Over 200 Chinese firms eye business in mining,agric sectors by Vanguard Media Limited

JULY 6, 2015

Over 200 Chinese firms eye business in mining, agric sectors BY FAVOUR NNABUGWU

ver 200 Chinese companies have expressed interest in the country ’s mining, agriculture, confectionary and pharmaceutical sectors. Speaking during the signing of a Memorandum of Understanding (MoU) between the Chinese delegation and a consortium of Nigerian businessmen, Executive Secretary of the Nigerian Investment Promotion Council (NIPC), Mrs. Uju

Aisha Hassan-Baba in Abuja, said the Council is willing to facilitate the Chinese companies’ business activities in Nigeria. “We will also ensure that your investment is safe in Nigeria. We are willing to give you one-stop-shop services and other incentives that will ease your investment in the country.” Hassan-Baba said, “We expect them to come with the profile of their companies and what they have to offer to us. We will be ready to open up our markets to them, that is why the NIPC is involved in this so that we can see what kind of investors they are.

“We are moving away from the oil sector and hoping that these investors can fit into these areas mentioned because some of these areas are the priority of the government especially

Continues on page 22

Ex-Ecobank CEO can seek $24 million payout after London ruling

ormer Ecobank Transnational Inc. Chief Executive Officer, Thierry Tanoh can seek about $24 million awarded by West African

MEETING: From left, former President of Ghana, John Kufuor; President of Cote D’Ivoire, Alassane Ouattara, CoChair of the Africa Energy Leaders Group (AELG); Tony O. Elumelu, Chairman of Heirs Holdings and Co-Chair of the AELG; Vice- President of Nigeria, Yemi Osinbajo during the inaugural meeting of the AELG in Abidjan to discuss regional solutions to the electricity deficit in Africa. C M Y K

the agricultural sector. The agriculture sector as you know, is the one that provides the most jobs.” The investments, according to the leader of the Nigerian consortium coordinating the Chinese firms, Gen Chiemeka Egbemena are mainly companies involved in petroleum, iron and steel, agricultural and manufacturing sectors, as well as free

courts against his former employer after a London judge overturned an order blocking the payments. Judge Robin Knowles lifted an injunction blocking Tanoh from enforcing court judgments in Togo and Ivory Coast, according to a judgment in London on Friday. Tanoh may now collect 7.5 billion CFA Francs ($12.6 million) awarded in Ivory Coast in January and a further $11.5 million awarded by a Togolese judge in February, according to the judgment. Tanoh left the bank more than a year ago as Nigerian regulators investigated allegations of management fraud and poor governance while he was CEO in 2013. Tanoh denied any wrongdoing and subsequently sued Ecobank for unfairly terminating his contract in Togo and for defamation in Ivory Coast, winning both cases. Richard Uku, a spokesman for ETI in Lome, said he couldn’t immediately respond to a request for comment. Tanoh’s lawyers in London also declined to comment. The case is Ecobank v. Tanoh, High Court of Justice, Queen’s Bench Division, Case No. 2015-494.

22 — Vanguard, MONDAY, JULY 6, 2015

Cover

Entrepreneurial Education Revolution: An Imperative for Sustainable Development in Nigeria (2)

AGM - From left: Newly elected president, Nigerian-British Chamber of Commerce (NBCC), Prince Dapo Adelegan; immediate past president, NBCC, Prince Adeyemi Adefulu; past president, NBCC, Mrs. Adetutu Adeleke and the Director-General, NBCC, Mrs. Joyce Akpata at NBCC Annual General Meeting (AGM) held in Lagos.

Over 200 Chinese firms eye business in mining, agric sectors Continued from page 21

trade zone. He stated that the Chinese Government is committed to encouraging and supporting Chinese companies’ investment in Nigeria, just as it continues supporting the country’s efforts at attracting foreign investment. “The major significance is that we are falling in line with the new policy of government to look elsewhere for the growth of our economy and that is the desire of those companies that are coming to

invest in the area where the world seem to be moving.” “About 200 Chinese companies are coming to do business in Nigeria. We are most interested in mining and agricultural and allied industry. These areas are our priority. Mutual benefits have been enjoyed by the two countries in agriculture, economics, i n f r a s t r u c t u r e , communication, cultural exchange and education over the years of cooperation, Mr Egbemena said.

On his part, the President of Abuja Chamber of Commerce and Industry Limited (ABUCCI), Mr Joe Wenegieme said that the Chinese investors would come into the country next month to explore potential investment opportunities in the country with a five-day trade fair. “We have sent letters out to different states government, local people and private organisations to come and meet with the investors so they can have the opportunity of discussing with them.”

Airline operators lose over $180m to bird strike incidents yearly —GROUP

irline Operators of N i g e r i a (AON) have claimed that their members lose over $180 million (N41.4 billion) to bird strike incidents at airports in the country yearly. Capt. Noggie Meggison, Chairman, AON, made the claim while speaking at the Nigeria Leadership Initiative (NLI) Safer Skies Forum in Lagos. Meggison, who spoke on the topic, “Aviation Safety: Operators’ Perspective”, also attributed over 70 per cent of crashes in the country to oversight deficiencies of regulatory agencies. He said that the operators lose engines to bird strike yearly and aircraft engines now cost between $40 million and $70 million, depending on the aircraft. “We need to start looking at landing aids and landing areas at airports because over 70 percent of air crashes in Nigeria are linked to C M Y K

Over 70 percent of air crashes in Nigeria are linked to negligence on the part of aviation parastatals and oversight deficiencies of regulatory agencies negligence on the part of aviation parastatals and oversight deficiencies of regulatory agencies. “For instance, the ADC crash was due to air traffic control issue; Wings aviation crash due to wrong charting by Nigerian Airspace Management Agency while Associated Plane was on ground for 24 months before it was taken to the skies. “We need to look at the issues and not sweep issues

under the carpet in Nigeria. “We have issues ranging from bad drainage runway surface to failure of air traffic controller to properly monitor runways, among others”, Meggison said. Also speaking, Mr Adamu Abdullahi, Director, Consumer Protection Directorate of the Nigerian Civil Aviation Authority (NCAA), identified aging workforce and paucity of funds, amongst others, as challenges facing the sector. Abdullahi said Nigeria was investing heavily on manpower development, adding that government was also revamping the Nigerian College of Aviation, Zaria for personnel training in critical areas. On his part, Mr Yemi Dada, Managing Director, IRS Airlines, said airlines were not making profit in Nigeria due to problems ranging from inadequate infrastructure, insecurity and operating a dollar based system.

igeria faces a number of is vital that entrepreneurial challenges that can education is addressed from only be met if it has innovative, an early age, besides, age is well-educated, and no barrier to entrepreneurship entrepreneurial citizens who, as Tony Hsieh of Zappos whatever their walk of life, have started selling worms from raw the spirit and inquisitiveness mud when he was 9 years old, to think in new ways, and the Steve Job, Richard Branson courage to meet and adapt to and Mark Zuckerberg of the the challenges facing them. Facebook fame all started off as Moreover, a dynamic economy, young entrepreneurs. which is innovative and able The time is ripe for us as a to create the jobs that are country to stop celebrating needed, will require a greater mere certificates and number of young people who dormancy, while primacy and are willing and able to become recognition should be given to entrepreneurs, young people creativity, skills and who will launch and enterprising spirit. successfully develop their own The present times have commercial or social ventures, shown over time that the global or who will become innovators arena is blind to your in the wider organisations in credentials but is a wealth which they work. Because creating slave to your skills and education is the key to shaping abilities. Anyway, it is not your young people’s attitudes, skills credentials that guarantees and culture, it is vital that success in the global/ entrepreneurship information age education is but rather your addressed from an problem solving A dynamic early age. abilities, critical economy, Entrepreneurship thinking ability education is which is that can discern essential not only ‘fact from fiction’, innovative to shape the your ability to and able to mindsets of young adapt (un-learn & create the people but also to re-learn), your provide the skills creative and jobs that are and knowledge i n n o v a t i ve needed, will that are central to abilities and your require a developing an life-long love of greater entrepreneurial learning. If your culture. ‘piece of paper ’ number of It is important we to deliver young people failed embrace this these then whilst ‘global age’ it may have paradigm in our successfully education system prepared you for as it has been done in China, the industrialized 20th century India, Australia, Europe, U.S.A economy but it has certainly and of lately the Asian tigers failed you in the globalized (Malaysia, Singapore, Taiwan 21st. and the Koreas).The most As Alvin Toffler puts it, ‘The advanced form of this new illiterates of the 21st century model is what is referred to as will not be those who cannot ‘TEACHERPRENEUR’, read and write, but those who Which Bill Gates was cannot learn unlearn and rereferring to in 2010 when he learn’. It is the acceptance of said ‘five years from now on this open secret that should the web, you will be able to find make policy makers and the the best lectures in the world general populace to shift and it will be better than any attention from the conventional single university’. way of thinking that you must This involves embedding be a graduate before achieving entrepreneurial education into success. Some of the inventors education and training right such as Bill Gates, and Mark from the primary school to Zuckerberg dropped out of secondary school and tertiary school to make it in life because institution. The essence of this of their innovative, creative and is because education is key to enterprising spirit and not shaping young people’s necessarily because of attitudes, skills and culture, it certificate.

Vanguard, MONDAY, JULY 6, 2015 — 23

Nigeria, time to try new ideas D

uring the ideological cold war between the Western and Eastern block, Joseph Schumpeter coined the seemingly paradoxical term “creative destruction." Since then, generations of economists have adopted it as a shorthand description of the free market’s messy way of delivering progress. In Capitalism, Socialism, and Democracy (1942), the Austrian economist wrote: “The opening up of new markets, foreign or domestic, and the organisational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation - if I may use that biological term - that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Looking at Nigeria’s socioeconomic milieu, the greatest challenge facing the nation is the fact that Nigerian leaders at all levels do not allow room for this principle to apply in the system. Creative destruction of the old calls for new ways of thinking and doing things. It is about innovation, new ideas and creativity. The Nigerian environment at the moment, does not permit new ways. Nigerian politicians are the same old stock. They evolve from the same crop bereft of new ideas. They are stuck with the old. Nigerians thought that the idea espoused by Schumpeter was coming into place with the APC change

mantra. But as it is, there is just nothing new that is about to happen. Mohammadu Buhari has told the nation he is of the old stock, so expect nothing new. Nigerians' expectation from the new government at all levels is that the idea of sharing will be shelved and a new thinking of baking a larger cake for the nation will emerge. But Governors are already at it, talking of excess crude account that is to be shared. They have dragged as usual the yet-tosettle down president into setting up a committee to look into what the governors know too well has been shared. If this government were ready to replace old ways of thinking with the new, the Federal Government would have ignored these jobless governors. The Federal Government should have set up a committee to think of ways to earn more revenue at all levels of government. The revenue that accrues to the Federation Account is mainly from royalties, taxes, signature bonus or fees, VAT and revenue from duties paid on imported products. When the President told Governors to go and sort out their finances, it was based on the principle of fiscal federalism. The new idea that should come into governance now is true fiscal federalism. The Federal Government and the states should negotiate rights to mineral resources in the country. It should be that

while states exercise right of ownership to resources in their domain, they should collect the royalties, grant operating permits to companies and pay tax at an agreed rate to the Federal Government. Local government should be empowered to collect fees and dues in their areas of jurisdiction. This of course will bring about massive investment in the exploitation of natural resources across the country. States will then be forced to attract investors to exploit the resources in their domain. It will also encourage states to revive industries and put in place conducive environment for investors to play. As it is at the moment, the much talked about agriculture and solid mineral as the center points of revival of the

Nigerians' expectation from the new government at all levels is that the idea of sharing will be shelved and a new thinking of baking a larger cake for the nation will emerge

economy, have no clear cut policy that indicates the integration of the value chains in each of the sectors and their linkages to the entire economy. The lack of linkage of the oil sector to the other sectors of the economy has had adverse effects on the economic development of Nigeria. Nigerian politicians are not creative, creative destruction is the needed essential balm for moving a society forward. The perennial gale of creative destruction has become the centerpiece for modern thinking on how economies evolve. Schumpeter and the economists who adopt his succinct summary of the free market acknowledged the fact that lost jobs, ruined companies, and vanishing industries are inherent parts of the growth system. The saving grace comes from recognising the good that comes from the turmoil. The greatest undoing of this nation is that every time there is a regime change, the new leaders dwell much in the past by pursuing shadows. They start investigations that lead nowhere all because they have no new ideas to share. It is a known fact globally that over time, societies that allow creative destruction to operate grow more productive and richer; their citizens see the benefits of new and better ideas, shorter work weeks, better jobs, and higher living standards. This is not the case with Nigeria and nobody has ever asked why?

As it is from economic history a society cannot reap the rewards of creative destruction without accepting that some individuals might be worse off, not just in the short-term, but perhaps forever. At the same time, attempts to soften the harsher aspects of creative destruction by trying to preserve jobs or protect industries could lead to stagnation and decline, short-circuiting the march to progress. Schumpeter’s enduring term reminds nations that capitalism’s pain and gain are inextricably linked. The process of creating new industries does not go forward without sweeping away the preexisting order. It is the same for political class. You cannot make progress without doing away with the old order of political practices. Entrepreneurs introduce new products and technologies with an eye toward making themselves better off - the profit motive. New goods and services, new firms, and new industries compete with existing ones in the marketplace, taking customers by offering lower prices, better performance, new features, catchier styling, faster service, more convenient locations, higher status, more aggressive marketing, or more attractive packaging. In the same vein, Nigerian politicians should learn to evolve new ideas, political style, new political culture, tolerance and service to the people, not just to serve personal interest of allocating millions of naira as wardrobe allowance to themselves.

Business & Economy

FIRS collects N1 .8trn in six months N1.8trn

he Federal Inland Revenue Service (FIRS) said in Abuja that it collected N1.85 trillion as tax from the various sectors of the economy between January and June this year. The Acting Chairman of agency, Mr Samuel Ogungbesan, made this known before the leadership of the Senate to intimate it on the performance of the agency in the first half of 2015 fiscal year. He disclosed that N697 billion was generated from Petroleum Profit Tax, N778 billion from Company Tax, while N376 billion was realised from Value Added Tax within the period under review.

However, he noted that there was a shortfall in the level of non-oil revenue. According to him, the increase in tax evasion by individuals and corporate bodies was responsible for the low level of non-oil revenue. He noted, for instance, that

efforts by the FIRS to get surcharges from owners of private jets and mansions in the country over the years had not yielded the desired results. “We looked at those who own private jets and thought that yes, you are enjoying facilities and assets Nigerians do not

We raised assessment on about 130 private jet owners because we were made to understand that we have up to that number

have privilege to enjoying; we will name something we call surcharge on you, and of course customs also was to do some others like furniture surcharge, mansion surcharge, various kind of surcharges. “But regrettably, we have not been able to administer this. One, we have challenges; we raised assessment on about 130 private jet owners because we were made to understand that we have up to that number,” said Ogungbesan. The FIRS boss further explained that the agency recorded low revenue collection this year as a result of the general election and delay in the passage of the 2015 budget.

Other factors, according to him, include poor financing of the real sector by banks and Boko Haram insurgency in the North East region. He, however, expressed optimism that the new administration would work toward improving on the country’s revenue base. The President of the Senate, Dr Bukola Saraki, tasked the FIRS to find ways to improve on collection of non-oil revenue. He frowned at the country’s dependence on revenue generated from crude oil sales. Saraki pointed out that nonoil revenue was capable of making up for the revenue shortfall recorded by the country following the drop in international oil price. He said: “I think Nigeria’s continued dependence on oil is not something we should encourage.” C M Y K

24 — Vanguard, MONDAY, JULY 6, 2015

Business & Economy

Chinese airlines mulls direct flights from Nigeria

hinese embassy in Nigeria said that it is carrying out analysis on the possibility of direct flights from China to Nigeria by Chinese airlines. This is contained in a statement issued by the Public Affairs Unit of the embassy. “Chinese airlines are studying the feasibility of operating direct flights between China and Africa according to market rules. The Chinese side will continue to support bilateral cooperation in the field of civil aviation,“ it said. The statement also said that Chinese investors were also considering investing in the continent’s agriculture, trade, manufacturing, power and tourism sector sectors. It said that most investors have shown great interests in Nigerian market. The Chinese government has repeatedly said it was ready to contribute its quota towards the development of Africa’s aviation sector.

