Financial vanguard 09 February 2015 by Vanguard Media Limited

FEBRUARY 9, 2015

Uncertainty, as 32 mortgage banks scale recapitalisation hurdle

•15 downscales to MFBs, Finance Houses By YINKA KOLAWOLE

he dust is yet to settle on the recapitalisation exercise in the mortgage sector even as the Central Bank of Nigeria (CBN) confirmed that 32 primary mortgage banks (PMBs) have met the required criteria and licensed to operate in the country, out of 89 that were in existence before the exercise. 15 PMBs were also said to have converted to either microfinance banks or finance companies. CBN’s Director, Corporate Communication Department, Mr. Ibrahim Mu’azu, confirmed to Vanguard that a total of 32 PMBs, made up of 10 National and 22 State PMBs, are currently licensed by CBN, adding that the number is likely to rise. “Currently, there are 32 PMBs licensed by the CBN, of which 10 are National and 22 are State. The number may likely increase with time,” he said. It will be recalled that under a new guideline, CBN requested the then 89 primary mortgage institutions (PMIs) in the country to recapitalise to N5 billion and N2.5 billion to operate as National and State PMBs, respectively, with a 13-month deadline from November, 2011 to December, 2012. While the National PMBs are allowed to operate in any or all parts of the federation, the State PMBs are restricted to operate in one state. This caused a lot of ripples in the industry, prompting the apex bank to extend the deadline for compliance to April 30, 2013. But in another circular issued on March 20, 2013, CBN extended C M Y K

the deadline to December 2013, to afford all affected PMBs sufficient time to exercise the options for capital raising, business combination or downscaling. It later extended the recapitalisation deadline to ensure conclusion of on-going transactions to June 30, 2014. The apex bank also issued revised guidelines streamlining areas of

operations for PMBs. The new guidelines restrict the operations of PMBs to the provision of mortgage finance and excluded other related activities such as the provision of estate management duties. They are authorised to among other services to engage in the business of mortgage finance, real estate construction finance, acceptance of savings and

time/term deposits and acceptance of mortgage-focused demand deposits. Other approved services include drawing from mortgage funds, including National Housing Fund, NHF, facility for on-lending, financial advisory services for mortgage customers and other services approved by the CBN. Previously, mortgage firms were allowed to grant loans or advances for the purchase or building, improvement or extension of a dwelling/commercial house, acceptance of savings and deposits, management of pension funds/ schemes, performing estate management duties as well as offering of project consultancy services for estate development and engaging in estate development through loan syndication. Although CBN did not make available the list of the newly licensed PMBs, Vanguard however, gathered from reliable sources that the following attained National PMB Continues on page 22

ROUNDTABLE - From left :Yomi Abiola-Olawaiye, Business Development Manager, Centrespread; Bisi Adeyemi, MD, DCSL Corporate Services Ltd; Governor Babatunde Fashola of Lagos State and Prince Yemi Adefulu, President, Nigerian-British Chamber of Commerce during a business roundtable held in Lagos. Photo Lamidi Bamidele C M Y K

22 — Vanguard, MONDAY, FEBRUARY 9, 2015

Cover Story

Vocation And Technical Education – A Key To Improving Nigeria’s Development. Part 4

MOU - From left: Anambra State Governor, Chief Willie Obiano Chairman/CEO, Richbon Group, Chief C. J. Muonagolu Mr Taiwo Olumayowa the Chief finance officer of Richbon group and Ebere Ikediuwa , Secretary to the Chairman signing the MoU for the establishment of Automotive assembly plant in Anambra State.

Uncer tgage banks Uncerttainty ainty,, as 32 mor mortgage scale recapitalisation hurdle Continues from page 21 status, having successfully met the N5 billion minimum capital requirements. They are: ASO Savings & Loans Plc; Sun Trust Savings & Loans Ltd; Mayfresh Savings & Loans Ltd; Abbey Building Society; Infinity Trust Savings & Loans Ltd; Platinum Savings & Loans Ltd; Trust Bond Savings & Loans Ltd, Imperial Homes Savings & Loans, Haggai Savings & Loans and Jubilee Life Savings and Loans Ltd. A top official of one of the successful PMBs told Vanguard, on condition of anonymity, that the Other Financial Institutions Department, OFID of the CBN had conveyed the approval in a circular to the respective Managing Directors of the successful mortgage banks last year, following the review of the submissions of the various PMBs. He added that the apex bank also noted that 26 PMBs met the N2.5 billion capitalisation for State PMBs but 4 of them were still in the process of disposing properties to make up the capital. According to him, the circular to the successful PMBs, dated February 14, 2014, and entitled “Re: Compliance With the Minimum Capital Requirement”, stated: “Our assessment of the financial position and records of your institution as at December 31, 2013, against the requirements of the revised Guidelines for Primary Mortgage Banks (PMBs) in Nigeria, show that your PMB has satisfied the prescribed C M Y K

minimum capital requirements for a National Primary Mortgage Bank.”

t further stated: “26 PMBs have attained the state PMB status, having made the N2.5 billion minimum capitalisation. Four out of these have properties held for sale, which they were yet to fully dispose off or create mortgages for. 15 PMBs down scaled and converted to sub-sectors with lower capital requirements such as microfinance banks and finance companies, 26 PMBs failed to meet the prescribed minimum capital requirements for either of the two categories and do not have acceptable capitals for downscaling and, or conversion.” All efforts made to get further information from CBN’s Other Financial Institutions Department, which supervises PMBs,

Account holders who spoke with Vanguard decried the continuous silence of the CBN on the outcome of the recapitalisation exercise

proved abortive as there were no responses from both the Director and Deputy Director when contacted severally on the matter. Also when contacted on the matter, the Executive Secretary, Mortgage Banking Association of Nigeria (MBAN), Mr. K ayode Omotosho, said that the list of licensed mortgage banks was still being expected from the CBN. Stakeholders have held different views on the implication of the prolonged recapitalisation exercise in the mortgage sector. While operators with capacity to meet the requirement faulted the continuous shift of the concluding date of the exercise by CBN, those who could not easily meet up supported the extension. Some mortgage bank account holders who spoke with Vanguard decried the continuous silence of the CBN on the outcome of the recapitalisation exercise, noting that it was creating an atmosphere of uncertainty in the sector. Teslim Kolade said he maintains an account with his PMB because he knows it has met the recapitalisation requirement, a public announcement of the list of recapitalised PMBs by CBN will be more re-assuring. According to him, official release of the list of successfully recapitalised PMBs by the CBN will settle all doubts”. Another customer, Ify Chukwuma, said she saves with a mortgage bank to enable her access the National Housing Fund Continues on page 23

he focus is on the roles of technology and vocational education in enhancing entrepreneurial skills that will equip students for entrepreneurship education in Information and Communication Technology (ICT.) driven technological environment. The world has become globalized and the future prosperity depends on comparative advantage. This comparative advantage hinges on people and their technical or technological sophistication. Towards this, some crucial entrepreneurial and technical skills needed by the students in colleges of education (technical), polytechnics and universities to meet the trends in a global economy is analyzed. Technology education is to be considered as the key agent of technology development, either as a way of developing human capacity, increasing the shield work force for modernization, industrialization, environmental development or as a matter of personnel freedom, developing capability and empowerment. Technology education is increasingly recognized to be central to both the origins of technological development and challenges and to the prospects for successfully dealing with them (Alam, 2009). Decision makers at all levels, need timely, reliable access to knowledge generated by technology and technical education to introduce rational policies that reflect a better global understanding of complex technical, economic, social, cultural and article issues concerning the society, and our environment. Technical decision making and priority setting is an integral part of overall development planning and formation of technology development strategies. Above all, technology education is a human right and, as such, should receive priority in the allocation of national resources. It has become very necessary not to only keep technology education bound to the role of manufacturing skilled manpower but also to economic development and global economy. In Nigeria, technology education was previously not seen as fundamental for national development, or for the economic development, but for the school dropouts, and other social and political development within the nation and for individuals. Hallak (1990) argues that technology education is also linked to human resources development and that this has an impact on more than just economic growth, but also an impact on the wider development of individuals and societies. According to him, it contributes to: (a). Individual creativity, improved participation in the economic, social and cultural roles in society. (b). Improved understanding of an individual and heir respect for others, thus promoting social cohesion and material understanding (c) Improvement in health and nutrition. (d). Improved chances of economic development. (e). Improved technological development. (f). Socio-cultural change. (g). Democracy and equality (h). Ecological development/quality of life (increasing people’s awareness of their environments). From our analysis so far, it is clear that modernization and economic development, depends on investment and appreciation of modern trends in technology education. According to Woodhall (1997) investment in technological education and training produces benefits for the individual and for society as whole. The roles of technical and vocational education in enhancing entrepreneurial skills using information and communication technology is very important in training for self-employment, self-reliance and skills acquisition now that government cannot employ every graduate. This could be achieved through the development of entrepreneurial skills in technology and vocational education through information and communication technology.

Vanguard, MONDAY, FEBRUARY 9, 2015 — 23

n this column last Monday, I said that diesel mafias are milking ordinary Nigerians dry by making undue profit through importation. I said that prices of crude has long crashed yet these men in unwholesome diesel trade have refused to let Nigerians get the benefit of falling oil prices by reducing the pump price of diesel. A check with the Petroleum Products Pricing Regulatory Agency, PPPRA and some independent marketers confirmed that the landing cost of diesel is about N100 per litre. If the product lands in the Nigeria shore at N100 per litre, marketers are selling in filling stations at N160 per litre. sharp practices in the diesel This implies a difference of components for making this racketeering, it is the N60 per litre. Giving fuel are refined out of crude ordinary Nigerian that bears oil, usually by fractional allowance for handling cost at the burden. distillation. N10 per litre, these men are The amount being spent on AGO demand is driven by making an average of N50 per diesel if reduced could litre on diesel. Nigeria is said Nigeria’s inadequate supply induce companies to expand to be consuming about 11 of power to business places. their operations and employ Households, offices, eateries, million litres of diesel per day. more Nigerians. The cost of hospitals and Simple financial accounting banks, indicates that these Nigerians are pocketing close to N550million per day. In one week, they would have made N3.85 billion. If the trend is continues for a year or so, they would have made N198 billion from the sale of diesel. The question is what other business in Nigeria will be this lucrative? This is perhaps why it is an exclusive club and the more reason government operation in most of these government parastatals are agencies are looking the other companies is a fiscal drag on spending millions and will way at a great cost to employment. Nigeria is still spend millions on AGO Nigerians. currently facing a huge (diesel) consumption as the Today, more than 90 per cent unemployment problem that electricity supply situation is of petroleum products every hand should be on deck not likely to change consumed in the domestic to help solve. But the diesel significantly any soon, hence market are imported, usually merchants are only interested dependence on generators at costs which naturally reflect in their deep pockets. and mini-power plants will international crude-oil prices. A drop in the price of diesel surge. While households, Diesel is a petroleum-based will be a great relief to offices, eateries, banks, fuel that is used to power industries, household and the hospitals and government many types of vehicles and ordinary citizens. Cement parastatals that depend on boats. It’s made of a blend of Manufacturers have said diesel to operate are being crude oil components called again and again that bulk of ripped off daily by the current hydrocarbons. The

Diesel cabal at it again, ripping off Nigerians (2)

The question is what other business in Nigeria will be this lucrative?

their cost input is electricity generation. Those who still depend on diesel for power supply will have their cost reduced which will be reflected in the cost they eventually pass on to the final consumers. Households and eateries that use generators to power their operations will feel the impact of a drop in diesel pump price and will pass the benefit to the final consumer. Following the crash of crude oil prices, the maximum indicative benchmark of open market price of the diesel is about N99.11 per litre as of today, going by the Petroleum Products Pricing and Regulatory Agency. Surprisingly, the price of the product in filling stations across the country is N165 per litre with PPPRA not lifting a finger about the price or raising eyebrows about the unwholesome trend. The price of crude oil, which constitutes a major component in the pricing template, had plunged by about 60 per cent since June 2014 when it peaked at $115 per barrel. If Nigeria were a country where leaders walk the talk, diesel

has been deregulated and ordinarily, if Nigeria were to have an organised government, since the price of crude oil has fallen by more than 50 per cent, the price of diesel is supposed to have fallen a long time ago to about N74 per litre. Unfortunately, Nigerians are not getting the benefit of the so-called deregulation, and it also shows that the government agencies are not intervening in matters that touch the welfare of the populace except what benefits the ruling class. If a government allows for certain measures to take place in its economy, it is also the duty of the government to make sure that it is not being abused. PPPRA, DPR, NNPC and the Ministry of Petroleum Resources are turning their eyes the other way because powerful Nigerians are involved, milking the people and donating to parties for political gains. Ordinarily, if there were laws governing the deregulation of diesel, even before the price of petrol was reduced diesel marketers should have been the first to reduce their prices.” There is nowhere in the world where there is absence of regulations. You don’t just leave some things to the market completely. If you want to do that, then liberalise everything and you then protect the interest of the consumers.

Cover Uncertainty, as 32 mortgage banks scale recapitalisation hurdle Continues from page 22 (NHF), but the uncertainty surrounding recapitalisation exercise is making her apprehensive. “I maintain an account with a mortgage bank because I’m interested in obtaining NHF loan, but I don’t want my savings to go under if my PMB’s license is eventually not renewed. So CBN should please come out with the list of those that have made it,” she asserted. It was also gathered that MBAN, which is the umbrella body of mortgage banks in the country, lobbied the apex bank to soft pedal on the announcement of PMBs that have been adjudged to have successfully completed the recapitalisation requirements in order to limit crisis of

confidence in the sector. Reliable sources further disclosed that series of talks have taken place between some of the recapitalised and non-recapitalised banks to ensure soft landing for most mortgage firms through mergers and acquisitions.

bout 292 PMBs were licensed between 1990 and 1998. In July 1997, the Federal Mortgage Bank of Nigeria (FMBN), which was then regulating the sector, revoked the licenses of 97 of the firms. FMBN handed over 195 firms to CBN in 1998. The initial minimum share capital for PMBs was N5 million, rising first to N20 million and later N100 million. CBN recently revoked the operating licences of 21

Primary Mortgage Banks (PMBS) and directed the Nigeria Deposit Insurance Corporation (NDIC) to commence the process of liquidating the affected institutions. The affected PMBs include: Alliance and General Mortgage Limited; Benhouse Building Society; Consolidated Estate Building Society; Cymon Savings and Loans; Euro-Banc Savings and Loans; First Amalgamated Building Society; First Capital Savings and Loans; Global Building Society; and Harvard Trust Savings and Loans. Others are: Home Foundation Savings and Loans; Home foundation Savings and Loans; Jubilee Building Society; Lagoon Homes Savings and Loans; Leverage Home Savings and Loans;

Mid Land Mortgages; Mortgage PHB; MultiBlanc Savings and Loans; Mustard Seed Mortgage; Omega

Savings and Loans; Password Savings and Loans; Post Service Savings and Loans; and TMC Savings and Loans.

