New rules to halt tax evasion, raise VAT underway

AUGUST 10, 2015

New rules to halt tax evasion, raise VAT underway

BY OMOH GABRIEL CHAIRMAN, Federal Inland Revenue Service (FIRS) Mr. Sunday Ogungbesan weekend said the Federal Government is considering a review of Value Added Tax, VAT with a possible increase from 5 to 10 per cent. He said that FIRS is at the moment engaging stakeholders to sensitise the nation on the possibility of increase in VAT as the quick win for revenue generation for the country, saying that with

dwindling crude oil revenue the government expects to fill the gap with non-oil revenue.

He said that the service is collaborating with the Central Bank of Nigeria, CBN to capture the revenue flow of companies and individuals and that very soon it will be difficult for anybody resident in Nigeria to operate an account without a Tax Identification Number.

Meanwhile, President Muhammadu Buhari has urged Nigerians to stop

paying mere lip service to agriculture, as crude oil and gas exports will no longer be sufficient as the country’s major revenue earner. The President gave the charge at an audience he granted Dr Kanayo Nwanze, the Nigerian born President of the International Fund for Agricultural Development (IFAD), at the Presidential Villa, Abuja.

“It’s time to go back to the land. We must face the reality that the petroleum we had depended on for so long will

AWARD: From left, Executive Director, Enterprise Risk Management, Heritage Bank, Jude Monye; British Deputy High Commissioner, Ray Kyles; MD/CEO, Heritage Bank, Ifie Sekibo; and Acting MD, Enterprise Bank, Mary Akpobome; at the presentation of ISO/INEC 27001:2013 certification award to Heritage Bank at the British Deputy High Commissioner’s Residence, Ikoyi, Lagos last Thursday. Photo: Kehinde Gbadamosi.

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no longer suffice. We campaigned heavily on agriculture, and we are ready to assist those who want to go into agricultural ventures” he said.

Buhari pledged that his administration would also cut short the long bureaucratic processes that Nigerian farmers had to go through to get any form of assistance from government. He told the IFAD President that improvement of the productivity of farmers, dry season farming and creative ways to combat the shrinking of the Lake Chad will also receive the attention of his administration.

“There is so much to be done. We will try and articulate a programme and consult organisations like IFAD for advice” he added. According to the President, foreign exchange will be conserved for machinery and other items needed for production “instead of using it to import things like toothpicks”.

Nwanze had earlier congratulated Buhari on his victory at the general elections and assured him that IFAD was ready to give all possible assistance to the Federal Government and Nigerian farmers to boost agricultural production in the country.

Nwanze, who later spoke to State House correspondents, said IFAD had since 1985 been providing loans and grants in the nation’s agricultural sector to boost agricultural production.

“Nigeria has the largest portfolio of IFAD’s investment in Western and Central Africa and the second largest in Africa. But the case point here is that this country has all the endowments that it takes not only for it to produce enough food for its population but also to be the bread basket of region. And this is where my institution on my behalf, I offered our services and our support in the agenda of rural transformation as a key ingrate

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18 — Vanguard, MONDAY, AUGUST 10, 2015

Cover

Vocation and Technical Education — Key to improving Nigeria’s development (3)

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DINNER: From left: Governor of Lagos State, Mr. Akinwunmi Ambode explaining to a point to the Group Managing Director/Chief Executive Officer of Skye Bank Plc, Mr. Timothy Oguntayo and Group Head, Public Sector, Mrs. Moji Malik-Iyama, at the Governor’s dinner with the business community at the weekend.

New rules to stop tax evasion, raise VAT underway Continues from Page 17 in this country’s economic and social development,” he said The FIRS chairman, speaking on how to boost nonoil revenue said that it would crack down on tax evaders by denying them access to banking facilities for individuals and companies that failed to join its register.

FIRS boss told journalists in a news briefing in Lagos that there were more than 450,000 companies in the country, but only about 125,000 pay any form of tax.

Ogungbesan said it was difficult to track the financial activities of those who did not pay taxes, adding that most their firms were not active.

“We are collaborating with the CBN to enforce compulsory registration with the tax authorities by companies and individuals before they can access their bank accounts,” said Ogungbesan.

Tax identification numbers were introduced for corporate bank accounts in 2012 but some firms whose accounts pre-date the system are currently not obliged to have one.

“There is a need to review our tax laws,” said Ogungbesan, adding they were not stringent enough to deter evaders. Tax evasion can be punished with up to five years in prison.

According to him, the service was given a revenue generation target of N4.5 C M Y K

trillion in 2015 and has so far generated N2.667 trillion. He said that the estimated collection for July 2015 is N404billion. This, he said, is 106 per cent of the monthly target of N381.02 and brings total collection to date up to N2.374.18 trillion against the target of N2.667.13trillion, and improves collection percentage to 89 per cent. He said that the target for VAT was N1.283 trillion and the service has so far been able to generate N390.36 billion as VAT into the federation account. He said the target was set with the hope that as from July the VAT rate will rise to 10 per cent.

Oil has not been doing well, government expects the non oil sector to provide the relief being sought, governance must continue, this is paramount in the minds of every one.

Ogungbesan said “oil has not been doing well, government expects the nonoil sector to provide the relief being sought. Governance must continue; this is paramount in the minds of every one. If we can not pay salaries, it is a big problem for the country; my record shows that we have 450,000 corporate entities in this country, how many of them are contributing taxes, into the coffers of government, only about 125, 000. So the rest 300, 000 plus, where are they?

You can not find them; they are portmanteau companies.

The law says if you are registered within six months you must commence business.

“The same law which said you must commence business has not provided the infrastructure upon which you can rest. If a company is registered and stays for years without doing business and becomes operational ten to fifteen years later, it will be required to pay return charge fee of N25, 000 for each of the year it did not operate as penalty. This kind of law does not promote investment.

“There is the need to intervene, and amend the complex laws that inhibit interest in promoting investment in the country.

The thinking is that all those in the informal sector are not paying taxes, it is only those in formal employment that are paying. Can this be true?

When the local government comes to the market to

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n entrepreneur is a person who makes plans for a business or a piece of work and gets it going. Anyanwuocha (2001) observes that the entrepreneur is the chief coordinator, controller and organizer of the production process. The entrepreneur combines other factors of production (land, capital and others) in such a way as to obtain maximum production of goods and services at minimum costs.

In order to effectively enhance occupational skills in the present day, entrepreneurs need also to acquire information and communication technology knowledge and skills.

Mkpozi (1996) observed that a country that is developing and manufacturing its own goods either from Hi-Tech or small/medium scale industries using indigenous skills and exports some of those goods to other countries is usually economically stable. This could be better achieved through the acquisition of entrepreneurial and occupational skills in technology and vocational education. Individuals with technical and vocation skills and good knowledge of ICT are characterized by selfreliance, self-employment and fit properly into today’s technical, entrepreneurial and business world.

The entrepreneur should therefore possess technical skills, ideas and management skills which are necessary for the success of the venture. One of such skills is information and communication technology which is characterized by employee empowerment and involves the making of unskilled and semiskilled workers to be skilful and functional in today ’s world of work. It also involves the development of task oriented team of workers who no longer depend on individual managers for all their decisions to achieve targets. Technical process re-engineering are also required to redesign technical work processes, jobs, organizational structure, management system, and also in process designs using in manufacturing industries.

These components of ICT have great implications for

the enhancement of entrepreneurship education in technology and vocational education field of work. According to Azuka, Nwosu, Kanu and Agomuo (2006), classroom behaviour must align with ICT- driven environment which is constantly shaping and reshaping the work place and consequently, what is learnt and how learning takes place.

There are various numbers of opportunities for technology and vocational education graduates with entrepreneurship skills in ICT driven technical and vocational education environment.

These opportunities exist in various forms for the e n h a n c i n g entrepreneurship skills.

Nwabuona (2004) views entrepreneurship education as the identification of the general characteristics of entrepreneurs and how potential entrepreneurs can be trained in management techniques needed for effective performance of persons for long time survival of an organization after the acquisition of occupational skills.

Therefore, the roles technology and vocational education in enhancement of entrepreneurship skills is to identify and equipped graduates with critical wealth of skills, technical knowledge, and a good measure of self-confidence using information and communication technology competence.

The entrepreneur should therefore possess entrepreneurial and management skills which are necessary for the success of the venture.

Ogalanya in Nwabuona (2004) identified entrepreneurial skills to include managerial or administrative skills, job/ technical skills, human relations skills, innovative/ enterprising skills, competitive skills, communication skills, conceptual/planning skills, supervisory/guidance skills, according skills, investigation/problem solving skills. Ohakwe (2003) observed entrepreneurial skills as banking transactions, internet concepts and skills, internet websites knowledge and skills.

Vanguard, MONDAY, AUGUST 10, 2015 — 19

In this column in March this year, we warned the nation of the tough times ahead in the foreign exchange market and the economy at large. In view of what is happening in the economy, we republish the article as a reminder.

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he 2015 election will certainly come and go but the after effect may linger for a long time. Whether it is PDP or APC that eventually wins the presidential election, the party that will come to power post-election, had better get prepared for the handling of the economy. As it stands, the nation is on a financial cliff that can fall off any time except a miracle happens. The one commodity that provides life support for the economy has seen its price at the international market fall to as low as $58 per barrel (now below $50).

The International Energy Agency has predicted that crude oil prices may fall to as low as $20 per barrel. Oil prices might have stabilised only temporarily because the global oil glut is worsening and US production shows no sign of slowing. The US may soon run out of spare capacity to store crude, which would put additional downward pressure on prices. That process would last at least until the second half of 2015, when growth in US oil production is expected to start abating.

Behind the façade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly.

As a result of the above oil market scenario, the incoming government will have a herculean task running the

Tough times ahead after elections country effectively. Many states will not be able to pay their bills, same with the Federal Government. As it is now, money that would have been judiciously used is being frittered away in foreign currency in the name of election.