Terminal operator bemoans inconsistent policies at ports

he General Manager of Five Star Logistics Ltd., Mr Rigo Nazzari, said inconsistent government policies at ports had been having adverse effects on operations of the terminal. Nazzari said this when the Executive Secretary of Nigerian Shippers’ Council (NSC), Mr Hassan Bello, paid a courtesy visit to the terminal at the Roll On/Roll Off (RORO) Port n Lagos. “The auto policy is affecting our terminal. The auto policy has hindered our operations. “We are recording low activities in our terminal as a result of the unstable policy. We urge you to assist in conveying our message to the government,” Nazzari said. He said the management of the terminal would continue to partner with Nigeria as the largest business economic avenue in West Africa. We are on the right path to prosperity but our concern is efficient access roads to the ports,” Nazzari said. C M Y K

MONEYGRAM: From left: Korede Demola-Adeniyi, Head, Premier Banking, Ecobank Nigeria; Kingsley Umadia, Executive Director, Ecobank; Alexander Hoofmann, Executive Vice-President, Business Development, Moneygram and Kemi Ogunsanya, Regional Manager, Anglophone, West Africa, Moneygram at the commencement of MoneyGram Send services in Ecobank branches on Thursday in Lagos.

New report projects steady decline in food prices over next decade A

new report issued by the Food and Agricultural Organisation (FAO) and the Organisation for Economic Co-operation and Development (OECD) said the real prices for global agricultural products would continue their gradual decline over the coming decade. The report, “OECD-FAO Agricultural Outlook 20152024” indicated that decline in prices would be as a result of a combination of strong crop yields, higher

productivity and slower growth in global demand.

Low cost of oil pushes energy and fertilizer costs down and removes incentives for the production of first-generation biofuels made from food crops

It noted that as the low cost of oil pushes energy and fertilizer costs down and removes incentives for the production of first-generation biofuels made from food crops, food prices would continue to slope downwards over the next ten years. It said that modest production growth was expected in Africa, although further investments could raise yields and production significantly. The report said among the

various commodities enjoying a decline in market costs are cereal prices, which as a result of the concurrence of high cereal stocks and low oil prices, are expected to weaken in the short term. The statement also noted that over the medium term, however, slowly rising production costs and sustained demand may strengthen prices again. It said high sugar demand in developing countries would likely boost prices for the commodity and spur further investment in the sector. The report suggested that the market outcome would nonetheless hinge on the ongoing competition between the profitability of sugar versus ethanol in Brazil, considered to be the world’s leading producer. The report said in spite of the advantageous scenario regarding global food pricing, prices would likely remain at levels above those at the beginning of the 2000s. It said major changes in demand should be expected throughout the developing world, amid a growing population, rising per capita incomes and urbanisation, which, would increase demand for food. The report further explained that rising incomes would prompt consumers to continue diversifying their diets, notably by increasing their consumption of animal protein relative to starches. It said as a result, the prices of meat and dairy products are expected to be high, relative to crop prices. The report explained that among crops, the prices of coarse grains and oil-seeds, used for animal feed, would rise relative to the prices of food staples.

NSE moves 138.55m shares worth N1.55bn

ransactions at the Nigerian Stock Exchange (NSE) on Friday maintained a downward trend as investors staked N1.55 billion on 138.55 million shares transacted in 2,796 deals. The News Agency of Nigeria (NAN) reports that the volume of shares traded closed lower compared with 186.73 million shares valued N1.77 billion exchanged in 3,257 deals on Thursday. UBA emerged the most traded equity with an exchange of 18.41 million shares worth N86.102 million transacted in 157 deals. It was trailed by Zenith Bank which accounted for 15.75 million

shares worth N305.59 million achieved in 149 deals, while FBN Holdings sold 14.36 million shares valued N114.29 million traded in 260 deals. Beco Petroleum Products transacted 9.76 million shares worth N4.88 million in one deal and Access Bank sold 9.08 valued N48.70 million exchanged in 246 deals. Similarly, the All-Share Index lost 200.77 points or 0.61 per cent to close at 32,538.34 compared with 32,739.11 recorded on Thursday due to price losses by major blue chip equities. Also, the market capitalisation which opened at N11.176 trillion decreased by N69 billion to close at N11.107

All-Share Index lost 200.77 points or 0.61 percent to close at 32,538.34

trillion. Dangote Cement topped the losers’ chart, dropping by N2.50 to close at

N170 per share. It was followed by Lafarge Africa with N2 to close at N101, while Nigerian Breweries dipped N1.05 to close at N144 per share. Seplat lost N1 to close at N342 and Guinness also dropped by N1 to close at N152 per share. On the other hand, 7UP recorded the highest price gain to lead to gainers’ table, appreciating by N7 to close at N190 per share. Nestle inched N4 to close at N854, while UACN chalked up N1.99 to close at N44.49 per share. Cement Company of Northern Nigeria grew by 50k to close at N11.50 and Port Land Paint gained 23k to close at N4.90 per share.

Vanguard, MONDAY, JULY 6, 2015 — 25

Business & Economy

N480bn spent annually on malaria treatment By PROVIDENCE OBUH

bout N480 billion is lost annually to malaria treatment and absenteeism which is about 46 per cent of all curative health costs, said National Coordinator, National Malaria Elimination Programme Federal Ministry of Health, Dr. Nnenna Ezeigwe. To address this challenge, she said that there is a need for massive awareness creation for behavioural change and improved health seeking behaviour to increase demand for services and utilisation of various intervention especially Insecticide-Treated Nets (ITNs), Artemisinin-based Combination Therapy (ACT) and Rapid Diagnostic Tests (RDTs) and also the need to fill the existing gap of $500 million for 2015 to Procure and distribute anti malarial medicines and commodities and Scale up Indoor residual spraying (IRS) Ezeigwe attributed the figure to malaria burden and effect on the economy, adding that the country accounts for a quarter of malaria burden in Africa Another economic burden and effect of malaria to the economy is the re direction of finances from health maintenance (e.g. good nutrition, proper hygiene) to treatment “Malaria is endemic in Nigeria with all year round

transmission; about 97 percent of total population at risk,” she said. On the other hand, Mr. Wellington Oyibo, from the International Center for Malaria Microscopy and Malaria RDT Quality Assurance Center, College of Medicine, University of Lagos, said that malaria is preventable, curable but kills and a child die every 60 seconds. Oyibo described malaria as a disease caused by the obligate intracellular protozoa of the genus Plasmodium, explaining that clinical malaria emphasises the concomitant signs and symptoms in addition to

malaria parasite while, plasmodium infection is the presence of the parasite in the blood without symptoms. His words, “Increased

Another economic burden and effect of malaria to the economy is the redirection of finances from health maintenance to treatment

intervention with funding, hope for success but could be slow if momentum not sustained. “Use of interventions such as: Long Lasting Insecticide Nets (LLINs), medicine for intermittent prevention of malaria and other preventive measures including vaccines. Prompt testing for malaria using rapid test is now available and reliable. ACTs are effective when malaria is confirmed. “Advocacy, communication, social mobilisation is critical in promoting the malaria strategies of government. State governments to take up full responsibility for malaria control and Public-private partnership to fight malaria critical.”

OPEC over-supplies dampen rise in oil prices

upply of crude from the Organisation of the Petroleum Exporting Countries (OPEC) rose to a three-year high of 31.60 million barrels per day (bpd) in June, analysts said. Analysts at PVM Oil Associates, London said outside the United States supply, oil supply from OPEC alone had risen by 300,000 bdp up from 31.30 million bpd in May. “We are going into the second half of this year with a heavily oversupplied fundamental picture, which makes any bullish price forecast hard to accept,” oil market analysts wrote. Other analysts echoed assessments of a fall in prices in the second half of the year. “When refineries go into fall (autumn) maintenance we expect to see some significant pressure on crude oil and on that basis we expect to see the crude time-spreads under pressure by the end of the third quarter,” said Olivier Jakob, analyst at Switzerland-based Petromatrix. But oil prices edged higher as the U.S. dollar slipped following weaker-than-expected U.S. nonfarm payrolls data. Poll indications that Greek citizens were expected to back a cashfor-reforms deal in a referendum on Sunday added to the bullish momentum, traders said.

Shippers’ Council set to audit terminal operators LAUNCH: From left: Uduak Ekpo-Ufot, Senior Manager, Data Services, Airtel Nigeria; Phyno, (Chibuzo Azubuike) Airtel Smart Icon, NITIN Anand, Vice-President, Data and Digital Services, Airtel Nigeria and Felix Ofulue, Public Relations Manager, Airtel Nigeria, during the launch of Airtel UnlimiNET Data in Lagos.

Inadequate foreign exchange hampers fuel importation, says DAPPMA T

he Depot and Petroleum Products Marketers Association (DAPPMA) has blamed inadequate foreign exchange facility from banks for the inability of marketers to import petrol into the country. Mr Olufemi Adewole, the Executive Secretary, DAPPMA disclosed this in Lagos, against the backdrop of the ongoing lingering fuel scarcity. According to him, most marketers are faced with the challenges of getting foreign exchange facility from banks to fast-track petroleum products’ importation. “The business of oil and gas importation involved changing naira into dollar to be able to import products, but banks often refused to give foreign exchange facility. “Most marketers that have licences to import products could not import

due to foreign exchange challenges. Some marketers who imported some cargoes of petrol into the country, which cost around 18 to 20 million dollars, found it difficult to pay their foreign partners in dollars because banks were not giving foreign exchange to marketers. Adewole said that the inability of marketers to access banks foreign exchange contributed to the ongoing fuel scarcity in the country. He said that marketers were also constrained due to the burden created by unpaid subsidies. According to him, the current foreign exchange crisis in the country, as well as the failure of banks to advance loan facilities, make it difficult to consider importing fuel. Some of the major marketers, who preferred not to be quoted, said that the inability of government to pay

subsidy debt of more than N300 billion also contributed to the lingering scarcity. The marketers said they were unable to import fuel in the last two months due to accumulated debt— as a result of the outstanding subsidy. Mr Seyi Gambo, a former Publicity Relations Officer of PENGASSAN, urged the Buhari administration to urgently address the issue of downstream, describing it as the major problem confronting the nation. According to Gambo, oil cartels and other actors in the sector, had held the country hostage for too long, and full deregulation is the ultimate solution to the problem. “With deregulation, there is guarantee of product availability and once the products are available, factors of demand and supply will dictate the pricing,” he said.

he Nigerian Shippers’ Council (NSC) has unveiled plan to audit the operations of private terminal operators to attain operational efficiency. The Executive Secretary of the NSC, Mr Hassan Bello, disclosed this in Lagos during a courtesy visit to Ports and Cargo Handling Services Ltd, the port operations arm of the Sifax Group. Ports and Cargo Handling Services, operating in terminal ‘C’ of the Tin-Can Island port, Lagos, is among the few terminal operators granted the concession to run ports in Nigeria. Bello said the idea of auditing the terminal operators was meant to ascertain their equipment and find out the challenges facing them. “There is need to cooperate with the Nigerian Shippers Council having been gazetted as the commercial regulator. It is important to transform the port and make it the hub of the West Africa sub-region,” he said. The NSC chief said there was the need for modern shipping practice, adding that the council was ready to listen to complaints from shippers and convey their requests to the Federal Government.

26 — Vanguard, MONDAY, JULY 6, 2015

Banking & Finance

Heritage Bank reiterates commitment to offering innovative services

anaging Director/Chief Executive, Heritage Bank Limited, Mr. Ifie Sekibo said that the bank is committed to introducing more innovative banking services. He made this pledge while speaking on ‘Innovation in Financial Services Delivery’ at the annual Cashless Card Expo of Central Bank of Nigeria (CBN).” Heritage Bank, he said, transformed the interior of banking halls, and was the first bank without an in-house Data center. “We are the first to deploy deposit machines in all branches, and also launched the first real transparent MasterCard in Nigeria. In addition to these, Heritage Bank transformed small and medium enterprise (SME) banking.” Heritage bank, he noted, is a product of innovation, and hence encourage deployment of innovative platforms. “We bounced back on the waves of innovative thinking, we thrive on an innovative ecosystem, we encourage and deploy innovative platforms”, he said. Sekibo pointed out that innovation is inevitable for the banking industry. This he said is due to changing dynamics across the globe which has penetrated banking. These changes, he noted are driven by forces of globalisation, self service mobile devices and regulation, adding that the impact of these changes on the Nigerian banking landscape is reflected in the sharp increase in the growth of electronic payment services between 2012 and 2014 in the country. He noted that, “The volume of e-payment in Nigeria grew from N18.1 trillion in 2012 to N35.1 trillion in 2014. While transactions through PoS increased from N48 billion in 2013 to N312 billion in 2014, Instant Pay transactions increased from N3.8 trillion in 2012 to N19.9 trillion in 2014”. He said that the growth in e-payment however does not mirror the huge population of mobile phone users in the country. “There are over 105 million mobile phones users in Nigeria.

C M Y K

WORKSHOP: - From left, Mr. Richard Morgan, Managing Director, YTGO Limited; Mrs. Abigail Oyewobi, Managing Director, Pinnacle Project Managers and Mr. Dipo Akinyemi, Branch Manager, John Street, Sterling Bank Plc at a workshop supported by the bank in Lagos.

Financial Derivatives predicts 9.1% inflation for June zSays further naira devaluation inevitable STORIES BY BABAJIDE KOMOLAFE

nalysts at Financial D e r i v a t i v e s Company have predicted a one percent increase in inflation rate to 9.1 percent for the month of June. The prediction is contained in the FDC Economic Bulletin issued on Wednesday. The company also stated that another devaluation of the naira is inevitable despite addition restrictions to the foreign exchange market recently announced by the Central Bank of Nigeria (NBS). The inflation rate predicted for June is coming about two weeks to the July 16 th date scheduled by the Nigeria Bureau of Statistics for the official inflation rate for June. The company stated, “Based on our forecast, headline inflation in Nigeria for June is expected to increase marginally to 9.1% (±0.2%) from the level of 9.0% in May 2015.

“If accurate, this will be the seventh consecutive monthly increase in inflation since November 2014, and the highest level in 2 years. Nigeria’s inflation continues to yield to the impact of protracted fuel scarcity that extended into mid-June. “Other factors that have contributed to increased inflation include reduced supply of food, owing to logistics issues and heavy

rainfall, which has affected planting in some regions of the country, and higher price of imported goods due to the exchange rate factor. “At its next Monetary Policy Committee (MPC) meeting on July 20 to 21, the Central Bank of Nigeria would have to proffer solutions to address inflation, depleting external reserves and determine an efficient exchange rate price mechanism. This is a

significant development given the apex institution’s decision to restrict access to the interbank currency market on 41 select items, including staples, rice, cement, tomato products and poultry. This pushes the pressure towards the parallel market. The additional N33 that importers would have to pay to purchase dollars will translate into increased prices of imported goods. This increase in inflation rate puts the CBN under pressure to review interest rate (MPR) upward at a time when a downward review was being mooted. Commenting on the need and impact of further devaluation of the naira, the Company stated, “Despite the CBN’s attempts to prevent a further devaluation of the naira, it is inevitable that the CBN would succumb to pressure. The effect of an exchange rate adjustment will include: Higher inflation stemming from more expensive imported items. Producers may have to pass on the cost of imported raw materials to consumers, thereby causing cost-push inflation; “Domestic investors that want invest in foreign stocks would have to source for the dollar at a higher rate. On the other hand, a weaker naira could spur increased stock market participation by foreign investors; “Majority of the stocks quoted on the floor of the stock exchange are owned by foreigners. Devaluation provides an avenue to own more shares of Nigerian companies; “The CBN restriction of importers’ access to foreign exchange at the interbank market would lead to inflation. However, in the long term, this decision could revive and bolster the agricultural and manufacturing sectors.”