BRIEFING - From lef: Kaodi Ugoji, Group Head, Strategy and Corporate Communications; Dipo Odeyemi, Divisional Head, Operations and Technology; Bola Onadele.Koko, MD/ CEO and Atinuke Taiwo, Divisional Head, Legal, Regulatory and Company Secretary, all of FMDQ OTC PLC, a SEC licensed regulators of trading in fixed income securities, during a media briefing on FMDQ 2014 market review and outlook for 2015 in Lagos.

24 — Vanguard, MONDAY, FEBRUARY 9, 2015

Business & Economy

21 ships laden with petroleum products, foods, arrive Lagos

wenty one ships laden with petroleum products, foods and other goods have arrived Lagos ports, waiting to berth. The Nigerian Ports Authority (NPA) made the announcement in its daily publication – ‘Shipping Position’ released on Friday in Lagos. The publication indicated that 10 of the ships contained petrol, aviation fuel, bulk gas and diesel. It noted that 11 other ships waiting to berth were laden with rice, containers, crude palm oil and bulk fertiliser. The Shipping Position explained that 38 other ships were also expected at the ports. The document indicated that 17 of the expected ships would sail in with containers, while 21 others would arrive with bulk sugar, rice, vehicles, tug boat, aviation fuel, crude palm oil, kerosene, and general cargo. It noted that 21 ships were in the ports, discharging palm oil, containers, bulk wheat, fresh fish, general cargo, kerosene, bulk gas and petrol.

Chivita leverages partnership, effective communication to drive loyalty

he amazing success of many global brands that are household names today is possible because they mastered the art of creating highly attractive partner and customer value propositions. Brands, through effective communication have endeared themselves to their consumers and increased their market share. The publicity and goodwill generated around the recent partnership between Chivita 100% and Manchester United football club is a testament to how effective communication strategies have not only endeared consumers to the fruit juice, but also helped increase sales. The partnership has created massive exposure and visibility for the Chivita 100% brand through an effective online, television, print and outdoor campaign in recent times. From positive reviews of the partnership in major television sports programmes, newspapers and digital platforms to visible outdoor presence on prominent billboards and Rapid transport buses, the publicity strategy has been effective in creating affinity and sustaining loyalty for the brand. C M Y K

Business sur viv al rrate ate now less than 50% surviv vival — CEO Ekimiks By FRANKLIN ALLI

USINESS survival rate in Nigeria is now less than 50 percent. This is due to increasing exchange rate of the naira to foreign currencies and interest rates charge by banks on loanable funds. Mr. Ekiyor Tope Miriki, the Chief Executive Officer of Ekimiks Nigeria Limited, disclosed this when he addressed delegates at a training programme for young entrepreneurs in agriculture. The programme which has this theme ‘Empowering

With the business survival rate being less than 50 percent, a business in agriculture is even more demanding due to the economics involved

Agripreneurs on Agripreneural and Business Management,’ attracted more than 60 youth from six countries across Africa. “With the business survival rate being less than 50 percent, a business in agriculture is even more demanding due to the economics involved in the process,” he stated. The creation of business opportunities for unemployed youth in the agricultural sector

is at the center stage of an African wide initiative led by the International Institute of Tropical Agriculture. D r. Nteranya Sanginga, the Director General of IITA, the organizer of the event, explained that inclusive growth of the continent could be achieved through the joint implementation of mechanisms in agribusiness which would work for both farmers and consumers. “A young ‘agripreneur ’ coming from a communication background is working with fish now. First, you might

think communication and fish where is the link?; but when you start understanding how sales figures of fish products can increase throughout value chains by involving young people coming from different sectors, such as communication or marketing, it might become an eye-opener for you in engaging in new partnership opportunities,” he said. Chief Moji Ladipo, a former Registrar of the University of Ibadan, encouraged the participants to be passionate about what they do.

MEETING - From left: Mr. Emeka Akwuaka, Company Secretary, PAC Asset Management Limited; Mr. Chris Oshiafi, Chairman and Mr. David Okwuadigbo, Managing Director, during Completion Board Meeting on PACAM Balanced Fund’s 1billion unit offer, in Lagos.

Richbon to create 5000 jobs with $40m auto assembly plant

xecutive Chairman of Richbon Group Chief CJ Muonagolu has assured that about five thousand new jobs would be created when the automobile assembly to be located in Anambra state fully comes on stream. Speaking in an interview after the signing ceremony of a $40million memorandum of understanding with the Anambra state government in Awka, Muonagolu said his group will employ between 1,000 and 1,500 at 40 per cent capacity but that the number will rise to between 3,500 and 5,000 jobs when its production hits a peak in the next few years. This is aside from thousands of indirect jobs that would be available to Nigerians as a result of the project. The company which will be producing XGMA brand of agricultural equipment, Sino trucks and Cedar commercial buses said its partnership with the Chinese firm was based on its track record which has rated it as the 3rd best in the world in the area of heavy equipment manufacturing. Meanwhile the Federal Government’s agricultural transformation agenda is expected to receive fresh boost

as the plant begins manufacturing of agricultural equipment in the next 18months. The Richbon boss, who signed on behalf of the company, said the factory on completion would facilitate the transformation of the nation’s agricultural value chain and enhance transportation and distribution chain. He

commended the Federal and Anambra state governments for their efforts in encouraging Nigerian entrepreneurs to achieve their dream of job creation and industrialisation, stressing that the task of diversifying the Nigerian economy was the responsibility of all the citizenry. In particular, Muonagolu

commended the Anambra state administration led by Chief Willy Obiano for tackling the security challenges in the state and improving its investment climate, stressing the policy trust of the government will make the state an investment destination of choice.

PushCV unveils Elite Employee Quest to empower job seekers BY JONAH NWOKPOKU

nline enterprise solution, PushCV.com, has announced an initiative, Elite Employee Quest 2015 that seeks to connect prime employees to head-hunters and qualified job seekers. In partnership with top companies across Nigeria, the Elite Employee Quest 2015 initiative according to PushCV, will give everyone an equal opportunity to be part of the qualified, deserving people that PushCV would place in gainful employment in top organizations in 2015. The programme which will be formally announced on the 12th of February, 2015 at a

Cocktail Event in Lagos will have top CEOs and Human Resources professionals across Nigeria in attendance. PuschCV said the programme will seek talents across five major employment categories including: Accounting, Engineering/IT,

Job seekers find it quite difficult to find the right jobs because of overwhelming competition and lack of knowledge

Administration, Sales/ Marketing, and Customer Service. PushCV and their partners said they believe that the initiative can bridge the gap between qualified candidates and employers. “Job seekers, even qualified ones, find it quite difficult to find the right jobs because of the overwhelming competition and lack of knowledge of how/ where to send their CVs; and the employers say they have jobs available, but most of the applications they receive are not up to standard. It takes up a lot of time and money going through the piles of applications looking for qualified candidates,” the online recruiter said.

Vanguard, MONDAY, FEBRUARY 9, 2015 — 25

Business & Economy

NSE, UK strategise to build, expand capital flows to Nigeria By PETER EGWUATU

he Nigerian Stock Exchange, NSE and United Kingdom, UK are strategizing on how to build and expand capital flows into Nigeria. The President of NSE, Mr. Aigboje Aig-Imoukhede, who disclosed this weekend shortly after a closed door meeting with British High Commissioner, Mr. Andrew Pocock in Lagos, said “We discussed on how to expand trade and capital flows between Nigeria and Uk. The managements of London Stock Exchange Group (LSEG) and the Nigerian Stock Exchange (NSE), had already signed a capital markets agreement that supports African companies seeking dual listings in London and Lagos.” According to him “The deal, which was for an initial period of two years, was signed by Nikhil Rathi, Head of International Development, LSEG, and Oscar Onyema, Chief Executive Officer (CEO), NSE. The signing of the deal was witnessed by Sir Roger Gifford, UK CoChairman of the UK Government’s Nigeria Emerging Capital Markets Task (ECMT) Force, and myself, Co -Chair. The agreement follows the implementation earlier this year of a new settlement process between the UK and Nigeria. This made significantly more efficient, the listing and trading of ordinary shares of Nigerian companies listed in London, as well as those of UK companies on the Nigerian market.” Aig-Imoukhede stated that their goal is to ensure that all companies that have

substantial operations in Nigeria are accessible to both Nigerian and international investors. “In addition, we will be ensuring that our leading companies achieve the global profile and international institutional investment they deserve. The collaboration will help in building capacity for the market operators. We are still an infant in the terms of development when you compare us to UK. It is an opportunity to leverage upon.

Also we don’t have a UK institution in Nigeria, so this cooperation will attract companies from UK to establish in Nigeria” he emphasized. In his own comment, British High Commissioner, Pocock said “The UK will like to help Nigeria in areas like Agriculture and Education as part of its support in helping Nigeria diversify the economy. We would like to expand our interest in value adding businesses.

SESSION - From left: Mr Rasheed Olaoluwa, MD/CEO, Bank of Industry; Mr Oladapo Oyebanjo, D’Banj, BOI Ambassador; Mr Waheed Olagunju, Executive Director, SME, BOI and Ganiyu Muhammed, General Manager, SME at the Bank of Industry Capacity building session for Business Development Service providers held in Lagos.

First Bank leading banking brand in Nigeria

or the fourth consecutive year, First Bank of Nigeria has been ranked number one banking brand in Nigeria by The Banker magazine of Financial Times and Brand Finance, London, United Kingdom in their annual 2015 The Top 500 Banking Brands. According to a press release

by the Country Representative of The Banker magazine Nigeria, Mr. Kunle Ogedengbe, First Bank moves from being number 382 in 2014 to 336 this year. Other Nigerian banks that made the ranking moved up. They are Zenith Bank, Guaranty Trust Bank and Access Bank. Zenith Bank moves to number

SEC committed to dematerialisation — Ag. DG By FAVOUR NNABUGWU

According to him “Lagos as a mega city should have multiplier effect in the development of other states in the country. There are great potentials in this country ad that is what we are looking at developing. If in the next five to ten years there is a good private and public sector collaboration the better it will be for the country in terms of scale production, infrastructure development etc.”

he Securities and Exchange Commission (SEC) is committed to aligning the pace of growth in the capital market though dematerialisation to boost investors’ confidence. Dematerialisation refers to the conversion of share certificates (physical paper form/ certificates or documents of title representing ownership of securities) to an electronic form which is domiciled directly with the CSCS. Ag. Director General of SEC, Mounir Gwarzo gave the assurance when he received the management of Central Securities Clearing System (CSCS) Plc at the Commission’s head

office in Abuja. Gwarzo said that CSCS plays a very critical role in the capital market and disclosed that SEC Nigeria is now ready to conclude the dematerialisation process in the market. “We have already commenced the dematerialisation process, if not for certain things it would have been concluded by now. We are ready to work with stakeholders to ensure that we conclude the process. One of the critical parts of this exercise is public enlightenment and we will be in the market in the next few weeks to tell people to open their accounts, sort out the issues with e-dividend and get ready for dematerialisation. We will make use of jingles in radio, newspaper adverts among other enlightenment tools.

388 from 453 in 2014, Guaranty Trust Bank moves to 417 from 422 while Access Bank made first entry into the ranking. Brand value of First Bank increases to $300 million in 2015 from $228 in 2014 and according to the Economics editor of the magazine, Silvia Pavoni, the brand value is “the licensing rate that a third-party would need to pay to use that company’s brand.” Commenting on the methodology of the ranking, Pavoni said Brand Finance obtained brand-specific financial and revenue data; modeled the market to identify market demand and the position of individual banks in the context of all other market competitors; established the royalty rate for each bank; calculated the discount rate specific to each bank, taking account of its size, geographical presence, reputation, gearing and brand rating and discounted future royalty stream (explicit forecast and perpetuity periods) to a net present value which is the brand value.

Oil rally holds, trading almost $2 higher

rent crude oil and U.S. crude for March delivery traded almost two dollars higher on Friday, promising a steady appreciation in the weeks ahead. Benchmark Brent crude traded $1.90 higher at $58.47 per barrel, while the U.S. crude for March delivery traded at $52.18 per barrel, up by $1.70. The steady appreciations were attributed to fighting in Libya and stronger economic signals from the U.S. which had helped futures rebound from near-six-year lows. In Libya, fighting over control of power had highlighted the threat of a breakup in the country, imperiling the country’s oil exports. In the U.S., non-farm payroll data due later on Friday is expected to show firm job growth in the world’s largest oil consumer in January, a positive signal for demand. “The official selling price to Europe increased quite a lot. They’re reflecting the tighter picture in the Mediterranean,” Olivier Jakob of Petromatrix, a daily research newsletter on the oil markets in Zug, Switzerland, said.