Right now, politicians have invaded the foreign exchange market to buy up the available dollar to pay electorate for votes.

Instead of saving the windfall from oil when prices were high, state governors clamoured for the sharing of money in the excess crude account. Now, the account has nothing to be shared. Indications are that the pressure on the naira now is as a result of political activities in the country. Postelection, the naira may see some level of stability at N197 to the dollar.

The unusual use of dollar in political campaign has led to further depletion of the nation’s foreign reserves as money is carried around in sacks to people whom the politicians believe have some influence over a certain section of the populace and their presidential voting choice. As a result of the mopping up of the dollar from the system for non-productive use, a less than three per cent differential between the bank naira – dollar rate and the black market rate after the November 2014 devaluation,

is now about 13 per cent in less than five months.

This is not in the best interest of the economy and after the election, if prices of crude continue the southward journey; things will become worse as fewer dollars will be available at the foreign exchange market for importation of essential consumer goods. This, of course, will give rise to hyperinflation which is already rising and will continue to rise. The National Bureau of Statistics (NBS) last week released the Consumer Price Index (CPI) report for February 2015, saying that prices of goods and

Nigerians should expect higher electricity tariff, naira devaluation, less power from the national grid, which means more expenses incurred to run generators; for now, there is no light at the end of the tunnel

services rose slightly by 20 basis points, which is about 0.2 per cent. It said that rise in prices, headline inflation – measured Year-on-Year (Y-oY), was estimated at 8.4 per cent, 20bps higher than 8.2 per cent reported in January 2015.

This is largely the expectation as inflationary pressure intensified in February due to the weakness of the domestic currency over the past six months. This had a knock-on impact on prices of both imported food and non-food items.

After the election, which ever party comes into power, Nigerians should expect a rough time going forward.

There is no doubt that with dwindling oil prices, Jonathan or Buhari will have no option than to remove completely, fuel subsidy. It will not be a matter of choice; it will be a matter of survival for the government to continue to meet its internal financial obligation. The first shot at raising revenue will be subsidy removal. Nigerians should not be deceived. This will certainly come into play early in the life of the new administration.

None of the political parties has made it an electoral issue and Nigerians have not asked either Jonathan or Buhari what they intend to do with subsidy on petrol.

The Nigerian banking sector

will feel the heat as they are likely to lay off employees after the election is successfully concluded. Many companies may not be able to service their facilities and non-performing loans may mount. Banks may be tempted to stop giving out loans due to high cost of funds.

In a bid to tighten monetary policy after the election, the CBN may demand to sterilise public funds in the banking system or demand that all public sector funds be placed directly with it. The private sector deposit in banks may see some increase in the amount the CBN will withdraw from banks.

The banks will then be under extreme pressure to perform post-election 2015.

The Federal Government under pressure to raise money, may after the election, allow the naira to further depreciate to raise more money for government as crude oil prices probably falls below $53 which is the 2015 budget benchmark.

More manufacturing companies will close or reduce operations due to stifling business environment wreaking havoc on their businesses. Nigerians should expect higher electricity tariff, naira devaluation, less power from the national grid, which means more expenses incurred to run generators. For now, there is no light at the end of the tunnel.

Cover New rules to stop tax evasion, raise VAT underway Continued from Page 18 allocate stores, the woman in the store pays N2, 000 per month. Is that not tax she is paying? All those sundry levies being collected by states, they have more than sixty levies on these businesses what do you call that? They are taxation in one form or another.

“It is true they are not paying adequate taxes, some body that should be paying N60,000 is giving you N2, 500. The limitation and the challenges we have is that we do not know who these tax payers are and where they are operating from. The fact is that the Federal Inland Revenue Service which every one is quick to refer to is only administering the Federal Capital Territory, not the

entire country and so that makes it difficult for us.

"When we compute tax-to-

The fact is that the Federal Inland Revenue Service which every one is quick to refer to is only administering the Federal Capital Territory, not the entire country and so that makes it difficult for us

GDP ratio, every now and then you hear Nigeria is doing only about 7.5 per cent, whereas other countries in Africa are reporting about 19 per cent.

“Yes they are partially correct but they forget that the various levies at the local and state levels, including the personal income taxation administered by state governments are not captured.

If you include them in the tax figure, Nigeria will be doing close to 17.5 per cent. It is still not enough because the bench mark is 20-22 per cent. We are not assessing ourselves correctly.

“The quick win is, why not increase the rate of VAT from 510 per cent? Can we do it now?

If you see how far we have gone this year in revenue generation you will see that VAT would have increased by July, that is the target they gave us but we have

not been able to do it. We are consulting as we speak to you, we will also speak to the academic community, the students, we will speak to labour.

"I will tell you first and foremost that we in Nigeria do not pay the classical VAT, which anyone may settle for. The first is the income VAT, is just a matter of taking all the incomes of production and solve them into mathematics and then the value such as income, labour, entrepreneurial, the increase in these element from the previous year record is value added. This can be conveniently calculated with proper records and book keeping" he said.

He added that Nigeria needs to adopt a central tax payment.

He said that there are a lot of benefits in this type of tax collection system that will

enhance the revenue generation of the different levels of government in Nigeria. He also said that collaboration will go a long way in non-oil revenue drive of the country.

“We are collaborating with all the banks to ensure that even individuals without TIN cannot do businesses with the banks. So what is the idea of this centralisation of tax system, is about helping states to collect their tax revenue, not keeping the revenue, because the constitution says every state shall keep its revenue, but the constitution did not say each state shall collect its own revenue. It is easier if I can have an MOU so that FIRS can help them do the collection. We have the staff; FIRS has six thousand staff, check it out with any of the states,” he said.

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20— Vanguard, MONDAY, AUGUST 10, 2015

Business & Economy

Regulations, fiscal incentives can speed Islamic Finance Development

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he development of an Islamic finance industry in Africa could help plug the regions large infrastructure gaps over the coming decade, says Standard & Poor’s Ratings Service in a Report published last week.

However, a framework of regulation and fiscal adjustments will be necessary to foster African sukuk markets, provide wider investment options for potential Islamic investors, and attract a pool of Islamic liquidity, the report says.

To date, African sovereigns have issued about $1 billion of sukuk instruments, compared with global sukuk issuance of an average $100 billion per year over the past five years.

Meanwhile, widening fiscal deficits and large infrastructure gaps will likely require multibillion-dollar additional financing needs over the next decade.

Experience in South Africa and Senegal has shown that a significant amount of time can elapse between a government’s announcement of intent to issue sukuk and their effective issuance, as governments gauge market interests and try to address the legal hurdles and cost of issuance.

“We believe legislation gap is the main cause of delay between a country’s intent to issue and its effective issuance of sukuk,” said Standard & Poor’s credit analyst, Samira Mensah. The success of Malaysia in SouthEast Asia as a hub for Islamic finance lies, among other things, in the strong regulatory framework to support the sector’s growth. Malaysia also moved quickly in 2009 to address the standardization of instruments and interpretation of Sharia law.

Tax regimes are equally important to consider when encouraging sukuk issuance.

Sharia-compliant instruments require equal treatment with conventional instruments for investors to consider them.

Malaysia introduced various tax incentives that made Islamic finance a cheaper economic alternative for institutions to raise fund.

However, increasing technical assistance by the Islamic Development Bank (IDB) and Islamic Corporation for the Development of the Private Sector (ICD), are gradually facilitating sovereign sukuk issues.

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NIPC parleys CTG to promote home-made products

BY FAVOUR NNABUGWU

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HE Nigerian Investment Promotion Commission (NIPC) is working closely with the National Cotton, Textile and Garment (CTG) Policy Committee in order to promote Made-in-Nigeria products and encourage the resuscitation of the textile industry in the country.

The Executive Secretary of the commission, Mrs. Uju Aisha Hassan Baba, who met with the sub-committee on communication and local patronage of CTG in her office recently, stated that “NIPC is

not only promoting Foreign Direct Investment (FDI), but also encouraging Local Direct Investment (LDI) as they contribute so much to the growth of the economy.”

She maintained that the commission will partner with the committee to realise most of its initiatives to encourage and promote indigenous products as that will spur the creation of wealth and generate employment for Nigerian youths, stressing that “NIPC is aware that there are wealthy Nigerians that will invest in their home economy rather than keeping their money outside the country if they are encouraged and guided

properly.” She added that the commission will strive in its marketing drive to seek for investors that will partner with Nigerian investors to resuscitate the ailing textile industry in the country.

The NIPC boss disclosed that the commission is already partnering with state governors to promote agriculture in their various states in order to grow products like cotton that is the main raw material for textiles and garments products, adding that the “NIPC has put many strategies in place to realise its mandate of attracting and promoting investments into the economy”.

Earlier, the chairman of the sub-committee on communication and local patronage of CTG and Madein-Nigeria products, Mr. William Iheanacho Otabil, stated that the CTG policy of the Federal Government, which was inaugurated in December 2014 was envisioned to create a competitive cotton, textile and garment sub-sector capable of stimulating and supporting sustainable value addition along the entire CTG value chain.

He announced that as part of the commission’s initiative to propagate Made-in-Nigeria products, it has concluded arrangements to hold BuyNaija Dress Day; Buy-Naija Military and Paramilitary patronage and Buy-Naija Schools Patronage, all aimed at patronizing Nigerian textile materials.

RECEPTION: Executive Director, Sterling Bank Plc, Mr. Yemi Odubiyi; Honoree, Prof. Nnenna Okore of North Park University, Chicago, Illinois, USA; Professor of Sculpture, University of Nigeria, Nsukka, Prof. El Anatsui; Managing Director/CEO, Kachifo Limited, Mr. Muhtar Bakare and Art Curator, The Wheatbaker Hotel, Sandra Obiago, at a reception in honour of Prof. Okore.