Nihilent organises seminar for insurers

ihilent Nigeria, a Lagos based leading global business consulting and solutions integration company, and a subsidiary of India headquartered Nihilent Technologies, in association with the Nigeria Insurance Association (NIA), recently organised a workshop on digital transformation for the insurance industry and the need for quality frameworks in the sector. The day-long seminar had eminent speakers including Ravi Teja, VP of global consulting businesses at Nihilent, Suhas Oak and Martins Olajide, SMEs on IT governance frameworks, Vijay Zende, SME on insurance covering key talk points in the agenda. Ravi talked at length on the top trends in digital and explained with case studies, how insurance, like other critical sectors is being driven by Social, Mobile, Analytics, Cloud and Internet of Things.

Vijay introduced the audience to Nihilent’s wide range of technology and consulting services delivered for Nigerian businesses, while Suhas and Martinsdwelt on the importance of business frameworks like ISO 27001 and COBIT 5 for effective governance of information assets. Oti Ikomi, Chairman, Nihilent Nigeria acknowledged NIA’s support in this knowledge sharing initiative. On the seminar, he had this to say: “The insurance industry in Nigeria is going through a paradigm shift in this digital era, and we realized the need for a comprehensive seminar on these lines”. He drew attention to the role of Nihilent in the insurance industry. “For the past 15 years, Nihilent has been driving change management using digital and Information Technologies in emerging markets such as South Africa, Tanzania, India and Nigeria, and has helped financial services and insurances companies.

Vanguard, MONDAY, JULY 6, 2015 — 27

Banking & Finance Bayelsa moves to leverage private sector investment for economic growth IEI-Anchor PFA sacks Zwingina as board chairman

BY JONAH NWOKPOKU

ayelsa State government is set to leverage on private sector investment to drive the economic growth of the state This, according Commissioner for Ministry of Trade, Industry and Investment, Hon. Kemela Okara is the purpose of the Second Bayelsa State Economic Summit schedule to hold from July 29th to July 31st in Yenagoa, the state capital. In an interaction with journalists in Lagos last week, Okara explained that the reason for organising the Bayelsa state investors forum is that “we felt it is important coming from the backdrop of what used to be Bayelsa State before the amnesty when Bayelsa was known for things like militancy, pipeline vandalism, kidnapping and other violent crimes. “So, coming from that background, post amnesty, the government of His Excellency, Seriake Dickson saw very clearly that there was need to communicate that Bayelsa is open for business, that Bayelsa welcomes investors and that the state is serious about growing the local economy. And one of the ways that was clear to us to communicate that effectively was to organise a forum where investors can meet with government officials and can meet with the local private sector in Bayelsa State and can have discussions focused on how to establish businesses in specific focus areas.” Held successfully for the first time in 2014 with over 800 delegates in attendance, the forum, according to Okara, had already started producing tangible results as the state recently penned a N19.8 billion contract with Kesio Associates Nigeria Limited, one of the companies that participated in the maiden edition of the forum, to build a 5,000 unit stalls of building materials market to serve the entire Niger Delta region. Okara said the idea of opening up Bayelsa State up for investors was borne out of a vision to create opportunities for all in the state while creating a private sector context that would allow private enterprises to thrive in the state. According to him, “We set a very clear vision and our vision was possibly to become the model of African

AWARD - From left: Nduka Mba-Uzoukwu, Divisional Head, Service Management, Keystone bank limited, and Uzoma Dozie, Manging Director, Diamond bank Plc, at the Card Expo Award 2015 in Lagos, where Keystone Bank won the Best Achievement in Customer Service. economic success story. Flowing from that, we asked ourselves what to do. And our aim is to grow enterprise, create jobs in order that we can have prosperity for all. Our strategy has been that for us to achieve these dreams, we need to move away from depending on the receipt of FAAC allocation that comes to every state on a monthly basis to having an economy that has a proper value chain with opportunities that abound. That can only be achieved when you focus on industrialisation. This is because it is when you industrialise that you create secondary and tertiary levels where people can be hooked up on the value chain. “Having determined that, we considered what should be our focus areas. We determined that four areas should be our focus. One area that is very obvious is oil and gas industrial activities. This is because we already have a well developed oil exploration segment of the market. And then we thought about the industries that can spin off from there. These include industries in petrochemicals, fertiliser and refining. “The second focus area is agriculture. Bayelsa State even prior to oil exploration was a very big centre for oil palm production. As a matter of fact, some of the earliest palm oil estates were established in Bayelsa State way back in the 1960s. So we thought, let us deepen the oil palm sector of the agriculture. The other area we considered

is rice farming, because our terrain is ideal for rice farming.” Explaining further, he said: “The third area we are focusing on is power generation. And the reason for us is quite simple. This is because, even though Bayelsa is known as oil and gas producing state, we are actually more of gas than oil. We have more gas than oil. In many ways, oil is actually incidental to the abundance of gas that Bayelsa State has. And gas is fixed up for power generation. So our aim is to attract power generation companies to be cited in Bayelsa State. In that regard, we have set aside an area which is called a power hub, an area which is in continuity to gas evacuation.

We need to move away from depending on the receipt of FAAC allocation that comes to every state on a monthly basis to having an economy that has a proper value chain

“The fourth area for us is light manufacturing. From our studies, we have realised that for many businesses, what is key for them in light manufacturing types of endeavours is really regular power supply. If we have regular power supply, we will be able to attract that kind of businesses because power is perhaps the single costliest factor for any business anywhere in Nigeria. So we thought we could leverage on that. Tied to light manufacturing is the establishment of the ecoindustrial park. This refers to what is today’s global best practice in building industrial parks to make the environment greener, to have much better standard of waste management so that waste will not impact negatively on the environment.” He said these areas, for which they are seeking investors, shall form the fulcrum upon which the foundation of Bayelsa State’s economy shall be built. He said to drive this; the state has already begun to put the requisite infrastructure like access road, finance, and other forms of incentive in place. “We know we cannot achieve these without certain key enablers,” he said. He added: “One is infrastructure and it should be noted that within the vicinity of this industrial park that is being built, there is an airport which is due to be completed this year. It is just fifteen minutes drive from this eco-industrial park.

he Board of Directors of IEI-Anchor Pension Managers Limited has sacked Jonathan Zwingina its chairman following a vote of no confidence passed on him by the directors. Zwingina, who had been the chairman of the board since its incorporation in November 2004 was sacked at the board’s meeting last week in Abuja due to allegation of interference with the day-to-day management of the company and altering Minutes of Board Meetings. In fact, the PFA is believed to have had five managing directors in the last 10 years under the chairmanship of Senator Zwingina, a development, analysts say does not augur well for the organization and industry. Stakeholders are hopeful that with this development the management and the Board would now focus on building value for the stakeholders and remain competitive in the industry. A source in PenCom confirmed the development saying, “We were notified of the action by the management of the organization. It is within the confines of the organization to do what it feels right for its smooth operation.” On measures put in place to ensure that similar occurrence does not happen in the industry, the source said, “This is why we have the fit and proper requirement for appointments into any organization and we shall continue to enforce and monitor it.” A former managing director of the PFA who spoke on the condition of anonymity described the removal of Senator Zwingina as Chairman as long overdue. At the company’s annual general meeting last year, Solomon Okoli, managing director of the company assured shareholders that with the extension of their operations to 30 states of the federation, servicing over 75,000 customers and managing a couple of states’ staff pension, the company was now positioned for sustainable growth and profitability.

28 — Vanguard, MONDAY, JULY 6, 2015

Corporate Finance

LBS Alumni vows to promote social entrepreneurship

agos Business School, LBS Alumni Association has stated its commitment to promote social entrepreneurship and a culture of excellence in Nigeria. LBS Alumni Association stated this during its annual President’s Dinner held recently in Lagos. The event which had in attendance distinguished alumni of the school and notable captains of industries is the most anticipated event of the institution. Speaking at the event, the Lagos Business School Alumni Association’s President, Mr. Wole Oshin stated that the association would continue to offer opportunity for continuous learning and trends in the business environment. He noted that “through our various summits and topics we have attempted to impact Government policies in the past in different ways’ Oshin added that “this year ’s focus to encourage social entrepreneurship has led to the setting up of the Lagos Business School’s Alumni Association’s President’s Impact Entrepreneurship awards, which would commence in the third quarter of this year. It is open to Lagos Business School Students and its aim is for them to identify projects that would impact on their environment” Also speaking at the event, the Dean, Lagos Business School, Dr Enase Okonedo, has grown to become one of the best Business Schools in West Africa. She noted that “from 11 Customs Executive Education to organizations in 2009, we have now developed and offered 39 customs executive education to organizations in 2014. The Lagos Business School is now ranked amongst the top 70 business schools in the world offering customs executive education.” Honoured at the event with the distinguished Alumni award was Mrs Omobola Johnson, who served as the immediate past Minister for Communication and Technology. She was recognized based on her invaluable contributions to the areas of Information and Communication Technology during her time of service, Present at the ceremony were dignitaries including past presidents of the Association, former Government officials and renowned industrialists.

VOYAGE - From left: Mrs Amaka Ifeora, Asst. Director, Compliance and Monitoring and Enforcement, Nigerian Shippers Councils; Dr Phil Ofulue, Executive Director, Administration, Sifax Group; Captain Rohan Catalin, captain of the ship; Mr Henry Ajoh, GM, Shipping, Sifax Group and Mr John Jenkins, MD, Ports & Cargo Handling Services Ltd at the maiden voyage of Sifax MNM African shippng Line's Vessel MV SCL Angela to Lagos on Friday. Photo by Lamidi Bamidele

Shareholders query low attendance of members at AGMs BY PETER EGWUATU

hareholders have berated the low attendance of members at Annual General Meetings, AGMs, just as they tasked the Securities and Exchange Commission, SEC to make policy directing companies to repackage proceedings at meetings. The shareholders, under the

aegis of Proactive Shareholders Association of Nigeria, PROSAN who spoke to Vanguard said “We have observed that less than 2 per cent of the shareholders of quoted companies attend their companies’ AGM globally.” The National Coordinator of PROSAN, Mr. Oderinde Taiwo, who spoke the minds of its members stated that one of the demands of sustainable good corporate governance is

the disclosure of vital information to shareholders which are always discussed among other matters on the floors of the AGM of companies. According to him “By implication if there is any way such proceedings can be assessed by these shareholders after such AGM , it will be a move towards positive direction. Therefore, we the members of PROSAN ,

the Nigerian representative in the World Federation of Investors, WFI do hereby suggest to the Director General of SEC to make policy that will compel all the quoted companies in Nigeria to package the proceedings of their AGM in YouTube for easy online accessibility of all the stakeholders.” Taiwo advised that SEC, apex regulator of the Nigeria capital market should begin to think of ways of developing the market to meet global standards. In his words “ We believe that compelling companies to use YouTube at AGM will also help the work of SEC easier in the area of monitoring of activities of proceedings at meetings. In addition, all intended foreign investors can have first hand information about the growing capital market via this device.” The shareholders’ group further stated that the continuous delay on the appointment ministers would continue to affect the capital market as investors need to know the policy direction of the economy. According to Taiwo “Both foreign and local investors will only invest in a market if they know the policy direction. You can see that immediately the new president for Nigeria emerged after the 2015 election, the stock market moved up and now the market has been going down because of the uncertainty caused by continued delay in the appointment of ministers and policies announcement.”

CSR: Vitafoam donates mattresses to Boko Haram victims

s part of its Corporate Social Responsibilities (CSR) Vitafoam Nigeria Plc has brought succor to some victims of insurgents, Boko Haram by donating 100 luxurious mattresses and 100 pillows to the Internally Displaced People (IDPs) in Borno State through a Non-Governmental Organisation (NGO), The Oasis Association. Explaining the rationale behind the donation, Vitafoam’s Group Managing Director, Mr Taiwo Adeniyi stated that the donation of mattresses and pillows will in a way alleviate the sufferings of the people displaced by the insurgents, called Boko Haram. According to him, the donation is Vitafoam’s way of giving back to society. “Oasis contacted us to partner with us by assisting in this regard. We believe that we are just contributing our part. We have been supporting victims of many disasters over the years and we have consistently spent millions of Naira annually. The significance of our donation of mattresses and pillows is better appreciated against the essence of comfortable sleep as a necessary condition for thinking better. As a good corporate citizen, we shall continue to support the needy”, he said. Adeniyi noted that Vitafoam’s operations in the Northern part was affected by the activities of Boko Haram thus leading to some loss of revenues. He however explained that government alone could not address the

level of destruction caused by the insurgents and called on other corporate bodies to assist the Internally Displaced Peoples without further delay. He thanked Borno State government for giving Vitafoam an opportunity to assist the victims. Commenting on Vitafoam’s operations, Adeniyi assured the shareholders of increased value saying that all the company’s activities aimed at increasing shareholder value ultimately. The President, Oasis Association, an NGO, Air Vice Marshal Olufemi Soewu explained that Oasis Association comprises professionals of various backgrounds driven by selfless desire to assist humanity. According to him, the Association had assisted many victims of disasters including those that suffered at Ikeja cantonment some years ago. He noted that annually, the NGO focuses on different sectors of the society. According to him, the group focused on health last year and assisted victims of tuberculosis while this year, the focus is internally displaced people. Soewu commended Vitafoam’s management for the quick response to the request to assist victims of insurgency in Borno State. The Head, Borno State Liason Office, Lagos, Mrs Racheal Dunama Balami thanked the management of Vitafoam and promised to convey the gesture to the government of Borno State.

Vanguard, MONDAY, JULY 6, 2015 — 29

Corporate Finance

CWG subscription business model now yielding fruits — OKERE BY PETER EGWUATU

he Founder and Chief Executive Officer of Computer Warehouse Group (CWG) Plc, Mr. Austin Okere has said that the company’s subscription business has begun to yield fruits. He said this during his speech at the 10th Annual General Meeting (AGM) of the company held in Lagos. According to Mr. Okere, the CWG subscription business model was conceived five years ago as the company needed to reinvent and transit to become a company that could predictably grow revenue and profit. From a small startup some 23years ago with seed capital of barely N160,000, CWG has grown to become one of Africa’s largest system integrators with revenues of more than $100m, 650 staff and operations across Nigeria and three other African countries, CWG had always been at the forefront of innovative information technology solutions that enables growth. Mr. Okere noted that the opportunities that CWG has successfully pursued under its subscription business include providing a cloud solution for micro finance institutions in partnership with MTN (a solution dubbed MTN XaaS), building a cloud based solution for Micro, Small and Medium Enterprises (MSMEs) to manage their businesses. He noted that being certified by the CBN as a payment terminal service provider (PTSP) will enable the company to deepen its offering in the Point of Sale and Payment systems. Recognising the need for automation and effective management of internally generated revenue, CWG has recently launched technology solutions that help State Governments to increase their internally generated revenue in the area of third party Insurance management system. The company re-iterated its commitment to continue its focus in developing new lines of businesses, under the CWG2.0 model, which are better positioned to withstand macroeconomic shocks, especially those relating to foreign exchange movements. The new products include the flagship

CWG-SMERP, the cloud based On the company’s financial scorecard, the Acting Chairman noted that gross margin percentage grew by 5 per cent to 20 per cent from 19 per cent in 2013, while the financing costs and general operating costs declined by 43 per cent and 15 per cent respectively to N199.8million and N2.7billion as against Financing cost of N348.7million and a

Operating Expenses, OPEX of N3.2billion in 2013 respectively, showing better efficiency of our operations. The company also finished with an improved cash position of over N1.5bn at the year end. Shareholders at the event were informed of the payment of the 2kobo dividends per unit share, to be made within 24 hours. The meetings witnessed the election of Mr. Kunle Ayodeji as an Executive member of the Board in charge of

Finance and Operations. Mr. Ayodeji is a seasoned professional with over 15 years of experience in the fields of banking, financial consulting and private equity. He has held Executive positions in numerous organizations including KPMG and Abraaj Capital. In the same vein, three other shareholders were also elected as members of the audit committee, while Ernst and Young was reappointed the company ’s auditor for another year.

