokers (CIS) has bounced back to reckoning as it recorded N64 million surpluses as against a series of losses for six consecutive years.

The Council of CIS has also approved the request of the President and Chairman of Council, Mr. Albert Okumagba, to step aside, pending the ongoing oversight activities of the Securities and Exchange Commission (SEC) at BGL Group, where he is also Group Managing Director/Chief Executive Officer.

In approving the request, the Council has authorised the First Vice President, Mr. Oluwaseyi Abe, FCS, to act in the capacity of President and Chairman of Council of the Institute.

Besides, the institute which held a successful 20th Annual General Meeting (AGM has embarked on many initiatives to re-brand, grow membership, benchmark its operations with the global standard and play pivotal roles in the growth and development of the Nigerian Capital Market.

Generally, stockbrokers

commended the new administration for its outstanding performance within one year and the aggressive approach which has put the Institute on the National consciousness.

In his remarks, the Acting President and Chairman of Council, Mr. Oluwaseyi Abe urged the Stockbrokers to

support the on-going transformation by paying their membership and practising fees promptly.

Abe implored them to show more interest in the Institute’s activities.

By the institute’s current Annual Report and Financial Statements, “From a financial perspective, the institute

recorded a surplus of N64 million Naira, a significant landmark as it represents reversal of the series of losses recorded in the last six years.

This is accounted for by four main factors- a massive debt recovery drive which achieved modest results, higher income from selffinancing activities, efficient cost management and control, and receipt of grant from the Nigerian Stock Exchange” The Financial Statement also indicates that the institute shall undertake a comprehensive rebranding to take its rightful place in the financial market, ensure revamping of its finances, and initiate a process through which it will be used as a platform to support knowledgeable professionals that would help deepen the financial inclusion in Nigeria.

On membership drive, the institute has strengthened its Professional Diploma in Securities and Investment to create opportunities for the youths that are interested in pursuing a career in the financial market. By this role, the institute would supply the manpower requirement of the nation towards achieving the national saving strategy and financial inclusion plan.

“To this end the CIS professional Diploma Examination has been redesigned as fully computerbased test holding every month as opposed to twice a year. This is aimed at reducing our time required to complete certification thereby accelerating the process of training and certifying candidates”.

Sterling Bank calls for monetary policies focused on growth

BY PROVIDENCE OBUH

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terling Bank Plc has called for continued accommodative monetary policies and flexible fiscal policies focused on growth, even as it recorded a Profit After Tax, PAT, of N9.0 billion against N8.3 billion in 2013 in its financial year ended December 2014.

Speaking at the 53rd Annual General Meeting, AGM in Lagos, Chairman, Board of Directors, Mr. Asue Ighodalo, said that the Governor of the Central Bank of Nigeria (CBN) is expected to balance monetary policy measures which support growth against those needed to rein inflation and stabilise their domestic currencies and financial systems in the emerging economies.

...Records N9bn PAT Ighodalo said that the second half of the year, 2015 should offer some respite to domestic economy as political uncertainties taper the current multinational counterinsurgency push, curbs the activities of insurgents in the north-eastern part of the country and international oil prices gradually inch upward on the back of expectations of output cuts by OPEC at its next meeting in June 2015.

On the other hand, Managing Director/CEO Sterling Bank, Mr. Yemi Adeola, said that the year was challenging for the banking industry and that the double whammy of macroeconomic shocks and tighter regulatory environment put significant pressure on the margins of the

banks.

Adeola said that the domestic economy would be weighed down in the first nine months of the year by the impact of lower global oil prices and distractions from intense politicking, but should witness a gradual uptick during the latter part of the year as crude oil prices inch upwards and some certainly returns on the political front.

While the economic landscape may be challenging, I strongly believe that the Bank is on a sound financial footing, given its stronger capital position, asset quality and dedicated workforce to advance its growth plans.

Vanguard, MONDAY, MAY 4, 2015 — 29

Corporate Finance

FMDQ reiterates commitment to promoting price stability, transparency Stories by NKIRUKA NNOROM

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MDQ OTC Plc has reiterated its commitment to focus on product and market development initiatives that would promote price discovery on the platform and enhance transparency in the over-thecounter, OTC, market.

Chairman of the company, Dr Sarah Alade, stated this while outlining the Exchange’s five year strategic plan at the exchange’s 3rd Annual General Meeting, in Lagos.

According to her, the five year strategic plan, which spans 2015 – 2019, would see the exchange actualizing its vision of being the number

one in Africa in the fixed income and currency market.

She assured that the exchange was poised to reposition the Nigerian fixed income and currency market to become more globally competitive and support the nation’s economy.

Reviewing the company’s 2014 performance, Alade explained that the company posted a revenue of N1.75 billion, as against N155.65 million achieved in 2013, while profit before tax rose from N133.4 million to N708.5 million during the period under review.

She explained that transaction fee during the period was charged for the full year, adding that it accounted for 91.29 per cent of the total revenue.

Alade noted that the company focused on activating and developing its functions in the areas of market and business development, Legal, Regulatory, operations and technology in 2014.

During the year, FMDQ, according to her, achieved unprecedented transparency in the OTC fixed income and currency markets and positioned itself to offer value

added services to the listing of bonds in Nigeria by achieving the approval of its bond listings and quotation rules by the Securities and Exchange Commission, SEC. To consolidate on the performance, Alade said the company would focus on developing innovative products and market infrastructure, promoting price discovery and transparency, providing quality and reliable research.

Other key areas of focus in 2015, according to her

include; facilitating education and capacity building for all stakeholders, fostering integration of the Nigerian financial market with international market and increasing investors’ confidence.

According to her, the roll out of products such as currency derivatives, repos and syndicate underwritten commercial papers issuance facility will go a long way to add value to stakeholders and deepen the market.

Chams targets improved profitability via new products’ deployment …Pays N93.9m dividend

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hams Plc, Nigeria’s identity management and payments system company, has assured

its shareholders that the company is set to record improved profitability in the coming years given the on-going projects and prospects for the new products to be deployed.

This is even as the shareholders approved the distribution of N93.9 million dividends, which translates to 2 kobo per ordinary share of 50 kobo previously held by shareholders. st Giving the assurance at the 31 Annual General Meeting, AGM, in Lagos, the chairman, Very Rev. Ayo Richards, said the company is poised to release innovative products that will have major impact in the identity management space and make life more secure and convenient for its customers.

He said as part of the company’s strategic plan to consolidate the achievement recorded in the last three years and fosters its aspiration of dominating the identity management space in Africa, it partnered renowned consulting firm to forge a corporate strategy that would serve as a roadmap for the medium term. Commenting on the 2014 results, Richards said in spite of the tough market condition during the year under review, which impacted the company’s performance, it recorded improved performance from its subsidiaries.

He noted that the company recorded total revenue of N4.1 billion in contrast to N3.4 billion in 2013, representing 21 per cent increase.

The profit for the year after taxation increased by 49 per cent to N280 million compared to N188 million in 2013 just as the total assets grew by 12 per cent to N12 billion from N10.7 billion recorded in 2013.

Also speaking at the event, the Group Managing Director/Chief Executive Officer, Demola Aladekomo, informed the shareholders of his decision to retire from the board of the company effective September this year.

He said, “I will be leaving the role I loved to play since the inception of this company. On the other hand, I look forward to this new epoch of my life as I would be leaving in the confidence that I am entrusting the company in the hands of highly competent and professional management who would bring fresh ideas to business.”

Continuing, Aladekomo explained that 2014 financial year was period of business consolidation for Chams as it took positive step to achieve its set objectives which is evident in its financials.

“We achieved some major milestones on our existing projects and also fostered numerous new business partnerships. Our ability to deliver growth across major financial indicators further attests to our strong market positioning and industry leadership,” he said.

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30 — Vanguard, MONDAY, MAY 4, 2015

Homes & Housing

UNION HOMES ACQUISITION: US mortgage rates rise on mixed economic reports

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ortgage rates in the US were pushed up slightly by mixed economic reports, according to the latest data released by Freddie Mac. The 30-year fixed-rate average rose to 3.68 percent with an average 0.6 point.

(Points are fees paid to a lender equal to 1 percent of the loan amount). It was 3.65 percent a week ago and 4.29 percent a year ago. The 30year fixed rate has stayed below 4 percent for more than 20 weeks, dating to November. The 15-year fixedrate average grew to 2.94 percent with an average 0.6 point. It was 2.92 percent a week ago and 3.38 percent a year ago. The 15-year fixed rate hasn’t been above 3 percent since March 19.

Hybrid adjustable rate mortgages also moved higher.

The five-year ARM average edged up to 2.85 percent with an average 0.5 point. It was 2.84 percent a week ago and 3.05 percent a year ago. The one-year ARM average climbed to 2.49 percent with an average 0.4 point. It was 2.44 percent a week ago.