Customs impounds N35.6 m worth of poultry products in one week

By Godfrey Bivbere

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anagement of the N i g e r i a Customs Service, NCS, in continuation of its antismuggling efforts has impounded poultry products worth N35,651,458.00 (Thirty Five Million, Six Hundred and fifty One Thousand, Four Hundred and Fifty Eight Naira Only) in the out going week.

The Service’s efforts against smuggling of poultry products code named “Operation Hawk Descend”

saw a total seizure of 5,472 (five thousand, four hundred and seventy five) cartons of frozen poultry product that were confiscated at Idiroko bush path in Ogun States, Agbeji/Ife axis in Osun State

Owners of commercial buses operating in the South Western area to desist from such act or face the consequences of losing their vehicles

and Seme axis in Lagos State all around the South Western area of the country.

A breakdown of the seizure shows that the Western Marine Command of the Service impounded 3,221 cartons, Federal Operations Unit, FOU “A”, Ogun Command, Oyo/Osun and Seme Command seized 1,220, 820, 120 and 91 cartons respectively in the last one week.

In a statement signed by Deputy National Public Relations Officer of the Service, Joseph Attah, quoted the Customs boss Dikko Inde Abdullahi,

lamented the use of commercial vehicles to conceal and transport the banned poultry products.

The Customs helmsman called on owners of commercial buses operating in the South Western area to desist from such act or face the consequences of losing their vehicles and possibility of a jail term.

He however expressed the hope that the re-invigorated collaboration between the Customs Administrations of Nigeria and Benin Republic will help to deal decisively with the crime of smuggling from both sides of the border.

Vanguard, MONDAY, AUGUST 10, 2015 — 21

Business & Economy

Bankers urged to finance aviation industry

By JIMOH BABATUNDE

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LAUNCH: From left, Martin Thomle, deputy managing director, GMT Nigeria Ltd; Titi Osuntoki, executive director, business banking, Access Bank Plc; Herbert Wigwe, GMD/CEO, Access Bank Plc; Banjo Adegbohungbe, group head, global trade, Access Bank Plc, and Tim Maguire, chief financial officer, GMT Nigeria Ltd, at the official launch of Finance & Logistics Worldwide Scheme (FLOWS) by Access Bank Plc in Lagos. PHOTO BY AKEEM SALAU

Court restrains NUPENG from picketing CBN T

he National Industrial Court of Nigeria (NICN) has restrained the National Union of Petroleum and Natural Gas Workers (NUPENG) from picketing the Central Bank of Nigeria (CBN). Justice Peter Lifu, who gave the ruling in Abuja, also granted leave to the claimant to issue and serve its originating process.

“The defendants are hereby restrained either by themselves, or through their agents, privies, servants, members or anybody acting on their instruction or on their behalf,” the judge ruled. The order also barred the

BY FAVOUR NNABUGWU

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he Nigerian Investment Promotion Commission (NIPC) and Qingdao International Chambers of Commerce for the Private Sector (QICCPS), China, have signed a Memorandum of Understanding (MoU) to boost inflow of Foreign Direct Investment (FDI) into Nigeria.

The Executive Secretary of the commission, Mrs. Uju Aisha Hassan-Baba, and the Chairman of the Chambers, Mr. Shang Yongle, who signed the MoU on behalf of the two countries in Abuja, noted the need to recognize the benefits of the existing economic and bilateral cooperation between Nigeria and China.

Hassan-Baba said the two parties reached an understanding on the need to establish a close working relationship in order to facilitate

defendants from “disrupting, picketing, blocking, parading themselves or in any other way or manner disturbing the normal business operation of CBN, either at the headquarters or any of its zones or branches within the Federal Republic of Nigeria, pending the hearing and determination of the motion on notice”.

The union is protesting over the non-payment of the outstanding salaries and terminal benefits of its members who were disengaged by Seawolf Oil field Services Limited.

Seawolf Oil Field Services

Limited, due to its nonperforming loans with a bank, was acquired by Asset Management Corporation of Nigeria (AMCON) in 2014.

AMCON refused to pay the outstanding benefits of disengaged staff after acquiring the company, thereby generating the protest.

It was established on the 19th July 2010, when former President Goodluck Jonathan signed the AMCON Act into Law. The corporation was created to be a key stabilizing and re-vitalizing tool established to revive the financial system by efficiently

resolving the non-performing loan assets of the banks in the Nigerian economy. As part of its overall supervisory functions through AMCON, the Central Bank of Nigeria (CBN) is empowered to act with AMCON to provide a myriad of functions intended to improve the liquidity of the toxic assets. This is achieved by purchasing them using secondary market mechanisms, thus allowing the affected institutions to stabilize their balance sheets and avoid further losses. The judge adjourned the case till Aug. 13, 2015, for hearing.

NIPC, Chinese chamber sign pact for FDI inflow business entry of members of QICCPS into the country.

She reiterated her call on foreign investors to the country to always register their enterprise with the commission as it is the only agency of government that has the legal framework and statutory responsibility of promoting and attracting investments into the nation.

She assured the Chinese private sector of the commission’s unflinchingly assistance on relevant information to guide investors in setting up their enterprises and also provide incentives and aftercare services.

“The commission agreed to liaise with relevant institutions

of government in facilitating the grant of relevant approvals and licenses to such Chinese businesses from the QICCPS in accordance with relevant legislations and further agreed to identify specific projects and promote them to interested investors from both countries.”

The MoU also permits the Chinese businessmen to invest in Nigeria, particularly in construction sector; Woodwork (Furniture Manufacturing; Cement Manufacturing, Glass production, Garment and Diaper Manufacturing and Railways while the NIPC would facilitate and support the admission of such investments in accordance with relevant laws and regulations of this

country Mr. Shang Yongle who also led the Chinese delegation to the country, expressed their commitment to invest in Nigeria within the shortest possible time.

The MoU which was witnessed by the management staff of the commission and an 11-man Chinese delegation, further agreed to provide and disseminate up-to-date information on investment related matters to investors in their respective countries and to jointly initiate and organize promotional activities such as exhibition, conferences and seminars for the stimulation of investments into their respective countries.

he Managing Director of Medview Airline, Alhaji Muneer Bankole, has urged bankers in the country not to overlook funding of the aviation industry as he commended First Bank for its leading role in the industry.

Speaking at the Murtala Muhammed Airport, Lagos while taking delivery of a Boeing 767-300ER just acquired by the airline, Bankole said most banks in Nigeria do not understand the aviation industry.

Bankole commended First Bank for its effort at financing the purchase of the aircraft by the airline. “We started the business with First Bank and since we commenced business deal with it, the bank has been appreciating us for our commitment and consistency.”

He noted that the newly acquired Boeing 767-300 ER is an integral part of its long-term business model, adding that the aircraft would immediately be deployed for this year ’s hajj operations which will commence August 18th.

Bankole said the airline is set to change the face of pilgrimage in Nigeria with its Boeing 767300 ER as Nigeria pilgrims deserve the best too, “this is why we brought in this aircraft, it will be commissioned with the first flight to Makkah and Medinah.”

His words: “We are as usual poised to give our customers the best of service and with the introduction of our additional new baby, we will definitely expand our fleet and operations.”

Bankole added that the aircraft will join the airline’s growing fleet after the hajj operations, just as he said another Boeing 767 aircraft being expected soon would be deployed to Jeddah and Dubai routes.

“Today is an historic day for the country, because this is one of the domestic carriers in the country that commenced operations just three years ago. We ventured into regional operations with Accra and the federal government designated us to fly international too with Jeddah, Dubai and London, which has led us to source for a bigger aircraft to match any of the international airlines.

“This aircraft you are seeing is 767-300 ER, it has an endurance of over 14hours flying. We have six aircraft in our fleet now. These are the new generation aircraft you will find us using when we commence operations to UK and Dubai soon.”

22 — Vanguard, MONDAY, AUGUST 10, 2015

Vanguard, MONDAY, AUGUST 10, 2015 — 23

24 — Vanguard, MONDAY, AUGUST 10, 2015

Banking & Finance

Importers, agents groan under high exchange rate, policy uncertainty

BY GODFREY BIVBERE

HALF YEAR: Diamond Bank’s shareholders hope of dividend heightens as revenues rise

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MPORTERS and their agents are presently groaning under the high exchange rate and uncertain government policy that has resulted in the down turn in the volume of imports into the country since the new administration came to power.

Vanguard gathered that many importers have adopted a “wait and see” attitude to their businesses ostensibly due to the uncertainty surrounding the Buhari administration’s policy directiion.

Investigation revealed that importers are no longer placing orders for goods, but rather are waiting to see the government’s policy direction before further action can commence.

Confirming the development, a chieftain of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr. Onyebuchi Obah, described the development as very serious.

He said the ports were almost grounded because “importers are no longer importing” as they are yet to understand the present government’s direction in terms of policy.

“Nobody wants to take the risk of investing his money when he is not sure of what the government’s next line of action would be, adding that the situation was likely to remain so until the authorities come out with a clear-cut policy of where they are heading to.

He said rather than exposing Nigerian business men to the unpredictable foreign exchange, government should peg the rate at N65 for them, maintaining that with this, importers would be encouraged to do their business.

He said, “I can tell you that as things are now, no importer will put his money down in an environment where if you procured forex at N185 to the dollar and when the goods arrive your bill is calculated on N230 plus. No business can be sustained this way” “But if he is sure that if he opens his Form M at N65, N80 or N100 rate and the goods land, his bills are calculated on same rate, he’ll be encouraged to remain in business.

Unfortunately this is not the situation”.

By PETER EGWUATU

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he hope of higher dividend for shareholders of Diamond Bank Plc for the financial year 2015 heightened as the bank maintained stable growth in its half year results despite the harsh operating environment experienced in the period under review.