VISIT - From left: Prof. Abimbola Uzomah, the lead national expert on technical regulations of United Nations Industrial Development Organisation (UNIDO) National Quality Infrastructure project; UNIDO's expert on co-ordination, Mr Simeon Umukoro and representative of the Obi of Onitsha, Chief Chilo Asika, during a courtesy call by the UNIDO Group to the Obi of Onitsha in his palace in Onitsha, Anambra State recently.

Youth empowerment vital to growth of any country’s GDP — NYSC BOSS

he Management of the National Youth Service Corps (NYSC) has praised Heritage Bank for its commitment to youth empowerment, saying youth empowerment is vital to the development of any country’s Gross Domestic Product, GDP. Speaking during a courtesy visit by the NYSC top management team to the Heritage Bank headquarters in Lagos, the Scheme’s Director General, Brigadier –General Johnson Bamidele Olawunmi commended the bank, especially in the area of promotion of entrepreneurial culture among youth in the country. According to him, to tackle the rate of unemployment and enhance the economic growth of any country, the youth population segment must be encouraged and supported to develop entrepreneurial skills

and self-reliance. This, he said, led to the establishment of the Skill Acquisition and Entrepreneur Development (SAED) by the Scheme as a way of channeling more concerted efforts to youth empowerment to achieve the desired results. Brigadier General Olawunmi thanked Heritage Bank’s management for recently offering employment to thirty ex-corps members in addition to granting of loan facilities to many others to start their businesses under its SME Loan Scheme. The NYSC helmsman also showed profound gratitude to the Bank for its strong support for the NYSC Hope Alive Initiative Scheme, a programme designed to provide financial assistance to help rehabilitate Corp members who suffer disabling injuries during their National Youth Service Programme.

He added that through constant support of the Bank and other well meaning individuals and corporate organisations, the NYSC Hope Alive Scheme has been able to offer a new ray of opportunity for disabled young Nigerians to pursue their dream of self realization. Managing Director of Heritage Bank, Mr. Ifie Sekibo praised the NYSC for having the foresight and humanitarian spirit to set up the Hope Alive Initiative. He said Heritage Bank’s gesture of supporting the Scheme was informed by its belief that the future wellbeing of the country would be better guaranteed if all well meaning Nigerians and other stakeholders teamed up with the Federal Government to empower the youths to create wealth.

Southern Sun set to boost bilateral investment opportunities

o foster the growth of businesses in the country, Southern Sun Ikoyi has restated its commitment to boost bilateral investment opportunities in Nigeria. The company disclosed this when it hosted members of the Nigerian-British Chamber of Commerce amongst other business executives to an informative networking evening aimed at attracting and increasing bilateral investment opportunities between Nigerian established businesses and the British Chamber of Commerce. The enlightening affair which kicked off with a short lecture on ‘Life in the 21st Century’, was delivered by eminent speaker and Deputy President of the NigerianBritish Chamber of Commerce, Prince Dapo Adelegan. In his lecture, he challenged the need for Nigerian businesses to develop multiple streams of competences in order to better survive in today’s fast paced world. He stressed the need for a reformation in Nigeria’s education sector to ensure a more robust curriculum, which will equip students with vocational skills and training needed for their growth and sustenance in today ’s vibrant global business markets. In addition to the short lecture, the networking session which attracted representatives of local businesses ranging from small and medium sized enterprises to large scale multinational businesses and Government Agencies also offered marketing intelligence tips on bilateral trading. Highlighting the contributions of Southern Sun Ikoyi in sponsoring the interactive affair, Mark Loxley General Manager of the hotel stated that “as an established platform, we value our clients and as such, we take on every real opportunity to build new and to strengthen our existing relationships”. Mr. Loxley noted that by sponsoring the networking session for members of the NigerianBritish Chamber of Commerce, Southern Sun Ikoyi.

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30 â&#x20AC;&#x201D; Vanguard, MONDAY, JULY 6, 2015

Business Photos

*From right: Tolulope Tope Awofeko, Head, Retail shops and franchise, Airtel Nigeria; Yetunde Jayesimi, Divisional Head, Telcoms, Keystone Bank; Uchenna Okwodu, Divisional Head, Bank wide operations, Keystone Bank; Femi Oshinlaja, Regional Operations Director, Lagos region, Airtel Nigeria; and Grace Henshaw, Airtel Nigeria; at the Airtel-Keystone collocation in Lagos

Chams Plc held the official launch of Confirmme at Loius Solomon Close, V I Lagos. From left: Mrs Jamealah Ayedun, MD, Credit, in a handshake with Mr Olufeni Williams, MD, Chams Plc, Mr Luqman Balogun, Deputy MD, Chams Plc and Mr Sadiq Abubakar, Nig Inter-Bank Settlement Systems Plc. Photo Shola Oyelese

*From right: Mr Osita Ede, Head, Mass Market Diamond Bank; winner of N100,000, Mrs Jamaba Ideozu; Aishah Ahmad, Head, Retail Directorate, Diamond Bank and Mr John Anyawu from KPMG during the Diamond Bank Xtra Mid-year draw in Port Harcourt, Rivers State. Photo: Nwankpa Chijioke

*EECON Global held the launch of Top More drink at King Plaza, Adeniran Ogunsanya Street, Surulere Lagos. From left: Miss Uju Akpua, Branch Ambassador, Mr Paul Obanua, CEO, Greenfield Asset Ltd, Mr Nnamdi Nnachukwu,Chairman, EECON Global and Mr Izu Obi, CEO, Project Digital Ltd presenting the Top More drink. Photo Shola Oyelese

*From right: Executive Director, Enterprise Risk Management, Heritage Banking Company Limited, Jude Monye; Executive Director, Ivory Banking, Heritage Banking Company Limited, Mrs. Mary Akpobome; Star Prize Winner, Heritage Bank Training School Graduating set 2015, Chioma Ekwonu; Managing Director, Heritage Banking Company Limited, Mr. Ifie Sekibo and Executive Director, Lagos and South-West Corporate Banking, Heritage Banking Limited, Ola Olabanjo, at the Valedictory Dinner in honour of Heritage Bank Training School Graduating set 2015 on Friday. C M Y K

*From left: Hon. Babajide Bello, Executive secretary, Mushin Local Government and Engr. Chris Onyekachi, MD, Total Value Integrated Service Nig, Ltd, developer of the market, during the Press briefing on Ladipo Market matters in Mushin recently. Photo: Bunmi Azeez

Vanguard, MONDAY, JULY 6, 2015 — 31

Homes & Housing

•Modern mini housing development

Benefits of investing in real estate Stories by YINKA KOLAWOLE, with agency reports

helter is one of the most basic human needs everywhere in the world. The shortage of suitable accommodation in Africa is pushing up rent and property prices in several cities and towns across the continent, making it one of the hottest and most promising places in the world for real estate investment. Smallstarter.com notes that the boom in Africa’s real estate market is a juicy opportunity for entrepreneurs to exploit and become successful property owners. The following are some of the reasons why investment in real estate is attractive. Provides steady cash flow

Only very few investments can give the kind of leverage that real estate can

When you buy or build a house, and rent it out to tenants, that property starts to earn you rental income (monthly or yearly depending on the contract with your tenants). With the high demand for accommodation and growing inflation, rent prices are always on the rise. Higher rent prices mean

more income for you, the landlord. Compared to other investment options, the income from real estate is the most steady. For For instance, the amount of dividends paid by many companies often fluctuate and may not be paid every year. Bank savings (another form of investment) usually attract interest payments that may be steady but are often very small compared to the returns you can get from investing in real estate. Because the income from real estate investment is steady and predictable, you can plan better. Rental income is also great for people who are planning for retirement. Usable as loan collateral Collateral is one of the biggest obstacles faced by entrepreneurs in obtaining a

Extra costs tto o consider when buying a house

t can be a little confusing when it comes to identifying the tax charges involved in the process of securing your dream home. Lamudi has prepared a guide to the extra costs property seekers should expect to pay when buying any kind of real estate. There are three main types of taxes that are required to be paid by property tax owners. However, not all of these tax charges apply to every state in Nigeria. Property registration tax: Property registration tax is real estate tax that you pay when registering your ownership title. This tax charge is based on your property’s worth at the time of purchase.

Personal income tax: Personal income tax is mandatory when you sell a property or when you receive rent from properties you own. The percentage of tax you pay depends on the level of your income. However there is a 5 percent to 20 percent flat rate for people who earn as much as one million Naira per month. Land use charge: Land use charge is like a kind of rent paid by property owners in Lagos Nigeria annually. This tax is more or less like rent you pay to the government for granting you your request to lease the land. Land use charges are calculated based on the value of the land. How to register the

property: After you purchase a house, make sure you register it immediately so that you can officially transfer ownership to yourself. In order to do that, you will need to complete the following documents and send them to the land registry: Two pictures of the property; Survey plan; Form C; and Deed of assignment. Once this is done, the land registry will issue a document with a list of real estate taxes that you will need to pay. Once your property tax is paid, a certificate of occupancy will be given to you. Some states have their own laws on real estate taxes so be sure to stay up to date on the current charges by talking to your trusted real estate agent.

bank loan to start a new business or acquire property (such as a factory, machinery or equipment), especially in Africa. When banks ask for collateral, they want something that is equal to or greater in value to the loan amount you are asking for. Banks usually prefer real estate as collateral because it is known to continually appreciate in value. Unlike your car which loses value every day, the value of real estate properties are more likely to grow. And compared to stocks (which some banks accept), the value of a property cannot vanish overnight. As a result, an investment in real estate means that you can use the properties as leverage to get a loan from a bank and other lenders. Only very few other investments can give the kind of leverage that real estate can. High return on investment Real estate always grows in value, especially in developing regions like Africa where the property market is not as matured like in North America or Europe. Lagos, Nairobi and Luanda are some of the African cities that are currently rated as hot property markets. Due to the huge demand for shelter in many African cities, the returns on real estate investment are one of the highest in the world. Although buying and selling of real estate should not be your main investment goal, it is your insurance that should you need to sell your property sometime in the future (for whatever reason), you will still make a handsome return. You can earn rent income for many years or you could sell the property. Either way, you make money and earn a profit on your real estate investment. Low risk investment We have heard of stock market crashes and banks going bankrupt. Although real estate values often fall, it is not usually a very bad situation. In fact, even when property values fall, you would still earn rent income from the property. On the other hand, real estate is physical and tangible compared to stocks, bonds and many other intangible forms of investment. Both in times of high inflation, economic boom and bust, real estate investments remain robust and will most likely continue to earn you income. Very few other investment options can do the same.

RBS faces $13bn mortgage penalty

.S. regulators have told Royal Bank of Scotland Group Plc it could pay as much as $13 billion if it loses a lawsuit over its handling of mortgage securities. The U.S. Federal Housing Finance Agency, suing on behalf of government-owned lenders Fannie Mae and Freddie Mac, made the estimate in a June 24 court filing in a related case in Manhattan federal court. The prospect of a large U.S. fine comes as Chancellor George Osborne prepares to sell shares in RBS as early as September at a loss to the U.K. Treasury. A settlement is expected to be “substantial” and could come this year, RBS Chief Executive Officer Ross McEwan has said. The $13 billion sum marks the first time the FHFA has attached a potential value to its case against RBS in U.S. District Court in New Haven, Connecticut, and outstrips previous estimates.

US mortgage rates hit year high

he slow improvement in the US economy is nudging mortgage interest rates higher, with home finance giant Freddie Mac saying the average for a conventional 30-year mortgage rose to 4.08 percent this week, its high point for the year. Mortgage giant Freddie Mac said the average rate on a 30-year fixed-rate mortgage rose to 4.08 percent from 4.02 percent a week earlier. The rate on 15-year fixed-rate mortgages increased to 3.24 percent from 3.21 percent. Mortgage rates have increased in recent weeks, in the midst of the spring home buying season, as the economy has shown signs of improvement. A year ago, the average 30-year rate was 4.12 percent; the 15year average was 3.22 percent.

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32 — Vanguard, MONDAY, JULY 6, 2015

E- Commmerce

Konga partners Audax to empower youths in ICT, celebrates anniversary BY JONAH NWOKPOKU

igeria’s online marketplace, Konga.com has kick-started its third year anniversary celebrations with the announcement that it will partner Audax Solutions to train the next generation of computer programmers at the Audax Code School. Konga said the beneficiaries, young people aged 9 – 16, will be selected by Audax from Public schools, orphanages and nongovernmental organisations. Olatomiwa Akande, Konga’s Head of Public Relations who disclosed this in a statement noted that the initiative is in line with the company’s vision “to utilise the internet and mobile technologies to create a pan African platform that enables trade and commerce for millions of sellers and buyers.” Konga’s third year anniversary celebrations tagged ‘#KongaBIG3’ is billed to hold all through the month of July. Konga was launched as on online retail store in July, 2012 by Sim Shagaya in a small garage in Lagos. It started by selling beauty, personal and baby care products to online shoppers in Lagos. The company grew quickly with the rapid expansion of product categories and geographic reach. Today Konga delivers products to every state in Nigeria and now has a massive array of over 200,000 products listed for sale on its site. According to Akande, “Konga has truly revolutionized the ecommerce industry in Nigeria with quality products at great prices, innovative offerings and unparalleled services to our customers across the country. The company has clinched so many brand awards recently and has grown rapidly with over 700 employees, offices in Lagos, South Africa and China. The company is also set to expand more this month by moving to a bigger warehouse.” C M Y K

Starting Jumia helped us build Nigeria’s largest delivery network — ACE

UNDE Kehinde and E r c i n Eksin are the Founders and Managing Directors of African Courier Express, ACE. The duo were among the pioneers of ecommerce in Nigeria having been co-founders of Nigeria’s now largest online retailer, Jumia.com in a garage in Lagos, June, 2012. Jumia has since grown to become one of the biggest online retail brands in the country. In this interview, Kehinde and Eksin shared with JONAH NWOKPOKU how their experience building Nigeria’s biggest online brand played a significant role in inspiring and creating ACE, a solution that has revolutionised the Nigerian logistics industry. Excerpts What is ACE? ACE is an acronym for African Courier Express. It is Nigeria’s largest direct to consumer delivery network. We help retailers, banks, insurance companies and other businesses deliver goods directly to consumers all over Nigeria. The service also allows users to track packages real time as well as making provisions for payment collection at points of delivery. Can you take me through the ACE’s process of delivery? Tunde: Talking about the process, there are several ways one can leverage the platform. One is that our client manager will work with you to understand how your business works. And then they will help you to designate, to determine if you would like us to pick up from you or you would like to drop off for us to pick and deliver. If you prefer to drop off, once you get the items to our hub, we then initiate the tracking process so that you will get a tracking link and then one of our riders will start your package along the delivery route. What that means is that within Lagos, we are delivering the next day for items received from clients and across the country within three days. And throughout the process, you will get status updates from us. And if you like, we can collect a payment for you at the point of delivery, reconcile it and remit back to you in a very neat format that you can use for your reporting purposes. What is your scope of operation? Do you only deal with online retailers or both? Ercin: We deal with individuals and businesses that need to move goods from one place to another. And these clients are free to