ASO controls 40% of mortgage market Stories by YINKA KOLAWOLE

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SO Savings and Loans Plc is set to become the largest mortgage bank in the country, controlling 40 percent of the market share of the mortgage industry with the completion of its acquisition of Union Homes Savings & Loans Plc. The recently concluded transaction will see the combined entity having a balance sheet size of N110 billion which makes it the biggest outside the deposit money banks in the financial sector.

Vanguard gathered that the operational integration of both entities is expected to span 3 to 6 months following which Union Homes will be fully collapsed within ASO. The financial synergy created by the combination will

accrue primarily from a bigger post-acquisition balance sheet, resulting in increased ability to attract deposits and shore up liabilities due to renewed customer confidence.

Also, the shared internal costs and economies of scale is

On completion of the transaction, ASO’s larger balance sheet is expected to help deepen home ownership

expected to bring about an improvement in operational cost management.

A reliable source privy to the deal said on condition of anonymity because he wasn’t authorised to speak publicly on the matter, stated: “A unified business platform for both Union Homes and ASO will deliver financial synergies that will maximize profitability, shareholder value, revenue per customer (plus other target indices) and increase market share. To this end, we expect to see improved operational and profitability ratios within 3 years post acquisition.”

The new entity will have an expanded client base and distribution network, as ASO stands to inherit almost 30 branches from Union Homes, many in locations where ASO is currently not present,

UK mortgage approvals trending upwards

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fter a slow start to the year, the number of mortgages being approved is now “trending upwards”, according to the UK’s High Street banks.

Figures from the British Bankers Association (BBA) show that 38,751 housepurchase mortgages were offered in March, up from 37,453 in February. That is the highest number for 6 months, but 14 percent lower than a year ago. The BBA said that one reason for the improving picture was the low mortgage rates on offer.

Lenders have continued to cut rates, as the prospect of the Bank of England raising interest rates has receded.

Five-year fixed rates are now available for less than 2 percent a year. “The third successive modest rise in mortgage approvals ties in with our belief that housing market activity is now gradually turning around,” said Howard Archer, Chief European and UK Economist with IHS Global Insight.

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Modern mini housing development

Lagos generates N27bn from land transactions

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he Lagos State Government generated N27.05 billion from land transactions in the state between January and December 2014.

Permanent Secretary, Lands Bureau, Hakeem MuriOkunola, who disclosed this at a press conference in Lagos, noted that the 2014 land revenue amounted to an increase of N18.65 billion over the N8.3 billion generated in 2013.

“The revenue performance, which is considerably more than the total of the previous year by about N18.65 billion was due to transaction on the sale of

land for industrial development in the Free Trade Zone.

The revenue performance for the year under consideration exceeded the Bureau’s budget for the period by 165 percent,” he said.

Muri-Okunola emphasised that aside from some major transactions, the revenue from the new schemes being expected in the year under review as well as the property recertification project could not be realised, thereby making it difficult for the government to generate revenue from these sources.

He said that the revenue

would be improved upon when the new schemes; property certificate and transaction on state land are brought on board.

On the grant of Governor ’s Consent, the Permanent Secretary disclosed that 6,623 applications were received and processed in 2014, generating N4.3 billion which exceeded the target of N3.2 billion. He also revealed that compensation of N2.8 billion was paid to affected individuals and companies whose properties were acquired by government for overriding public interest.

particularly in the southern parts of the country. On completion of the transaction, ASO’s larger balance sheet is expected to help deepen home ownership and the growth of Nigeria’s small but rapidly expanding mortgage industry, which is challenged by high cost of capital for mortgage lenders.

Analysts say the larger ASO Savings could leverage on the services of the newly established Nigeria Mortgage Refinance Company (NMRC) to expand the tenure of its mortgages to between 15 and 20 years, from the 5 to 10 years presently obtainable. “They could use short-term money and create long term mortgage asset, and sell those assets to NMRC for cash, to do similar mortgages. NMRC is also giving mortgage lenders like ASO a chance to get relatively more affordable interest rates,” an analyst said.

Recall that the federal government launched NMRC in 2014 to expand the secondary mortgage market, allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders and mortgages in the market. “We anticipate that the NMRC will stimulate the secondary market for Mortgages. Our modest goal is to grow the active mortgages in Nigeria from 20,000 to 200,000 in 5 years,” said Finance Minister Ngozi Okonjo- Iweala at the launching.

ASO Savings’ (stand alone) 2013 audited financial statements showed profit after tax PAT increased by 205.42 percent to N207.51 million compared with N117.14 million loss recorded in the corresponding period of 2012.

With the acquisition, the new ASO is well positioned to expand aggressively as Nigeria’s population and income per capita grows.

The country’s rapid rate of urbanization which the World Bank put at 51 percent in 2012 and an estimated 80 million people living in the cities is expected to spur the demand for housing.

Recent data released by the Nigeria Bureau of Statistics (NBS) shows that in the fourth quarter of 2014, real growth recorded in the building and construction sector stood at 12.66 percent (year-on-year), while housing finance Africa in its housing vision 2020 report states that the yearly housing requirement of Nigeria was 500,000 units which is expected to reach 2.1 million by 2020. This represents a minimum growth rate in housing requirement of 11.6 percent per annum for the next 9 years, according to analysts.

Vanguard, MONDAY, MAY 4, 2015 — 31

Insurance Stories by ROSEMARY ONUOHA

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hareholders of Mansard Insurance Plc have given the Board and Management of the company the approval to change the company ’s name to AXAMansard Plc. Shareholders of the company unanimously gave the approval at the company ’s 23rd annual general meeting in Lagos last Tuesday.

Recall that French insurer, AXA, acquired 100 per cent stake in Assur Africa holdings, which holds a 77 percent stake in Mansard, thereby making AXA the beneficial owners of Mansard.

Chairman of the Company, Mr. Victor Osibodu, said that with the acquisition, Mansard stands to benefit from limitless access to global resources, capacity development, strong global brand recognition in corporate space and staff cross-positioning adding that Mansard staff have now become members of a multinational group.

“These are a few benefits amongst many others. I am very confident that these factors will transcend into better service delivery and product innovation that will deliver unequaled solutions to our esteemed customers and translate into increased returns for all shareholders,” he stated.

He said the purchase of the parent body of Mansard by AXA group has received all necessary regulatory

Prestige Assurance seeks brokers’ collaboration

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WORKSHOP - From left: Mr. Ganiyu Ayodele Sanni, Past President, Institute of Public Analysts of Nigeria (IPAN); Dr. Dahiru Adamu, President; and Mr. Kayode Isah, Hon. Commissioner for Health, Kwara State during the 21st IPAN Mandatory Workshop at Ilorin recently.

Mansard gets shareholders approval to change to AXA approvals therefore Mansard can now bid fare well to its erstwhile majority shareholders Assur holding and cleave to its new identity.

On the company ’s performance during the year ended December 31, 2014, the Chairman said gross premium grew by 28 percent from N13.59 billion in 2014 to N17.40 billion in 2014.

Net premium income of the

company grew by 20 percent from N 7.54 billion in 2013 to N9.05 billion in 2014.

Profit before tax rose by 2 percent from N 1.98 billion in 2013 to N2.02 billion in 2014 against 27 percent dip in profit after tax which decreased from N2.1 billion in 2013 to N1.5 billion in 2014.

He said total asset of the company rose by 24 percent at the period from N36.1

percent in 2013 to N 44.9 billion.

Osibodu further said as a result of series of expenses incurred by the company during the period which is expected to yield remarkable profit in future, the company could not announce any dividend to its shareholders.

Continental Re plans African acquisitions

BY FAVOUR NNABUGWU, with agency reports

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ontinental Reinsurance Plc plans to acquire rivals across Africa over the next three years as it seeks expanaion across the continent, said Chief Executive Officer, Femi Oyetunji.

In each of the company’s five African regions, “one subsidiary has been given the responsibility to look for acquisitions,” Oyetunji said in an April 28 interview at the company’s headquarters in Lagos.

“A few names have come up in each region and we’re assessing them strategically at the board level.”

Premium income for the insurance and reinsurance industry is improving in Nigeria, as regulators enforce rules requiring companies with at least five workers to provide life coverage. The National Insurance Commission is also making property insurance mandatory in the country.

Continental Reinsurance plans to “raise significant capital” this year through equity sales to enable it to “take advantage of opportunities that abound in Nigeria and Africa,” Oyetunji said.

The fundraising, initially planned for last year, was delayed after Emerging Capital Partners LLC, a

Washington-based buyout firm, announced plans to sell its majority stake. The investor “is very close to concluding the exercise and will announce the preferred bidder for its 54 percent stake soon,” Oyetunji said.

The March presidential election has bolstered investor confidence in Nigeria, he said. “With the peaceful conclusion of elections, business optimism has grown and people are going to be investing.”

President Goodluck Jonathan conceded defeat to former military ruler Muhammadu Buhari after last month’s vote. The peaceful succession soothed investor fears in a country with a history of election-related violence.