Diamond Bank Plc, in its half year (H1) performance scorecard, showcased its ability to sustain growth in all parameters, by posting 5.3 per cent increase in its gross revenues, and N14.59 billion in comprehensive income, which represents 3.3 per cent increase over 2014 figure of N14.12 and surpasses analysts’ expectations for the half year (H1) ended 30 June 2015.

TH In the half year results ended 30 June, 2015 released recently on the Nigerian Stock Exchange, NSE, Diamond Bank recorded •Mr. Uzoma Dozie, Chief Executive Officer, Diamond Bank Plc Profit After Tax, PAT of N12.15 billion, which is lower than its 2014 position of N13.78billion.

The Bank’s capital adequacy ratio surged to 18.6 per cent, them. It is a sign of better things market share responsibly. We retail banking and providing in excess of the Central Bank to come. Dozie management shall expand customer convenient and easy banking of Nigeria’s (CBN) required will do well as economic relationships, enhanced by our to the micro small and medium minimum, and signposting the activities improve in the years elaborate channels and enterprises segment, it has however continue to grow its bank’s preparedness for ahead” Okezie noted. excellent service delivery”. expanded business and to The Group’s focus on funding corporate and mid-tier Another leader of remain an industry leader. shareholder Group, Proactive the real sector was reflected in business segments, and The shareholders who spoke Shareholders Association of the growth in loans and according to the CEO, “the against the backdrop of the Nigeria, PROSAN, Mr. advances to customers from concept of value chain bank’s performance for the Oderinde Taiwo said “ The bank N791.09 to N793.67 billion since management helps us to period under review should be commended for this the beginning of the year amidst provide end to end solution to commended the management performance as it is an a decline in the pace of the value chains of our clients and for the proactive measures indication that the second half economic activities and weak corporate taken to maintain the growth performance would be better as economic fundamentals. ultimately improves value for in some of the performance the country’s economic indices Deposits, however, declined both us and the customers.”

It will be recalled that the indices. improves. The economy is down from N1.49 trillion to N1.35 Mr. Boniface Okezie, and it has affected so many trillion, reflecting cumulative bank in its full year 2014 result Chairman, Progressive institutions so, if Diamond changes in regulation such as recorded a growth of 27.3 per Shareholders Association of Bank could record this the new unified Cash Reserve cent in total assets from N1.52 Nigeria, PSAN, who spoke the performance, it then means that Ratio and Treasury Single trillion in the previous year to mind of its members said “We it would do better in the next Account that necessitated N1.93 trillion. This was driven are impressed with the bank’s half of the year when activities sterilization of huge sums of mainly by growth in deposits, performance and kudos should are expected to pick up since money by the Central Bank of which surged 23.8 per cent from N1.21 billion in 2013 to be given to the management the last national election has Nigeria. for this result given the tight come and gone.

The Bank’s focus remains on N1.49 billion, demonstrating the Bank’s strong ability and business environment it Speaking on the bank’s half network to generate cheap operated upon. Many year result from the Bank’s deposits from the retail and companies are not doing well Corporate Head Office in middle market segments. Also, at the moment due to the slow Lagos, Uzoma Dozie, Group the bank grew its loan portfolio pace of governance.

Managing Director/CEO, said to customers from N689 billion Boniface Okezie said “The that the Bank’s continued to N791 billion, representing bank under the leadership of success in spite of regulatory 14.8 per cent increase.

Otti did not let us down, so headwinds, is hinged on Gross earnings increased by we still believe in the new focusing on the implementation 15.0 per cent from N181.2 leadership led by Uzoma of strategies that promote billion in 2013 to N208.4 Dozie. We hope with this sustainable growth and billion, showing an increase of performance, the dividend for profitability for the long term.

9.6 per cent in net operating this year may likely surpass the According to the bank’s Chief income which stood at N116.3 previous year if economic Executive Offer, CEO “Our billion in 2013 to N127.4 condition improves in the next innovative, customer friendly billion. However, Profit Before six months.” services and retail banking Tax (PBT), declined marginally He said the dividend for last strategy are showing positive by 12.5 per cent from N32.1 year was commendable given results and will enable us to billion in the previous year to enormous funds that were sustain low cost of funds. In the N28.1 billion, reflecting the deployed for expansion and quarters ahead, we will focus harsh regulatory headwinds rebranding. on premium quality risk assets, that hallmarked business ‘’It is an impressive as we continue to explore operations in 2014. performance. We commend opportunities to grow our

Our innovative, customer friendly services and retail banking strategy are showing positive results and will enable us to sustain low cost of funds.”

Vanguard, MONDAY, AUGUST 10, 2015 — 25

Banking & Finance

BY PETER EGWUATU

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he Central Bank of Nigeria, CBN has ordered banks in the country to refund charges made on customers for daily cash withdrawal or deposits exceeding set limit in the 30 states that full cashless policy transactions has not taken place.

The CBN disclosed that the new policy on cash-based transactions has not officially taken place in all the states of the country.

Briefing newsmen after the 322 Bankers’ Committee Meeting in Lagos weekend, Mr. Kolawole Balogun, who represented the Director Banking Supervision Department of the CBN, Tokunbo Martins said “At the meeting we agreed that banks should refund the charges made on customers for withdrawal and deposits in those states that cashless policy has not taken place.”

According to him “ The cashless policy has officially taken place in five states and federal capital, Abuja. The states are Lagos, Abia, Anambra, Kano, Ogun and Rivers States, as well as the Federal Capital Territory, Abuja. The CBN has not officially announced the take off implementation of full cashless policy in other states other than the already stated states and federal capital territory, Abuja, due to some infrastructure bottlenecks. We are allowing ample time for the banks to deploy adequate infrastructure needed to support the cashless policy as well as enable additional sensitisation of various bank customers on the merits of the

NDIC introduces deposit insurance system curriculum in universities

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LECTURE - From left: Interim Chairman, the Nigerian Society of Engineers, Aeronautical Division, Group Capt John Obakpolo, chairman of the occasion, Dr. Prince Julius AdelusiAdeluyi, Guest Speaker, Mr. Aliyu Edoji Aliyu and MD, NAMA, Engr. Ibrahim Abulsalam, during the 2015 Annual Public Lecture by the Nigerian Society of Engineers, Aeronautical Division, at NCAA Annex, Ikeja Lagos.

CBN orders banks to refund withdrawal charges in 30 states policy.

There are telecommunication, power and other problems that are yet to be addressed” The CBN ) has introduced a new policy on cash-based transactions which stipulates a ‘cash handling charge’ on daily cash withdrawals or cash deposits that exceed N150,000 for Individuals and N1,000,000 for Corporate bodies. The new policy on cash-based transactions (withdrawals & deposits) in banks, aims at reducing (not eliminating) the amount of physical cash (coins and notes) circulating in the economy, and encouraging

more electronic-based transactions (payments for goods, services, transfers, etc.). Tokunbo further noted that the CBN will sanction delinquent debtors whose names were published by banks if they refused to negotiate with their banks on how to pay their debts. “The publication of debtors names is ongoing and banks will be doing this on quarterly basis” he added.

Speaking on domiciliary account, Mr. Segun Agbaje, Chief Executive Officer, Guaranty Trust Bank Plc said “said “The restriction on

domiciliary account is just the cash deposit. Every other things remain the same.

Payment of school fees, medical treatment etc can be done through the domiciliary account. Any person or company that need foreign currency can go through the CBN’s window and get whatever it wants provided it is a genuine who cannot meet the official window requirements that can go to parallel market. The essence is to strengthen naira and make Nigeria less import dependent.”

Union Bank’s Smart Centres leverages technology to drive banking services

By JONAH NWOKPOKU

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s part of its moves to embrace modern banking, Union bank of Nigeria Plc has introduced new technologies to drive convenience and ease of access to its financial services.

The technologies which are embedded in its Smart Centres is a revolutionary platform that provides a one-stop shop for all financial services for all its customers across the country.

Services that can be obtained in the Smart Centres include: Account opening, cash deposits, cash withdrawals, live video chat with customer care agents, fund transfers, internet banking etc. The Smart Centres introduced in May, 2015 and operational in Abuja and Lagos presently are basically electronic branches aimed at totally redefining the

branch channels as, to make it more customer-friendly.

Features include an interactive project screen which consists of a video wall that creates a larger than life video experience. The device also allows customers to interact with the projected image contents from promotional videos and other products information being displayed.

The Smart Centre also features an interactive kiosk which allows customers to open an account in five minutes and conduct other online banking transactions. The technology which is the first of its kind in Nigeria is a state of the arts interactive medium on which customer service personnel can also sit around and attend to customers. The device also comes with various other applications centred on customer service including investment

banking, amongst others. The other feature is the innovative Samsung smart TV for video conferencing which enables customers to use the Samsung PC at the centre to communicate with the Union Bank contact centre team. Customers via a live video chat can get immediate resolution to any issues they want resolved.

Speaking on the innovations, member of the Smart Centre team, Titilope Amusan who conducted newsmen around the facilities in Lagos, said: “With this technology, we want to let our customers know that in this competitive market, we are ready to serve them and offer them the best service they can get anywhere in the country. All these are also our own way of making life easier for our customers. As you know, this technology makes it possible to break the barrier of restricted

Monday to Friday financial services. And the service is seamless and faster as opposed to walking into a banking hall and filling a long tedious form and waiting forever to get to your account details. With this technology, you can get your account details in just five minutes.”

She added: “The Smart Centre is one of the transformation projects that we are doing at the moment in Union Bank. We also call them the bank of the future.

The Smart Centre is the one-stop shop for customers where you can walk in serve yourself.