•Tunde Kehinde

ship anything across Nigeria. What inspired you into this line of business and what particular new solutions are you bringing to the table? Tunde: We used to run Jumia Nigeria and we grew that brand from just five employees to about a few thousands by the time we left. And the greatest challenge we saw was, how do we get these items across this country in a deterministic fashion, so that you can tell your customer that his ‘order X’ is coming within one or two days? That was a great challenge and we tried to build our own delivery network in-house but even that was not enough to meet the demands. And we

What we are offering is next day delivery, pay on delivery in a world class fashion and real time technology that has not been brought to Nigeria before said: look, why not create a platform where the everyday Small and Medium Businesses or individuals can ship what they want, receive payment at point of delivery and track packages real time

•Ercin Eksin

in a way that delights the customer. And then we launched the ACE about a year and half ago and have since then shipped to over 200, 000 customers. We have presence in five cities across the country and we have collected payments for everyone, from small merchants selling in big marketplaces to offline giant retailers like Chicken Republic. There are several new innovations we have brought to logistics in Nigeria. First, we have introduced our own delivery proprietary technology into the market, customised for the Nigerian consumer. What that means is that you can now tell at every point in the delivery process where your package starts. This is something that no one else is doing. Our riders have their own mobile application at the point of delivery when they update our system that an item has been delivered. We get a notification and our business merchant gets an alert and then the end customers can reconfirm that they received their package. At the same time, we are now the biggest direct to consumer payment collector for retail in this market. So what we allow our businesses to do is ship a package, receive a payment either through a POS or in cash and get it to our merchant in a timely fashion. So what we are offering is next day delivery, pay on delivery in a world class fashion and real time technology that has not been brought to Nigeria before. Funding is a great challenge for most ecommerce start-ups,

how did you get funding to embark on capital intensive business like logistics? Ercin: It is true that in Nigeria there have not been exits in the start-up space in a large scale. So it’s true that people in general are sceptical to invest in startups. But what is also true is that if you have the right experience and team, including the right approach to a problem, there will be people willing to invest in your business. That was how we got our funding. This is because we built Jumia to successful level and people believed in us that we could make logistics successful as well. Tunde: We have been fortunate to have investors from day one. One of our largest investors now is Interswitch. If you have a world class product, a world class team, it is always very likely that you will get investors easily looking to help you create something amazing. What we are looking to create is the largest delivery network across Africa, where anyone, Nigerian, or anyone from West or East Africa can ship what they want and when they want it affordably while tracking it real time. Given your experience in the last two years in the logistics space, how would you assess the Nigerian logistics industry? Ercin: E-commerce has become quite wide with the introduction of couple of players like Jumia and Konga style. The reason being that there is quite a need in Nigeria, because if you look at Lagos where you have about 17 million people, there are only three international quality shopping malls. And if you go outside of Lagos, the availability of goods even decreases further. Therefore, e-commerce has become a good value proposition in Nigeria but the fact is the biggest challenge was always getting the goods from the warehouse to the end consumer. There were big players but their processes were not customised to the needs of the consumer and now there are small players but do not have the IT infrastructure and management structure in place to scale. So that was how ACE came to fill that gap because we solved the challenge in Jumia and we realised that we could also do that to help other players in e-commerce to help them scale.

Vanguard, MONDAY, JULY 6, 2015 — 33

Business & Economy

BoI disburses N75.8m to off-grid solar home system providers

he Bank of Industry (BoI) on Friday disbursed N75.8 million to GVE Projects Ltd,, and Arnergy Solar Ltd. to provide solar home systems to off-grid communities in six states. The states for the pilot phase for the take-off are, Anambra, Delta, Niger, Osun, Kaduna and Gombe. The Managing Director, BoI, Mr Rasheed Olaoluwa, while presenting cheques to the recipients, said the project was being implemented by the bank in collaboration with the United Nations Development Programme (UNDP). Olaoluwa said that UNDP which has 50 per cent stake in the project had contributed $1.6 billion. He said that the project was divided into the Stand alone, which costs N31.6 million, and the Micro-Grid, which costs N44.2 million, making a total of N75.8 million. Olaoluwa stressed that the project would involve the National Agency for Science and Engineering Infrastructure and local meter

manufacturers. He stated that the project would be operated on a Pay As You Go basis without any threat to existing electricity distribution companies. “There are two major systems, the stand alone, which is for singular homes attached to their roofs, while the Micro-Grid would be used as a cluster for different homes

in the community. The choice whether to use the micro-grid or stand alone would depend on the type of settlement in the chosen communities, which has not less than 200 houses. “The solar system when installed can power 4 LED lamps, Television, radio and other appliances, with an average daily cost of N50. After the pilot phase has been

proven successful, we have a long term goal to provide 100,000 homes with the solar power systems within the next five years,“he said He said that the project would provide a long term solution to the problem of power generation, which ihe said was currently less than 4,000 megawatts. The chief executive officer of the bank said the programme

was a more viable solution to rural-urban migration and poverty alleviation. A recipient of the loan, Mr Ifeanyi Orajaka, assured stakeholders that the quality of the project would be of international standard. Orajaka said that a model of such project had been done by his company in a community in Rivers state in 2013.

NSC, NPA to negotiate tariffs at ports T

he Nigerian Shippers’ Council (NSC) has called for negotiation with the Nigerian Ports Authority (NPA) to achieve a reduction of tariffs at ports. The Executive Secretary of the NSC, Mr Hassan Bello, made the call in Lagos during a courtesy visit to NPA’s headquarters. Bello said the negotiation would involve dialogue and constant meetings with the authority to proffer solutions to tariff increase at the ports. He commended the

authority for the introduction of the e-payment and eberthing systems which had been improving maritime services. The executive secretary said the e-payment system was in line with international standards. “There is capital improvement in dredging of channels which indicates that the Nigerian maritime services are moving gradually to be the hub in West Africa. NPA should consider multiple access roads while contracting out access roads leading to the Lekki

Deep seaport, so that the constant gridlock happening in Apapa and Tin-Can ports will not persist at Lekki. “Constant dredging of Nigerian waters has enabled bigger vessels to visit our ports,” the executive secretary said. Bello acknowledged that Nigerian ports had been having huge traffic of cargo coming in. He urged NPA to look into expansion of port access roads as well as roads linking various terminals and quay aprons in the terminals. Bello said that the

continuous gridlock on the ports’ access roads had affected efficiency at the ports, adding that the NSC was interested in reduction of the costs of doing business at ports. He requested that NPA should provide offices where officials of the NSC could carry out some of their functions. “To decongest the ports access road, we want to see 70 per cent of cargo moved through the off- dock terminals by promoting the Inland Container Depots.

34 —Vanguard, MONDAY, JULY 6, 2015

People in Business

I do what I do because of passion — JOSEPH OBIGBARA By Ebele Orakpo

because I am talking out of my own experience; it might not be someone else’s experience but I believe that money helps you and lack of it can be very frustrating in business. Trust: I am aware that people just need to trust you with stuff but sometimes they don’t give you choice goods, the kind of goods that sell almost immediately. As a musician, I would say choice goods are like hit songs; some songs are evergreen, same thing with clothing. There are some stuff that you buy and it is just there looking at you. Those are the kinds of clothes that people give you to help them market but those choice clothes are hardly given to you because they sell them fast. But if you have funds, you go for choice goods. Clothing is like our generation; it is fast, trends change in months so if you don’t have funds, your success will be limited. You will succeed but to an extent.

r. Joseph Chijioke Obigbara a.k.a Joe Bling, is the Managing Director/Chief Executive Officer of Lagosbased Jeans Factory, a fashion outfit. The graduate of Public Administration from the Anambra State Polytechnic worked briefly in the banking sector as a marketer before veering into fashion business. He spoke to Financial Vanguard recently on his business, the challenges and his dreams for the business. Excerpts . Banking to fashion: I do what I do because of the passion. I have always been a fashion person right from the age of five. As a matter of fact, I became a model in my school. My father was a fashion designer; I suppose I inherited that from him. Living your dream is not easy because sometimes, people want you to go in a different direction. I am a graduate and I was expected to be in paid employment. Although I worked in the bank briefly but I decided to follow my passion which is clothing. Right now, I am retailing clothes for other brands but my aim is to have a clothing line which happens to be the name of my business, Jeans Factory. Why Jeans Factory? Jeans Factory is a brand name. I love jeans and casual wears generally. If you go to the streets, you will find out that a lot of people wear jeans; 80 out of 100 people on the street wear jeans and that is because very few people have white-collar jobs and dress corporately so I saw it as an opportunity. That was why I dived into that line of clothing. Now, it does not mean that we deal in jeans only. We also sell other things like T-shirts, tops, shoes etc for both ladies and men, all branded Jeans Factory; it’s a vision which I believe, will grow with time. So the essence is to take advantage of the disadvantage we have here since very few people wear corporate outfit. Casual wears are not only cheap, they are things you want to wear anytime, you feel free and smart in them without having to look for electricity to iron them. So very soon, you will see clothes with that brand name.

because you determine how much you will pay for the goods. Doing business without funds can be very frustrating. I am talking out of experience. If you have little funds to start, you will go very far and your journey will be very fast unlike someone who doesn’t have funds. I stand to be corrected

Going into local production: For now, I bring in stuff from abroad but sometimes when I run out of goods, I source from the local markets. Cost of production in Nigeria is high; power is not stable so it is cheaper to import than to produce. I am trusting that things will improve so if power is stable, why not? I would love to produce locally.

I don’t have issues with banning, I am not an advocate of importation but let us face reality; what are the things we have on ground? Can we really produce?

Banning is good but... Importation of textile is not even legal, but the law is not strictly enforced because our textile companies are not producing due to high cost of production. The problem I have with Nigerians is that they always want a forceful change without counting the cost; they don’t look at the parameters, they just say yes, we want the dollar to be so so; how are you going to bring the dollar rate down? What are the things you want to do to bring the dollar rate down? You say you want change, how is the change going to come about? There are things you need to put in place but we don’t want to do all that, we just want to ban. I don’t have issues with banning, I am not an advocate of importation but let us face reality.

*Mr. Joseph Obigbara...This is my dream and it is something I expect my children and grandchildren to live on even after I am gone This is my dream and it is something I expect my children and grandchildren to live on even after I am gone. Initial cost: I started the business with five shirts only. I came to Lagos on holiday and a friend of mine said instead of just sitting doing nothing, I should try my hands on something. I collected five shirts and that kind of sparked off the dream of a boutique. That is why I said it is a vision, it grows. I have always liked clothing and looking good so I took the shirts and sold them easily. That was how I started and here I am today! All I needed was that friend of mine who gave me a few shirts and it sparked off the vision. From there, I met a few people who also supported me. Challenges: Joseph said paucity of funds is the major challenge facing the business. "Funds play a very vital role in business. Some people say you don’t need money to do business, I agree to a certain extent but if you have money, it will help you get what you want at a specified price. If you have money, you do not need to beg anyone to give you goods, you get choice goods at your own price

What are the things we have on ground? Can we really produce? The essence of wanting to produce here is for you to patronize indigenous factories or products. Now, for a businessman, the motive is to maximise profit. If as a business person I produce here and I don’t make profit, I fold up. There are other factors like acceptability, how patriotic are we? You find out that locally made products are more expensive than imported ones. For example, men’s shirts; the ones from Turkey are cheaper than those made locally which they tell you are hand-woven. What are we trying to achieve? We want to bridge the gap, to make affordable clothes but we find out that the ones we produce are more expensive, how are people going to buy? If Shirt A is imported and sells for N6,000 while Shirt B is locally made and goes for N10,000 because of the cost of production, which one would you rather buy? These are the factors I look at as an individual. The aim of this whole thing is about profit meaning if you can’t make profit, the business closes down. You are not running a charity organisation, you are in the business to make money and when there is no profit, by the time you do it once or twice, you pack up. Employees: Presently, I have one. I have had some experiences here with some of these young people; they are not focused. Today, they are here and tomorrow, they are out. They want money they don’t work for. It is a challenge. Someone comes in here today to work for you, she wants to be paid a huge sum of money and she is not ready to work to contribute to the growth of the company, all she wants is the money and you know, the level of immorality has worsened the case when it comes to having to employ young girls because they are distracted. They work for a few months and they are gone because some guy comes in and gives them that amount of money you pay them in a month in just one day and they are like; 'if someone can give me this in a day, then what am I doing here?' So once they meet one, two or three guys, they are gone. You also have some people who are focused who from here go to school and improve themselves.

C M Y K

Vanguard, MONDAY, JULY 6, 2015 — 35

Aviation

Ghana to host Africa's first aviation exhibition

*Participants at the Malaria No More Seminar in Lagos

ICAO, CAPSCA applaud Nigeria’s efforts at combating communicable diseases By LAWANI MIKAIRU & DANIEL ETEGHE

he Head of Implementation Planning and Support-Safety Section, Air Navigation Bureau and CAPSCA Programme Global Coordinator, Mr. Micheil Vredeenburgh has applauded Nigeria for her effort in fighting the deadly communicable diseases in the country. Speaking at a two-day visit to train stakeholders in the aviation industry, Mr. Vredeenburgh said that Nigeria performed very well during the outbreak of the deadly Ebola Virus Disease (EVD) adding that she demonstrated much efforts in ensuring public safety at the various airports across the country. He added that the team’s visit is geared towards assessing Nigeria’s preparedness for eventualities and also as a training section. “This programme is to implement the international health regulations as well as the ICAO standard and recommended practices which are related to public health emergences in the aviation sector”. “This visit to Nigeria is part of the ICAO doggged show, Ebola aviation action plan and it is actually funded by the United Nations development programme under the global Ebola response muti partner trust fund” Vredeenburgh said. Also speaking, Representative of World Health Organisation, Dr. Harry Okpata who commended the efforts of Nigerian government said that the visit by WHO and CAPSCA was to assist the country to overcome the challenges in implementation of ICAO-WHO regulations. Dr. Okpata further noted

that WHO places great importance on the implementation of public health both in the aviation sector and the nation at large. He said “International health has improve since CAPSCA started in 2007. We have made a lot of progress since then and we are happy seeing the implementation of public health across the world”. In his address, the Director General , Nigeria Civil Aviation Authority, Captain

Usman Muktar said the previous assistant visit which were in 2009 and 2011 helped greatly in the curtailment of the Ebola virus that broke out in 2014. He pointed that the assistant visits have helped in preventing the spread of communicable diseases at the nation’s airport adding that their visit will go a long way in entrenching a positive and enduring culture in Nigeria aviation sector and globally in curbing the spread of

communicable diseases in air travel. He further thanked the team for coming, promising cooperation and assured of adherence by all other agencies in the sector. Meanwhile, The Directors of Federal Airport Authority of Nigeria, Engineer Saleh Dunoma and of Nigeria Airspace Management Agency, Mr. Ibrahim Abdusalam also assured the visiting team of compliance to the outcome of the assistance programme.