Polo inspires Nigerian designers to boost local content

n promoting its vision for sustaining the development of luxury markets within Nigeria and Africa, Nigeria’s leading luxury goods brand, Polo Avenue store, recently showcased to guests the laudable efforts of trending Nigerian designers Zashadu and Ariaba Beads. Geared towards inspiring budding luxury designers from within the continent, designers Zashadu and Ariaba Beads were selected for their unique and creative approach to their crafts using handwoven African techniques and perfectly bringing to fruition, African trends fused with global ideas. Zashadu and Ariaba Beads are fashion brands who have showcased their unique designs in luxury handbags and jeweleries across Africa, Europe and Asia. Known for injecting great passion, love and care into every design, Zashadu and Ariaba brands both embody the true spirit of luxury from within Africa. The driving force and creative head of both brands describe their designs as “compelling creations with magnetism appeal."

26 — Vanguard, MONDAY, FEBRUARY 9, 2015

Banking & Finance

Emir of Kano commends UBA leadership role in banking reforms

he Emir of Kano, His H i g h n e s s , Muhammadu Sanusi II, has commended the management of United Bank for Africa (UBA) Plc for the leadership role the bank played in the financial industry reforms, when he was the Governor of Central Bank of Nigeria (CBN). The Emir, speaking during the visit of the executive management of UBA to his palace in Kano on Wednesday, said that because of the UBA’s commitment to the reforms introduced by the apex regulatory institution, the Bank’s Group Managing Director, Mr. Phillips Oduoza chaired the committee on financial inclusion, which championed financial inclusion, the cashless and mobile banking initiatives in the country. “The reforms introduced by CBN towards improving Nigeria’s financial landscape were a collective decision and responsibility of everybody, but I should emphasise the contribution of UBA. UBA’s Group Managing Director chaired one of the critical committees that drove the reform,” the Emir said.

FCMB kicks-off Millionaire promo

irst City Monument Bank (FCMB) Limited has commenced another promotion tagged, ‘’FCMB Millionaire Promo”, which will run from February to July 2015. This follows the huge successes recorded in the first and second phases of the FCMB 30 th Anniversary Promo held between 2013 and 2014 across the country. In a statement, FCMB announced that the Millionaire Promo is targeted at all segments of the society and for existing as well as potential savings account customers.. The eligible products/accounts for the promo include FCMB basic savings, kids account, Nairawise, e-savings,

First Bank drives epayment with non cash ATM transactions *Records N928m bills payment BY BABAJIDE KOMOLAFE

ank customers are i n c r e a s i n g p a t r o n i z i n g automated teller (ATM) machines for non-cash transactions like bills payment, airtime purchase and money transfer. This is reflected by the value of bills payment and airtime purchase transactions recorded by FirstBank Nigeria Limited in 2014. With over 2,500 ATMs across the country, the bank has the largest network of ATM in the banking industry. According to the bank, bank customers used its ATM to make N928.48 million worth of bills payment and also to purchase N3.2 billion worth of airtime in 2014. As a result the bank emerged as the leader in bills payment, accounting for 38 percent of bills payment services in the nation’s banking industry as at December 2014. The bills payment option is one of the features of FirstBank’s ATMs, which also have other unique functional features which include cash transfer, air-time top-up, and cash deposit among others. The bills payment option is the non-cash transaction feature on the ATM that makes it easier for customers to pay for bills such as Cable TV subscription, post-paid phone bills, and pre- booked airline tickets. These transactions can be executed through the Quickteller option on any of the bank’s ATMs. The Transfer feature enables customers to transfer money from their accounts to both intra (within FirstBank) and interbank (other banks) accounts, thereby reducing the queues in the banking hall, save time as well as provide a more convenient option for customers’ money transfer needs. In 2014 alone N251 billion was transferred from one account to another using FirstBank ATM. The bank is also currently responsible for over 40 percent of interbank transactions and 26 percent of airtime vending. As active mobile network users in Nigeria are over 130 million and the need to recharge is on the increase, the bank’s ATMs also provide the platform for easy top-up.

To further enhance convenience, FirstBank’s ATMs also operate the Cash Deposit function which allows customers to deposit funds without customarily having to enter a banking hall for this transaction. This is a direct testament to its value proposition of putting customers first. Folake AniMumuney, the b a n k ’ s spokesperson, said this distinct development was achieved as a result of the bank’s desire to reach out to more people in the country and as part of living true to putting customers at the heart of our business. “FirstBank is

In 2014

alone N251 billion was transferred from one account to another using FirstBank ATM

positioned to meet the needs of its customers and to reach out to the under banked and unbanked. Our mission is to make banking as convenient for our customers as is obtainable globally ”, she said. She said that to aid the use of its ATMs nationwide and for enhanced protection of customers’ funds, the Bank has, in particular, designed innovative and tailored-made

financial services products to ease banking transactions. A major product is the FirstBank Verve Debit card, a Naira denominated domestic payment card accepted for payment throughout Nigeria on all electronic channels, including the ATMs. One of the outstanding and unique features of the product is that it is issued in 15 minutes at FirstBank branches. This distinctive feature stands the product out as it saves time and is very easy to obtain. Also, the card, which is accepted nationwide, aside withdrawing of cash, can be used to access value added services including bills payment, airtime recharge, flight and hotel booking among others. The card is Chip & PIN secured for greater protection of customers’ funds, provides extra protection for web based transactions with “Safetoken”, is Naira denominated, and personalized, bearing the customer ’s name. It is accepted wherever the Interswitch or Verve logo is displayed and can also be used to perform transactions via the Quickteller services menu on FirstBank ATMs. The bank also has a Naira denominated international Debit card issued in partnership with MasterCard Worldwide, a card which enables transactions all over the world wherever the MasterCard logo is displayed. The card is accepted worldwide at over

29.4 million merchant locations and can be used for cash withdrawals at over 1.8 million ATMs, in over 210 countries. The card is also secured by Chip & PIN technology and is issued in 15 minutes at FirstBank branches. The bank has a VISA Naira Credit Card designed for customers who operate salary accounts in the bank. The card is accepted worldwide for cash withdrawals and purchases on ATMs and POS terminals, and for e-commerce on the Internet done either on desktop computers or mobile devices. The card allows customers a 45-day interestfree period on spent funds and settlement is done in Naira. The bank also has a number of other card products tailored to addressing the varied needs of customers – VISA Debit (Dual currency – denominated in NGN and USD), VISA Prepaid (denominated in NGN and USD), VISA Gold card, Mastercard Platinum, and VISA Infinite. To cater for as many customers as possible, the bank’s ATMs are equipped with cardless functionality that makes it easier for nonbank customers to deposit or withdraw money from the ATMs without a Debit card. At the end of December 2014, FirstBank had deployed a total of 2,597 active ATMs. The bank’s ATMs have dispensed over N2.1 trillion between January and December 2014.

…………………………………………….BRIEFS………………………………..

Vanguard, MONDAY, FEBRUARY 9, 2015 — 27

Banking & Finance

BDC operators move to resolve lingering crises in ABCON By BABAJIDE KOMOLAFE

ureaux De Change (BDC) operators has commenced moves to resolve the lingering leadership crisis in the Association of Bureaux De Change Operators of Nigeria (ABCON) Rising from a stakeholders meeting of BDCs in the South West zone, the operators adopted four resolutions aimed at restoring peace to the Association. Since last year, some members of the Association’s Board of Trustees and the Executive council have been locked in legal battles which have grounded its operations. But on Tuesday, some concerned BDC operators, under the aegis of BDC Stakeholders Committee in South West, convened a stakeholders meeting of BDCs in the South West zone in Lagos. Addressing the meeting, Mr. Abdul Rasheed Amao, CEO, A&S BDC, and a member of the Stakeholders’ Committee, said that the leadership crisis had denied BDC operators of a voice to speak on their behalf at a time such voice is needed most. He said the meeting was convened to allow BDC operators brainstorm on the way out of the leadership crisis. Consequently, BDC operators at the meeting considered four resolutions for adoption. Thereafter, Mrs Mojisola Adesanya of Anchoria BDC moved the motion, calling the warring members of the Board of Trustees and the Executive council to withdraw the court case at the Supreme Court and settle amicably. The motion was seconded by Mr. Okai Agare of Green House BDC. The second resolution was moved by Prince A. Ajayi of Double K BD and seconded by Ndubisi of All Saints BDC. The resolution called for an Emergency General meeting of all stake holders nationwide. This was followed by another resolution by Benjamin Oje, seconded by Ken Ajurichi of , mandating the Stakeholders Committee to develop the agenda of the proposed EGM. The fourth resolution mandated the Stakeholders Committee to meet with Mr. Bamidele Adiesa,pioneer chairman Board of incorporatedTrustees ,other members of pioneer Board of

Trustee and four members of stakeholders committe to resolve the lingering issue. The motion for the resolution was moved by Mr. Osita and Engineer Nze. The resolutions were adopted via a voice vote by all BDC operators that attended the meeting. The stake holders meeting also resolved to checkmate the falling fortune of

the naira in support of the monetary policies of the CBN. Further, the operators expanded the membership of the Stakeholders Committee from seven to 11. Members of the Committee are: Abdul Rasheed Amao of A&S BDC, Moses Ebitu of Mat-Arni BDC, Alhaji Ibrahimm Alli Seabril BDC, Nduka Vincent of Agnus Dei

BDC, deyiga Samson of StandOut BDC, Abubakar Mohammed of Forward Marketing BDC, Eyinla Emilia of Aexel BDC, Onyema Esther of Coolsworth BDC, Ken Ajuruchi of Finance Bridge BDC and Osita Agoms of Maroon BDC.

DRAW - From left: Senior Manager, KPMG Advisory Services, Mr. Lawrence Amadi; Business Development Manager Enugu 1, FirstBank, Mr. Anthony Uwandu; Zonal Coordinator, National Lottery Regulatory Commission, Mr. Eke Micheal; Business Development Manager, Awka, FirstBank, Mr. John Okah; and Team Lead (Liability Generation) Consumer Banking, FirstBank, Mr. Maxwell Ezenwa at the FirstBank Savings Bonanza Draw held in Awka yesterday.

Ecobank faults IMF report on corporate governance

cobank Transnational (ETI) has faulted the report of the International Monetary Fund (IMF) which indicted the Bank group of poor corporate governance among other things. A statement issued yesterday by the Group said, “Ecobank Transnational Incorporated (ETI), parent company of the Ecobank Group, wishes to correct misperceptions conveyed by an International Monetary Fund (IMF) report released on 4 February 2015. The report suggests that ETI’s rapid expansion, lack of regulation and poor governance pose a wider threat to financial stability in Africa. “The report, which contains some inaccuracies, is roughly 18 months out of date as regards some of its references to the Ecobank Group. The internal governance issues that it refers to at Ecobank date back to a period of several months between mid2013 and early 2014. The Ecobank Group dealt conclusively with those internal governance issues at the time. The matter culminated in the dismissal of its then Group CEO, Mr. Thierry Tanoh, who was replaced by Mr Albert Essien in March 2014. “Since that period, a reconstituted new Ecobank Group board and senior management

team has been able to restore stability to the bank and regain the confidence of its stakeholders, including its regulators, shareholders, customers and staff. The board is led by the experienced and well respected Mr. Emmanuel Ikazoboh as Chairman. He is supported by a diverse group of directors with a rich mix of experience and knowledge of the African banking industry. Senior management is led by Mr. Essien, a veteran professional of Ecobank for almost 25 years. Board and management have provided strong leadership for the institution since their assumption of office at Group’s 2014 Annual General Meeting. “It would be wrong for the report to inadvertently convey the perception that past governance issues still exist at Ecobank. A lot has taken place between the preparation of the aforementioned IMF report and the present time. At the end of 2014, Nedbank and Qatar National Bank became the largest shareholders of the Ecobank group. The investment by both of these banks demonstrates their confidence not only in the Ecobank Group’s future growth prospects, but also in the strength of its governance and its management. “The Ecobank Group took well calculated steps in its expansion over the last eight years.

AfDB issues $1bn global benchmark bond

he African Development Bank last week issued a $1 billion global benchmark bond, with oversubscription from investors including central banks and multilateral institutions. The Bank in a statement announcing outcome of the issue, said, “On Thursday, February 5, 2015, the African Development Bank (AfDB) successfully launched and priced a new 1 billion 5-year US dollar global benchmark due February 12, 2020. This is the AfDB’s first US dollar global benchmark of the year. The transaction was announced on Wednesday, February 4 at 2:15 p.m. London time with initial price thoughts of midswaps +2 basis points area. “Indications of interest exceeded USD 1.6 billion overnight, which enabled the Bank to tighten price guidance to midswaps plus 1 basis points area when opening books at 8:15 a.m. the following day. The orderbook grew extremely quickly, reaching USD 2 billion after only 1 hour of book-building, with investors showing little spread sensitivity. “Given AfDB’s strong liquidity position, the deal size was capped at a maximum of USD 1 billion from the outset. Consequently, the decision was taken to close the orderbook at 9:20 a.m. London time, well ahead of the originally anticipated schedule. The deal recorded the largest ever level of oversubscription for an AfDB debt offering. “The strength of the orderbook allowed the lead managers to price AfDB’s new benchmark at midswaps flat (equivalent to US Treasuries plus 17.6 basis points), at the tight end of the original price guidance. Over 30 investors participated in the transaction, with high quality orders from Central Banks and Official Institutions (73%) taking the bulk of the transaction. Final distribution figures highlight AfDB’s strong penetration across different regions, with the participation from Asian investors (55%) setting a new high for AfDB.”