“This Smart Centre offers 24 hours availability as opposed to the traditional banking where if you do not get there before official closing hour, you are denied of banking services, meaning you have to return the next day or squeeze out time to make those banking hours.

he Nigeria Deposit Insurance Corporation, NDIC has introduced deposit insurance system DIS into the curricula of Nigerian universities and other tertiary institutions as part of the on-going efforts toward enhancing public awareness on its mandate and operational activities.

The DIS programme commenced with two courses: “Fundamentals of Deposit Insurance Scheme” and “The Practice of Deposit Insurance”were designed for students of Business Administration, Economics, Banking and Finance, and Accounting.

The ‘Fundamentals of Deposit Insurance’ was specifically designed for 300 level students while ‘The Practice of Deposit Insurance’ was for 400 level students.

The introduction of the programme is intended to enhance the knowledge of both undergraduate and post-graduate students of universities and students of the Chartered Institute of Bankers of Nigeria, CIBN. This will go a long way to enhance the quality of potential staff of banks as well as promote financial literacy and financial inclusion.

Enterprise Bank unveils ‘Association Savings Account’

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ot for profit organisations in the country now stand the chance of growing their savings when they open and operate the Enterprise Association Savings Account (EASA), an interest-bearing account, specially developed by Enterprise Bank Limited to satisfy the financial needs of that segment of its customers.

The bank said the contribution of these organisations to humanity and society in general, requires support that ensures they earn some form of revenue on their savings to aid their humanitarian services. A statement from the Corporate Communications Department of the bank said, “We have a large number of non-profit bodies, associations, organisations, clubs and movements among others in the country, who do not engage in profit-making businesses. But because of the nature of their role, they require our support.

“As a financial institution that cares, we are aware that these associations require savings accounts to keep their funds as against transactional current accounts with its attendant charges.

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26 — Vanguard, MONDAY, AUGUST 10, 2015

Corporate Finance

NSE, IoD collaborate to train directors of quoted companies

BY PROVIDENCE OBUH

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he Institute of Directors of Nigeria, IoD, has disclosed its collaboration plan with the Nigerian Stock Exchange, NSE, to train directors of quoted companies to ensure strict adherence to corporate governance principles and ethics.

President of IoD, Mr. Samuel Akeju stated this at the New Members Evening and Induction Ceremony with the theme: “Change” in Lagos.

He said, “The IoD Nigeria and Nigerian Stock Exchange (NSE) have collaboration to train directors of companies listed on the exchange.”

With a vision to institutionalize the tenets of sound corporate governance and best practices in the Nigerian business environment, he said that the IoD Nigeria maintains cordial relationship with Ministries, Departments, Agencies and Companies in both the public and Private sectors of the Nigerian economy to increase national and international visibility.

To this end, he said that the IoD Nigeria joined the African Corporate Governance Network (ACGN), which is an umbrella body of all Institute of Directors and affiliates in Africa.

Additionally, Akeju pointed out that the twin issues of tax burden and non-compliance with the relevant sections of the Fiscal Responsibility Act 2007 and the various sectoral Codes of Corporate of Governance seem to be the most challenging aspects of the Problems besieging the business community.

“While tax burden is a factor militating against returns to investment, non-compliance is an attitudinal change factor, which is attributed to how effective or otherwise the governance of an organization is” he said.

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By NKIRUKA NNOROM OREIGN portfolio investment on the Nigerian Stock Exchange, NSE, in month of June dropped to N69.65 billion against a total transaction of N79.77 billion recorded the previous month.

This is even as domestic transactions increased to N133.80 billion from N65.68 billion recorded in May. Capital market operators pointed out that the policy uncertainty in the economy is

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NSE: Foreign portfolio investment drops to N69.65bn in June affecting investment decisions.

“Investors are not clear about what would be the policy direction of this government and that is why the level of bids in the stock market has been weak.

“You have seen the market move southwards over the last couple of weeks and I think

that would persist until the government comes out with a clear economic policy that investors can relate to,” said some market operators who spoke with Vanguard.

On the other hand, foreign portfolio investors who are eager to play in Nigeria’s fixed income securities market would like to see a higher and

PROJECT FAME: From left: Joba Popoola, Participant in MTN Project Fame 4; Ade Bantu, Artiste; Tolu Adesina, participant in previous Project Fame and Joy Panam, audition judge during the MTN Project Fame West Africa Season 8 opening Gala show in Lagos.

more sustainable exchange rate equilibrium as well as a return to a price-driven forex trading platform, they stated.

However, total transactions at the nation’s bourse increased to N203.45 billion (about $1.04 billion) in June 2015, up 39.88 per cent from May 2015.

Foreign investors conceded about 31.52 per cent of trading to domestic investors as FPI transactions decreased from 54.84 per cent of the total transactions in May to 34.24 per cent in June while domestic transactions increased from 45.16 per cent to 65.76 per cent over the same period.

Foreign portfolio investors’ inflows accounted for 20.97 per cent of total transactions, while the outflows accounted for 13.26 per cent of the total transactions in June 2015.

In comparison to the same period in 2014, total FPI transactions decreased by 40.97 per cent, whilst the total domestic transactions increased by 24.45 per cent.

FPI inflows outpaced outflows which was consistent with the same period in 2014.

Overall, there was a 9.78 per cent decrease in total transactions in comparison to the same period in 2014.

Forte Oil to raise long term fund, pledges to pay dividend

By PETER EGWUATU & NKIRUKA NNOROM

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ORTE Oil Plc has disclosed that it is targeting to raise long term fund to boost its business and pay dividend to shareholders.

The Group Chief Executive Officer, Forte Oil Plc, Mr. Akin Akinfemiwa, disclosed this during the company’s fact behind the figures presentation at the Nigerian Stock Exchange, NSE in Lagos.

According to him “We are planning to raise cheap long term debt fund that would help boost our business, reduce our debt and enable us pay dividend to our shareholders.”

Commenting on the debt profile of the company, he said the huge amount of debt incurred was a result of devaluation of the currency as subsidy payment was not made as at when due. We are

not even interested in the subsidy and that is why we are positioning the company and ready for deregulation of the sector. As of now, the federal government owe marketers about N40 billion. We are incurring huge interest from the banks, so timely payment or receipt of this fund would enable us to pay better dividend to our shareholders and settle our debts. We are looking at foreign investors to have as foreign partners to enhance our proposed drive in the upstream

Wehave completed a major restructuring exercise to compete effectively in the upstream sector wherein the company’s name changed to Forte Upstream Services.

sector” Akinfemiwa stated that the harsh operating environment affected the company’s performance in the first half of the year, 2015. However, he assured that the company is optimistic to surmount the obstacle as it has commenced its 5-year growth and consolidated strategy for all of its strategic business units which include strategic retail business expansion, increased commercial customer base for both fuels and lubricants, improved operational efficiency and logistics and talent management and development.

According to him “We have completed a major restructuring exercise to compete effectively in the upstream sector wherein the company’s name changed to Forte Upstream Services. We are having business expansion with existing and new clients (Shellproduction chemicals contracts and Addax, Afren and ChevronDrilling fluid contract).

Commenting on the company’s half year result, he said “Revenue fell by 23 per cent from N79.6

billion in first half 2014 to N61.2 billion (Volumes decline) in first half 2015 as a result of reduced importation of petroleum products by the company due to prolonged delays by the government in making subsidies payment. This was further exacerbated by nationwide strikes by downstream sector workers “At the back of the fall in revenue, operating profit declined by 39 per cent to N2.8 billion in first half 2015 from N4.5 billion in the corresponding period of 2014. However, net income fell 19 per cent due to lower tax burdens and recoveries of prior period interest charges hitherto recognised through government reimburse-ments.”

Meanwhile, Chief Executive Officer, Nigerian Stock Exchange, NSE, Mr. Oscar Onyema has charged Forte Oil management to continue to strive to achieve the highest standards of corporate governance by ensuring ongoing compliance with the exchange’s post-listing requirements, including prompt filing of its financials.

Vanguard, MONDAY, AUGUST 10, 2015 — 27

Corporate Finance

Profit taking drags down All Share Index by 0.17 %

By PETER EGWUATU

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he gains recorded for the four days running last week could not be sustained on the last trading day, Friday, as transactions at the Nigerian Stock Exchange (NSE) ended on a negative trend on with the All-Share Index declining by 0.17 per cent to close at 31.441.71 points against 31,497.73 points recorded on Thursday.

Capital market operators opined that the drop in the All Share Index was a result of profit taking by investors as they felt that the market would return bearish given the fact that no active economic activities have taken place in the economy.

Also, the market capitalisation which opened at N10.795 trillion lost N19 billion to close at N10.776 trillion.

Guinness recorded the highest price loss to lead the losers’ chart, dropping by N6 to close at N131 per share.

Total came second with N5.25 to close at N150, while Flour Mill lost N1.84 to close at N29 per share.

Cadbury declined by N1.75 to close at N33.30, while Okomu Oil shed N1.17 to close at N24.83 per share.

Conversely, Forte Oil led the gainers’ table with N8 to close at N208 per share.

Mobil Oil garnered N5 to

close at N160, while PZ rose

by N1.51 to close at N34.51.

Ashaka Cement inched N1 to close at N23, while Berger Paints appreciated by 0.47k to close at N9.97 per share.

Continental Insurance for the third consecutive day emerged the most traded equity with a

total of 315.48 million shares valued N293.39 million.

It was trailed by Transcrop, having accounted for 47.46 million shares worth N133.66 million, while Zenith Bank sold 24.61 million shares valued at N415.86 million.

Access Bank traded 22.72 million shares worth N108.85 million, while Stanbic IBTC exchanged 18.95 million shares valued N400.85 million. In all, a total of 524.65 million shares worth N2.33 billion were traded by investors in 3,432 deals.