The reinsurance company, which announced plans this month to open a construction property and engineering risk services unit in South Africa, intends to boost specialist skills in other areas, including actuaries and information technology, to advise and support underwriters, Oyetunji said. ($2.33 billion). “We have various channels for business procurement, we have network of office up to the tire 7 in nook and corner of the country; we have different other lines of business such as health insurance, bancassurance, agricultural insurance in a big way,” Swamy stated.

anaging Director of Prestige Assurance Plc, Mr. Balla Swamy has appealed to insurance brokers to do business with his company stating that no insurance company in Nigeria can survive without intermediaries.

Swamy, who made the appeal at the Nigerian Council of Registered Insurance Brokers, NCRIB, evening in Lagos last week, said that his company is focused on product innovation, technology, customer service and intermediaries.

Swamy said, “Prestige Assurance is managed by three experienced Indian expatriates and run by well experienced Nigerian team of 76 employees. The Company is blended with Indian and Nigerian insurance market experience. The company has a history of prompt claims settlement and customer friendly relations.”

According to Swamy, Prestige is equipped with an IT platform called GIBS and is Web based; three ways of communication by personal contact, email and SMS is activated; portal services available for major business partners to provide effective services; automatic online upload of motor and marine certificates to Nigeria Insurance Industry Database, NIID, as well as claims are being attended on specified time lines. The Managing Director assured the brokers that quotes will be attended to on time as they will provide competitive rates in line with the risk and market, while their marketers will patronize brokers and management team will be in touch with brokers also. He also said that the vision of the company is to be the most respected, trusted and preferred non-life insurer in Nigeria while their charter is “highest priority to customer needs, courtesy and caring occupies pride place in our work culture.

Our commitments are to act courtesy, fairly and reasonably in all our dealings with the customers,” he said.

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32 — Vanguard, MONDAY, MAY 4, 2015

Interview

Nigerians should buy locally made goods to grow economy — MD BoI

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n this interview, Mr. Rasheed Olaoluwa, Managing Director/CEO Bank of Industry (BoI), justifies why governments and the citizens should patronize Nigerian manufacturers of high quality products instead of imported goods.

BY FRANKLIN ALLI

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ou have toured the Momas Electricity Meters Manufacturing facility, what is your assessment of the state of the infrastructure and equipment on the ground?

We just finished the factory tour of Momas and this is a factory where they produce prepaid electricity meters. I must say that I have been very impressed really by the level of technology on displays here. People who have an engineering background would understand what I mean here.

I saw semi-conductors, integrated electric circuit and the process of making these circuits. It is the first time this is happening in Nigeria. For me, the key issue is, we have a company in Nigeria that is owned by a Nigerians that has the capacity to supply almost all of the electricity meters that we need in this country. For me, there is an industrial policy issue here. BoI wants to help Nigerian companies like this that have the capacity to produce what Nigerians or Nigerian businesses require.

We don’t need to import such things.

This is one of the reasons why our foreign reserve has been under pressure-we keep importing what we produce locally; I think the major strategic step for our country to take is to come out with an industrial policy to ensure that any company we have identified as having capacity to produce items locally, such companies are given supports and patronage. Momas produces all kinds of meters-pre paid and post paid, they have even developed a very robust platform that ensures that from your mobile phones you can check how much is the balance on your meter, and whether you need to re charge or not. These are things that we should be very proud of as Nigerians. I am very proud of what they have done and they require supports that they can get from us, Nigerians and the Nigerian governments.

How do you integrate your customers so that they patronise one another?

Yeah, that is a very good question. You will have noticed that I was asked the Chairman of Momas (Engr. Kola Balogun) some questions as we were going around the facility. When we got to the part where he showed us the C M Y K

•Mr. Rasheed Olaoluwa

We keep importing what we produce locally, we cannot develop our industrial base if we are bent on patronising imported goods

plastic casing, I mentioned to him –are you procuring the cases from Innoson Plastic Manufacturing, one of our customers, and he said, yes, they get only the big ones. Of course, we encourage our customers to patronise each other.

There is a portal that BOI is putting up right now which will actually show case every BOI customers in terms of all their products, the profile of the company, etc. so that Nigerians can access and patronise these companies. So, it is a very good point that you have made that our customers can support each other.

To what extent has the bank assisted this company?

We supports Momas in terms of both long term loan as well working capital.

So far so good, the company is meeting its obligations.

How much?

I don’t think the client want me to mention the amount (Laughs) How can we as a country develop our own industrial base?

We cannot develop our industrial base if we are bent on patronising imported goods. What I am going to do to be very specific, is from time to time, I have meetings in Abuja and I am going to put it on the table; I am actually working on a presentation which I intends to make to the Federal Government. We have identified our customers and other customers we have

identified in the economy who have capacity, not just capacity, we are talking about good quality outputs, people who can actually produce good things like Secure ID; the company is among the most modern card manufacturing companies in the world, so we really do not have justification for importing cards anymore in this country. Momas where we are today has a very modern prepaid meters manufacturing facility, so we don’t really have reasons for importing those things, rather we need to really find a way to support companies like these to grow and create employment. Momas has capacity to hire 500 staff if they are well patronise but currently their staff strength is 100. So that is the impact of what we are talking about. We have been exporting our jobs to other countries because we have been importing goods from them. We need to begin to really support our own manufacturers. That is what BOI is out to encourage.

What informed your visit to NFE Industries Limited and Knight Metal Manufacturing Company Limited, subsidiaries of Wempco Group?

These factories were commissioned recently. NFE Industries Limited in particular, processes steel billets for wire rods .They are used for processing products in Nigeria that are used to produce nails of different sizes, they are used to produce barbed wire, wire mesh and so on and so forth. Before this facility was commissioned, as a country, we used to import wire rods. So this is the first group that is actually producing this item locally. This is a very good development, and I am really very impressed.

Again, we are seeing a company that is producing a product locally to the highest international quality, and I think as a government, we can support and protect local manufacturers like this.

Am aware that there are people who still imports wire rods up till now but with this new factory, there is no justification for continuing to import.

And luckily from my discussions with the company’s executives, the ex-factory price here is actually cheaper than imported steel rods; so really, no one has

any reason to import. I really benefited from the discussion in knowing what are the factors responsible for their cost efficiency? You hear a lot of manufacturers complaining about how harsh the environment is and all that but here is a local manufacturer that has managed to put together the various factors of production such that the exfactory price is actually cheaper than imports. This gives me a lot of hope that indeed, Nigeria is on the right track; the Industrial Revolution Plan is working, and I think, going to the future a lot more facilities like this are going to come up that will ensure that we become more self-sustained as a country.

Looking at the ceramic products, there is made-in-Nigeria on the cartons, what is the bank doing to encourage citizens to patronise locally made quality products?

Before we got to this tile factory, we saw the nail factory and on the bags of nails it was written Made in Ogun State Nigeria. That was because the former governor of Ogun State, Otunba Gbenga Daniel insisted that they shouldn’t just write made in Nigeria, they should write Made in Ogun State Nigeria. But guess what? Our own fellow citizens complain that they don’t want that; that they should write made in China, that it helps their markets; so they have to put some Chinese words on the bags. I think we need to get over this inferiority complex among our citizens. A product that is made in Nigeria to the highest quality, we should be proud of it that it is our own as supposed to longing for products made outside Nigeria. So it is a psychology, it is an orientation that we need to change.

How many of these factories do you think can service the whole of Nigeria?

Okay, the factory that produces billets, wire rods has 300 thousand metric tonnes annual capacity; that is massive. I think at the end of the day it calls for industrial policy.

We want to support local producers. They are the first to take a step in this particular direction, so we would like to support and encourage a number of other producers to come on board so that there is competition just like you have seen competitions in the telecom sector. Initially, the MTN was charging N50 per minute, till today you know how much completion there is in that sector; at the end of the day, it is in the interest of the consumer. So they have taken the first step and with support in terms of industrial policy, and consumer, other producers will be encouraged to come into the picture.

Once there is competition, the price will definitely come down.

To what extent has the bank key into the NIRP? Yeah, again, we just finished looking at the ceramic tile factory, where kaolin is mined from the nearby mining lease in Ogun State, the kaolin is mixed with a lot of other raw materials to produce tiles and you can see they are of international quality tiles-very rugged, you can designed all kinds of things on it and you can even put your name and picture on it; this is one of the key sectors identified in the Nigeria Industrial Revolution Plan; the three being agro processing of our agric produce into intermediate raw materials for industries; the second is Solid minerals and metals this group we have just visited today is a strong player in that sector.

Vanguard, MONDAY, MAY 4, 2015 — 33

Economy

South African groups to double Nigeria investments …Target middle-lower income buyers Stories By EMEKA ANAETO, Economy Editor

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s xenophobia diplomatic tension between Nigeria and South Africa dies down, South African companies are taking bullish positions on the Nigerian economy, apparently crowding out local competition.

Two of the South African companies have, Pepkor and Shoprite, amongst many others have announced expansion program that would more than double their stakes in the Nigerian economy. Pepkor Ltd., the South African clothing retailer bought by Steinhoff International Holdings Ltd. for $5.7 billion in 2014, plans to double its presence in Nigeria with 10 store openings per year through 2018. Confirming this plan Pepkor Nigeria’s general manager, Deon Conradie, told Bloomberg last week in Lagos that the company which opened its first outlet in Nigeria in 2012, will have 31 stores by July this year. The clothing and footwear chain plans to sustain that growth rate over the next three years, he said.