28 — Vanguard, MONDAY, FEBRUARY 9, 2015

Corporate Finance Stories by PETER EGWUATU

Skye Bank intensifies focus on retail, commercial banking

kye Bank Plc has stated that as it assumes the status of a mega bank following the acquisition of Mainstreet Bank Limited, it will place strong emphasis and focus on retail and commercial banking as a way of bringing about a healthy deposit mix to bring down its cost of funding. The new business strategy will also allow the bank to reduce the volume of public sector deposit and term deposit at its disposal for enhanced profitability and business sustainability. Group Managing Director/ Chief Executive Officer of the bank, Mr. Timothy Oguntayo, disclosed these at the weekend at a forum with stockbrokers which took place in Lagos. Oguntayo disclosed that the acquisition of Mainstreet Bank and the attendant synergies between the two institutions had given Skye Bank the competitive edge in the industry which it would leverage to deliver quality customer service and high returns to shareholders The Skye Bank boss said the acquisition had also provided the bank the opportunity to optimize cost, assuring that the bank would leverage its superior information technology to block leakage as well as pursuing aggressive expense control. Specifically, he said the bank would continue to upgrade its information technology continually, while also promoting the usage of point of sales terminals and automatic teller machines to serve its teeming customers. Assuring of seamless integration, Oguntayo said the bank has put in place measures to grow its balance sheet as well as create value for its shareholders. Similarly, t h e b a n k ’ s branch network is now 450 compared to 260 branches before the business combination with Mainstreet Bank. Oguntayo also expalined that the increased branch network would make access to the bank’s services easier.

perators in the Nigerian capital market have criticized the multiple tax system existing in the market and have canvassed for a global competitive tax rate for the country. The operators who bear their minds at a day diagolue on the “Capital market & the 2015 Federal Budget” organised by the trio of Chartered Institute of Stockbrokers (CIS), Association of Stockbroking Houses of Nigeria (ASHON) and Association of Issuing Houses of Nigeria(AIHN) in Lagos said multiple tax system is a disincentive to companies operating in the country. Speaking as a guest speaker at the occasion, Mr. Tola Mobolurin, who is also the Chairman of NASD Plc said “We should have a tax law that should be encouraging and non discriminating. It is really unfair to have multiple tax system because it does not encourage people to invest in the country. For example, in a situation, where a publicly quoted company pays tax when profit is declared and is also made to pay tax when it makes loss the following year is not a good tax system. So, the federal government should design a tax system that is globally competitive.” He further stated that insurance companies should not be discriminated. In his words “ We should not discriminate against insurance companies. At the moment, government said

VISIT - From left : Bamdele Ogunnaike, Chief Financial Officer, Skye Bank; Henry Egbiki, Regional Managing Partner, EY; Timothy Oguntayo, GMD, Skye Bank and Dayo Babatunde, during the official visit of the Skye Bank to EY office at Marina, Lagos.

Capit al mar at or Capital markket oper operat ator orss seek global competitive tax rate insurance company cannot carry over loses as done in banks. Why should it be so?

We can’t afford the subsidy, until it goes, we can’t find reasonable investment in refinery and other petrochemical industries

The rule should be reviewed because insurance is a big business.” The Chairman of Association of Issuing Houses of Nigeria, Mr. Victor Ogiemwonyi, said “Double taxation is not good for the capital market. When a company is made to pay double taxes, then it would not attract more companies to the market. Government should encourage more companies to the market by giving tax waivers. For instance, pioneer status should be granted to companies.” On the issue of budget, he

SEC to accelerate speedy passage of Commodity Exchange bill

he Securities and Exchange Commission, SEC has assured the management of Nigeria Commodity Exchange (NCX) iof its support in its bid to get NCX bill passed at the National Assembly. Ag. Director General of SEC, Mounir Gwarzo gave this assurance when he received the management of the NCX who paid him a courtesy call in Abuja. Specifically, he disclosed that the commission was ready to support NCX whenever there is public hearing on its bill at the NASS, but advised the management of NCX to do its networking very well before then. Besides, Gwarzo also advised NCX to be well positioned for competition as there were other commodity exchanges, like AFEX that will soon be competing with it. Gwarzo said that SEC was very keen on the growth and development of the exchange largely because of its important role in the economy.

“Migrating from being stock exchange to commodity exchange is a major feat and we are very excited about it. On our part, we will reach out to the Ministry of Finance so that we can make a case on some of the incentives that can encourage trading on the floor of the commodity exchange” “We are very confident of the success of the exchange as the prospects are very high but a lot of things need to happen and you need to do more in that regard” NCX is the former Abuja Securities and Commodity Exchange (ASCE) which has transformed into a commodity trading outfit. He added that since circulars were issued to companies to ensure their shares are traded on the stock exchange, it made a lot of difference in market transactions in the secondary market. He assured that once the warehousing receipt system and all other things were in place in the commodity exchange, the commission will collaborate in any other area to ensure a very active market.

sid that the government was able to reduce six per cent on recurrent expenditure and over 30 per cent on capital expenditure. He advised government to allow naira to find its level, saying that companies would manufacture locally to earn the dollar. Comenting on the budget, Mobolurin, described the budget as tentative, saying that it does not align with the current situation as oil benchmark is still dropping. He said, “Frankly, Nigerians need to face the reality, we can’t afford the subsidy. “ Until it goes, we can’t find reasonable investment in refinery and other petrochemical industries. The real budget and work will commence after the elections. If we are not careful, in the next 20 years, the country will remain where it is because with the current situation, it can’t meet up the budget target.” According to him, Saudi Arabia will continue to drag down oil price and Shell, a major oil producer, has started laying off staff . “The government too will retrench its staff , close some departments. We are going to have a situation where civil servants will not collect salaries for months.” He further stressed that as the naira depreciates, subsidy on fuel goes up. Naira is over N200 in the black market and it will find its realistic figure after the election. On the way forward, he enjoined the government to reduce spending on legislators, advisers and retrain civil servants on different vocations for two years before laying them off.

Vanguard, MONDAY, FEBRUARY 9, 2015 — 29

Corporate Finance

FMDQ targets N175trn market turnover in 2017 … to float N100m Investors Protection Fund Stories by NKIRUKA NNOROM

MDQ OTC Plc has said that it target is to achieve N175 trillion market turnover come 2017 as it pursues its strategic intent of bringing about revolutionary changes and fostering development of the Nigerian Over-theCounter (OTC) financial

market. The Securities Exchange also said it is set to float a N100 million Investors Protection Fund (IPF) to ensure that investors that commit their money in the market do not suffer any kind of loss. Speaking during its 2014 Review and Outlook for 2015, Mr. Dipo Odeyemi, Divisional Head,

Operations and Technology, said FMDQ is working together with the Securities and Exchange Commission, SEC, to work out modalities for effective take-off of the Fund. Already, he said the rules have been submitted to the SEC, and the Fund is expected to fully take effect by the end of the second quarter upon a

successful engagement with the SEC. According to him, the introduction of the IPF would increase investors’ confidence

and also eliminate the fear factor involved in committing ones money in financial instruments. Listing some of the

strategic initiates for 2015, Odeyemi said that FMDQ will pursue aggressive education and capacity building for market participants to increase investors’ confidence and reduce market failure to ensure that the market is always up and running.

Access Bank eyes ‘most respectable bank’ status in 2018

ccess Bank Plc has said that proceeds from its on-going rights

issue will position it as one of the most respectable banks in

Africa by 2018 The bank is currently shopping for N52.6 billion via a rights issue to its existing shareholders by offering 7.628 billion shares of 50 kobo each at N6.90 each. The offer opened on January 26, 2015 and it will run till March 4, 2015. Speaking at the ‘Facts behind the offer’ at the Nigerian Stock Exchange (NSE), the Group Managing Director (GMD) Herbert Wigwe, said the proceeds would be used to upgrade the bank’s information technology platforms to enable it provide better services, upgrade its branch networks and further improve its working environment. “The funds raised would provide Access Bank with additional capacity to further consolidate its leading corporate banking business as well as additional capital headroom to support our increasing market share in the SME and retail segments’” Wigwe said. He noted that despite the challenging conditions in the nation’s banking sector with regulatory changes and increased competition, Access Bank has continued to sharpen its execution skills, thereby ensuring a solid platform to build on. Wigwe explained that the capital raising is in line with the bank’s fiveyear corporate strategy plan to be one of the top three banks in the country and the world’s most respected African bank. “In our five-year business plan, we have customers as the central focus. We have said going forward into the future, our customers will be taken along as true partners. C M Y K

30 — Vanguard, MONDAY, FEBRUARY 9, 2015

Homes & Housing

Borno builds N700m houses for insurgency victims

orno State government has inaugurated an eight-man committee for the distribution of 432 free apartments constructed at the cost N700 million to victims of insurgency at the Yerwa Peace Estate, Maiduguri, for residents of Bula-Bulim Ngarnam. News Agency of Nigeria (NAN) reports that the affected residents had their houses destroyed by the Boko Haram insurgents. Governor Kashim Shettima said the gesture would enable the affected people to return to their normal life after losing their houses to the insurgency. He said it was also part of government’s responsibility of providing for the needy, adding that the houses were constructed at the cost of about N700 million by a committee appointed by the state government. “Since assuming office in 2011, we have left no one in doubt about our resolve to providing housing to our teeming population as it is one of our cardinal objectives. We have been able to construct houses across the state in spite of the insecurity facing us,” he said.

US mor tgage mortgage rates hit 20month low

.S. mortgage rates declined, remaining at the lowest levels in more than 20 months. The average rate for a 30year fixed mortgage fell to 3.59 percent from 3.66 percent, Freddie Mac said in a statement. The average 15year rate slipped to 2.92 percent from 2.98 percent, the mortgage-finance company said. Both were the lowest since May 2013. Falling borrowing costs have spurred an increase in the number of Americans applying for home loans. The Mortgage Bankers Association’s index of refinancing applications rose to an 18-month high in January, and the flow of homeowners seeking to reduce their monthly bills is set for a sustained boom, according to Paul Diggle, property economist for Capital Economics Ltd. in London.

HOUSING FINANCE: FMBN forges through daunting challenges By YINKA KOLAWOLE

•Set to raise share capital to N250bn

he Federal Mortgage Bank of Nigeria (FMBN) has taken steps over the years to navigate through numerous challenges in the quest to deliver on its core mandate of promoting the delivery of affordable and modern houses to Nigerians. One of the challenges is the issue of low capital base. The bank currently has a share capital of N5 billion out of which the Federal Government has paid up its own share of N2.5 billion representing 50 per cent, while the Central Bank of Nigeria (CBN) and the National Social Insurance Trust Fund ( NSITF) have not paid up their 30 and 20 percent share respectively. The bank was established in 1956, as the Nigerian Building Society (NBS), a joint venture of the Commonwealth Development Corporation and the Federal and Eastern Governments of Nigeria. It was subsequently renamed Federal Mortgage Bank of Nigeria after the federal government undertook 100 percent ownership acquisition of the NBS via the Indigenisation Act of 1973. A new management team was recently inaugurated for FMBN, headed by Mr. Gimba Ya’u Kumo as the Managing Director, for a second term in office. At the event, He promised to develop pro-active and effective strategies to attract offshore funding for affordable housing to Nigerians. He also pledged to improve service delivery to National Housing Fund (NHF) contributors across the country, and improve welfare of staff members across board to ensure a well-motivated workforce and profitable operations. Low capital base Yaú Kumo lamented that FMBN was grossly undercapitalized compared to similar institutions in other countries in West Africa, disclosing that there was need for government to speed up plans to re-capitalization the bank. According to him, an improved capital base will place FMBN in a better position to refinance mortgages, as it cannot meet the larger part of demands for mortgage loans from various stakeholders at the moment. “For now, the only source of funding the bank has to meet the teeming demands of Nigerians is the National Housing Fund (NHF) collection which is minimal

•A row of houses in FMBN-Elim Estate, Enugu compared to the housing needs of Nigerians. Every worker is expected to contribute 2.5 per cent of the salaries to the fund and if you look at this sum, it is small compared to the housing needs of Nigerians.”

e however said the Federal Government is exploring ways of raising the share capital of the bank to N250 billion within the next few months. He assured that discussions to raise the share capital had reached advanced stages by all stakeholders. “We have set an agenda for ourselves and chief among them is the recapitalization of the bank. We have made substantial progress on that, in the next few weeks we will see results on the table,” he said. The last three years has seen improvement in housing finance in Nigeria. A housing retreat hosted by President Goodluck Jonathan for key players in the housing sector, including FMBN, resulted in the launching of the Nigeria Mortgage Finance Company

We have set an agenda for ourselves and chief among them is the recapitalization of the bank

(NMRC). This signaled the beginning of a process that is today increasing opportunities for Nigerians to own their homes at an affordable price. Before now, the lack of healthy mortgage financing system in Nigeria had made the rate of home ownership in the country one of the lowest in Africa. Nigeria’s homeownership rate was put at about 25 per cent which is much lower than contemporary countries. To address this development, the Kumo-led FMBN management has embarked on drastic measures to ensure that the housing deficit is bridged and this has led to the introduction of mass housing schemes in various parts of the country. Some of the mass housing schemes are done on a rent-and-own model that allows low income participants to rent a home for 15 to 20 years and own the property at the end of that period. Innovations Notwithstanding its limitation, particularly the housing deficit, the apex mortgage bank initiated projects, which have delivered about 53,000 houses through the NHF, as well as launching of the housing scheme for the informal sector, and the Estate Development Guarantee (EDG) scheme, amongst others. These initiatives, coupled with its plan to recapitalize, are set to place the industry on a new pedestal. For instance, with the informal sector’s Cooperative Society Loan Scheme, Yaú Kumo explained that

operators such as farmers, traders and artisans would be able to tap into the benefit from the National Housing Scheme, like those in the formal sector. He said the scheme to extend the bank’s services to people who can be deemed as “disadvantaged” in the society because of their low income level, which may be irregular and difficult to access under the NHF loan window. The FMBN, under the scheme, he added, is now using cooperative societies to benefit a certain group of people operating in the informal sector category, especially because of the nature and structure of their income, which is not definite or regular. “The loan enables a cooperative society that has acquired a plot of land to develop houses for allocation to its members. The parcel of land would have title in the name of the society which would act as facilitator on behalf of its members in the loan transaction and facilitate construction of the housing units. The root of the title of the estate land would be sublease to the beneficiaries,” he said. Managing Director of Trans-Atlantic Mortgages, Preye Ogriki, said the Kumoled management has done well in the face of daunting challenges confronting the country ’s housing finance and delivery. According to him, “FMBN has done well in the last three years or so. It has increased NHF collections through the e-payment platform and this has contributed to funds available to the bank.” Ogriki also noted that the bank has attracted many states to the NHF scheme.