•From left, Medical Director, Lagos Island Maternity Hospital, Dr. Lawson Imosun; representatives of wife of Lagos State Governor, Dr. Claudiana Sanwo-Olu; Mrs. Ladun Ogunbanwo; Director, Vitafoam Nigeria, Mrs. Titi Bakare; and Group Managing Director, Vitafoam Nigeria Plc, Mr. Taiwo Adeniyi, at the launch of Vitafoam’s breast feeding products during the 2015 World Breastfeeding week in Lagos

Lagos govt commends Vitafoam’s two innovative products

BY PETER EGWUATU

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AGOS State Government has commended the management of Vitafoam Nigeria Plc on its innovativeness by introducing two unique products to prevent nursing mothers from the hazards of breast feeding.

The two products, Vitafoams Early days Breast feeding Covers and Pillows which were unveiled last weekend were specifically designed to enable nursing mothers maintain proper position for breast feeding devoid of back pain and privacy while breastfeeding in the public.

Speaking at a special ceremony to mark World Breast feeding Day at Lagos

Island Maternity Hospital in Lagos, Lagos State’s First Lady, Mrs Bola Ambode explained that Vitafoam Nigeria Plc had been at the forefront of products aimed at reducing infant mortality in Nigeria. Mrs. Ambode who was represented by Mrs. Ladun Ogunbaniro stated that Vitafoam’s Board and Management should be appreciated as a good corporate citizen which constantly produces products that address human problems. Mrs Ambode called on the government and other employers of labour to support the initiatives in order to have a better society.

She reiterated that Lagos State government had increased the maternity leave from three months to six months while there is 10-day paternity leave as a support for

proper child care.

Earlier in his address, Vitafoam’s Group Managing Director, Mr Taiwo Adeniyi explained that the company had expanded its products’ portfolio from being a manufacturer of just mattresses and pillows into a foremost producer of ultimate comfort products. According

Vitafoam has ventured into production and supply of flexible, semi rigid and rigid polyurethane foam products including furniture, bed and beddings.

to him, Vitafoam has ventured into production and supply of flexible, semi rigid and rigid polyurethane foam products including furniture, bed and beddings. This expansion gave birth to some of its current subsidiaries: Vitapur, Vitagreen, Vitasco and Vitabloom”, he said.

Commenting on the World breastfeeding Week, Adeniyi noted that the company ’s support for the week culminated into its production of products that ensure that mother ’s breastfeed their babies in comfort either in the private or public.

“We produce quality baby soft and hard furniture like the pregnancy pillows, bed sheet collections, pillows, baby cot, play mat and everything that makes the mother and their babies experience total comfort” he said.

Custodian and Allied grows profit by 21%

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ustodian and Allied Plc, one of the leading non-bank financial institution quoted on the Nigerian Stock Exchange (NSE) with investments in life and non-life insurance, pension fund administration, trusteeship and property holding businesses, has announced an unaudited profit before tax of N3.34 billion and profit after tax of N2.62 billion for the six months period ended 30 June 2015.

In spite of the challenging environment in which the group operated during the reporting period, the profit before tax represents an increase of 21 per cent over that of the corresponding period of 2014.

Similarly, shareholders’ funds grew to N24.42 billion from N22.49 billion, as at 31 December 2014, while total assets exceeded N54 billion as at 30 June 2015.

In furtherance of its tradition of rewarding shareholders, an interim dividend of 6 kobo on every 50 kobo ordinary share will be paid to shareholders, whose names appear on the th register on 14 August, 2015.

The directors are confident that, barring unforeseen unfavourable circumstances, the positive trend would be sustained for the rest of the year.

NSE wins financial institution of the year award

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he Nigerian Stock Exchange, NSE has stated that it has received the 2015 Financial Institution Award from The Oil & Gas Year (TOGY) Nigeria.

The award was presented to the NSE last week at The Oil & Gas Year Nigeria Award ceremony, an annual event held to celebrate individuals and institutions who have distinguished themselves in their areas of specialization.

According to the organisers of the event, this award is being conferred on the NSE in recognition of its first-ever dual listing with the London Stock Exchange through the $500 million Initial Public Offering (IPO) of Nigerian independent hydrocarbons company Seplat Petroleum Plc. The listing was the largest European IPO of an exploration and production company since the 2008 financial crisis.

With almost 50 per cent of locally sourced capital and more than 65 percent of trading volumes done on the exchange, the role of capital markets in advancing local oil and gas firms is clear.

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28 — Vanguard, MONDAY, AUGUST 10, 2015

Homes & Housing

BY YINKA KOLAWOLE

US mortgage applications rebound

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here was more encouraging news for the US housing market last week as mortgage applications jumped to the highest level in four weeks.

The volume of applications rose 4.7 per cent from the week earlier, according to data from the Mortgage Bankers Association. This followed a 0.8 per cent rise the previous week.

The increase was driven by a 6 per cent rise in the refinance Index, which showed that a drop in mortgage rates has encouraged homeowners to refinance their mortgage.

Meanwhile, the seasonally adjusted purchase Index climbed 3 percent.

The rise in mortgage applications came alongside a drop in mortgage rates. The fixed 30-year mortgage rate decreased to 4.13 percent in the week, the lowest level since May. July was a strong month for the housing sector with a rise in housing starts and existing home sales. New home sales proved to be a spot of weakness during the key spring summer season for the housing market.

UK housing affordability gap grows

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he gap between the most affordable and least affordable homes in England and Wales has widened, figures show.

The average home in Westminster, London cost 24 times more than a typical gross annual salary in England and Wales, the Office for National Statistics (ONS) said.

At the other end of the scale, the average property price in Blaenau Gwent in Wales was only four times greater than the average salary. This gap has widened since 2007, the figures show. House price rises in the most expensive 10 percent of areas of England and Wales have outstripped growth for the least expensive 10 percent of areas. “Westminster and other exclusive central areas of the capital have long been unaffordable for the majority of us,” said Peter Rollings, chief executive of Marsh & Parsons estate agents.

ONS said that in 2014 - the latest figures available - the value of the least expensive homes had not returned to prerecession levels. This left some owners at risk of being left in negative equity.

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HE mortgage banking sector in Nigeria has been confronted with numerous challenges that have impeded the attainment of its policy objective of acting as a catalyst for the development and provision of affordable housing in the country.

Nigeria Deposit Insurance Corporation (NDIC) highlighted some of the challenges being encountered by primary mortgage banks (PMBs) in its 2014 annual report. The report stated: “Some of the challenges include: Delay in accessing NHF funds/dearth of long term funds. Most of the PMBs continued to find it difficult to provide the required bank guarantee to access the NHF. Only four out of the 42 PMBs in operations were listed on the Nigerian Stock Exchange

NDIC enumerates challenges facing mortgage banks which meant that many others did not have access to long term funds through the Stock Exchange window.

“Due to lack of understanding of the nature of business of PMBs by the public, it had been difficult for the PMBs to mobilise deposits to finance their housing projects

It had been difficult for the PMBs to mobilise deposits to finance their housing projects which were usually long term in nature

which were usually long term in nature. The public prefer to open savings/current accounts with deposit money banks (DMBs) rather than with PMBs whose operations were considered to be too complicated. Another challenge is the Land Use Act, which had made the process of perfecting title to landed property burdensome, slow and costly.

That had affected negatively the foreclosure procedures on the properties pledged as collateral.

Accordingly, the Land Use Act needs to be reviewed to address this issue.

“Also, under-developed Mortgage-Backed Securities (MBS) which allows mortgage

AGM: From Left; Mr Godwin Ehigiamuoe, Managing Director Lapo Microfinance Bank Ltd, Dr Osaren P. Emokpae, Chairman, Board of Directors, and Mrs Cynthia Ikponwonasa, Company Secretary, Lapo Microfinance Bank Plc, during the 4th Annual General Meeting of Lapo Microfinance Bank Ltd, last Thursday in Lagos. PHOTO: Kehinde Gbadamosi.

assets to be traded on recognized stock exchanges, do not presently exist in Nigeria. Securitization of mortgage assets should be encouraged to enhance marketability and promote market deepening; Appalling state of facilities like roads, transportation, power and water supply had contributed to the high cost of building construction in Nigeria.

Furthermore, the high foreign exchange content of imported building materials such as cement, tiles, ceramic wares etc have made housing nonaffordable for the average and low income earners.”

Experts have always identified some of the major challenges facing the mortgage banking sector to include the lack of foreclosure laws governing the default mortgage loans, the entire cost associated with the task of title transfer, poor infrastructure to provide support for house constructions and highly complicated and lengthy legislative and legal frameworks for land acquisition.

Operators of mortgage finance in the country have therefore intensified their clamour for government to overhaul the housing finance system, especially strict financing laws and weak banking structures that have led to volatile markets and made investors, reluctant to do business in such trying market conditions.

Developer partners UK firm for exclusive housing projects

BY KINGSLEY ADEGBOYE

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essr

Wrothams W i n d s o r, Nigerian property adviser and real estate investment company has partnered a United Kingdom property developer, The Berkeley Group, in a bid to launch three exclusive developments known as Royal Arsenal Riverside, 250 City Road and 375 High Street Kensington in Lagos and Abuja.

The Berkeley Group is made up of five autonomous companies: St. George, St. James, Berkeley, St. Edward and St. William which are all publicly-owned and listed on the London Stock Exchange as a FTSE 250 company.

According to a statement from

Wrothams Windsor, Berkeley Homes is now launching Waterfront II at Royal Arsenal Riverside which boasts of 205 Manhattan Apartments as well as an exciting range of one, two and three-bedroom properties and penthouses. Waterfront II is situated on the banks of the River Thames, with over 1km of river-walk and favourably positioned close to the proposed four-acre Waterfront Park.

Situated in North East London, 250 City Road is set to launch its first phase and is quickly becoming the most talked-about London residential destination of 2015.