In a related development property group, Resilient, one of South Africa’s largest owners of platteland malls, has entered into a joint venture with Whitey Basson’s Shoprite to build 10 shopping centres in Nigeria. The deal, worth more than USD85 million, also involves two other South Africa’s big finance and investment organizations, Standard Bank and Group Five.

Justifying these new investment moves Conradie said “our prices are low and we cater for that middle-to-bottom market, which is the fastest growing”.

Woolworths Holdings Ltd., another South African retailer that targets wealthier consumers, said in 2013 closed three Nigerian stores because of high costs-to-patronage ratio.

Nigerian demand for goods other than food is expected to increase to USD110 billion in 2030 from USD20 billion two

•Goodluck Jonathan President Federal Republic of Nigeria years ago as Africa’s biggest economy grows and its working and middle classes seek alternatives to outdoor markets, according to McKinsey & Co. While a 40 percent fall in oil prices since June has curbed growth in the continent’s biggest crude producer, the economy is forecast to expand 5 percent in 2016, the International Monetary Fund said in its April 28, 2015 report.

More than 100 South African companies are doing business in Nigeria across several industries, with the biggest investment being in the telecommunications sector.”

Reacting to the NigerianSouth African commercial

Resilient, one of South Africa’s largest owners of platteland malls, has entered into a joint venture with Whitey Basson’s Shoprite to build 10 shopping centres in Nigeria

•Jacob Zuma President S. Africa

relations South African President, Jacob Zuma, said last year, “We welcome the participation of South African business in other sectors in Nigeria as well, such as engineering, construction, media, banking, retail, hospitality, oil and gas exploration and services.”

Zuma said there had also been keen interest from Nigerian businesses to invest and do business in South Africa across a number of sectors.

Entry to the Nigerian market requires relatively high capital

investment due to inflated rental and power costs, according to Pepkor.

Steinhoff, a Johannesburg-based furniture retailer, agreed to buy Pepkor in November last year to expand into clothing and new economies. The deal, said to be the largest purchase of a South African company in more than a decade, will create a retailer spanning three continents.

Looking into the Shoprite calculations on Nigerian economy and business Managing Director of Resilient Mr Des de Beer, who has a

formidable reputation for spotting growth opportunities, has been eyeing Nigeria for a while as the African country where he believes the group can best replicate its South African retail property model. De Beer says Nigeria’s population is a huge 155million but the country has only a handful of formal shopping centres. He believes Nigeria offers better potential returns than South Africa, where opportunities for new retail developments have become few and far between. “The risk in South Africa is up but the returns are down. It’s time to explore fresh markets.”

De Beer says Shoprite has already spent a lot of time in Nigeria and has an impressive understanding of how that market operates.

“Being able to leverage off their existing skills base will significantly reduce our risk.”

Resilient and Shoprite’s venture will focus on centres 10000m²-15000m² in size. At least 10 suitable sites have already been identified in and around Lagos and Abuja. The centres, to be built over the next three years, will be anchored by Shoprite stores.

De Beer would like to list the shopping centre fund in Nigeria once it reaches the right critical mass, a similar approach to Resilient’s entry into Romania in 2007 through New Europe Property Investments (Nepi).

New coal find to boost power sector A group of indigenous mineral explorers have discovered 196mn metric tones of coal in Edo State. With the newly-discovered coal reserves, 1,200MW of power could be generated into Nigeria’s national grid, according a report by African Review.

The 35 km-long reserve has a generation capacity of 1,200MW for the next 50 years, which could sufficiently mitigate Nigeria’s ongoing power problems, said members of the technical team of Jidet Nigeria, which revealed the findings. Head of the company’s technical team Olujide Pocon Tajudeen-Alan stated that the construction of power generation facilities could cost around USD1.5 billion.

Special adviser on renewable energy to the Nigerian power ministry Albert Okorogu said that the discovery of coal was wonderful, especially since Edo State was conventionally not known to possess coal reserves. “The Ministry will do all it can in ensuring that they move from mining coal to using it to generate power,” he added.

Jidet Nigeria, according to the report, has met with the power ministry in Abuja to discuss the best ways to attract technical partners and financiers with a view to actualise the project.

“We want to commence the application and processing of licenses to officially enter the power sector.

34 —Vanguard, MONDAY, MAY 4, 2015

National Assembly’s biggest joke in four years “Reps raise 2015 budget by N134.5bn, pass N4.4tn.”

PUNCH. April 24, 2015. t is just as well that over seventy per cent of the current representatives in the National Assembly will not be returning. This is probably the least productive legislative branch in the world today.

Unproductive, that is, in anything which could be beneficial to the people of Nigeria. It might however be the front runner for mischief and idleness.

Only God knows how over four hundred adults, most highly educated, presumed to be capable of handling simple arithmetic, can in the last week of April pass a budget which the first three months have proved impossible to execute. Yet, a month before most of them are sent to the dust bin of our political history, they increased the budget by N134.5bn at a time when aggregate revenue is not only falling rapidly, it is most likely to fall further.

Among the most irresponsible members of the House are those committees with oversight responsibilities for the oil and gas sectors of the economy.

Among other duties, Nigerians would have expected that they will undertake to remain current with the trend of global prices of crude and gas as well ad future trends – short, medium and long. Additionally, they would regularly share the information with other members of the NASS to serve as guide to decisions about the budget.

Obviously, they have failed to do this. Otherwise, it is difficult to imagine why so many adults, presumed to be knowledgeable could be asking for expenditure of revenue they know will never be realized.

Already, the price of crude oil had stayed stubbornly below the benchmark, sales are down, and are likely to get worse in April and May as some of our biggest customers have failed to take up their options. Even, non-oil exports are experiencing global resistance as many of our products are being rejected for quality reasons.

Altogether, the picture which emerges is bleak. With the revenue projections so underwhelming, no serious legislators can agree to pass a

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budget higher than when it was first presented late last year.

“We are not amused.” Queen Victoria, 1819-1901.

Queen Victoria, like most monarchs, kept several clowns and court jesters, whose duty was to entertain the monarch and her guests – just as we have our own Ali Baba and Basket Mouth etc. Clowns performing before queens and kings however ran a terrible risk. One their jokes are not funny to the monarch they could hear the sentence passed: “I will make you shorter by a head” (Queen Elizabeth I, 15331603. Since most of the jesters in the NASS have been “decapitated” by the voters, we can no longer threaten them with removal. We can only try to understand why patriotic adults will engage in an exercise in futility.

What then could have informed this absurdity? The obvious answer is political vendetta. The second, closely related, is the quality of individuals we send to the NASS. Nigerian politicians are largely irresponsible. Most of them are in the NASS for what they can get out of it not what they can contribute. That explains why important bills like PIB take forever to get through the House and they still don’t get passed.

Similarly, annual budgets are treated with the disdain they don’t deserve. No budget had been passed before April since 2000 and none had been implemented by the Executive branch. Yet, not once had the NASS conducted an inquiry into why a document taken seriously elsewhere in the world suffers this fate in Nigeria.

Political vendetta underlies the current budget passed by the House. With most representatives on their way out, they feel no obligation to fashion out the best possible budget for the country.

Instead what they have come up with is a banana peel for Buhari and the incoming NASS which will be dominated by the APC. Most of them who can think, know it won’t work but they don’t give a damn.

It remains to be seen if President Jonathan will sign the appropriation bill into law and join the jesters in a bid to register their displeasure that, for them, the party is over. If he does Jonathan would have sacrificed a great deal of the goodwill he garnered by conceding defeat immediately after the election results were announced. He will strengthen his claim to our eternal gratitude by not signing it.

We can only try to understand why patriotic adults will engage in an exercise in futility

C M Y K

Vanguard, MONDAY, MAY 4, 2015 — 35

E-Commerce

Big data: Driving e-business through open access Stories by JONAH NWOKPOKU

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ig data is a broad term for data sets so large or complex that traditional data processing applications are inadequate.

Challenges include analysis, capture, search, sharing, storage, transfer, visualization, and information privacy. The term often refers simply to the use of predictive analytics or other certain advanced methods to extract value from data, and seldom to a particular size of data set.

Specifically, businesses especially online related ones use big data, by combining data from web browsing patterns, social media, industry forecasts, existing customer records, etc to predict trends, prepare for demand, pinpoint customers, optimize pricing and promotions, and monitor realtime analytics and results.

According to McKinsey analysis of more than 250 engagements over a five year period, companies that put data at the centre of the sales and marketing decisions improved their marketing ROI by 15 to 20 per cent.

In Nigeria, the availability of big data has not proved to be very economically useful.

This is due to restricted access placed on big data.