NCAA approves NAHCO’s new charges By LAWANI MIKAIRU

he Nigerian Civil Aviation Authority, NCAA, has approved the recent cargo tariff increase being implemented by the Nigerian Aviation Handling Company Plc (nahco aviance). NAHCO and clearing agents under the aegis of the Association of Nigeria Licenced Customs Agents (ANLCA) and the National Association of Government Approved Freight Forwarders (NAGAFF) had agreed to a 20 percent tariff increment toward the middle of May. The increment had since taken effect. In a letter addressed to the MD/CEO of nahco aviance, dated June 2, 2015, and signed by the NCAA’s Director General, Captain

Muhtar Usman, the NCAA said, “In line with powers conferred on the Authority by Part 18.7.3.1 of the Nigerian Civil Aviation Regulations (Nig. CARs) 2012, approval is hereby given to your company to increase the Import Handling Charge from N38.00/kg to N46.00/kg and the Courier Handling Charge from N45.00/kg to N54.00/kg as agreed with the stakeholders.” While commending NAHCO for embarking on wide consultation with all stakeholders before embarking on the tariff increase, NCAA stated further that it “wishes to advise that Nahco Aviance should continue to ensure adequate consultations with

the stakeholders in line with the laid down guidelines and regulations guiding review or introduction of any charge.” It further asked that NCAA be invited as an observer to future consultations on such a subject – matter. In a meeting at the head office of NAHCO in Lagos, on May 15, 2015, the negotiating team of ANCLA led by the Vice – Chairman, Honourable Bola Ashiru – Balogun, with the Treasurer, Afolabi Azeez and the Financial Secretary, Obanla Alex said that they reached the agreement with NAHCO in the interest of the overall development of the industry and in realization of the fact that both sides were in this tough economic situation together.

Airbus to help China enter plane seat market amid Western delays

irbus is to help China set up production of aircraft seats and galleys in a move to ease shortages and delays that have threatened disruption to global aircraft production. Planemakers including Airbus, Boeing and Embraer have been wrestling for more than a year with delayed

deliveries of aircraft seats or galleys from suppliers including France’s Zodiac Aerospace. Its main rival, B/E Aerospace of the United States, has also been reported by U.S. media to have suffered some supply delays. The decision to help foster

the development of seats and galleys in China was among a set of agreements signed during a visit to Toulouse by Chinese Prime Minister Li Keqiang on Thursday. Airbus officials believe there are too few suppliers of cabin equipment to keep up with the rapid increases in aircraft production.

Ghana would play host to Africa’s first ever Air Expo, bringing together about 200 international exhibitors from the aviation industry across the world. The air expo, which would run from October 12 to October 14, 2016, would be held under the auspices of the Ministry of Transport. It would also be used to send messages to the world that Africa and indeed Ghana is the obvious choice for the future of global aviation. Speaking at the launch Mrs Dzifa Attivor, Minister of Transport, said the air expo would bring together the major players covering a wide profile in the realm of African aviation, including airport companies, airlines, regulators, airport management agencies to ground handling agencies. “Ghana enjoys a stable political climate on the African continent and our objective is to create this awareness within the African and global aviation that an investment in the Ghanaian aviation sector will be mutually beneficial to both Ghana and investors,” she said. Attivor said the African Air Expo 2016 would create an opportunity for the public and private sectors to collaborate on critical issues facing African aviation. She said the expo would provide Government with deeper insight into the road map for African Aviation and how Africa could strategically position itself within the aviation roadmap. She further noted that the expo would also allow Ghana to focus on critical areas within the aviation industry such as upgrading of airports infrastructure to meet the demands of the aviation industry on the continent. Mr Ademola Oluseyi Onafowokan, Nigerian High C o m m i s s i o n e r , congratulated the government for the initiative, adding that the programme would become one of the best achievements of President John Dramani Mahama. He appealed to corporate institutions both local and international to assist Government to ensure the success of the programme.

36 — Vanguard, MONDAY, JULY 6, 2015

Tax Matters

e-Tax Pay the easy way to pay your tax Shippers demand new port order, to streamline activities

he Shippers Association, Lagos State (SALS) has suggested a new port order for the Nigerian ports, to streamline maritime activities, in line with international standards. The President of the association, Mr Jonathan Nicol, made the suggestion in Lagos. “The greatest problem we have in this industry is that we always have people who are not fit in maritime administration because they are not groomed. You don’t really make progress if you actually meet people not on ground to continue with a system that will last for posterity. We need wellqualified individuals to man all the government agencies in the maritime industry,” Nicol told said. He said that directors in maritime parastatals with requisite qualifications would assist the government to achieve its aims of making the maritime industry a hub in West Africa. Nicol commended the organisers of the Nigerian Maritime Expo (NIMAREX), for their efforts in ensuring that government provides the industry with training vessels. The shipper said that the training vessels would expose the cadets to sea-time training, adding that Nigeria could afford to buy such vessels. He said Nigerian cadets should complete the training package by using the nation’s ocean-going vessels which could also pick up bulk cargo or move petroleum products. Nicol warned that a ‘league of half-trained seafarers’ was not healthy for the nation’s shipping community. The shipper, however, said that government was weary in putting down money to purchase training vessels. According to him, this is because the previous training vessel which government bought was not properly managed. Nicol said, “a single vessel can train more than 36 cadets, while a big vessel can train about 74 cadets”.

C M Y K

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 has not been left behind as, for some time, reforms are ongoing to make its operations friendlier, convenient and conform to global best practices. In order to simplify payment methods, 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 to 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 the 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 having a registered TIN, an existing account and sufficient funds, then; ? Select the service (etax Pay) from the list of services displayed on the bank self-service 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, Pre-operation 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 in realtime. 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 ? Personal Income Tax/ PAYE (Residents of FCT and non-Residents) ? Withholding Tax ? National Information Technology Levy ? Capital Gains Tax

? Pre-operation Levy ? Late filing penalty ? Stamp duties ? Etc. 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 ? P r o m o t e s transparency and boosts the taxpayer ’s confidence and trust in the tax system. ? Promotes voluntary compliance. ? It is convenient, saves time and compliance costs as taxpayers can do it themselves within the confine of their offices without going to the banking hall. ? E-tax Pay solution

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 taxpayers’ information against FIRS records and automatically notifies FIRS.

streamlines the process flow in tax remittance, with all banks collecting for FIRS using their various channels. ? Banks integration to the NIBSS e-tax Pay is a veritable avenue for enabling all forms of tax payments/ collections particularly from the bank accounts of taxpayers to the designated bank accounts of FIRS. ? This solution harmonizes online tax assessment with the e-tax Pay 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 real-time notification of transactions. ? The security of payment is intact as the platform leverages 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 realised 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 taxpayers’ information against FIRS records and automatically notifies FIRS. … fast track your tax payment, use the e-tax Pay.

Vanguard, MONDAY, JULY 6, 2015 — 37

The welcome change at NERC “The Commission is considering putting a ceiling on the amount of consumption that unmetered customers in a particular class could be billed by estimation in a particular month. This initiative is aimed at incentivising the distribution companies to accelerate their metering..” PUNCH, June 3, 2015, p 32 erhaps plans were in progress to introduce a measure which equity and commonsense dictated all along, but the announcement so early in June 2015, by the Nigerian Electricity Regulatory Commission, NERC, represents the sort of transformation which should have been introduced years ago. But, Dr Amadi, Chairman of NERC, who was recommended to President Jonathan by Professor Bart Nnaji, former Federal Minister for Power, and a heavy investor in one of the DISCOs, had all along cut the figure of an apologist for Power Holding Company of Nigeria, PHCN, and now the DISCOs. It does not require the intelligence of a space rocket scientist to understand that the DISCOs were sold to friends of the former administration, despite the efforts to make the biddings appear transparent. Amadi

could not therefore be expected to regulate tariffs in a manner that would jeopardize the investments of the friends of the government and his benefactor. He is one fellow who would not bite the fingers that have fed him – unless pushed by more powerful forces. The change of government had forced Amadi and NERC to address a problem which had existed for more than twenty years, apparently, but not really, defying solution. That problem had been estimated billing by PHCN and now DISCOs. Hundreds of thousands of houses and even commercial buildings in Nigeria either have no metre or have metres which packed up years ago. Permit me to present my experience as a case study. The one in my house, in Lagos, was there before I was born in 1944 until recently when Eko Electricity Supply Company, EKEDC, mercifully provided a prepaid metre. The 70-plus years old metre packed up more than thirty years ago and since then it had been estimated billing. It is three bed-room bungalow, with a long veranda, kitchen, toilet, one air-conditioner, five fans, two refrigerators and one electric iron. Furthermore, no more than four people live there and everybody goes to work or school from morning

till early evening; then after eating and watching television, if there is power supply, retire to bed by 10.00pm to prepare for the next day. All lights, except one security light are turned off. Yet, for 12 years, NEPA, then PHCN, sent bills almost the same as that of a three-storey building next door; with over 70 occupants and at least 12 air-conditioners – among other appliances. Apparently, they never sleep in that house because we can still hear them at 2 0r 3 am. All letters and visits to NEPA (PHCN) were of no avail until I sent a letter to the Managing Director, copied to the Minister of Power, late Chief Bola Ige, threatening to stop paying and

Hitherto, we carelessly leave lights, fans and air-conditioners on because it mattered not how much we use or waste. With the prepaid, all the waste had stopped.

to resort to self-help. That brought temporary relief. To shorten the story, it became too obvious that NEPA, PHCN and now the DISCOs are aware they cheat those customers who are honourable enough to pay the unwarranted bills. Their staff connive with delinquent customers to over-estimate the bills of good customers in favour of those whose bills are deliberately understated. This became clear to me when I found out that a NEPA official rents one of the flats in the three-storey building!!! This is perhaps the only country in the world, in which, millions of customers are paying trillions of naira every month and they don’t have proof of consumption of the service. And, it is perhaps the only country where such a situation could have persisted for thirty or more years. One of my readers, nearing ninety now, living in Abuja, had often told me that Nigerians are too docile. It is difficult to disagree. It took the increase of fuel price from N79 to N141 on 1st January 2012, to induce us to occupy Freedom Square in Ikeja, Lagos, and to force the Federal Government to scale down the pump price. Meanwhile, a more outrageous assault on our pockets had persisted for decades without a response from us.

Although, the previously lethargic, or was it complaisant, NERC had apparently woken up to its responsibilities, the measure announced is not enough. Nigerian power consumers must live up to their responsibilities. We must start demanding proof of service delivery from DISCOs as justification for the bills they bring to us. Certainly, if enough people simply refuse to pay unless the bills are substantiated, then the DISCOs will speed up metre delivery. One argument in favour of this absolutely legal self-help is that NERC cannot be relied upon to enforce its decisions; agency officials can easily be compromised by the DISCOs leaving us no better than when we started. After years of fighting what appeared like a losing battle with NEPA, PHCN and DISCO, I suddenly stumbled on a strategy that worked wonders. Today, I have a prepaid metre, which admittedly does not guarantee total equity, but, I no longer have to wait every month not knowing what the bill will read. LAST LINE: If any official of a DISCO is reading this, let me inform them that it is actually in their own interest to install metres. Hitherto, we carelessly leave lights, fans and air-conditioners on because it mattered not how much we use or waste. With the pre-paid, all the waste had stopped.

Business & Economy

Huawei discloses benefits of T1 7.0

uawei, a global leader in ICT solutions and Android Smart-phone has disclosed the benefits of using its recently launched tablet, T1 7.0. A statement made available to FV, described the tablet as an original approach to balancing productivity, content creation and consumption in one portable tablet device with a 4100 mAh battery for more effective performance and staying power. The statement noted that the product is equipped with an IPS HD screen in a 7-inch display, the rest of the specs including; a 5MP rear camera with LED flash, having a slim (8.5mm) metallic unibody build which is sleek and light, both fashionable and portable. “With a 4100mAh battery for lengthy browsing, streaming and gaming, the tablet is equipped with GPS and Wi-Fis capable of running for 12 hours of HD video

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playback.” Senior Marketing Manager, Huawei Technologies, Nigeria, Mr. Olaonipekun Okunowo, said: “We are really excited to launch the Huawei

T1. 7.0tablet, an outstanding media pad designed for those who want to enjoy unparalleled entertainment. Its superior 7-inch IPS screen, 4G LTE connectivity

and exceptional camera makes it the perfect tablet at the most affordable price of N25,000.00 only for those on-the-go this summer. “For content creativity and enhanced entertainment, the large, bright and crystal clear

Greece accuses lenders of terrorism

reece’s Finance Minister accused international creditors of “terrorism” in an interview on Saturday, a day before Greeks vote in a referendum that could decide their country’s fate in the euro common currency. ``What they are doing to Greece has a name: terrorism,” Finance Minister Yanis Varoufakis, was quoted as saying. It stated that the government implemented capital controls and ordered banks shuttered on Monday in an effort to prevent the collapse of the financial system following a breakdown in talks between Athens and its lenders.

The country, which is rapidly running out of money, missed a 1.7 billion dollar loan payment that was due to the International Monetary Fund on June 30. According to the statement, the same day the existing bailout programme

Greeks will go to the polls on Sunday in a referendum on a new bailout proposal that had been put forward by lenders in June

from European partners expired. Greeks will go to the polls on Sunday in a referendum on a new bailout proposal that had been put forward by lenders in June. It is widely seen as a vote on whether the country should stay in the Eurozone but the Greek government led by Prime Minister Alexis Tsipras is urging a “no” vote. Greeks should overcome fear and blackmail by sending a message of democracy when they vote, Tsipras said in a rally on Friday. Opinion surveys show Greeks about evenly split on how they will vote. Lenders’ proposals: Key

screen delivers a better pixel density providing a premium content viewing experience. Either watching videos or reading magazines and ebooks, the Huawei T1 provides an immersive media consumption experience,” he said.

sticking points ·VAT (sales tax): Alexis Tsipras accepts a new threetier system, but wants to keep 30% discount on the Greek islands’ VAT rates. Lenders want the islands’ discounts scrapped ·Pensions: Ekas top-up grant for some 200,000 poorer pensioners will be phased out by 2020 - as demanded by lenders. But Mr Tsipras says no to immediate Ekas cut for the wealthiest 20% of Ekas recipients ·Defence: Mr Tsipras says reduce ceiling for military spending by •200m in 2016 and •400m in 2017. Lenders call for •400m reduction - no mention of •200m

38 — Vanguard, MONDAY, JULY 6, 2015

Micro-Finance

Pride micro finance partners with telecom companies to digitalise banking

ride Micro finance has digitalized mobile phone banking, an innovation that will see customers of the the microfinance institution carry out their banking using mobile phones as opposed to visiting the bank. The new product dubbed the Pride Mobile will enable the bank’s customers to do a variety of transactions including balance inquiry, buying airtime, inter-account fund transfer, paying for utilities, depositing and withdrawing money from the account onto one’s mobile money account. Unveiled recently at the Pride Nakawa branch, the service will also allow the customers to access their money anytime and anywhere.