Designed by one of the most innovative and acclaimed architectural practices of the decade, Foster + Partners, 250 City Road delivers the optimum place to live and

work. Situated in the heart of one of London’s most vibrant areas and very close to the City and the capital’s tech and creative quarters, this landmark scheme lays the foundations for an enduring new community.

Upon completion, the scheme will comprise 930 homes, expertly built by Berkeley Homes, a 190 bed 4 star hotel, office and retail space, all set amid breath-taking architecture conceived to complement the existing surroundings.

On the other hand, 375 Kensington High Street, located at one of London’s most fashionable addresses, St Edward’s prestigious development - offers the height of luxury living in a highly sought-after neighbourhood.

This development has been designed to complement its

regal surroundings, which include Kensington Palace, the Royal Albert Hall and the Victoria and Albert Museum.

When complete, 375 Kensington High Street will comprise of more than 500 homes including apartments and penthouses, and will transform this corner of the Capital into a flourishing new community.

Mr. Adam Jones, Director of International Properties for Wrothams Windsor noted that Berkeley Homes is a unique developer that seamlessly combines historic and contemporary buildings. “The launch of these three developments highlights Berkeley ’s commitment to developing brand new, modern buildings, which bring highquality and stylish design to the London Landscape.

Vanguard, MONDAY, AUGUST 10, 2015 — 29

Micro-Finance

Access Bank, GMT unveils import solution scheme for SMEs Stories by PROVIDENCE OBUH

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CCESS Bank Plc in collaboration with GMT Nigeria Limited, integrated logistics service provider, have introduced an import solution scheme, Finance and Logistics Worldwide Scheme (FLOWS), with a view to meeting Small and Medium Enterprises (SMEs) importation need.

FLOWS is a combination of import finance and logistics services targeted at importers such as: traders, manufacturers, contractors/ vendors of large corporate

and owner of retail outlets who are into importation of non-perishable, fast moving and unrestricted goods.

Customers stand a chance to benefit trade finance facilities by the bank; efficient processing of all documents relevant to the specific import; management of total landing costs for any import; lowest rates based on the strength of a consolidated package, among others.

Speaking at FLOWS unveiling ceremony in Lagos, Group Managing Director, Access Bank, Dr. Herbert Wigwe, said that the platform would deliver

an end-to-end cost efficient management of the entire import process which reduces the total lead time of a typical importation transaction.

He explained that the decision to bear its clients burden became necessary as a result of the hectic importation process they undergo.

Wigwe said, “Serving the SME segment provides us with the huge opportunity of achieving economic development and growth across Africa, considering its criticality to the economy.

“We appreciate the fact that SMEs are the future and engine room of the economy, and as a bank we are well

Oyo State Governor, Senator Abiola Ajimobi (middle), flanked by Board Members of Nigerian London Business Forum, Prof. Chris Onalo (2nd left) and participants at the just concluded UK-Nigeria Economic Forum held in London.

positioned to providing the necessary support through deliberate focus and commitment of resources towards their growth. It is vital that this integral sector of the economy gets all the support it needs to drive growth and development. The future outlook for the sector is encouraging provided that the challenges are militated against and the present gaps are adequately covered.

“The opportunity in this sector is enormous and the financial sector plays a central role in the growth and development of the economy through mobilisation and deployment of financial resources,” he said.

On the other hand, Deputy Managing Director, GMT Limited, Mr. Martin Thomle, assured SMEs that necessary structures would be put in place to ensure smooth process of the scheme.

Thomle said that the company established in 1999 has since grown into the largest inbound logistics service provider in Sub Saharan Africa, offering integrated logistics service that spans across the supply chain transforming logistics challenges into competitive advantages and providing customized solutions to meet any logistics demand when importing goods into Nigeria.

According to him, “Supported with our import financing, we add further value to import process, resulting in reduced working capital requirements and improved cash flow management. GMT expertise is in importation, exportation, sea and airfreight, transportation, import financing, warehouse services, vendor managed inventory services and project management,” he said.

NEPAD partners LASMI on funds for programme participants T

he NEPAD Business Group Nigeria (NBGN) Graduates’ Employability Improvement and Development Initiative (GEIDI), is charting ways with Lagos State Microfinance Institution LASMI on how to make funds available for programme participants.

GEIDI is an intervention from the NBGN specifically designed as its contribution to reduce the scourge of unemployment particularly among Out of 50 that started, 42 participants successfully completed the six months training initiative involving vocational skills acquisition,

entrepreneurial development as well as practical demonstrations in related industries.

Chairman, NBGN, Chief Chris Ezeh, said that the NBGN was set out to provide a holistic initiative that sees participants through training, employment or setting up of trades or vocations.

Ezeh said this at a Photo Session and Presentation of Certificates ceremony in Lagos, saying, “There were set backs particularly with loan facilities to assist participants in setting up their businesses. The financial institution that we had its commitment before the

commencement of the program backed out along the line.

“We have therefore initiated discussion with another financial institution, LASMI as it concerned provision of loan facilities for participants of the first edition and the second edition that will soon commence. LASMI has assured of its collaboration and we are at the moment discussing the relevant terms and conditions. It may involve participants forming cooperative societies. We will however get back with full details in due course,” he said.

On the other hand, Acting Head, NBGN Secretariat, Mr. Dosumu Oluwole, said that

retraining of jobless graduates in technical and entrepreneurial skills would solve problem of unemployment.

Oluwole puts total unemployment rate at 10.8 percent with the youth unemployment rates exceeding the adult unemployment rates.

He said, “For Nigeria to solve the threat of her huge unemployment problem particularly among her teeming young graduates, attention must be given to retraining of the unemployed graduates in technical and entrepreneurial skills that will enhance their competition in the labor market. This will equally enable them to be self employers and consequently employers of labor.”

Visa to reward holiday card user with “NotATourist” campaign

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he global payments technology company, Visa, penultimate week, announced plans to reward holiday card users with “#NotATourist”, an innovative, regional campaign aimed at driving international tourism during holidays.

The NotATourist campaign designed to inspire travel beyond the regular tourist sites to savour truly local experiences would be running in the Middle East and African markets including, Nigeria, Ivory Coast, Cameroon, Democratic Republic of Congo (DRC) and Senegal till August 31, 2015.

Also, the campaign is poised to help travellers explore destinations as local inhabitants and not as tourists by providing local knowledge using crowd sourced digital content that is showcased on Visa’s NotATourist website and the Visa Explore mobile app.

30 Lotto agents rewarded with prizes

BY ONOZURE DANIA

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t least 30 Sub Agents of Golden Chance Lotto have been rewarded with prizes ranging from Tricycles, Deep Freezers, Television sets and cash sums, for record of highest sales representative to the company.

Speaking at the event, the Managing Director of Golden Chance Lotto Charles Arthur said that their company is the first and only one that rewards its Sub agents, adding that there are so many Lotto companies in Nigeria, but he hasn’t heard of anyone of them rewarding the sub agents who are closer to the costumers.

He said that this is part of the company’s contribution of giving job opportunities to the youths as some of the sub agents are youths, some of whom are students, stating that with the business they already have, they won’t have to look for jobs when they graduate as they already have a job of their own and will also be employer of labour.

Arthur further stated that the prizes that are won is to encourage them so that they can work harder.

30—Vanguard, MONDAY, AUGUST 10, 2015

Tax Matters

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OAGF to partner FIRS for improved revenue collection

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he Accountant General of the Federation, Alhaji Ahmed Idris, has made an offer for his office to partner the Federal Inland Revenue Service, FIRS, in exploring creative avenues to improve revenue collection for the government. Making this offer while receiving a delegation from the FIRS led by the Ag Chairman, Mr. Samuel Ogungbesan, to a meeting at the Treasur y House in Abuja, Idris noted that the drop in oil revenue and the increase of revenue from taxes have made government aware of the enormous revenue potential which could be generated through taxes and other nonoil generating sectors, if properly harnessed.

He further observed that although similarities exist in the functions of both institutions, their roles have been clearly defined by the Constitution, adding that the FIRS has remained one of the greatest ally of his office. Idris also said this provision has underscored the need to synergize their operations to make them more effective for the benefit of the Nigerian economy.

10 ships arrive Lagos ports with petroleum products

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en ships have arrived the Lagos ports with petroleum products, waiting to berth, the Nigerian Ports Authority (NPA) said on Thursday in Lagos.

This is contained in NPA’s daily publication, Shipping Position, made available to newsmen in Lagos.

It said that eight of the ships arrived the ports with petrol, while the remaining two sailed in with diesel and aviation fuel. The document indicated that 34 other ships were expected in the ports from August. 6 to August.

28. NPA noted that 11 of the ships would arrive with containers, while five others were expected with general cargo. It said that eight ships would sail in with petrol, diesel, kerosine and bulk gas; while 10 other ships would sail in with rice, frozen fish, buck wheat and soya beans.

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LECTRONIC-Taxpay is an online self-service tax payment system which gives taxpayers the opportunity to pay their taxes through their banks’ online payment portals.

It is an initiative of FIRS in collaboration with Nigerian Interbank Settlement System (NIBSS). It is meant to facilitate payments of taxes from the comfort of taxpayers’ offices or homes. Taxpayers can pay using the electronic channels provided by their banks such as the banks’ internet banking platform, branches and mobile banking platforms.

Conditions to be met by taxpayer before using e-Taxpay platform Register and obtain your Taxpayer Identification Number (TIN) Have an account with any bank of your choice and subscribe to the internet banking function of your bank.

Have sufficient funds in the account to cover the tax liability/ transaction.

Steps to take to make payment through e-Taxpay platform Having registered and received a TIN, an active internet banking account and sufficient funds, then; decide the channel to use. If you decide on internet banking channel, log on to your bank’s internet banking platform e.g.

GTBank Online Banking, FirstOnline, etc;

Tax payment made easy...