Some institutions that retain and continue to gather such large amount of data include the telecommunication companies. Through sheer large number of mobile phone users, SIM card registration and increasing penetration of smartphones, these telecommunications companies have been able to gather so much data more than any other institutions in the country.

At the just concluded Mobile West Africa conference held in Lagos, Senior Manager, Enterprise Marketing, MTN Nigeria, Tayo Egunjobi, presenting a paper titled: ‘Thoughts on Big Data’ explained that Nigeria has more big data than it knows what it can do with it.

According to him, “We are swimming in an ocean of data made possible by the internet, mobile penetration, web and business applications.”

Giving instance of big data availability in Nigeria using MTN as an example, he

MOBOfree records 44% penetration in Nigeria

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PARLEY - From left: Mr. Oliver Omajuwa, General Manager, Sifax Off-dock; Mr Philip Ofulue, Executive Director, HR and Administration, Sifax Group; Mr. Machaus Brinsma, MD, Sifax Group and Mr. Sunkanmi Olubi, Asst Manager, Commercial during Sifax Group media parley on the activities of the company held in Lagos. Photo Lamidi Bamidele. noted that MTN with its 60 million active mobile lines records about 2.6 million minutes of voice calls monthly.

It also records 77 per cent of Internet Traffic generated through mobile devices utilising about 40 million Megabytes from MTN Monthly.

In terms of business applications, he noted that

rights of mobile phones users.

For these, industry analysts believe that the restrictions placed on data usage is impeding the growth of electronic business in the country. But the telcos argue that it is matter of security, and most importantly, compliance with industry regulations.

At a panel discussing how Nigeria can benefit from

Through sheer large number of mobile phone users, SIM card registration and increasing penetration of smartphones, these telecommunications companies have been able to gather more data than any other institution in the country MTN holds 8.5 Petabytes of Data with a growth rate of 30 per cent.

What all these mean is that with such huge concentration of data in one place, decisions around technology consumption habit can easily be made through careful study and analysis of these data.

The problem however is that access to these data is restricted by the telecommunications’ regulator, the Nigeria Communications Commission.

Although the restrictions to access to these data has not prevented MTN from mining the same data to sell to advertisers who use these with little considerations to privacy

liberal data policy, Chief Executive Officer, eTranzact International, Valentine Obi noted that strides have been made in payments in Nigeria, from the time where data collection was a very difficult task, to 2015, a period that is seeing an increased focus on data collection from regulators and organizations, an example being the recently instituted Bank Verification Number.

According to him, access to big data can play a critical role in e-fraud prevention.

He said: “One big prerequisite for financial inclusion and in fraud control for financial institutions is a check called ‘Know your Customer.’ It is one of the

biggest challenges we face in the payments industry, and all players can come together to help solve this issue. The Telcos own a lot of user data and can help the payments platforms by sharing this data.

"There is a big need for the Telcos to share data in order to safeguard and protect customers from fraud just like banks share data with the switching platforms.”

Kojo Boakye, Policy and Advocacy Manager, Alliance for Affordable Internet also speaking, pointed out that Africa stands a better chance at benefiting from increasing broadband and smartphone penetration if better policies regarding data access are put into place. According to him, instead of the telcos monopolising the data, open access can help businesses to consolidate gains while new ventures stand a better a chance at navigating their businesses to profitability and reduce the high failure rates prevalent among start-ups.

But in a swift reaction, Airtel Nigeria’s Head, New Products Development, Okechukwu Igwegbe noted that the issue of access to data lies primarily with the regulators. While acknowledging the benefits inherent in open access, he also pointed out that there are still other institutions like the Independent National Electoral Commission and the National Identity Management Commission which can also boast of avalanche of reliable big data and have not embraced the open access strategy being canvassed.

OBOfree.com, a social marketplace, has announced that it had experienced an increase of more than 44percent in the number of registered users of MOBOfree.com in Nigeria over the past twelve months, resulting in a 1042 per cent increase in the number of classifieds published on MOBOfree.com in Nigeria which makes more than 500,000 active listings on the platform in Nigeria only. Over the same period, the number of registered users of MOBOfree.com in Uganda increased by more than 1555%, resulting in a 5548% increase in the number of classifieds published on MOBOfree.com in Uganda.

With 4 million registered users, including two million monthly active users in Nigeria and a strong footprint in Uganda and Zimbabwe, MOBOfree is one of the largest and most successful classifieds platforms in Africa.

One Africa Media acquires 100% of Jobberman

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ne Africa Media group has confirmed full acquisition of Nigeria’s job portal, Jobberman.com.

Under the deal, co-founders, Ayodeji Adewunmi, Opeyemi Awoyemi and Olalekan Olude will double as shareholders and Directors in One Africa Media. The trio will still act in their current roles as CEO and Senior Vice Presidents respectively but will also operate at the group level bringing their experience and expertise to bear in other One Africa Media-owned businesses through a shares roll-up deal.

Speaking on the deal, Ayodeji Adewunmi said, “We started Jobberman with the vision of being the No. 1 destination for jobs in Africa; a mission we continue to work toward. With the additional funding provided by One Africa Media, and the new group designations, we are better poised to achieving this goal and also growing other sister companies of Jobberman in the One Africa Media group.

We can now go on to conquer Africa and keep a firm grip on Nigeria which is Africa’s most populous nation and largest economy.”

36 — Vanguard, MONDAY, MAY 4, 2015

Vanguard, MONDAY, MAY 4, 2015 — 37

38 — Vanguard, MONDAY, MAY 4, 2015

Vanguard, MONDAY, MAY 4, 2015 — 39

40 — Vanguard, MONDAY, MAY 4, 2015

Tax Matters

Alade, Momoh, others inducted as NLI Senior Fellows

BY JONAH NWOKPOKU

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eputy Governor, Economic Policy, Central Bank of Nigeria, Dr. Sarah Alade and Chairman/CEO of Nigeria’s broadcaster, Channels Television have been inducted into the Nigeria Leadership Initiative as Senior Fellows.

Other Nigerians inducted included: Chairman of the Governing Council of Nigeria’s National Human Rights Commission, Professor Chidi Odinkalu, Founder/ CEO of Main One Cable Company, Ms. Funke Opeke, Permanent Secretary, Federal Ministry of Communication Technology, Dr. Tunji Olaopa and a host of others.

NLI is a not for profit organisation with a mission to create a growing, global network of credible, accomplished communityspirited Nigerian leaders, committed to taking responsibility for driving positive change in Nigeria and Nigerian communities.

They were inducted in a ceremony held in the United States of America and attended by Justice Margaret Marshall, former Chief Justice of the Supreme Judicial Court of Massachusetts and Ambassador Joy Ogwu, Permanent Representative of the Federal Republic of Nigeria to the United Nations at the Yale School of International Affairs, in Yale University, Connecticut.

During the four day programme which was in partnership with Yale University, the fourteen accomplished Nigerian leaders participated in the seminar themed: “From Success to Significance: Legacy” which focused on the ideals and ideas that make a good society as well as value creation for a good society.

NLI said the major objectives were to bring to the fore “the importance of a good legacy through individual action; engage the participants to recognize the true picture of a good society; remind participants of their responsibility to lead with values in their various roles; encourage the participants that leadership is generational and transferable and, therefore, the need to mentor the younger generation.”

C M Y K

Tax on the go, anywhere, anytime T

he tax system since medieval times has undergone reforms, these reforms focused on taxpayers are meant to increase service delivery and customer satisfaction. The FIRS is not left behind as reforms have been undertaken with a view to make our operations friendlier, convenient and conform to global best practices. In order to simplify the payment method, FIRS has designed a new payment platform called e-tax Pay. What is e-tax Pay? E-tax Pay is an online selfservice tax payment system whereby the taxpayers are given an opportunity to pay their taxes through their banks’ online payment portal.

It is an initiative put in place

by FIRS in collaboration with Nigerian Interbank Settlement System (NIBSS) and approved collecting banks. This is to assist taxpayers pay their taxes with maximum ease. Taxpayers can do it themselves using the electronic service channels provided by their bankers.

(These service channels will include the banks internet banking, ATM and other mobile banking platforms.)

Conditions to meet before using e-tax pay platform You must have registered and obtained Taxpayer Identification Number (TIN) You must have an account with the bank You must have sufficient funds in the account to cover the tax liability/transaction Steps to take to make payment through e-tax pay platform Having satisfied the condition of obtaining a registered TIN, an existing account and sufficient funds, then; Select the service (e-tax Pay) from the list of services displayed on the bank selfservice channel or request for this service from the bank branch Provide all the required information including the taxpayer‘s TIN. Select the tax type (e.g.

Company Income Tax, Preoperation Levy, Value Added Tax, etc.)

Enter the amount to be debited from the account provided Confirm that all the information provided are correct and valid Submit the request.

When this process is completed the platform will

notify FIRS online real time.

Also FIRS has online access to the tax portal to view transactions real time to know taxpayers that have made tax payments.