IFC's $65 million syndicated loan aid microfinance lending in cambodia

FC, a member of the World Bank Group, has arranged a syndicated loan of $65 million to help Cambodia’s PRASAC Microfinance Institution Ltd. The country’s biggest microfinance provider – increase its lending to micro, small, and medium rural and agricultural enterprises, most of which are owned by women. The syndication comprises $20 million each from Thai banks Kiatnakin Bank, Siam Commercial Bank, and TMB Bank Public Company Limited, and $5 million from ING Bank NV. This syndication supplements IFC’s $10 million ownaccount loan made in April to support PRASAC’s continued expansion of its micro loan portfolio, according to IFC. IFC’s syndicated lending program has mobilized over $50 billion from more than 500 financial institutions for over 1,000 projects in more than 110 emerging markets since the program was established in 1957. As of December 30, 2014, IFC’s syndicated loan portfolio under management totaled $15.4 billion. C M Y K

Payment policy accounts for 70% decline in SME growth Stories Obuh

by Providence

he reason 70 percent Small and Medium Enterprises (SMEs) go into extinction at early stage has been attributed to payment policies by multinationals and blue chip companies. Registrar/Chief Executive Officer, Institute of Credit Administration (ICA), Prof. Chris Onalo, made the attribution at a business luncheon in Lagos, stating, “We are campaigning that blue chip companies and multinationals including conglomerates that care to outsource any business to SMEs should come down a bit on their payment policy standard. If payment date is 30 days before, cut it to two weeks that SMEs invoice must be paid, so that they can fly.” Onalo pointed out that there are also the problem of management; lack of capacity building; wrong preferences and poor attitude to settlement of SMEs invoice by conglomerate and multinationals. He added that successful entrepreneurs should come down and talk to younger entrepreneurs to encourage them to draw inspiration from their effort. “Those entrepreneurs who started with nothing but have become multinationals and conglomerates, have made it impossible for the young entrepreneurs to come down to them. They are afraid of

sustaining what they have established forgetting that they need to impact that strength and trait that enabled them to be successful businessmen today. “Our national reorientation needs to be addressed. Most of the times those 70 per cent SMEs that go into extinction is as a result of many factors but chief among those factors is that SMEs are subjected to slow payment response to their invoices,” he said. Continued, he said, for example, “if a blue chip company gives LPO to SME and they supply what you have given them LPO for, it means you have subjected that SME to your own internal policy, of don’t pay in less than one months time or don’t pay earlier than two months

70 per cent SMEs that go into extinction is as a result of many factors but chief among those factors is that SMEs are subjected to slow payment response to their invoices time and based on this you are frustrating the SME business because he/she has no other place to raise money to attend to other LPOs that

he has and even if he has temporary overdraft from his bank. “This scenario can cause the SMEs to fold up because before you pay, other things would have eaten deep into his profit,” he said. Speaking on consumer credit , he said that Nigeria is a big consumer market because of its population as a result of that credit thrives, both at individual and institutional level, saying, “We have not seen what constitute consumer credit yet. If you are taking credit far above your income, you have planned to become a distressful person because it is above your income. “For the economy to stand firm, there must policy initiative that encourage the manufacturers of goods and services to produce in mass and use credit to sell continuously,” he said.

EVENT - From left, Relationship Manager, Retail Marketing, First Bank Limited, Shomolu, Mr. Kayode Osolaja, Managing Director, Mr. Michiel Buitelaar and Head, Corporate and Enterprise Sales, Mr. Chiekezi Dozie both of Smile Communications Nigeria Limited at a connected lifestyle event hosted by Smile Communications Nigeria Limited he on Tuesday in Lagos.

Nigeria ranks among countries with 5% women holding CEO positions

report from 2015 Global Women Entrepreneur Leaders Scorecard has shown that Nigeria is among the four countries with five percent women occupying Chief Executive Officer ’s (CEO) position. Meanwhile, this is a fallout of the Dell’s (providers of technology solutions) sixth annual Women’s Entrepreneur Network summit which ranks 31 countries based on their institutional and business environment measures. The Scorecard ranks and rates opportunities and challenges faced by female entrepreneurs worldwide and the 31 countries surveyed account for 70 percent of the world’s female population. The results show that gender-based differences still stifle the growth of women-

owned businesses worldwide. The categories in the survey included the pipeline for female entrepreneurship and potential for high-growth women-owned businesses, estimating the number of jobs that will be created by womenowned businesses if they reach their growth potential. The 70 percent of the

countries surveyed scored below 50 percent, showing a significant growth gap between female and maleowned businesses globally. According to the report, “Women need more equal access to resources, those resources include education, internet access, bank accounts and training programs.

“Gender differences hold back entrepreneurs, in all the countries surveyed women are significantly less likely to know an entrepreneur. And that means they lack role models and essential connections to the entrepreneurial community, which lowers the likelihood they will start a business.

Man docked for allegedly defrauding MfB of N5m

businessman, Mufutau Gbadamosi, penultimate week, appeared before an Ebute Meta Chief Magistrates’ Court in Lagos for allegedly using forged documents to obtain a N5million loan from a Microfinance Bank (MfB). The accused, 44, is facing a three-count charge of fraud, obtaining under false pretext and stealing. Gbadamosi, pleaded not guilty to the threecount charge preferred against him.

But the Prosecutor, Insp. Richard Odigie, told the court that the accused committed the offences on May 26, 2013. He said the accused defrauded the MfB situated at No. 11, Suberu Ogunsanya St, off Ayangburen Road, Ikorodu. The prosecutor said that the accused presented fake landed property documents as collateral to obtain the N5million loan from the bank.

Vanguard, MONDAY, JULY 6, 2015 — 39

International Business News

Canadian firm plans renewable energy project in Nigeria

anada based s c i e n c e company, NH3, plans a renewable energy project to tackle power challenge in Nigeria, its International President, Mr Robert Leth, has said. Leth disclosed this in Abuja on Friday while signing a Memorandum of Understanding (MoU), with Nigeria’s Traveri Group. He said the project would commence on a pilot scale in Enugu and Nasarawa states. Leth added that the company had entered into agreements with the Governments of both states and that the project would be funded by accessing 185 billion euros from European Union fund. He explained that the EU

fund, Horizon 2020, was set aside to finance the fight against climate change globally. The president explained that the firm’s decision to introduce renewable energy in Nigeria stemmed from its commitment to tackle the threats associated with global warming. Mr Innocent Obende, Chief Executive Officer of Traveri NH3, said green technology which provided solutions to energy problems in developed nations of the world would be replicated in Nigeria. He stated that with the MoU, the company would immediately begin the feasibility study as to how to fund and best deploy renewable energy to the generality of Nigerians. He said the company

had signed similar memorandum with the government of Enugu and Nasarawa states where the project would soon commence on a pilot scale. “Traveri NH3 is set to replicate the green energy technology provided in the United States in Nigeria as part of ways of finding solutions to the country ’s energy problems. “With the technology in place, the firm will create employment, provide energy and manufacture fertiliser. We have met with the technical committees of the states, we have entered into partnerships and we hope to focus on waste management, electricity generation, and real estate”, he said.

Telkom CEO, Maseko appears in court on car-fraud allegations

elkom SA SOC Ltd. Chief Executive Officer Sipho Maseko appeared in a Johannesburg court on Friday after being summoned to respond to allegations of trafficregulation fraud. Police started investigating Maseko last July after he was accused of cloning car license plates to avoid traffic fines. Mabena Motshoane, who had bought a black Range Rover previously owned by Maseko, received about 30,000 rand ($2,448) in penalties linked to a newer model vehicle with the same license plate, he said at the time. Maseko “appeared at the Wynberg Magistrate Court today for fraud,” South African Police Service spokesman Lieutenant Colonel Lungelo Dlamini said by e-mail, without giving further details of the case. “The three charges all relate to allegations regarding a previous motorvehicle license plate and include one of fraud and two related to the Road Traffic Act,” Telkom spokeswoman Jacqui O’Sullivan said by e-mail. Maseko didn’t return a C M Y K

•Sipho Maseko phone call seeking comment. Maseko, a qualified lawyer, has been CEO of Telkom, South Africa’s biggest landline phone company, since April 2013. He was previously chief operating officer of wireless operator Vodacom Group Ltd. and CEO of oil and gas company BP Plc in southern Africa. Pretoria-based Telkom is about 40 percent owned by the South African government. Telkom shares have quadrupled under Maseko’s leadership as the company cut costs and boosted revenue after a decline in landline use hurt the business. The operator returned to profit for the first time in three years in fiscal 2014, and said

last month it will pay its first dividend since 2011. Maseko approached the court in May and received a summons to appear in court on June 5, Telkom said in the statement. That was delayed until today and the matter has been postponed until Sept. 4, the company said. “Mr. Maseko vehemently denies any intention to defraud any person or organization and the necessary representations will be made to progress this matter,” Telkom said. “Mr Maseko would like to address these claims and he now has the opportunity to do so, through the legal process.” The stock fell 3 percent to 60.57 rand at 3:22 p.m. in Johannesburg, valuing the company at 32 billion rand.

40 — Vanguard, MONDAY, JULY 6, 2015

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Vanguard, MONDAY, JULY 6, 2015 — 41

Economy

Bankers, financial analysts weary over forex regime By EMEKA ANAETO, Economy Editor

ollowing multiple rules rolled out by the Central Bank of Nigeria (CBN) last week, financial experts have classified the monetary policy regime and environment as unstable, uncertain and therefore hostile to businesses. CBN had rolled out two circulars last week declaring some items ineligible for both its foreign exchange (forex) window and the alternative sources namely, the bureau de change (BDC) and export proceed windows, citing excessive pressure on foreign reserve and the need to stimulate local production of those items. A top executive of a leading banking group in Nigeria told Vanguard on the heels of the last circular issued last week that the policy circular was one too many on just a single item in the monetary policy shelf. He suspected that the apex bank was actually in panic over the growing quantum of unmet forex demand which would eventually force another round of devaluation of the Naira. Afrinvest Group, a leading investment house in Nigeria, in its reaction last weekend said ''we observe that some of the recent policies are characterized by seeming inconsistencies, conflicts, policy reversals'' adding that ''more clarifications that have trailed forex guidelines have considerably weakened the credibility of the CBN''. According to the investment house, the feedback effect can be seen in heightened uncer-

tainty in the capital market and the economy. They said that real sector investors face increased uncertainties in

With no analysis or data on level of domestic selfsufficiency provided to justify the exclusion of the 41 items, there are no basis yet to project the CBN's next move on forex policy

•Godwin Emefiele, CBN Governor projecting cash-flows and deciding on long-term capital budgeting and short-term working capital plans. They further stated that ''the CBN's recent decision to restrict some arbitrarily selected-items from obtaining forex

at all segments of the forex market has further placed the CBN's policy under scrutiny from domestic and international media. With no analysis or data on level of domestic self-sufficiency provided to justify the exclusion of the 41

items, there are no basis yet to project the CBN's next move on forex policy. This continues to be responsible for lack of clear direction for the market''. ''The financial market (equities and fixed income)'', according to them, ''is in dare need of a clear cut policy direction and stability. A lot of foreign investors appear to have taken to their heels leaving only the bandwagon local investors, who also have no clue of the impact of future monetary policy on their investment position, in the scene''. Speaking in the same direction some executives of Stanbic IBTC Bank Plc in a radio program in Lagos last week lamented that even with the series of supplementary and additional circulars on the same issue the total outlook of the forex policy still left much room for clearity as it failed to address the effective date for the policy. They also noted that it would create considerable confusion with respect to transactions already commenced just before the new policy.

Over 200 Chinese firms eye investments in mining, agricultural sectors By FAVOUR NNABUGWU

ver 200 Chinese companies may have expressed keen interest in the country ’s mining, agriculture, confectionary and pharmaceuticals sectors. Speaking during the signing of Memorandum of Understanding (MoU) that facilitates the investments in Abuja last week Mrs. Uju Aisha Hassan-Baba, Executive Secretary of the Nigerian Investment Promotion Council (NIPC), said the Council was willing to facilitate the setting up of Chinese companies’ businesses in Nigeria. “We will also ensure that the investments are safe in Nigeria. We are willing to give them one-stop-shop services and other incentives that will ease their investment in the country”, she stated, adding that the Council expects them to come with the profile of their companies and what they have to offer to Nigeria.

*Job creation in all sectors, Q1, 2015

She further said ''We will be ready to open up our markets to them that is why the NIPC is involved in this so that we can see what kind of investors they are.” “We are moving away from the oil sector and hoping that these investors can fit into these areas mentioned because some of these areas are the priority of the government especially the agricultural sector'' The investments, according to the leader of the Nigerian consortium coordinating the Chinese firms, Chiemeka Egbemena, are mainly companies involved in petroleum, iron and steel, agricultural and manufacturing sectors, as well as those operating in the free trade zone. He stated that the Chinese Government is committed to encouraging and supporting Chinese companies’ investment in Nigeria, while continuing to support the country’s efforts at attracting foreign investment. “The major significance is that we are falling in line with the new policy of

government to look elsewhere for the growth of our economy and that is in line with the desire of those companies that are coming to invest in the area where the world seem to be moving.” Egbemena stated ''about 200 Chinese companies are coming to do business in Nigeria through this consortium. We are most interested in mining and agricultural and allied industry. These areas are our priorities''. On his part, chairman of the Abuja Chamber of Commerce and Industry Limited (ABUCCI), Mr Joe Wenegieme, said that the Chinese investors would come into the Nigeria next month to explore potential investment opportunities in the country in a five-day trade fair. “We have sent letters out to different state governments, local people and private organisations to come and meet with the investors so they can have the opportunity of discussing business with them.”

*New formal jobs in all cadre, Q1, 2015

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42 — Vanguard, MONDAY, JULY 6, 2015

International Business News

Nigeria’s hospitality sector to grow 2.4% by Q4 BY JONAH NWOKPOKU

ndustrial activity in the nation’s travel and tourism sector is set to rise exponentially as fiscal remits stack for a 2.4 per cent increase before the end of the last quarter of 2015. According to figures released by the National Bureau of Statistics, NBS the Nigerian economy which advanced 5.94 percent in the last quarter of 2014 has experienced an expansion rate of 3.96 per cent year-onyear in the first three months of 2015. On the backdrop of this development, policy reforms geared towards increasing internally generated cash flow from service sectors such as the travel and tourism are under-going deliberations on the floor of the National Assembly. As a result, greater foreign direct investments (FDI) in the sector, in spite of the currency exchange differential, are spurring the development of urgently needed infrastructure. In 2014 alone, monetary receipts from visitor exports accrued a total of N108.8 billion at 0.8 percent as the World Bank partners with domestic investors and other stakeholders in a $12 billion hotel construction deal. With a cash base of N1.56 trillion as direct contributions to Gross Domestic Product, derived from the out-going financial year serving as leverage for the local investments, analysts predict three straight quarters of strategic growth by 8.3 percent for the hospitality industry; a figure that will hit a treble in ten years. Highlighting the benefits of this dynamic for ecommerce, Marek Zmyslowski, Managing Director, Jovago Nigeria said, “We are excited that the industry is growing and promoting the hospitality industry through the quality of services we offer as an ecommerce business. It is what we are committed to doing at Jovago. At present, no other company in our sector is offering this brand promise and we are positive."

uropean bonds and stocks traded cautiously last Friday before a Greek referendum on EU-prescribed reforms that could determine the country’s future in the euro zone and which polls suggest could go either way. Yields on top-rated German 10-year Bunds, the benchmark for European borrowing costs, fell as some investors chose to preserve their capital in low-yielding but relatively safe assets. European stocks dipped and were set for the biggest weekly drop in two months, while the euro edged higher. The moves were marginal, though, as investors did not want to position too heavily on either side. “The European market is frozen ahead of the Greek referendum,” said Markus Allenspach, head fixed income research at Julius Baer. Supporters of Greece’s bailout terms have taken a wafer-thin lead over the “No” vote backed by the leftist government, 48 hours before Sunday’s referendum, an opinion poll showed. The poll by the respected ALCO institute for newspaper Ethnos put the “Yes” camp on 44.8 percent against 43.4 percent for “No”. But the lead was within the pollster ’s 3.1 percentage point margin of error, and 11.8 percent of respondents said they were still undecided. “Attention will be pinned on Greece and this is likely to see investors cautious as we head into the weekend ... Even if we get a Yes’ vote, this means the country must go back to the negotiation table and try to knock something together again,” IG market analyst Stan Shamu said. “However, it’s a lot worse on the other side as a ‘No’ vote will present a host of uncertainties that could really rattle markets ... Either way, traders will need to buckle up for a tumultuous Monday.” Many investors were lightening up positions and staying on the sidelines. “It’s far from obvious which way it is going to go...and you definitely couldn’t position on the back of that at the moment,” said Thomas Laskey, an investment manager at Aberdeen Asset Management. While Europe was fixated on Greece, a rout in Chinese stock markets continued. Chinese markets, which had risen as much as 110 percent from November to a peak in June, have collapsed since June 12, losing more than 20 percent. The Shanghai Composite Index was down 5.8 percent, while the CSI300 Index fell

SUBMISSION - From left: Patrick Thomas – Head Service, Sub-Sahara Africa, Siemens AG, Sean Manley – GM, Power Generation Siemens Nigeria, Akin Akinfemiwa - GCEO Forte Oil PLC, Onyeche Tifase – MD/CEO Siemens Ltd., Engr. Adeyemi Adenuga - MD Geregu Power PLC, Modupe Odusola - Legal & Investment Relations Forte Oil PLC At the submission of Performance bond and execution of other contractual terms after the payment of $83 Million for the Major Overhaul and Upgrade of the Geregu Power Plant in Kogi State to Siemens Germany.