Vanguard, MONDAY, FEBRUARY 9, 2015 — 31

32 — Vanguard, MONDAY, FEBRUARY 9, 2015

Interview

Agent Banking: Banking services not for few people — Sekibo By PETER EGWUATU

he singular most attention-grabbing event in the nation’s banking sector in 2014 came in the last quarter of the year. The announcement by the Assets Management Corporation of Nigeria (AMCON) of Heritage Bank as the winner of the bid for the acquisition of Enterprise Bank jolted the entire banking industry, as many operators did not give them the chance to be the one that will win the bid. It would have been considered an impossible task for a bank that entered the market less than two years ago to beat other well established to acquire Enterprise Bank that was up for sale. In this interview, the Managing Director/CEO, Heritage Bank, Mr.Ifie Sekibo spoke about how the bank emerged as the preferred bidder for the Enterprise Bank, Agent Banking services and other issues in the banking sector. Excerpts: What is Heritage Bank doing in the area of Agent Banking? The bank’s management said Agent Banking is about bringing banking services to the people, so that they do not need to go far away to do their banking services. Banking services is not for the privileged few, it is for everybody, and with the small bank we have opened, we are offering banking services to everybody in this market, irrespective of their educational background and what they do. What is the contribution of Heritage Bank in the financial inclusion strategy of the CBN ? As part of our support for the financial inclusion strategy of the CBN, Heritage Bank did set a standard when it launched its pilot ‘Corner Shop’ to cater for the need of traders and artisans of the Gbagada plank market, located at Gbagada Estate of Lagos State as a foretaste of its Agent Banking Scheme. The shop is aimed at giving traders the opportunity to enjoy financial services without the risk and stress of walking kilometers in order to visit a bank branch. What is the bank doing in the area of SMEs development? C M Y K

Heritage Bank’s sponsorship commitment in the areas of Small and Medium Enterprises (SMEs) development, sports, entertainment, charity and advocacy also stands out. Through its unique SMEs Support Platform, the Bank, in 2014, raised the bar in the efforts to deepen the SME Culture in the country. Its Micro Small and Medium Enterprises (MSME) Clinic radically emerged as a unique platform set up to offer a holistic bailout strategy for SMEs in the country through an amalgam of services such as business diagnostics, advisory services, financial literacy and entrepreneurship development, customized product development for each customer and market knowledge development. This scheme is backed up by the innovative Heritage Bank Micro Small and Medium Enterprises (MSME) Investment Protection Fund; a non-collateralized funding option with embedded insurance for the default risk inherent in the SME scheme to assist the growth and rejuvenation of the sector. This remains a strong differentiating indicator of the Heritage Bank approach to SME funding in the country. For example, under this scheme, Heritage Bank, through a groundbreaking partnership with Dbanj, the Koko Master, offered support for KOKO AGROPRENEUR, Dbanj’s initiative under the banner of the national agricultural renewal project being championed by the Ministry of Agriculture. The national agricultural renewal project initiative is aimed, on the one hand, at providing practical leadership and encouragement to the massive youth population to embrace the agricultural revolution being championed by the Minister of Agriculture, Dr. Akinwunmi Adeshina, as part of the national socio-economic transformation agenda. It is also an initiative designed to stress the significance of small and medium enterprises as a veritable platform for future economic well-being of the

country. How did Heritage Bank emerge as the preferred bidder for Enterprise Bank? At inception we did state the way the bank wanted to go. We re-capitalized to the tune of N12 billion, took up all liabilities and assets of the defunct Societe Generalle Bank of Nigeria ,SGBN and found some form of accommodation for depositors whose money has been trapped for over 10 years. Our vision is simple and clear; today, we might look quite new in the market, but our idea of what this bank should be is clear from day one. We want to be a bank that people will believe and we want to lead in the knowledge that generation banking is the way to go. Heritage Bank’s thirst for unique customer satisfaction, not only financially but in other ways, started shortly after its operations began. This became evident as it commenced a zero COT offering to its numerous clients from April 15, 2013. The Bank’s offering of zero COT implies there shall be no

Banking service is not only for some people, it is for everybody

hidden charges in transactions. Consequently, this huge selling point would boost the bank’s goodwill, customer trust and consequently, deposit base in 2014 as it warmed up to serve its customers more goodies. The Heritage Banking Company Investment Services Limited (HISL), a special purpose vehicle sponsored by Heritage Bank to bid for Enterprise Bank, not only came tops in the bid process but, against all industry predictions, paid the total N65 billion purchase price within the timeframe specified by AMCON. What would be the benefit of the acquisition of Enterprise Bank? The Enterprise Bank acquisition served a clear signal that Heritage Bank, which entered the market in 2013 with a regional bank status, was focused on transforming into a strong national bank. The acquisition of Enterprise Bank which currently boasts of over 160 branches, over 177 ATMs, 57 Cash Centres and 2000 POS Terminals spread across major markets and commercial centres in the country will increase Heritage Bank’s points of presence from the current 15 Experience Centers to nearly 200 branches spread all over the country. This automatically transforms the bank from a tier-2 player to a strong tier-1 player. However, the acquisition of Enterprise Bank, earth-shaking and record-breaking as it was, happened to be just one of the many strategic, industryredefining moves Heritage Bank has made, since coming

on stream, to justify its fast growing image as an industry game-changer. How did Heritage Bank surmount the challenges in the banking sector to now became one of the major players in the sector? When Heritage Banking Company Limited rose from the ashes of the defunct Societe Generale Bank of Nigeria (SGBN) in early 2013, the thinking of some industry watchers then was that of a bank whose soul lies in uncertainty. They were not sure if the new banking experiment would turn-out a success story or not. But the new management was optimistic and determined to ignite heritage of banking success. Immediately they got a regional banking license from the Central Bank of Nigeria (CBN) in 2013 to start Heritage Bank, they hit the ground running with a unique philosophy to Create, Preserve and Transfer Wealth to its teeming Customers. Guided by passion and a brand architecture that exudes quality service, performance, respect, integrity, innovation, tenacity and excellence as core values, the promoters of the new quintessential bank were driven by African world view of wealth creation. This reflects in the naming protocol of the bank’s strategic divisions; Ivory, Manila, Cowry and Coral Banking. The unique naming of its branches as Experience Centres to the minutest simplification of banking Service offering also gave a strong hint that the bank’s brand differentiation was well thought-out.

Vanguard, MONDAY, FEBRUARY 9, 2015 — 33

34 â&#x20AC;&#x201D;Vanguard, MONDAY, FEBRUARY 9, 2015 Vanguard Markets | Monday, February 09, 2015 | Issue 028

AGAINST THE GRAIN

Seplatâ&#x20AC;&#x2122;s counterintuitive acquisitions win market applause EN months after its historic initial public RÉ£HULQJ ,32 Seplat Petroleum KDV JLYHQ LWV shareholders cause to cheer DPLGVW WKH JORRP EURXJKW on by the sharp decline in oil SULFHV ,Q OLJKW RI GHSUHVVHG FUXGH SULFHV FRPSDQLHV LQ WKH VHFWRU KDYH EHHQ GLVFRXUDJHG E\ VFHSWLFDO VKDUHKROGHUV DQG XQFRQYLQFHG EDQNHUV IURP SXUVXLQJ 0 $ DFWLYLWLHV 6HSODW KDV FKRVHQ WR WDNH WKH HOHYDWRU JRLQJ LQ WKH RSSRVLWH GLUHFWLRQ ,W KDV GRXEOHG down on its bets about oil pricesâ&#x20AC;&#x2122; prospects. The company announced on Thursday that it had completed the acquisition of WZR RLO EORFNV OML53 and OML55 IURP Chevron and Belema Oil UHVSHFWLYHO\ 7KH WLPLQJ LV QRW RSSRUWXQLVWLF 6HSODW KDV ZRUNHG DVsiduously behind the scenes IRU PDQ\ PRQWKV RIWHQ LQ FRQWHQWLRXV OLWLJLRXV FLUFXPVWDQFHV WR VHDO WKHVH GHDOV ,WV SHUVHYHUDQFH KDV SDLG RÉ£ 7KH EORFNV DUH ORFDWHG LQ the shallow waters of the 1LJHU 'HOWD 8QGHU WKH GLVFORVHG WHUPV RI WKH GHDO 6Hplat will pay $259.4m for a 40 SHU FHQW VWDNH LQ 20/ DQG PQ IRU D LQWHUHVW LQ 20/ 6HSODWÂ¶V VWDNH LQ 20/ ZDV LQGLUHFWO\ DFTXLUHG WKRXJK LWV SXUFKDVH RI D SHU FHQW VWDNH LQ %HOHPD 2LO ZKLFK KDV ERXJKW a 40 per cent interest in the EORFN IURP &KHYURQ

Seplat drill technicians working on a rig

Source: Thomson Reuters

Ildar Davletshin and 7HPLODGH (VKR RLO DQG JDV sector analysts at Renais-

sance Capital YLHZ WKH WUDQVDFWLRQV DV ÂµD VLJQLILFDQW DQG SRVLWLYH GHYHORSPHQW

IRU 6HSODW Â¶ ,Q WKHLU SUHliminary assessment of the GHDOV WKH\ QRWH WKUHH NH\

WDNHDZD\V 2QH 20/ DQG 20/ ZLOO ERRVW 6HSODWÂ¶V UHVHUYHV E\ DERXW SHU FHQW 7ZR WKH EORFNV VKRXOG enable the company to double oil production as soon as they reach capacity withLQ IRXU \HDUV 7KUHH WKH\ should help Seplat increase (%,7'$ ZLWKLQ WKH UDQJH RI SHU FHQW E\ DQG add about 20 per cent to its QHW DVVHW YDOXH There is also a sense of relief that Seplatâ&#x20AC;&#x2122;s acquisition WUDLQ LV RQ WKH PRYH DJDLQ DIWHU IDOVH VWDUWV LQ ,Q its report for the half year SHULRG HQGHG -XQH it explained that its bids for OML 29 and OML24 which were put up for sale by Shell had been unsuccessful EHFDXVH LW VWXFN WR ÂµSULFH GLVciplineâ&#x20AC;&#x2122; and did not put forZDUG ÂµWKH KLJKHVW SULFH RÉ£HUÂ¶ The news of its latest acTXLVLWLRQV FRPHV RQ WKH EDFN of announcements in JanuDU\ WKDW LW VXFFHVVIXOO\ UHÂ¿QDQFHG LWV H[LVWLQJ GHEW IDcilities and had commenced WDONV ZLWK Afren WKH )76( 250 listed independent oil exploration and production company. 7KH RLO FRPSDQ\ UHFHLYHG $1 billion from two consorWLD RI EDQNV RQH ORFDO DQG WKH RWKHU IRUHLJQ 7KH IXQGV were to be used to repay $552 PLOOLRQ LQ H[LVWLQJ GHEW ZLWK WKH EDODQFH KHOG LQ UHVHUYH WR VHL]H DGYDQWDJH RI QHZ EXVLness opportunities. ;

FOREX RATES 167.50

$/N 167.7 167.6 167.5 167.4 167.3 Fr

256.9785

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191.8043

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26.8232

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0.2822

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181.7097

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1.4276

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237.1180

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44.6286

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25.7585

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237.3978

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12.20

10.60

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02/02

05/02

11.00

23/01

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02/02

05/02

17.00

9.00

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02/02

05/02

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FX ($/N) 193.0

187.0

23/01

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05/02 Source: FMDQ

C M Y K

Vanguard, MONDAY, FEBRUARY 9, 2015 â&#x20AC;&#x201D; 35

VM2

BUSINESS

VM | Monday, February 09, 2015 | Issue 028

REWIND

Ecobank in the crosshairs OULD Ecobank Transnational Incorporated be dealing with a case of bad news goose-stepping in pairs on its manicured front lawn? On Tuesday, a labour court sitting in LomĂŠ, the Togolese capital, awarded $11.6 million to Thierry Tanoh, its ousted chief executive, for wrongful dismissal. Tanoh was removed under a cloud in 0DUFK IRU IDOVLÂżFDWLRQ RI ÂżQDQFLDO VWDWHPHQWV DQG governance failures at the pan African bank. The following day, February 4, the International Monetary Fund released a report, Pan-African Banks Opportunities and Challenges for Cross-Border Oversight GDPQLQJ WKH ÂżQDQFLDO institution on critical points. 7KH UHG Ă&#x20AC;DJV SRS XS HYHrywhere in the IMF report: rapid expansion was not been matched by commensurate strengthening of governance standards, enjoyment of the status of a bank holding company registered in Togo, ETI is not formally regulated but is supervised by the Commis-

Ecobank branch

sion Bancaire (Banking Commission) of the West African 0RQHWDU\ 8QLRQ LWV ÂżQDQFLDO SHUIRUPDQFH GLÉŁHUV DFURVV regions, its cross-border risk transfer mechanism is opaque, and although the Nigerian subsidiary reported a decent improvement in capiWDO SRVLWLRQ DQG SURÂżWDELOLW\ in H1 2014, its â&#x20AC;&#x2DC;true position may be less positive based on several risk factorsâ&#x20AC;&#x2122;. The report goes on to list

the risk factors shadowing the Nigerian subsidiary, the biggest in the group. It reads like a parade of the usual suspects. Weak capital position, reckless lending practices, high operating costs, unstable deposit base, and lack of FRQÂżGHQFH LQ WKH PDQDJHment team. No one will fault the authors of mincing words. The verdict in LomĂŠ comes on the heels of another one delivered by a court in Abid-