Taxes that can be paid using the e-tax pay channel You can use the e-tax pay channel to pay all taxes/levies collected by the FIRS. They include: Petroleum Profit Tax Education Tax Companies Income Tax VAT

The e-tax pay service is safe and secure. The platform leverages on the security measures provided by the service channels of the banks

Personal Income Tax/PAYE (Residents of FCT and nonResidents) Withholding Tax National Information Technology Levy Capital Gains Tax Pre-operation Levy Late filing penalty.

Stamp duties Documentation required when you want to pay tax.

Prepare the relevant tax returns Compute tax payable or prepare remittance schedule (CIT/PAYE/WHT/VAT) Fill the relevant selfassessment forms Benefits of using e-tax Pay Promotes transparency and boost the taxpayer ’s confidence and trust in the tax system Promotes voluntary compliance It is convenient, saves time and compliance cost; as taxpayers can do it themselves within the confine of their offices without going to the banking hall.

E-taxpay solution streamlines the process flow in tax remittance, with all banks collecting for FIRS using their various channels.

Banks integration to the NIBSS e-taxpay is a veritable avenue for enabling all forms of tax payments/collections particularly from the bank

accounts of payers to the designated bank accounts of FIRS. This solution harmonizes online tax assessment with etaxpay platform; which gives convenience of assessment and remittance.

NIBSS collection platform has been integrated to the system(s) of FIRS for data acquisition and online realtime notification of transactions.

The security of payment is intact as the platform leverages on the robust security infrastructure of banks.

It makes account reconciliation easy for FIRS. It enhances effective budgeting and forecasting due to the availability of adequate information on details of tax revenue realized over a period of time.

Security of the e-tax Pay Platform The e-tax pay service is safe and secure. The platform leverages on the security measures provided by the service channels of the banks.

The system through NIBSS validates taxpayer ’s information against FIRS records and automatically notifies FIRS. … fast track your tax payment, use the e-tax Pay.

Vanguard, MONDAY, MAY 4, 2015 — 41

People in Business

When I realised my potential in entrepreneurship, I quit my job — Olusanjo Philip

BY EBELE ORAKPO

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r.

Oluwole O l u s a n j o Philip is the Managing Director/Chief Executive Officer of Abeokuta-based Global Academy for Creativity and Innovation, an outfit that is into production of Iru (locust bean) and other food condiments and machinery.

In this chat with Financial Vanguard in Abeokuta, Olusanjo Philip speaks on his business and the challenges, saying he was able to start industrial production through the help of Federal Government’s YouWin programme.

Excerpts: Background: After his primary and secondary school education in Kwara State, he gained admission into the University of Ibadan (UI) in 1993/1994 session where he read Archeology and graduated in 1997/98 session. Thereafter, he went back for his master’s degree in Anthropology still in University of Ibadan. He later gained employment with the same university and left in 2007 as Assistant Registrar.

Going into business: Mr. Olusanjo left a lucrative job to follow his heart. He said: “When I realised my potentials in entrepreneurship, I went to Obafemi Awolowo University Ile-Ife for formal training in entrepreneurship.

"I later started my business but my dream of starting industrial production was still in the pipeline until I got empowered by the Federal Government through the Youth Enterprise With Innovation in Nigeria (YouWin). With that, I was able to start industrial production.

“I was the first to package iru (fermented African locust beans also known as Carob beans or by its scientific name, Parkia biglobosa) in a modern way.

"We process locust beans from scratch to finish. The finished product is dry and we have two variants - the powdered one and the grain but they are both in sachets."

Advantages: “Remember I was one of the first to start industrial production of iru but I was the first to package it in modern way. Some of the advantages of industrial processing is that we have taken away some of the shortcomings in the traditional iru,” he said.

Although people are aware of the health benefits of locust beans which include: improvement of vision, digestion aid, blood pressure control in hypertensive patients, control of blood sugar and bad cholesterol level in diabetic patients, and helps in stomach and mouth ulcer treatment, some have refused to eat it because of its very pungent smell.

Said Olusanjo: “Some people do not eat it because it smells, it gets spoilt easily and it is prone to contamination. Not only that, it contains a lot of impurities and foreign materials like stones, chaffs etc and also because it is not readily available. You have to go down to the market to get it but now, all those shortcomings have been taken care of. You now have a refined locust bean without impurities, no odour as it now has very good aroma and well packaged. It is very handy and you can get it almost anywhere.

“We also have ground pepper packaged in sachets.

It is produced from our local pepper, undiluted unlike what you get in the market that is mixed with colouring or ground kolanut. We source our raw materials locally.”

Initial cost: “I started the business with my personal savings of two million naira and then I got empowerment through YouWin like I said earlier in the sum of N6.2 million. I have to give kudos and thanks to President Goodluck Jonathan for that initiative,” he enthused.

Olusanjo who presently has nine employees, said he has invented three machines to enhance production.

His words: “I have invented three machines to enhance our industrial production.

You discover that some of the machines we read about in the papers, like dehauler,

* Mr Olusanjo Philip... I have invented three machines to enhance our industrial production washer etc., are not effective but personally, I have invented two models of dehaulers, a washer and a fermentor for industrial processing of iru.

My dream of starting industrial production was still in the pipeline until I got empowered by the Federal Government through the Youth Enterprise With Innovation in Nigeria (YouWin) programme

* Iru

* Some of the employees at work.

C M Y K

42 — Vanguard, MONDAY, MAY 4, 2015

Aviation Stories By LAWANI MIKAIRU

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anaging Director, Nigerian A i r s p a c e Management Agency ,NAMA, Engr Ibrahim Abdulsalam weekend disclosed that the Federal government has engaged the services of financial consultant to reconcile the indebtedness of domestic airlines operating in Nigeria to the aviation agencies , namely, Nigerian Airspace Management Agency ,NAMA, Federal Airports Authority of Nigeria, FAAN, and the Nigerian Civil Aviation Authority, NCAA. Abdulsalam disclosed this in a media chat with aviation correspondents in Lagos. He added that the international carriers operating in Nigeria have been up to date in paying their charges to the agencies. He also said that if the debt owed by the local carriers was not properly addressed, it would ground the services offered by the agencies in the aviation industry.

According to him “We are working out modalities for payment of debts owed by the airlines. That is why we are not releasing the figure they owe us. It is our local airlines that have been defaulting in payment; they are part of our system and we have to be moderate with them.”

“Nobody goes to fly on credit; you have to pay for the ticket. That is why the airlines should honour their debt obligations to the agencies. If we ground the airlines, people will be affected. It will not immediately solve the problem and I believe we will

FG engages consultants to reconcile airlines’ debts manage it,” he said.

He said that the agency had being in discussion with an Arik consultant approved by the federal government concerning the debt owed by the airline. And that Airline Operators of Nigeria, AON, is handling the reconciliation of the debts owned by other domestic airlines aside Arik Air. On the International Civil Aviation

Organisation Security Audit ,ICAOSA, of Nigeria aviation sector that would take place in June, Abdulsallam said that NAMA would work with other agencies in the aviation industry to prepare for it.

He also the federal government had helped NAMA in paying off its debt on the Total Radar Coverage of Nigeria (TRACON) project.

Abdulsalam further said that the new Navigational Aids equipment just procured by the agency would be installed at six airports across the country, including Lagos . According to him, a lot of new air routes have being created to reduce fuel consumption and air travel time by the airlines.

Stakeholder calls on local airlines to buy cargo planes

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r Owolabi Awosan, Vice President, Greater Washington Logistic cargo company, has called on domestic airline operators in Nigeria to buy cargo planes to facilitate the movement of cargo across the country by air. He said heavy cargo brought into the country by foreign airlines are distributed across the country by road.

He added that road transportation has many hazards especially for sensitive goods and perishables. He also said if airline operators in the country had dedicated cargo planes, most of such goods would be freighted by air. Adding that air cargo was relatively cheap, faster and safer but people lack the awareness to make use of the opportunity it creates.

According to him what many people are not aware of is that it is cheaper to send a kilogramme of goods by air than by road. For example, most courier companies charge 1,000 Naira for a parcel of goods that can be freighted by air for not more than 300 Naira, even if it is done through an agent.

He also said government should encouraged airlines operators to have dedicated aircraft build for cargo operations within the country. “There is no dedicated aircraft for domestic cargo distribution within the country.

What we have most is the international airlines with big belly aircraft that are mostly operating cargo business here.

“The aircraft we use here are not big belly, we have big items that cannot go under the belly of our domestic

carriers. So most of the items go by road. We use the domestic carriers to distribute items within the country while the international aircraft are used to distribute items outside the country.”

He urged the media to partner with cargo companies in the country to create awareness among the public.

“Logistic is not about moving goods/ items by road or sea alone, it is also about using the airspace which is safer and faster.

“Nigeria is more into import than export, we are developing nation. It is now government is promoting our manufacturing companies, in a few years the country may start exporting good/items and there will be more goods/items to export.

Micro-Finance

UPMFB tto o disbur se N1 .5bn in 20 15 disburse N1.5bn 2015 Stories by PROVIDENCE OBUH

U

muchinemere Pro-credit Micro Finance Bank (UPMFB) is set to disburse about N1.5 billion as loan facility to the active poor in its 2015 financial year.