European bonds, stocks on the defensive before tight Greek vote 5.4 percent. The dollar fell against a basket of currencies on Friday, hurt by softer-thanexpected U.S. employment data. The U.S. payrolls report showed employers hired 223,000 workers last month, fewer than the 230,000 increase forecast in a Reuters poll. The government also downgraded its reading on April and May job growth while wage growth remained subdued. The dollar index was down 0.11 percent retreating from a four-week high of 96.422. The dollar was buying 122.93 yen, down slightly on the day. “With liquidity thin and the Greek referendum coming up, not many would want to take large positions going into the weekend. The U.S. jobs

•Greek Prime Minister Alexis Tsipras report has taken the wind out count stoked fears of of the sails for the dollar for oversupply. Brent crude the time being,” said Alvin LCOc1 was down 45 cents at Tan, currency strategist at $61.62 a barrel, while U.S. Societe Generale. Oil prices crude was $56.56, down 37 dropped as a rising U.S. rig cents.

Strike at East Africa’s biggest harbour disrupts regional trade

strike by Kenyan dock workers at the port of Mombasa disrupted trade for five neighboring countries that rely on East Africa’s biggest harbor for their shipments of goods, the Kenya Ports Authority said. Members of the Dock Workers Union stopped working on Wednesday because of a dispute over salary deductions to pay for a national-health insurance program, Gichiri Ndua, the managing director of the

Mombasa-based authority, said in an e-mailed statement. The stoppage is unwarranted, he said. “There is no trade dispute registered between the Dock Workers Union and Kenya Ports Authority,” Ndua said. “The strike is therefore uncalled for and has caused undue disruption to port operations. It has adversely affected business in Kenya and the entire region.” Kenya is the world’s biggest exporter of black tea and

Mombasa hosts one of the world’s largest auctions of the leaves. The harbor serves landlocked countries including Uganda, Africa’s top shipper of coffee, Rwanda, Burundi, South Sudan and eastern Democratic Republic of Congo. A separate strike by dock workers over a new biometric time-management system ended on Monday. The stoppage barred hundreds of trucks from entering or leaving the port.

Vanguard, MONDAY, JULY 6, 2015 — 43

Advertising & Promotions

No law to enforce penalty in pay-tv industry —-ACTV BOSS

develop the market for our self, develop a niche for our self because right now the tendency is also thriving in the industry, Nigeria with a population of about 170 million, 26 million households with television, the market is so huge. There is still a huge market that is not being addressed, we are here to capture that niche market and grow it.

By PRINCEWILL EKWUJURU

Managing Director and Chief Executive Officer of newly introduced African Cable Television, ACTV, a paytv platform, Mr. Godfrey Orkeh speaks on the challenges confronting the industry e and need for government to enact a legislation to penalize erring operators. On Content development/ cost It varies depending on the content; some are more expensive than others because they have so much clout like the Discovery Channel. Content price varies from $1 to $100,000, there is no fixed price for content, depending on how desperate the owner wants to sell and how desperate the buyer is. Types of content We buy two types of content in the industry. You either develop the raw content or you buy the linear content. The linear content is already a channel that someone has put together. The linear channel is a ready-made content; they determine the schedule, like the BBC, the content there is controlled by the BBC. The other aspect, which is the raw content, is for us to buy the materials and put them together. Preventing hacking The issue we have regarding hackers, the solution we chose is that we are the first paid TV platform in Nigeria that is cardless. We have put away that element that can encourage hacking. Also the software we use is an active anti-virus, it actively monitors any form of tempering and we deal with it accordingly. We are not saying our platform is 100% tamper proof, but what we have done is to reduce it to the barest minimum and make hacking as difficult and challenging as it could be to deter them. Challenges and legislation The number one challenge in the industry is that there is no regulation, NBC is doing its best but there is no Act of law that empowers it up to penalize. Before the last government handed over there was a bill that was being pushed, anti-competition bill like what we find in Europe

•Mr. Godfrey Orkeh

that nobody can own 100 per cent of an industry, if you grow beyond a particular size, for instance when Microsoft, Google among others grew beyond a certain size, they were stopped to allow room for other players. There is no such law right now in Nigeria. So it is a big barrier; it is only legislature that can change that. The other challenge that is affecting our business is foreign exchange (forex), 80 per cent of what we buy is international content: CNN, BBC, Aljazeera, we buy in dollars. Apart from these, other challenges can be dealt with. However, as more players become part of the ecosystem of buying and distributing, the market will grow and there will be several players that will get access and customers will have more options to choose from and it is a good thing that such facility is not limited because it will enable Nigerians to benefit by have more options. This is good for the economy and the customers. Innovation and growth Before the end of the year, we will be releasing one of our most innovative products into the market to change the entertainment world; we will be doing more of local content, funding local content and building local capacity and platforms for game shows to drive the industry. Nigeria is ripe to have its own movies that can com-

pete anywhere in the world just like what we have in the music industry today. We see ourselves meeting all the expectations of all Nigerians, in an affordable and consistent manner. Intention to break into competition We knew there is a monopolistic tendency in the market. The existing structure in the legislature of Nigeria allows a dominant player to take advantage of the environment. Before we came to the market, there was no pay TV offering PVR for the middle class and for you to

When Microsoft, Google among others grew beyond a certain size, they were stopped to allow room for other players. There is no such law right now in Nigeria. So it is a big barrier; it is only legislation that can change that get decoder with PVR you have to cough out about N70, 000 but we are saying with N15, 000 you can have a PVR. In content wise there was a lot of exclusivity which is going to be difficult for one person to break. Beyond this, we will

Capacity We have the capacity, as it works, the technology does not require physical presence everywhere; we only need one physical presence to deliver the service. What we have done is to partner with dealers who make commitment by keeping data in the regions, installers and retailers. We have been recruiting nationwide; we are creating jobs and adding value to our customers. We cover the whole country and beyond in terms of the capability to receive our signals, so any customer anywhere in Nigeria can receive our signals. Nigerians and foreign products Looking at the entertainment industry now, without Nigerian music, the party will not rock unlike what we had in the seventies and nineties. There is a shift and 40 to 50 per cent of Nigeria adults now watch Nigerian content. Can you believe that Channel TV after CNN in Nigeria has one of the highest ratings? And it is a Nigerian channel just because people are connected to the station. We believe the mindset is changing. Target market Our offer is all-inclusive, addressed to all the demographic of our customer base, because we are pushing innovation and making it available at a very convenience price we are actually addressing all our customers. This is different from the traditional trend in the industry; we are targeting every member of the demographic groups in Nigeria, the high income earners to the middle income earners and to the lower earners. Looking at our subscription packages they are structured in that way, we will deliver across all of demographics. Our objective at the initial stage was targeted to the middle class but our experience has shown that the upper class and lower classes are also interested in our service.

Conoil wins poster award The ninth edition of the Poster awards organised at the instance of Outdoor Association of Nigeria, OAAN has ended with Conoil’s poster winning the highest laurel” The Grand poster award, with Toyota Yaris, Globacom, Starlite posters winning too. Among others that won include: Pepsi, Golden Penny Spaghetti, Ariel and Panadol. Speaking at the ceremony, President of the Association, Charles Chijide, said the place of outdoor advertising to the success of all marketing communications efforts has continued to be on the increase that explains why the award witnessed a haul of entries, the highest in a long while. “By the close of the entries we had over 110 entries. We had less than 70 in the previous year.” Continuing, he stated, it has consistently been influenced by and has benefited tremendously from prevailing technological advancements.

NBC donates to Zaranzong community Nigerian Bottling Company, NBC Limited has donated an electricity transformer to the Zaranzong community in Jos, Plateau State. NBC Limited handed over the transformer in a ceremony at the Zaranzong Community Centre, Jos East Local Government Area of Plateau State. Speaking at the handover ceremony, Managing Director, NBC Limited, Ben Langat said, “Partnering with our communities wherever we operate remains our top priority. The provision of a transformer to support power supply in Zaranzong Community is coming at a time when there is a high need for community development, entrepreneurial spirit and youth empowerment, which are key drivers for our community impact programs. Today, power supply remains a major society challenge and this gesture is a way of empowering the Zaranzong community. The success and development of communities we operate in, is our company success too.” Uzo Odenigbo, Head of Public Affairs and Communications, NBC Limited, who was also present at the occasion, thanked the Leadership of Zaranzong Community Traditional Council and the Zaranzong Youth Association, adding that the Jos community and NBC Limited always enjoy a mutual and sustainable relationship in the community. The collaboration and partnership between NBC Limited and communities in Jos span across community youth empowerment, educational support and water supply, including donation of furniture to schools in the community and provision of access to potable water amongst other value adding legacy projects. C M Y K

44 — Vanguard, MONDAY, JULY 6, 2015 Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

maintaining their existing substantial investments in storage and supply infrastructure nationwide, while unserviced overheads and recurrent expenses would deepen their agony and ultimately cripple their businesses. What shines through from the above narrative is the extreme good fortune of the banks, as heads or tails they win; clearly, therefore unless, this business model changes, the major oil companies, and genuine independent marketers may eventually opt for self preservation and, divest from the downstream fuel business. Comparatively, however, the superior profitability of banks is obvious from the relatively bountiful 10-15% net surpluses generated annually, while, conversely, fuel marketers, will be lucky to post net returns of 2-3%. These divergent relative profit indices are incidentally also clearly reflected in the price earning ratios of the respective equities in both sectors. Although abolition of price control would minimize interest charges on delayed payments, but in reality, banks profitability will still be sustained especially if shorter turnaround order cycles also lead to increase in loans sought by fuel marketers. Evidently, the foregoing discussion does not validate the widely held view that marketers form the core cabal that allegedly opposes the abolition of subsidy. Indeed, it is more likely that genuine marketers, would prefer an unencumbered ambience, with prices which are determined by market forces, so that budgeted profit margins will be secure from the destabilising vagaries of a fuel subsidy regime, and marketers will escape the fatal damage that payment delay and Naira devaluation could inflict on their business. Save the Naira, Save Nigerians

Fuel imports: The real cabal A

cursory survey of media reports on the downstream oil sector suggests that the prevailing popular belief is that a predatory cabal has a vice grip over the business of fuel importation. There is concern, therefore, that this, presumably, vicious class of businessmen would do everything to ensure that refineries will never work, and that the subsidy regime would subsist, while fuel supply will continue to be carefully manipulated to regularly induce artificial scarcity so that bountiful profits can be harvested from the attendant sufferings and economic dislocation deliberately caused by the oil cabal. It would probably be more difficult to find a contrary view to the above popular perception, than it is to find the proverbial needle in a haystack. Besides, the widely reported ‘extreme’ annual subsidy values seem to also confirm that these fuel barons make a kill on the back of fellow Nigerians. Furthermore, despite several allegations that marketers collect billions of Naira as refund of subsidies on fuel supplies which were never delivered, no convictions have, surprisingly, so far resulted from EFCC’s tenuos efforts. Nonetheless, it will be useful to examine the process of fuel importation more closely to actually identify the real beneficiaries in this business. Indeed, the major oil marketers, Total, Mobil, Oando, Conoil, NNPC inclusive, and a few others have not been fingered for collecting subsidy with fake import papers. However, it may be more difficult to vouch for the innocence of the motley subset of hundreds of indigenous independent

marketers, as this class also accommodates the ubiquitous briefcase importer, who is clearly, a more footloose buccaneer. Sadly, much to the chagrin of the public, the snail speed procedure for prosecuting financial crimes, may, postpone judgment day for fuel subsidy racketeers, while a judicial process that is allegedly compromised may actually also set the guilty free. However, let us examine, hereafter, how profitable the fuel supply business is for bonafide importers, who have to borrow billions of dollars and Naira to finance their operations. The available data from the National Bureau of Statistics indicates that fuel accounts for over 40% of Nigeria’s total foreign exchange expenditure on imports annually. Thus, the consolidated forex requirement for genuine importers will exceed $5bn annually. Instructively, commercial banks would buy the required dollars, predominantly, from the Central Bank at the official rate and then add between 1-2% premium on their purchases before selling forex to importers; the banks could easily earn up to $100m from such simple exchange transactions. However, the premium on each dollar sold may well exceed N10 per dollar, whenever dollar is relatively scarce and the parallel market exchange rate is over N220 while official rate remains below N200/$ as is currently the case. It is also not immediately obvious to non business persons, that the same banks lend fuel importers the Trillions of Naira which they subsequently exchange for dollars; presently, marketers would pay between 17-20%

interest for the Trillions of Naira borrowed for fuel imports. Furthermore, importers would also require additional Naira loans to settle port, storage and other ancillary domestic charges. Thus, the already high consolidated cost of importation will still become further compounded with the other bank charges, such as COT, L/C establishment, loan administration, insurance and of course, the legal fees to perfect each contract. Worse still, ultimately, the ‘now customary ’ extended

Evidently, the foregoing discussion does not validate the widely held view that marketers form the core cabal that allegedly opposes the abolition of subsidy delays preceding government’s release of subsidy refunds to marketers, will also lead to unexpected open-ended additional costs; thus, each cycle of import may attract well over 10% consolidated interest charges, from which banks may earn over N100bn additional income. Ultimately, the relatively modest 3-4% gross margins which marketers projected on shorter turnaround cycles for their imports will become

extensively breached because of delayed payments, while the ‘unexpected’ failure of the venture may become a major inducement for hyper stress for genuine fuel merchants. Sadly, the woes of fuel importers could still be further compounded if the Naira exchange rate also depreciates against the dollar before subsidy claims are finally settled, especially if government foot drags or denies liability for delayed payments and the attendant exchange rate differentials. Indeed, the recent 20% devaluation of the Naira may have inadvertently added over N200bn($1bn) to the annual cost of fuel import; thus, any additional delay in the settlement of the existing claims for payment delays and exchange rate differentials would in turn, further increase the attendant interest burden for marketers. Indeed, the longer it takes to settle the alleged current outstanding claims of almost N300bn, the heavier will be the ultimate debt burden to marketers particularly if the official dollar rate appreciates above N220 as per current speculation. Expectedly, the reluctance of marketers to commit to fresh orders for fuel supply will inevitably induce domestic scarcity which will also trigger a spiral in the black market price of fuel. Thus, with the constant abiding threat of negative profit, it is difficult to understand how any sane businessman would wish that such an oppressive business model should continue. Nevertheless, without the steady cash flow from fuel marketing, the existing heavy debt obligations would ground the activities of marketers and increase the burden of

Business & Economy USAID spends $89m on projects in Sokoto, Bauchi states — Official

he U.S. Agency for International Development (USAID) has spent over 89 million dollars on the Targeted States High Impact Project (T-SHIP) in Sokoto and Bauchi states in the last six years, an official said. The Nigeria Mission Director of USAID, Mr Michael Har vey, made the fact known in Sokoto on Thursday at the End-ofC M Y K

Project Dissemination Meeting of the USAID sponsored T-SHIP. He said 45 million dollars was spent on T-SHIP project in Sokoto State from 2009 to 2015 and 44 million dollars spent in Bauchi State during the same period. Harvey said that T-SHIP had made tremendous impact in reducing child and maternal mortality in the two states. He said although the

project would end within the month, USAID would partner the state governments to develop a new project for the benefit of the people. Gov. Aminu Tambuwal of Sokoto State said the state government planned to train 3,000 midwives to boost the manpower in the health sector in the 23 local government areas of the state.

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