InďŹ&#x201A;ation vigilance

jan court in January ordering ETI and Public Investment Corporation, the quasi-public South African investment entity and a major shareholder in the bank, to pay the ex-CEO $15m for defamation of character. In strongly worded rebuttals, Ecobank rejected the two judgments. â&#x20AC;&#x2DC;ETI does not accept the legitimacy of the Togolese courtâ&#x20AC;&#x2122;s ruling because the

court does not have legal jurisdiction over Mr Tanohâ&#x20AC;&#x2122;s employment contract. Mr. Tanoh signed this contract before assumption of his post as Ecobank Group CEO in July 2012 in the full knowledge that it was governed by English law. The contract expressly provides that all disputes shall be settled by international arbitration in London by an arbitrator appointed by the President of the International Chamber of Commerce in Paris. The contract grants exclusive jurisdiction to the English courts in relevant matters. Mr. Tanoh, an Ivorian national with permanent residence in the United States during his tenure as ETI Group CEO, rejected these express provisions of his contract, preferring instead to pursue litigation in a Togolese court for reasons best known to him.â&#x20AC;&#x2122; $Q XQQDPHG VHQLRU RÉ¤FLDO was quoted in Londonâ&#x20AC;&#x2122;s Financial Times saying that ETI would call â&#x20AC;&#x2DC;a special board meeting next week to review these issues and to make a decision over what is best for

the institution and whether we should move to a jurisdiction where there is a secure legal environment.â&#x20AC;&#x2122; Such threats are not made lightly. One sentence in the release hints obliquely that an out of court settlement PD\ EH LQ WKH RÉ¤QJ Âľ(FRbank rejects the excessive sums of money that he is demanding in local courts in Togo and Cote dâ&#x20AC;&#x2122;Ivoire.â&#x20AC;&#x2122; Does this suggest that ETI may be prepared to pay a reasonable severance package to end the matter? Ecobank also dismissed the IMF report as obsolete. â&#x20AC;&#x2DC;The report, which contains some inaccuracies, is roughly 18 months out of date as regards some of its references to the Ecobank Groupâ&#x20AC;Ś It would be wrong for the report to inadvertently convey the perception that past governance issues still exist at Ecobank. A lot has taken place between the preparation of the aforementioned IMF report and the present time.â&#x20AC;&#x2122; Some say that there is no VPRNH ZLWKRXW ÂżUH ;

Synergy Capital Managers bets on e-commerce with Netplus investment HE Mauritius-domiciled Synergy Partners Equity Fund is wasting little time to deploy its war chest. Last week, Synergy Capital Managers, the fund manager announced that it had made an undisclosed EXW VLJQLÂżFDQW LQYHVWPHQW LQ NetPlus Strategic Sales and Advisory Limited. The two-year old startup has established itself as a serious player in the e-commerce, and e-infrastructure space under Wole Faroun, its resourceful founder. NetPlusâ&#x20AC;&#x2122; technology underpins the companyâ&#x20AC;&#x2122;s own WebMallNG.com storefront, and is considered the most robust indigenously developed e-commerce platform in the sub-Saharan region excluding South Africa. WebMallNG.comâ&#x20AC;&#x2122;s competitors in the B2B arena include Kaymu and Konga. The company counts Diamond Bank, FCMB, Fidelity Bank, and UBA among its clients. NetPlus is also aggressively building out its presence in e-payments to go head-on against PayPal, which entered the Nigerian

Source: FSDH Merchant Bank and National Bureau of Statistics

HE i-word is on eveU\RQHÂśV OLSV ,QĂ&#x20AC;Dtion has a directly inverse relationship with belt KROHV WKH KLJKHU LQĂ&#x20AC;DWLRQ rises, the tighter belt holes are hooked. In the January edition of its ,QĂ&#x20AC;DWLRQ :DWFK report, analysts at FSDH Merchant Bank, point out

that international food prices as measured by the Food and Agriculture Organizationâ&#x20AC;&#x2122;s Food Price Index (FFPI) declined 1.9 per cent in January 2015, compared with December 2014, and 10.1 per cent DJDLQVW WKH -DQXDU\ ÂżJure. The report forecasts that WKH RÉ¤FLDO Nigerian Bu-

Published by

reau of Statisticsâ&#x20AC;&#x2122; LQĂ&#x20AC;DWLRQ rate for January will be 8 per cent, unchanged over the DeFHPEHU ÂżJXUH DQG VDPH DV WKH -DQXDU\ ÂżJXUH So far, so good. But with the see-saw in exchange rates, this could turn out to be the calm before the storm. ;

EDITOR: MIDENO BAYAGBON GROUP BUSINESS EDITOR: OMOH GABRIEL

In Association With

CONTENT DIRECTION: OBIORA TABANSI ONYEASO DESIGN & ILLUSTRATION: PUBLICAN MEDIA

C M Y K

market in 2014 in partnership with First Bank. Faroun expressed his delight at attracting institutional capital interest within its relatively short operating history. SPEFâ&#x20AC;&#x2122;s capital injection would help NetPlus to â&#x20AC;&#x2DC;grow its brand and strengthen partnerships with key players the in the ecommerce and e-payments space as well as providing value from a governance and management perspective.â&#x20AC;&#x2122; Akintoye Akindele, a part-

Vanguard Markets features unbiased, in-depth coverage of corporate and market developments across a wide range of business sectors. Every week, Vanguard Markets delivers essential business analysis and commentary on Nigerian companies, regional economies, and global markets. Vanguard Markets is published by Vanguard Media Limited in association with Customs Street Advisors Limited, a specialist communications consultancy.

ner in Synergy Capital Managers, the fund manager, said that NetPlus â&#x20AC;&#x2DC;solves a critical need in the marketplace, and is strategically positioned to unlock the enormous potential of e-commerce in 1LJHULD ÂżUVW DQG VXEVHTXHQWly across the region.â&#x20AC;&#x2122; Fundraising for SPEF is scheduled for its second close in the second quarter of the year. The fund is targeting P 1HW3OXV LV 63()ÂśV ÂżUVW investment. ;

Vanguard Media Limited, Vanguard Avenue, Kirikiri Canal, P.M.B.1007, Apapa. Website: www.vanguardngr.com ISSN 0794-652X

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36 — Vanguard, MONDAY, FEBRUARY 9, 2015

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Vanguard, MONDAY, FEBRUARY 9, 2015 — 37

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38 — Vanguard, MONDAY, FEBRUARY 9, 2015

Nasarawa State Budget as metaphor for unrealistic state budgets “Nasarawa to spend N107.9bn in 2015”, PUNCH, January 1, 2015.

he report by Umar M u h a m m e d disclosed that “The budget which was christened the budget of “sustainability” would be funded with resources from the Federation Account, internally generated revenue [IGR] Value Added Tax, and SURE-P.” Commissioner Danazumi, for Local Government and Chieftaincy Affairs, who delivered the budget on behalf of ailing Governor Al-Makura, could be forgiven for not realizing that he had delivered the most unrealistic and unsustainable budget in the state’s history. But, Danazumi need not feel bad. Nasarawa state is merely following in the foot-steps of other states which had presented budgets to their States’ Houses of Assembly. Simple arithmetic tells us that a state budgeting to spend N107.9 bn (N108 rounded up) would need to generate N9bn per month from all sources in 2015. The question is how realistic is this for Nasarawa?

To start with, SURE-P as a source of revenue has closed shop in reality. Dr Ngozi Okonjo-Iweala will soon reveal that truth to everybody. But, when the Federal budget is based on crude oil selling at $65 per barrel and the current price is under $57 per barrel, there will be no subsidy anymore. So out goes an entire revenue source from the estimates. Value Added Tax, VAT, could be up or down from last year’s actual revenue collected depending on how much VAT rate is increased and how much is actually collected in 2015. But, with crude prices going downwards, there is every chance that the Nigerian economy might contract and VAT collection might drop. However, SURE-P and VAT are minor variables in the budget estimates. Together they cannot account for more than fifteen per cent of the budget estimate. The bulk of the revenue expected to fund the budget of “sustainability” will come from the Federation Account, FA, and IGR. The question is: how well has Nasarawa performed in deriving revenue from IGR?

The answer is: very poorly. In an excellent report titled “States struggling to pay salaries”, DAILY TRUST reporter, Nurudeen Abdallah, on December 15, 2014, page 5, disclosed that, with the exception of Lagos, Rivers, Delta and Kano States, which generated N384.5bn, N87.9bn, N50bn and N24bn respectively, no other state got close to N25bn. Nasarawa actually achieved IGR N4.1bn in 2013. The 2014 result might not be different. That leaves us with the revenue from FA to provide the bulk of the funds for 2015. And it is precisely on this account that the Nasarawa state budget, as well as those of other states fall apart. As things stand right now, the Nasarawa state House of Assembly will be wasting everybody’s time, raising false hopes among the people if it expects the state to raise N108bn this year. Here is the evidence. The October 2014 allocation to states from the Federation Account, should have served as a warning to the states. All the states collected far less than they had collected in a month in more

than two years. Nasarawa collected only N5bn from Abuja. That sum included FA, VAT, and SURE-P allocations. And it also included the state’s share of the Excess Crude account which will not longer be disbursed as long as crude prices remain low. Furthermore, the FA was made from crude selling at well over $80 per barrel. The FA allocations for 2015 will be made from crude selling at $60 or less and without ECA and SURE-P funds. Certainly N9bn revenue per month can at best be regarded as a gross error, at best; or an unwarranted joke at worst. Again, it needs to be repeated that Nasarawa is not alone in making this monumental mistake at a time when every state needs advice on how to put together a really sustainable budget. Readily available information on other State budgets which represent the prevalent flight from reality include the following: Benue N8.5bn per month budget versus N5.2bn expected; Borno N14.8bn budget versus N7.7bn expected and Gombe N7.5bn versus N3.8bn. One cannot help wondering if ALL the state

governors intend to print their own currencies to make up the shortfalls they will experience in 2015. The Speakers of the State Houses of Assemblies and the Honourable members, if they love their people would be welladvised to put the interest of the people above partisan and selfish considerations. If budgets which cannot be implemented are passed, the people will suffer immeasurably. Civil society groups in every state should also rise to the occasion. The states that will be destroyed through a bogus budget belong to all of us. Politicians, irrespective of political party should not be allowed to bring unprecedented civil unrest nationwide on all of us. NEXT:FORHOWLONGWILL THE COUNCIL OF STATES REMAIN SILENT? The Council of States includes all former Heads of State alive – Obasanjo, Shagari, Buhari, Babangida, Shonekan, Abubakar and Obasanjo again. For how long will they keep quiet while the nation sinks? For once silence is not gold; it is either acquiescence or cowardice. Both are unbecoming of Elder Statesmen….

Micro-Finance

HB projects increase in bank lending to SMEs in 2015 Stories by PROVIDENCE OBUH

ank lending to Small and Medium Enterprises (SMEs) and the retail sector will increase in 2015, Director, Heritage Bank, Mr Tony Madojemu, has said. He statedd this at a forum organized by the Business Networking International (BNI) to mark its International Networking Week, saying “The retail sector was booming and some of the ‘big firms’ are beginning to dictate unnecessarily to the banks so

Banks are beginning to seek new opportunities to increase profitability and guard against collapse

attention is shifting from them to these sectors. “Even though the banking sector outlook for 2015, according to Fitch, tells us that banking may not fair

favourably this year, small business owners would favoured. “Banks are beginning to seek new opportunities to increase profitability and guard against

collapse, by seeking ways to deal with only well-structured SMEs, so I see this as good news. “The only challenge is how small businesses can manage operational risks in

Rotary District 9110 empowers 400 youths, announces dinner dance ball

etween October and December 2014, Rotary International, District 9110, Nigeria, empowered about 400 youths, even as it announces plan to hold its “Annual Dinner Dance Ball.” Speaking at a press conference in Lagos, District Governor, Mr. Dele Balogun, said that a notice was issued and youths who are underemployed and unemployed were asked to apply and about 400 persons were picked and trained in their various areas of interest. Balogun listed some of the projects funded in Nigeria to include: Microcredit scheme initiative; Provision of artificial

limbs by various clubs through centre in Lagos and Ogun State; Provision of water and improvement of sanitation and personal hygiene trough building toilets; youth exchange by sending young

Adults abroad to study and live abroad for a period of time, among others, while funding around the globe include: $76 million spent in fighting polio in Afghanistan, Pakistan and Nigeria, among other funding.

order to keep a well structured business that would attract banks to lend them money, business owners should brace up their competence if they must access loans.” Also speaking, National Director, BNI Nigeria, Mr. Chimaobi Agwu, said that small businesses needed networking and referrals to cushion the cost of advertising their businesses. Agwu explained that BNI is meant to supply network marketing services and referrals that could help small businesses grow and increase their market share.

Aquarian Consult debuts in Lagos, announces photography training

quarian Consult Limited has made its debut in Lagos even as it announces plans to hold training on photography, in partnership with Paul Ukonu, Africa’s influential photographer. The training scheduled to hold on April 13 to 16, 2015 will empower a number of Nigerians who are willing to advance the art of photography. Aquarian Consult Limited is a Business Development Consultancy with a structure

in fields of Business Development Services, Recruitment, Human Resource Consultancy and Training. Speaking at a press brief in Lagos, Manager, Business Development and Marketing, Mr. Ademola Balogun, said that the company plan to launch a new addition to its training programmes: The new Pitman, Etisalat learning platforms, DPSS Consultants-UK and Ocalm-US for enterprise and career development.