Meanwhile, the bank disbursed a total loan facility of N1.13 billion as micro loan to about 5, 395 low income earners in 2014.

In a statement, the bank said that about N659, 700, 000, representing 58.32 percent was given to micro loan

clients as micro loans and N367, 788, 150, representing 32.51 percent of the total loan was given as other loans.

According to the statement, the bank is collaborating with the Enugu State government and the Central Bank of Nigeria (CBN) in a partnership programme in the management of the Federal Government’s N220billion Micro, Small and Medium Enterprises (MSME) Development Fund.

A breakdown of the total facility

indicate that a total of 2,300 male clients received N589,245,900, representing 52.09 percent of the total loans disbursed in 2014 financial year ended, while 1,986 females got a total of N438,242,250, representing 38.74 percent of the total facility.

In the period under review, the bank disbursed a total Temporary Over Draft and Advances of N103,700,100, representing 9.17 percent of the N1.13bn, to its deserving clients, comprising mainly low income workers that receive their salaries and pensions through the bank.

How LAPO builds capacity for sustainable growth C

Godwin Ehigiamusoe MD LAPO MfB C M Y K

onscious of its target to achieve five million clients by the year 2017, LAPO Micro finance Bank (MfB) has again churned out graduates from its Management Trainees and Talent Pool programme, in partnership with the German AFOS Foundation and the German Catholic Entrepreneurs Association (BKU) co-financed by the German Government.

The partnership is to strengthen the bank as regards its capacity to promote qualitative growth and to efficiently manage the quality of its services.

Management trainee is a selection

of people, fresh graduates with managerial skill through selection process and interviews in the bank to ensure best candidate in different areas of the organisation emerge. The talent pool programme is a continuous improvement mechanism through which LAPO will identify, nurture and deploy selected employees to where they will be most effective to guarantee the sustainability of the bank growth process.

The essence of the programme is to help the orgaisation effectively manage its exponential growth as anticipated in its strategic plan in the medium and long term period of 2013-

2017.

Meanwhile about 12 candidates graduated the management trainees for 2015, compared to nine in 2013 with 39 candidates of talent pool.

In his address titled, “Grooming Leadership and Sustainability,” MD LAPO MfB Mr. Godwin Ehigiamusoe, highlighted; skill, vision, competence, integrity and trust, among others, as some of the qualities a leader must possess.

“Leadership is about everything, you must invest in acquisition of knowledge to be a leader and commitment is important to sustainability,” Ehigiamusoe said.

Vanguard, MONDAY, MAY 4, 2015 — 43

Advertising & Promotions

Bitters market: Ace Roots closes in on Orijin STORIES BY PRINCEWILL EKWUJURU

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n December 2014, after finalizing its merger talks with Consolidated Breweries, CB, PLC, which brought to 21 brands in its portfolio, Nigerian Breweries, NB Plc, launched a new product, Ace Roots, in what industry observers described as a direct competition with Guinness Ready to Drink, RTD brand, Orijin.

The management of NB, after the merger last year launched its biggest marketing onslaught against Orijin, a product from the stable of Guinness Nigeria Plc. The Sales Director of NB, Hubert Eze, while presenting the brand, said the launch was informed by the quest to meet the needs of consumers and reconnect them to an era when herbal drinks held sway to cure many health challenges.

He said the drink is blended with African herbs mixed with spirit. “We want to take our consumers back to the root.

Sometimes, we don’t look back,” he said. While publicly doing what he called a

“comparative marketing” on competitors product, Eze said with the significant growth of the ready to drink market since 2008, that is majorly driven by Orijin, NB is coming to the market with a unique selling point. “The drinks boosts of at least 14 natural ingredients, amazing

alcopop taste, and less sugar and alcohol.” He stated.

However, before the advent of Ace Roots, products like Alomo Bitters, Kerewa, Orijin Bitters, Ogidiga, Ibile, Baby Oku, Yoyo, Sappiro Lemon Ginseng, Kogbebe, Koboko, Osomo, Dadubule, Durosoke, Pasa Bitters and many others ruled the market.

All these products entered the Nigerian market using ‘sex energy boost’ as selling

ACTIVATION - From Left: Adeyanju Babatunde, Key Account Executive, Nigerian Breweries Plc., Abeokuta, Iyanudunu Ogunrinde, winner brand new generator and De Don, Comedian and Compere at the Legend Extra Stout Taste and Tell Activation in Abeokuta.

Agya Appiah entry boosts Nigeria Bitters market

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midst other competing Bitters brand in the market, Agya Appiah Bitters Limited, manufacturers of alcoholic Agya Appiah Bitters, Ghana, has announced its official entry into Nigeria.

Speaking during a media briefing, Mr. Andrews Akolaa, Acting Chief Executive Officer, Agya Appiah Bitters, said the introduction of the new product is to reinvigorate and fill the gap in the Nigerian Bitters market by providing it with the purest and most natural blend of alcoholic bitters which is currently being enjoyed in other markets around the sub region and other parts of the world.

He explained that the bitters manufacturer has always been driven by the need to do things differently and better. “We make bold to say that we are truly a Bitters brand that is all natural in composition; NO artificial colour, and no artificial flavour, evidenced by a smooth running taste down the throat.”

On what makes the new product different; Akolaa said: ‘our Bitters’ medicinal values are widely acclaimed for improving the general wellbeing of both the young and old. Agya Appiah prepares Bitters from acclaimed herbs. These herbs have been used as a result of years of research into the useful properties of various medicinal plants.”

He noted that the Founder, a foremost practitioner and former President of the Ghana Federation of Traditional Medicinal Practitioners Association, developed these choice herbs from the magnificent forests

of Ghana into a high quality alcoholic beverage.

“As a former president of the Ghana Federation of Traditional medicinal Practitioners Association and foremost practitioner, our Founder has ensured that the product meets the best standards and is committed to quality excellence. And given this background the company has always toed his vision to remain natural in any product we put into the market and this makes us different.”

“Agya Appiah is endorsed by the Centre for Scientific Research into plant medicine; the agency responsible for analyzing plant based medicinal products in Ghana and an affiliate of W.H.O. The blend of 13 different medicinal plants come with many health benefits,” he stressed.

He stated that the product comes in a glass bottle size of 750ml and 200ml PET for connoisseurs on-the go - the perfect size that fits in any pocket.

To achieve success in this highly competitive market Agya Appiah has partnered with five distribution companies in Lagos and with their vast network of warehouses within major cities, a robust customer base and partners across the country, they are positioned to provide excellent and superior sales, logistics and support services to Nigerian customers.

Also speaking at the event, Samuel Ohemeng, Production Manager, Agya Appiah Bitters Limited, expressed the company’s commitment to maintaining quality and the cultured taste of the product.

point. After all, ‘sex sells’, it took them little time to overrun the Nigerian alcoholic beverage market with spurious claims of efficacy to cure and prevent all diseases.

Contrary to claims, these products have been found to contain high dosage of ethanol, caffeine and hemp.

Instead of ‘herbal extracts’, the bitter taste of many of the products is actually from ‘muru’, a substance used in treating pile in the northern part of the country.

In order to verify the claim

by NB also, Vanguard conducted a market research at various drinking joints across Lagos, Ogun, Ibadan, Imo etc, the probe showed that product is fast gaining acceptance and is poised to take over the lead in the market from competing brands. What was responsible for the quick return on investment according to Mr. Ajole Amakua, a Brand Specialist Director with June 24 Media, said the marketing strings being pulled by NB is giving the new product an edge, because the owners have the finance to run various campaigns, they are not controlled like their major competitor. “They have been able to establish the product in the minds of the consumers in this short time.”

What I also noticed is that Ace Root has eaten into a big proportion of the Orijin market. He stated. A consumer, who simply gives his name as Mike said he drinks Ace Roots because of its low sugar and affordability. For Ogazi Onami who was accosted at Royal Garden Restaurant in Iba, said he prefers Ace Root to Orijin because of its natural herbs, low sugar and its mild alcoholic content. Mr. Emma Eruebe, a Civil Engineer, says he cools off with Ace Roots because he has to switch over as a result of low sugar and price since one has to watch his pocket and health, what I also noticed is that Nigerians are aware and know what is good for them.

Even though the visibility of both products are almost the same in the market, there is no where you go you don’t see the flyers of both product, telling you of their uniqueness, but the question is will Orijin be able to sustain its campaigns.?

Aside gaining considerable edge over its closes competitor in the area of pricing, Ace Roots is very low in sugar (one cube) compared to Orijin’s about five cubes per 60 cl bottle.

Campaign: Mr Biggs to donate 5% proceeds to charity

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uick Service Restaurant, QSR, Mr Biggs, says it is embarking on a two prone activation tagged; ‘’Make A Difference,” with Coca cola Nigeria, aimed at connecting with children on May Day to reward loyalty, where 5 percent of its proceeds will be donated to charity.