Vanguard, MONDAY, FEBRUARY 9, 2015 — 39

Tax Matters

Pay As YYou ou Earn (P AYE) and Per sonal Income TTax ax (PIT) Explained… (PA Personal

s is the case with several tax types, the Personal Income Tax (PIT) which is made up of direct assessment for self-employed enterprises and PayAs-You-Earn (PAYE) for salary earners has attracted various questions from taxpayers across the nation. In a Q&A session with the Director, Medium Tax Department of the FIRS, Peter Ademola Olayemi explains in clear terms issues regarding PIT and PAYE. P. A. Olayemi is a chartered accountant and a seasoned tax administrator with vast years of experience in tax practice. He is a Fellow of the Institute of Chartered Accountants of Nigeria, the Chartered Institute of Taxation of Nigeria and the Institute of Debt Recovery Practitioners of Nigeria. Taxpayer What is PAYE? P. A. Olayemi: PAYE is an acronym for “Pay as You Earn”. It is a method of collecting personal income tax from employees’ salaries and wages through deduction at source by an employer as provided by the relevant sections of the Personal Income Tax Act (PITA). (S.81 of Personal Income Tax Act Cap P8 LFN 2011) Taxpayer What is the due date for remitting PAYE? P. A. Olayemi The due date for remitting PAYE is th the 10 day of every month following the month of deduction. Taxpayer Does PAYE charges on income vary from ministry to ministry for the same level of income/salary? P. A. Olayemi PAYE does not differ because the rates used for computation are the same. The current rates applicable to the chargeable income are as follows:

11%

15%

19%

21%

1st

N300,000 @

Kabir Mashi, Chairman, FIRS

submission of annual returns? P. A. Olayemi Yes, the two submissions, though made at different times, should be accompanied with a comprehensive list of staff that suffered the PAYE deductions. Comprehensive list of employees from whom PAYE deductions were made is continuously submitted on monthly basis each time PAYE is deducted and remitted to FIRS for residents of FCT, police, members of the armed forces, officers of the Nigerian Foreign Service and non-residents that derive income/profit in Nigeria and to the States Boards of Internal Revenue, residents of the respective states. The Annual returns (form H1) on the other hand is to be submitted by 31st day of January of every year by every employer to enable the tax authority ascertain whether the correct deductions and payments of tax have been made for the previous year (period of twelve months) for all its employees and for incomes from all sources earned during the year. Taxpayer What is Benefit-In-Kind?

N300,000 @

N500,000 @

N1,600,000 @

Above N3,200,000 @ 24% Taxpayer Is the submission of comprehensive list of staff with monthly PAYE deductions/remittance different from

P.A.Olayemi Benefit-In-Kind (B.I.K) may be defined as those benefits or perquisites that accrue to a person by reason of the office and/or position he/ she occupies. Benefits in kind include such benefits as official car, official accommodation, cooks, gardeners, security etc. The amount treated as B-I-K in the hand of the officer that enjoys the benefit is added to his income in arriving at his/her gross/ consolidated income that is assessed to tax. Taxpayer Where should PAYE deductions from the salaries of a staff working in Abuja but residing in Suleja or Mararaba be remitted to? P. A. Olayemi By residency rule, an employee’s PAYE is payable to the tax authority of the state of his/her residence. It is therefore the duty of the employer to deduct and remit it to the tax authority where the employee is resident. If the employee is resident in Suleja, the tax authority that is entitled to his PAYE is the Niger State Board of Internal Revenue. If he is however resident in Mararaba, the tax authority will be the Nasarawa State Board of Internal Revenue. Taxpayer What is the minimum tax rate for Personal Income Tax?

By residency rule, an employee’s PAYE is payable to the tax authority of the state of his/her residence

P. A. Olayemi The minimum tax rate is 1% of gross income. It is applicable if the taxable income is below N300, 000. Taxpayer Is it possible to apply for a refund for excess Personal Income Tax deductions/payments? P.A Olayemi Yes; the law provides that excess tax paid by any employee shall be

refunded on application by the employee to the relevant tax authority. He could however elect to have the excess tax payment be used to off-set future tax liability. Taxpayer When there is under deduction of tax from the employee’s income, who bears the burden of the under deduction? P. A. Olayemi Section 82 of Personal Income Tax Act, Cap P8, LFN 2004 states “that where an employer is required under a provision of this Act to make deductions from emoluments or amounts on account of emoluments paid by him to an employee shall account to the relevant tax authority in such manner as the relevant tax authority may prescribe for the deductions so made, and in the event of failure by the employer to make the deduction, or properly to account therefore, the amount thereof together with a penalty of 10% per annum of the amount plus interest at the prevailing commercial rate shall be recoverable as a debt due by the employer to the relevant tax authority” Based on this provision of the law, when there is an under deduction of tax from a staff salary, the employer whose duty it is to deduct correctly and remit to the relevant tax authority bears the burden. Taxpayer What is gross emolument/salary? P. A. Olayemi Personal Income Tax Act (PITA, 2011) as amended defines gross emolument as the aggregate of wages, salaries, allowances (including benefits-inkind), gratuities, pension, superannuation and any other income derived solely by reason of employment. Taxpayer What are non-taxable deductions under the PIT Act? P. A. Olayemi The sixth schedule of Personal Income Tax (Amendment) Act, 2011 listed the following as tax exempt: a) National Housing Fund contributions b) National Health Insurance Scheme contributions c) Life Assurance Premium d) National Pension Scheme e) Gratuities Taxpayer Is it within the law for a State Board of Internal Revenue to charge interest, penalty and threaten distraint for a shortfall between the PAYE remitted by a company and the PAYE deducted as stated on the company’s tax deduction cards.

40 — Vanguard, MONDAY, FEBRUARY 9, 2015

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Vanguard, MONDAY, FEBRUARY 9, 2015 — 41

E-Commerce

E-commerce: Exploring Unified Total Commerce to meet shoppers’ expectations Stories by JONAH NWOKPOKU

erchants have long treated their businesses as the sum of essentially different parts. The recent focus on mobile devices and social media has further fragmented brands’ strategies, with merchants continuing to focus on linear experiences, although on these new platforms. But consumers have a different view of brands. While they appreciate the convenience of being able to shop via a variety of touchpoints, research shows they also crave consistency when it comes to products, pricing and promotions. When asked which aspects of the shopping experience should be consistent, participants in a Consumer Shopping Survey by MarketLive ranked product pricing, free shipping policies, and other promotions as the three key areas where they sought a standardized approach The survey showed that merchants must respond to this expectation by taking a new approach: The Unified Total Commerce. This implies that rather than designing experiences by device, browser or social network, they should approach

shopping tasks from the consumers’ point of view of the brand as a single entity, and strive to understand at what points different research tools come into play and what spurs purchase decisions, whether instore or browsing a tablet. Then, by offering contextually-relevant products, content and offers that match shoppers’ needs in the moment, merchants can create a truly meaningful brand experience, one

that has the potential to create a lasting connection. The study suggest that for merchants to create more concretely in the days ahead, merchants should strive to create a unified commerce experience by focusing on five key areas, including: Physical store experiences by breaking down the “online/offline” mentality and creating a seamless flow of information from store shelves to online.

Jovago.com partners Antrak, Starbow Airline

ovago.com, online hotel booking platform has signed white label partnerships with two of Ghana’s domestic carriers, Antrak Air and Starbow Airline to provide more accessible hotel booking services to travelling Ghanaians. As the official hotel partners of Antrak Air and Starbow Airline, Jovago.com makes it easier for travelers visiting the Antrak Air website or the Starbow Airline website to find and book from over 200,000 hotels around the world, available on Jovago.com in a few simple clicks. Antrak Air has expressed partnership with the Jovago partnership.

According to the Marketing Manager of Antrak, Richard Kyereh, “this white label hotel booking solution will ensure that everyone visiting the Antrak Air website to book domestic flights in Ghana can also book their trips easily from the wide selection of hotels available on Jovago.com.” On its part, Starbow Airline which launched in 2011 with an inaugural flight to Kumasi, Ghana said the partnership reinforces their commitment to their customers. Starbow Chief Executive Officer, James Eric Antwi in a statement said: “Our commitment is to provide traveling Ghanaians with an

Payporte repositions, signs brand ambassadors

nline retail shopping brand, PayPorte, has started a strategic reposition that will strengthen its presence in the Nigerian e-commerce space. In this regard, the online retailer signed its first ever brand ambassadors; media personality and popular blogger, Toke Makinwa and Big Brother Africa season 9 housemate from Nigeria, Tayo Faniran. Speaking at the formal media unveiling and announcement which held in Lagos, the Managing Director/Chief Executive Officer, Payporte Global Systems Limited, Mr. Eyo Bassey, said: “Payporte is very happy with its choice of ambassadors and very excited about this new journey. We are a fast growing online business with the young, urban professionals and mature adults as our target audience and our brand is strongly committed to

delivering best services ; we are very confident Toke and Tayo will do an exemplary job in not just retaining our brand values but in also promoting those values”. Talking about their new endorsements, the two ambassadors expressed

their enthusiasm and their required participation in helping to grow the brand. “We are very excited and look forward to an amazing business yet friendly partnership with Payporte,” they said.

Suregifts marks Valentine with free gift cards

n the spirit of love, Nigeria’s leading gift voucher company, Suregifts.com.ng is giving away free movie gift cards, ice cream yoghurt gift cards and full spa session gift cards to lovers this Valentine season. To win the gift cards, customers have to purchase N20, 000 worth of gift cards on SureGifts.com.ng and use them to shop online or offline at Suregifts’ partnering merchants then notify the gifting

company to receive their winnings. Speaking on the promo, the Chief Executive Officer of Surgifts, Adeoyo Ojo said, “Gift cards are an innovative way of giving. Customers who don’t know what to buy their recipients purchase our gift cards and give them to the recipients to use to buy whatever they want. Companies also use it to reward their employees instead of handing them cash. C M Y K

42 — Vanguard, MONDAY, FEBRUARY 9, 2015

Agric

AGRIFEST’15: Nigerian Farmers celebrate new dawn T he festivity took on a carnival air with troupes of traditional dancers from all over the country displaying cultural costumes, as well as, crops and livestock from their ethnic groups. The farmers who gathered at Eagle Square in Abuja for the recent AGRIFEST did not just celebrate the newfound respect for farming and farmers, they also saluted the courage and creativity of the Minister of Agriculture, Dr. Akinwunmi Adesina, who has led the Agricultural Transformation Agenda of the President, writes Gabriel Ewepu. The demand for High Quality Cassava Flour (HQCF) for cassava bread is driving a 520% expansion in cassava processing in the country in the last three years. From just one medium-sized factory and three functional small High Quality Cassava Flour (HQCF) Mills, in 2011, there are today nine medium-sized mills, either fully functional or at advanced stages of planning, and 40 small HQCF mills.

The wheat milling industry has also embraced the cassava inclusion in bread program. Two of Nigeria’s largest wheat millers, Flour Mills of Nigeria and Honey Well, that together account for 70% of wheat milling capacity, launched 10% cassava composite flour for bread in November 2014. Installed capacity of HQCF will rise from below 36,000MTs to over 222,000MT once all the new processing plants are functional. These HQCF mills are expected to process over one million MT of cassava from farmers. The partial substitution of cassava flour for wheat in bread and confectionaries is estimated by the wheat milling industry to save the country about N224billion in foreign exchange savings, lowering our food import bill. Bakers today find that there is a commercial benefit - a savings of N2, 400 to over N4, 000 on every 50Kg of flour, from the inclusion of cassava flour in wheat flour - due to the additional loaves. Such astronomical growth in cassava processing capacity would not have been possible if the Agriculture

Transformation Agenda (ATA), had not taken active steps to encourage the wheat milling and bread baking communities to include cassava flour in their products, and worked with cassava processors to produce HQCF. So it was not surprising at the recently held Agricultural Festival (AGRIFEST 2015) in Abuja that over 40 industrial and master bakers came from all over the country to exhibit their commercial brand of cassava bread. The President of the 450,000

A truly revolutionary trend that is changing the face of Nigeria’s new agriculture is the story of young Nigerians being attracted to agriculture

strong Master Bakers of Nigeria, Sir Simon Abanulor, stood on the podium and said ‘never in Nigeria’s history has any government recognized Master Bakers and never in the country’s history has any government supported Master Bakers with N1.6billion worth of baking equipment and training of our members”. To ensure that the country produces enough cassava for the new industrial products as well as traditional foods, 130 million stems of improved cassava have been distributed to farmers. The 2013 NAERLS west season survey revealed the huge impact of reaching farmers with improved stems; the study estimated that cassava production in the country is currently at 65million MT, much higher than FAO estimates of 55million MT. In addition, 29,500 Ha of smallsized (1-10Ha) mechanized cassava A truly revolutionary trend that is changing the face of Nigeria’s new agriculture is the story of young Nigerians being attracted to agriculture. In December 2014, President

Goodluck Ebele Jonathan launched the Youth Employment in Agriculture Program (YEAP), to develop a new generation of 750,000 young commercial farmers and agribusiness leaders for Nigeria. Positive changes are also happening in the mechanization of agriculture in the country as AGRIFEST 2015 also revealed that a N50 billion fund has been provided to support the establishment of 1,200 Agricultural Equipment Hiring Enterprises across the country, to remove the drudgery out of agriculture This is a total of 6,000 units of tractors and implements, 15,000 power tillers, 20,000 planting and post-harvest equipment that will be deployed to mechanize an additional 4million Ha of land . As the ATA slogan goes, ‘it is time to commit the hoes and cutlass to the museum where they rightfully belong’. Other farmers at Agriculture Festival 2015 celebrated the amazing advances made in Nigeria’s agricultural sector. In testimonials, young and old farmers who produce rice, maize, sorghum among others eulogized the new dawn of agriculture in the country.

Aviation

Multiple charges plague aviation T industry — Unuigbe

By LAWANI MIKAIRU

hairman, Ministerial Committee on Aeronautical , NonAeronautical and Passenger Charges, Mr Ahonsi Unuigbe has revealed that the Nigerian Aviation industry is plagued by multiple charges which have put unnecessary burden on the travelling public. This is one of the highlights of the findings of the Committee. Making the Committee's presentation at the launching of the “Aviation Commits Initiatives” in Lagos, Unuigbe said some key highlights of the Committee's findings included “the fact that the aviation industry is plagued with multiple charges. For example, there are over 50 different charges imposed by the three main Aviation Ministry parastatals which in some instances, are charged by the different agencies for

the same services (a quick example is the imposition of both Port charges, as well as Cargo charges by FAAN on the same cargo).” He also said with respect to passenger ticket charges, the basis of some of these charges, is not known and is quite arbitrary. “For example, the

committee analysed the basis of computation of passenger tickets for four domestic airlines (namely, Arik, Dana, Medview and First Nation). The analysis shows that an amount ranging from 40% to 65% of the airfare is hidden as fuel surcharge (also known as YQ).”

he Minister of Aviation, Chief Osita Chidoka, on Tuesday said the Federal Government is to ground private jets registered in foreign numbers, but engage in commercial operations in the country. Also to be affected by this new policy are Nigerian registered private jets that engage in “hire and reward”. This new policy will come into effect as from Thursday, February 5, 2015.This is coming as the government has mandated all airlines operating

FAAN partners Air Force on airport security By LAWANI MIKAIRU & DANIEL ETEGHE

head of the fourth-coming election in February 2015, the Federal Airports Authority of Nigeria, FAAN, has called for partnership with the Nigerian Air Force to ensure that security is enhanced at the airport. Disclosing this development, Managing Director of FAAN, Engr. Saleh Dunoma said the collaboration is necessary between the Airforce Airport Command and the Aviation Security (AVSEC) especially at this period of electioneering campaigns and the general

elections. Engr. Dunoma made the call during a courtesy call by the Air Officer Commanding of the Nigerian Airforce. He further assured the team of the Authority’s support and assistance as both institutions are pursuing a common goal. Earlier, the Air Officer Commanding, AOC, pledged the support of the Air force in the area of security and other sundry issues. The AOC who was represented by Air Commodore A.L Osayintolu further requested for collaboration in other areas to enable the command serve the Authority effectively.