Speaking, Mufutau Fasasi, Finance Executive, UAC Restaurants, said during a press briefing that the marketing initiative is leveraging on its corporate social responsibility, CSR values to create the needed vibe and hype which resonates with the brand’s target consumers and pull foot traffic to the restaurants.

Fasasi said that during the campaign, every customer who participates stands the chance of winning a Mr Biggs meal ticket worth N4,000 which would be decided through a raffle draw.

Continuing, he stated, “our change collection boxes will be available at the restaurants for customers to drop their change after products are purchased.” The proceeds will be collated and given to charity homes.

IDL donates block of classrooms

I

ntercontinental Distillers Limited’s, IDL, Corporate social responsibility, CSR, Initiative came alive again as the company donated a block of four classrooms and two offices to Ilogbo Asowo Community High School, Ilogbo, Ota, Ogun state.

The Managing Director, Chief Patrick Anegbe, who was of the view that the building will go a long way in contributing to the growth and improvement in the standard of education in the community, said, “learning thrives in a conducive environment, as it’s a prerequisite for effective understanding and quality education.”

He stated that quality education offers “our children the best opportunity in life to realize their dreams and become the leaders of tomorrow.”

C M Y K

44 — Vanguard, MONDAY, MAY 4, 2015 Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

Is the abolition of fuel subsidy imminent?

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edia reports, lately, suggested that the approval for the 2015 Appropriation Bill, which was seemingly rushed through the National Assembly, in the last week of April, did not contain any provision for the payment of the usual subsidy on petrol and kerosene.

Nonetheless, the anxiety of labour and the other advocates and beneficiaries of the subsidy scheme may have been doused by the Senate Committee Chairman on Finance, Senator Ahmed Makarfi’s subsequent statement that, contrary to such reports, the National Assembly had infact approved the sum of N100bn as subsidy for Premium Motor Spirit (petrol) while N43bn was approved for kerosene for the 2015 fiscal year.

Nonetheless, the federal government, had in contrast, budgeted about N970bn for fuel subsidy in 2013, while only N515 was released to oil marketers according to a report titled “Senate approved N143bn for fuel subsidy” in the Punch edition of 1/5/2015.

Furthermore, according to the same report, “the same amount was also budgeted for the 2014 fiscal year, with only N414bn so far paid.

Thus, with the above historical data on subsidy provision and payments, critics may see the approved meager sum of N143bn as a booby trap for the incoming administration, since there is nothing to suggest that the price of crude will further plummet below $50/barrel or that demand would fall below the projected daily average of 40m litres.

In addition, available Petroleum Product Pricing and Regulatory Agency, (PPPRA ) data, indicate that

subsidy on petrol has soared to N43.25/litre, up from N2.84 as at January 2015. Thus, an estimated daily subsidy of N1.7bn with current crude price and Naira exchange of N197/$1, will amount to over N620bn this year. It is not clear if this figure also includes projected subsidy payments for kerosene. So, why then did the National Assembly approve barely 25% of the historical annual average subsidy payments.

However, Senator Markarfi assured Nigerians that the ‘paltry’ subsidy provision should not stop the initiation of a supplementary Appropriation Bill by Buhari’s incoming administration to cover any difference above the N143bn already approved by the National Assembly.

Indeed, if crude prices stabilise around the current $60-$65/ barrel, the subsidy shortfall could be well over N500bn, and the projected deficit of almost N1Tn in the 2015 budget may rise beyond N1.5Tn or constitute almost 33% of total budgeted expenditure of N4.49Tn! Instructively, with interest charges presently between 1016% for government loans, it may cost well over N200bn just to service those debts, which were primarily induced by expenditures on fuel subsidy, consequently such additional expenditure will compound the almost N1Tn debt service charge initially embedded in the 2015 budget.

However, these service charges must be distinguished from the N600bn interest payment that CBN would similarly incur in the process of mopping up unceasing surplus liquidity from the money market. Ultimately, consolidated domestic debt

service charges alone, sadly, may well exceed 30% of the paltry 2015 budget.

Regrettably, delayed payments of verified subsidy claims, may inadvertently also further bloat the already oppressive service charges on loans obtained to finance the 2015 budget deficit and other earlier government debts.

Curiously, the imminent federal and state elections, may have forced government to accede to pressure from marketers to pay the demanded balance of N256.2bn, which they claimed included core subsidy as well as interest on delayed payments and exchange rate differentials.

Incidentally, the marketers, have since confirmed that N40bn was the actual core subsidy value outstanding for part of 2014 and deliveries under Batch A & B in 2015; nonetheless, according to the marketers, the balance on the related foreign exchange differentials and the accrued interest on the outstanding invoices would come to N215bn after the maturity of government’s N100bn sovereign debt note by the 30th of April. Thus, if Nigerians were already apprehensive about the huge and clearly unsustainable incidence of subsidy values, then they must

Abolition of price imposition would clearly attract a host of investors into private domestic refining

Business & Economy Plastic subsector to grow by 7% by 2025

BY PROVIDENCE OBUH

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he plastic subsector is expected to grow by seven percent over the next ten years, just as a positive outlook is projected for the packaging industry due to increased market demand and sophistication of the Nigerian consumers.

Also, imports of food processing and packaging machinery witnessed an increase of €331 million in 2013, compared to €198 million in 2010, Managing Director, Fairtrade, Mr. Martin Marz, said this at the just concluded Agrofood & Plastprintpack Nigeria 2015 exhibition in Lagos, saying C M Y K

that the figure represents 67 percent increase in the period under review.

Martin said that the Nigerian plastics and packaging sector has grown to over 3,000 companies and the industry is fairly developed and tends to mirror the trend in the local fast moving consumer goods industry.

He noted that flexible packaging and plastics packaging have become very popular in Nigeria. Raw materials employed in the packaging subsector are mostly imported. “Growth in the plastic and packaging sector has been driven by the increasing sophistication of the Nigerian middle class.”

Meanwhile, within the period, imports of packaging machinery and equipment have gone up from €86 million to €182 million at 116 percent, while imports of plastics machinery grew by 71 percent from €52 million to €89 million.

Marz added that the food and beverage sector of the Nigeria economy contribute about 4.6 percent of its GDP not less than 66 percent of total consumer expenditure. Food and beverage sector is the largest segment of the Nigerian manufacturing industry compriisng 22 percent, “its is estimated at €16 billion in aggregate output.

Incidentally, if government appears incapable of also reducing its bloated recurrent expenditure budgets, the paltry barely N400bn allocation for capital and human capacity expenditure in 2015 may become further deflated below 5% of the total expenditure of N4.49bn.

It is therefore clear that in order to eliminate subsidy payments without stress, we may need to ironically pray that crude oil prices (our main source of revenue) will fall well below $50/barrel, while the Naira exchange rate will not suffer further depreciation which instigates rising fuel prices, to make subsidy removal a major challenge.

Clearly, organized labour has already taken a firm position to reject any attempt to remove subsidy and they have instead called on the government to revamp existing refineries and build new ones, so that fuel will be readily available at lower prices.

It is curious that the same people, who clearly recognize the huge waste and corruption associated with public utilities, would still demand for the entrenchment of such government parastatals.

Nonetheless, the abolition of price imposition would clearly attract a host of investors into private domestic refining, but this would not necessarily reduce prices to ultimately eliminate subsidy.

Instructively, however, fuel prices will conversely steadily fall if the Naira appreciates, as a stronger Naira will translate down the line to progressively induce cheaper fuel prices domestically and ultimately eliminate subsidy.

be surely perplexed that payments, which were delayed because of lack of funds, are now compounded by an additional sum of N215bn for interest on delayed payments and exchange rate differentials.

Surely, if this is not a scam, it is certainly a reckless fiscal strategy which is totally in denial of an imminent national debt trap.

In her response, the finance Minister, Dr. Okonjo-Iweala, confirmed last week that the sum of N56bn will additionally be paid to offset interest differentials; according to Dr. Okonjo-Iweala, “after these payments, a subsidy balance of N98bn already certified by PPPRA would be left as the amount owed to the marketers”.

Clearly, if the subsidy regime subsists with the present culture of delays in settlement, the still outstanding sum of N98bn will invariably also attract additional interest charges for delayed payments as well as exchange rate differentials; consequently, consolidated subsidy payments will exceed expectations and budget provisions, particularly if the Naira exchange rate also continues its current slide.

Furthermore, if in addition to Naira depreciation, crude prices unexpectedly climb above the current $60-65/ barrel range, the amount of fuel subsidy payable for the rest of 2015 will similarly increase; worse still, the attendant unbudgeted penalty for delayed payments and exchange rate differentials will also increase. Ultimately, if good sense, fails to prevail, close to 40% of total budgeted expenditure in 2015 may become dedicated to fuel subsidy payments!

Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Michael Eboh Franklin Alli Ifeyinwa Obi Rosemary Onuoha Nkiruka Nnorom CONTRIBUTORS Princewill Ekwujuru Jonah Nwokpoku Naomi Uzor Providence Obuh LAYOUT

SAVE THE NAIRA, SAVE NIGERIA!!

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