FG to ground private jets with foreign registration in the country to henceforth have Nigerian pilots in their cockpits Chidoka revealed this directive in Lagos at the launching of the “Aviation Commits Initiative”, which he said would help to close some gaps in the system. He said that at the moment, there are 90 foreign registered aircraft in the country with additional 111 Nigerian registered carriers currently in use in the system, stressing that some of them have diverted from their operational certificates. He decried that their diversion from their operational certificates has led to loss of massive revenues to the federal government and urged them to regularise their papers before the Thursday deadline. He said “ if by February 5, 2015, the affected airlines failed to regularize their papers as expected, the federal government through the Nigerian Civil Aviation Authority, NCAA, would ground their operations and revoke their licences.”

Vanguard, MONDAY, FEBRUARY 9, 2015 — 43

Advertising Stories by PRINCEWILL EKWUJURU

n a renewed effort to reinvent the spirit of civic responsibility, citizenship, neighborliness and social justice, the Lagos state government has embarked on a campaign tagged; the ‘Spirit of Lagos.’ For some months now, billboards in the state have been awash with messages of right thinking; ‘Do the right thing,’ ‘Change your thinking’ all in a bid to drive home the state government’s effort to preserving lives of Lagos citizenry with construction of pedestrian bridges, road markings, erecting traffic light where necessary, campaigning against indiscriminate dumping of refuse into gutters as a measure to fight flooding According to the state, the four cardinal points of the campaign rests on social justice where all rights of Lagosians are respected and preserved by holding governments responsible for the protection of the rights of the people to free and fair elections and to the freedoms

Winner emerges in Cussons Baby competition

Billboards preach civil responsiblity with ‘Spirit of Lagos’ campaign of speech, religion, assembly, communications media, and petition for redress of grievances without fear of reprisal; to the right to privacy; and to the guarantee of the rights to adequate food,

clothing, shelter, education, and health care, etc. Civic responsibility where all have a part to play in developing and sustaining the community and public services: It is about citizens

How StarTimes promo changed my life — Winner

ev. David Abayomi, is a retired civil servant, a Kogi state indigene, winner of one of the cars in the just ended ‘StarTimes ExtraTime promo’. In this chat, he spoke of how the promo has change his life and that of his family. Economic impart Since the time I won the StarTimes car, my status has improved and many people who did not know me came to know me. My family has also benefited immensely since I got the car. It has enhanced the economic status of the family.What the lord has done has really impacted on my life and that of my family. It has improved our status, and everywhere we go, people say we are favoured by God and

•Rev. David Abayomi

this manifested through StarTimes. Perception about promotions Just like I mentioned, many organisations make promises that they don’t keep just to promote their business. I was thinking this was one of such promos, until StarTimes redeemed its promise. And the way StarTimes managed the whole process made me to believe that the promo was not a fluke.It has improved my perception about the brand and has changed the perception of people around me. Not every organisation is faithful to their promises, not every

They have fulfilled their promise and people have seen it and are beginning to have confidence in them

organisation. Even though there are some organisations that don’t keep to their promises, StarTimes has been able to distinguished itself from the rest by fulfilling its promise. Although we still have a good number of organisation with credible integrity just like StarTimes. They have fulfilled their promise and people have seen it and are beginning to have confidence in them knowing that whatever StarTimes say, they do. Challenges The challenge I face is that the local and state government revenue officers in all states i visited are always on me to pay for advertising StarTimes in their area. This is tasking me a lot. Feelings: Prior to my winning the StarTimes promo I had the impression that most promotions are not real but fake. But when it came to reality that it was true. In fact I felt very elated, very happy, and also I give credit to StarTimes for making this happen. For keeping to their promises because many organisations have started this kind of promo and they didn’t accomplish their promises.

wanting to contribute to the society. It is comprised of actions and attitudes associated with democratic governance and social participation. Civic responsibility can include participation in government, church, volunteers and memberships of voluntary associations for the purpose of service to other people. Actions of civic responsibility can be displayed in Citizenship the state’s citizenry voluntary commitment to knowing and maintaining law and order: The status of a person recognized under the custom or law of a state that bestows on that person (called a citizen) the rights and the duties of citizenship. That may include the right to vote, work and live in the country, the right to return to the country, the right to own real estate, legal protections against the country ’s government, and protection through the military or diplomacy. A citizen may also be subject to certain duties, such as a duty to follow the country’s law, to pay taxes, or to serve in the military. Neighborliness Doing unto others as we would have done unto us: Concern and/care for other the people around, regardless of their relationship, be they strangers, acquaintances or friends. In this respect, the government has gone a step further to create an online, radio and television of the campaigns to endear to citizenry to principles of taking a right step at the right time.

he daughter of Mr & Mrs Oluyinka Davids, Morireoluwa Modesire Davids has emerged the overall winner of this year ’s Cussons Baby Moments competition. Little Miss Davids came tops to beat close contestants Caleb Adedeji and Olajide Alufa to second and third place respectively. Morireoluwa alongside three members of her family will enjoy an all-expense paid trip while second place winner, Caleb Adedeji and Olajide Alufa got a cash prize of N200,000 and N100,000 respectively. Speaking after the award ceremony, Mrs. Funmi Davids expressed her delight for the recognition given to her daughter and the family. She noted that the victory recorded in the competition remained a significant milestone that cannot be forgotten in a long time to come. According to her, winning the grand prize was the surest way to celebrate her birthday since she just clocked one few days ago. Commenting further on what inspired her participation in the competition, Davids said her belief in the brand coupled with the fact that the support she got from family, friends

Coca-Cola Nigeria wins tax awards Coca-Cola Nigeria Limited for the sixth year running has won the Lagos State Tax Compliance Award in recognition of the company’s exemplary compliance with its Pay as you earn, PAYE tax obligations, Access Bank as well. Speaking at the 2015 edition of the Lagos State Annual Taxation Stakeholders Conference held in Ikeja recently, where the award was presented to Coca-Cola as well as a few other companies including Access Bank, Governor Babatunde Fashola of Lagos State lauded the awardees for fulfilling their civic duty and thereby enabling the government to fund its development programmes in the state.

C M Y K

44 — Vanguard, MONDAY, FEBRUARY 9, 2015 Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

hat you are about to read is a true report of the gross impunity that has largely characterised decision making on those matters which affect our nation’s treasury; ironically, such gross mismanagement has lately been extolled as best practice. Please read on. ”Media reports at the end of July 2007 confirmed that the Presidential Committee which probed the $480 million which the CBN invested in the African Finance Corporation (AFC), has completed its investigations. After what appeared to be a painstaking audit exercise, over three months, and spanning three continents, the Committee Chairman, Tunde Ogunshakin, disclosed that CBN’s equity contribution was actually $462.923 million. However, the Committee noted that a decision for such investment should have required approval of the Federal Executive Council and consequently “frowned at the enormous powers of the CBN Board and recommended that the CBN Act be amended to reduce them”Daily Independent 23/7/08. The above notwithstanding, the Committee condemned the sourcing and use of funds by the AFC and revealed that the CBN funded the AFC investment with loans from the sale of government treasury bills! The Committee further noted that all funds were invested in money market instruments in Nigeria but described the style of operation “as round-tripping at best and money laundering if viewed from a criminal perspective” I n s t ructively, the ubiquitous instruments of treasury bills and federal government bonds are the CBN’s favourite tools for controlling the omnipresent

venture such as the AFC! Some analysts have suggested that the demand for immediate refund of the $460m equity to the Nigerian government probably contributed to the instability that ultimately brought the Nigerian Stock Market to its knees between 2008-9. Reports already confirm that one of the Nigerian banks involved in this scam had been indicted in the US for money laundering, and made to pay a fine of about US$15m. In a worst-case scenario, the AFC should have equally been made to refund the over $30m profit it made from purchasing CBN Treasury bills with government’s funds as readily implied by the erstwhile AFC CEO. It would be necessary and revealing for the Presidential Committee to be given a fresh brief to also investigate CBN’s acclaimed largesse of $7billion to 14 Nigerian banks as compensation for beefing up their capital bases, notwithstanding that it has become apparent, lately, that these acclaimed feats were made possible by the insidious opportunities provided by the same CBN for banks to lend their deposits to customers who will invest the funds in the same lending banks! Instructively, not long after the receipt of the $7bn, the fortunes of banks crashed and nothing has since been reported on the integrity of this loan or how much the banks have so far paid as interest to CBN. If the EFCC finds nothing criminally wrong in all this, it would have done disserve to its image as a serious fighter of economic and financial crimes. The above is an excerpt of an article first published on / 08/2008. Save the Naira, Save Nigerians

Economic mismanagement in retrospect scourge of excess liquidity when distributable dollar revenue are substituted with Naira allocations every month. Now, it is no more a secret that banks’ profits become bloated by the enormous profits they continue to make from the shenanigans of collecting government’s deposits for free while lending back to government at atrocious interest rates. This practice of idle loans cost Nigeria close to N400bn in 2007 and indications are that debt service charges may approach N800bn in 2008 (it is almost N1000bn in 2015). Clearly, banks are the prime beneficiaries of the juicy rewards from such risk-free investments which make no contribution to economic development; no wonder the banks pay little attention to supporting the real sector with credit. Until the bubble of AFC scam burst, the CBN had always maintained that the funds accumulated from such reckless government borrowings were simply sterilized or in layman’s language stored in CBN vaults as idle funds to restrain the public and the real sector from accessing these funds to fuel inflation. We now know better, as the Presidential Committee confirmed that part of these ‘idle’ funds was actually diverted into funding the AFC. However, since the AFC equity was denominated in dollars, the CBN obviously went into the forex market with over N50bn (enough capital base for two banks) to source

for the dollar equivalent from banks and Bureau De Change (BDC)! It is inexplicable that the CBN which currently sits on an idle pile of foreign reserves of almost $60bn would resort to the lowly BDC to source dollars, at higher cost, even when the prime source of BDC’s dollars is also the same CBN “What is going on here?” You might ask! We may wonder also that the CBN against national interest also, sold over $5bn to BDCs from January to June this year! Has anyone ever heard of the Bank of England or the US Federal Reserve allocating forex directly to BDCs on their high streets? Nevertheless, what benefits accrued to Nigerians from these CBN’s escapades? Well, in an open letter published in the media, Austin Ometoruwa, the recently suspended Chief Operating Officer of AFC, confirmed that the “AFC … sought to optimize earnings … by investing part of its short term naira instruments,

Until the bubble of AFC scam burst, the CBN had always maintained that the funds accumulated from such reckless government borrowings were simply sterilized

thereby taking advantage of higher naira interest rates versus those for US dollar deposits”. ( Vanguard pg. A3 4/8/2008)! In simple English, this implies that the AFC dollars found its way back into the Nigeria money market, where it was reconverted to naira, presumably through banks and BDCs so that the resultant naira sums were used to purchase government’s treasury bills which had yields of over 10% compared with less than 1% for such risk-free instruments abroad! Ultimately, the AFC repatriated profits in excess of US$30m from this sleight of hand within its first year of operations. Thus, the AFC with Soludo, the CBN Governor, as life Chairman became a major beneficiary of the high interest rate regime in Nigeria! Ironically, the real sector and patriotic Nigerian manufacturers meanwhile continued to decry the excruciating burden of high interest rates and the adverse effects on production and employment. Ironically, any attempt to reduce the costly burden of excess liquidity would be against the interest of the AFC in which our own CBN Governor is the Life President! I have maintained that the payment of dollar allocations to the three-tiers of government will tame the rampaging ghost of excess liquidity and strengthen the naira with low rates of interest in tow, but again, such salutary results would not favour the parochial interests of any rentier

Business & Economy Saudi Arabia deepens Asia oil discount to record low

audi Arabia, the world’s largest crude exporter, cut pricing for March oil sales to Asia, a sign that the desert kingdom is continuing to fight for market share. Saudi Arabian Oil Co. lowered its official selling price for Arab Light crude by 90 cents to $2.30 a barrel less than Middle East benchmarks, the company said in an e-mailed statement. That’s the lowest in at least the 14 years. “This is further evidence that they are hell bent on protecting their market share in China,” Bill O’Grady, chief market stratC M Y K

egist at Confluence Investment Management in St. Louis, which oversees $2.4 billion, said. “They are trying to stay competitive in what is the biggest area of growth.” Middle Eastern producers are increasingly competing with cargoes from Latin America, Africa and Russia for buyers in Asia. China was the world’s second-biggest crude consumer after the U.S. in 2014, according to International Energy Agency data. Oil prices have collapsed since the Organization of Petroleum Exporting Countries decided to maintain its output target on

Nov. 27, fanning speculation that Saudi Arabia and other members were determined to let North American shale drillers and other producers share the burden of reducing an oversupply. Brent crude, the benchmark for more than half of the world’s oil, rose as much as $2.31 a barrel, or 4.1 per cent, to $58.88 on the London-based ICE Futures Europe exchange and traded at $58. West Texas Intermediate, the U.S. benchmark, advanced as much as $2.18 to $52.66 a barrel on the New York Mercantile Exchange.

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