In the case of GTBank Online Banking, select the “Payment” option in the menu; Then select “NIBSS E-Bills payments” under the “Payment” option; Select the account to debit from, to continue; Once inside the NIBSS EBills payments, select “New Request” to start a new payment. This will take you to the NIBSS platform; then select “FIRS e-Taxpay ” from the displayed list services that the NIBSS platform provides, in order to start the tax payment in particular; you then enter your TIN (FIRS/JTB-TIN) or the TIN of the taxpayer you want to pay for;

Click “verify ” to validate that the TIN belongs to the taxpayer making the payment; A pop-up will appear with the TIN details. If ok, then go to the next stage; Select the tax type (e.g.

Company Income Tax, PreOperation Levy, Value Added Tax, etc.); Enter the amount to be debited (tax sum being paid); Accept service charge for the bank (if applicable); Confirm that all the information provided are correct and valid; Submit the request.

After a successful transaction, the system will generate an ‘eacknowledgement’ which can be printed online, or sent to a

specified e-mail address. The ‘e-acknowledgement’ is a confirmation of the transaction of payment of tax to FIRS which would be presented to FIRS field office for the issuance of statutory FIRS receipt to the taxpayer. A TAXPAYER SHOULD PLEASE ENSURE THE ‘eacknowledgement’ IS SUBMITTED TO THE TAX OFFICE OF DOMICILE TO GET A GOVERNMENT TAX RECEIPT FOR THE PAYMENT MADE. Real time notifications: The platform also notifies the taxpayer and FIRS through SMS alert and real time email.

FIRS can view payment transactions and reports online, in real time. Tax types that can be paid using the e-Taxpay channel: e-Taxpay can be used to pay all tax types and levies collected by FIRS. They include: Petroleum Profit Tax (PPT) Education Tax (ET) Companies Income Tax (CIT) Value Added Tax (VAT) Personal Income Tax (PAYE for residents of FCT and nonResidents) Withholding Tax (WHT). This requires a schedule to be uploaded on the platform; National Information Technology Development Fund Levy (NITDEF) Capital Gains Tax (CGT) Pre-Operation Levy (POL) Stamp Duties (SD) and late filing penalty

on the use of the FIRS E-Tax Pay Solution W

hat is the FIRS E-Tax Pay Solution?

The FIRS E-Tax Pay is an acronym for FIRS Electronic Tax Payment Solution.

What is the specific function of the E-Tax Pay? The FIRS E-Tax Pay is an electronic tax payment platform that enables individual and corporate taxpayers effect tax payments via their respective bank accounts using self- service channels provided by any Nigerian Bank. It is based on the recipient’s account and would place a debit on the recipient’s account while applying the credit to FIRS CBN’s account real-time.

How does the e-tax pay solution work?

The e-tax pay solution is hosted on the internet banking platform and bank branches of commercial banks and will be available to any taxpayer who has access to the internet via PC, or handheld devices such as mobile phones. It will

enable the bank customers who are registered for internet banking make their tax payments online and also via bank branches.

Will a taxpayer be charged for using the e-tax pay solution?

No, there is no additional cost to the taxpayer for using the etax pay internet banking solution. Only the normal bank charges such as CommissionOn –Turnover agreed between the customer and the bank would apply.

What is the specific requirement of a potential taxpayer to use the e-tax pay solution?

Taxpayers that intend to use the e-tax pay solution must have registered and obtained a valid TIN (Taxpayer Identification Number) from any FIRS or JTB office and would have done their respective self-assessment in order to use the e-tax pay to pay their tax liabilities. The etax pay solution prompts for a

valid TIN upon Login and performs a system validation with the TIN before populating with the taxpayer’s records.

Can a taxpayer use the e-tax pay to pay all FIRS taxes?

Yes, the e-tax pay can be used to pay all FIRS taxes. It has a drop down menu list showing all FIRS taxes. The taxpayer simply has to select the tax type he intends to make payment for.

Would a taxpayer receive confirmation if the transaction is successful?

Yes, the taxpayer would receive a confirmation that the payment is successful and a system generated reference ID would be issued. The system would also generate an eacknowledgement confirmation to the taxpayer which he can use to obtain his tax payment receipt/credit notes from FIRS office.

Does the e-tax pay solution send notification?

Yes, the system would send an e-notification immediately the transaction is successful.

The taxpayer would also receive a debit notification via email and SMS from his bank

confirming the payment.

Can taxpayers use the FIRS e-tax pay solution to make tax payments online now?

Yes. The solution has been implemented in all commercial banks. All bank customers that have their valid i-banking tokens and have registered for i-banking can access the e-tax pay under their internet banking menu under the NIBSS ‘e-billspay’ service and select FIRS e-tax pay as their tax payment channel and follow the prompts towards making the payment. They also have to have valid TINs. What are the specific selfservice payment channels under the FIRS e-tax pay solution?

The specific channels wherein a taxpayer can make payments are: internet/online banking, mobile banking and bank branches. For internet and mobile banking platforms, a taxpayer can access these self-service channels using PCs, Laptops, notebooks, smart handheld devices and mobile phones.

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Vanguard, MONDAY, AUGUST 10, 2015 — 31

Killing discos? Time for rethink “FG takes over Yola Disco from private investors.”

PUCH, July 24, 2015, p 27.

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HE story went on to state the reason for the take over. According to the report by Everest Amaefule, “Following the declaration of force majeure by Integrated Energy Distribution and Marketing Company, the core investor in the Yola Electricity Distribution Company, the Federal Government has taken over the beleaguered power firm.”

YEDC is the first but might not be the last DISCO to be taken over by the FG before long. While the decision might appear to be in the public interest, in the short term, it portends grave danger for the Nigerian economy. As more DISCOs go under, privatization of the power sector, a dream since the Structural Adjustment Programme, SAP, was introduced is becoming unraveled. Unlike the privatization of the banking, airline and communications sectors, which succeeded under Babangida and Obsanjo respectively, the first attempt at privatization of the refineries under Yar’Adua and power sector under Jonathan have created more problems than they have solved. And, there are dangers ahead.

First, reversal of the privatization

of refineries, which Obasanjo criticized, and now a power company will inevitably make it more difficult for governments (FG and States) to privatize any business or sector in the future.

Capital is a coward; it dreads uncertainties, especially when the capital investment is colossal and the recovery period is several decades. Taking over enterprises previously managed by public sector appointees invariably amount to re-investing in a business with a great deal of accumulated rot which we were fortunate to discard.

Political connections, rather than competence, inform appointments to even the most strategic economic organizations in this country and it is still to be proved that we have changed our orientation in that regard. Nigeria once had a Governor of the Central Bank of Nigeria, CBN, who read History. He naturally left a “rot” in the system which his more able successors required years to clear.

Certainly, none of the investors in DISCOs acquired a unit which required less than ten years to be turned around. Unfortunately, as things stand right now, it is doubtful if any of them will last the next five years. The reasons are not hard to discover.

Without exemption, the DISCOs were the victims of 419

agreements signed with the Jonathan administration.

Certainly, among the factors inducing them to invest in the sector were the promises regarding the power generation by 2014 and years beyond. Four highly respected individuals, President Jonathan, Vice President Sambo, and two former Ministers of Power, Professors Barth Nnaji and Nebo promised Nigerians, and by extension the DISCOs, the following: •Jonathan in ROAD MAP ON POWER – 14300MW by December 2013.

Without exemption, the DISCOs were the victims of 419 agreements signed with the Jonathan administration

•Sambo in 2015, 20,000MW soon (whatever that meant).

•Nnaji – 5000MW by 2011, 2012 •Nebo–6000MW by December 2013, 2014, and 10,000MW by December 2015.

If a private entity had promised those with whom it was signing agreements so often and failed to deliver on the promises, it would have been declared fraudulent and the victims would have headed for court. The DISCOs, which must have believed these pronouncements, before parting with their funds, would probably not have bothered if they knew Jonathan and Nebo would leave us in darkness on their way out.

It is bad enough that DISCOs were fraudulently promised power supply, from which they were to make their money, their predicament was deepened when the same government also guaranteed them tariff increase by 2015 which is now almost impossible for them to receive with only five months left in the year.

Suddenly, the DISCOs are requested to go and negotiate the new tariffs with their consumers.

That means no tariff increase for 2015. Yet, every DISCO must have factored the tariff increase into their projections for this year.

Most Nigerians must have missed the announcement by the DISCOs, in the PUNCH of July 15, 2015, page 34, by Mr Ernest Orji, of Eko Electricity Distribution Company, EKEDC.

According to Orji, “large investment in distribution network was still a mirage as the goal post keeps moving. It is scary, as many of us cannot meet payment obligations..” In addition to the Federal Government, DISCOs are also behind in their obligations to banks and other creditors and are being pushed steadily to the brink.

The collapse of DISCOs, and reversal of privatization of the power sector, at a time when the Federal Government itself is cashstrapped will result in a serious setback to the Nigerian economy immediately. Nobody can guess when the mess resulting in reversal will be cleaned up and Nigerians can once again be sure of who is in charge of power distribution.

When Jonathan, Sambo, Nnaji and Nebo were feeding Nigerians with atrocious lies about power generation, they were warned on these pages, in several articles that the crisis we have on our hands would be one of the consequences of their unpatriotic pronouncements.

In the article POWERFUL LIES; FAMILIAR STORIES ABOUT BLACKOUTS, I made the point that the fixation of Jonathan on re-election is inducing the government to lie to investors in the power sector. It was bound to back-fire. Now the crisis is about to become a calamity.

32 — Vanguard, MONDAY, AUGUST 10, 2015

Vanguard, MONDAY, AUGUST 10, 2015 — 33

Aviation

Protest halts work on new terminal at Lagos airport

By LAWANI MIKAIRU & DANIEL ETEGHE

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NGOING construction work at the new International Terminal building at the Muritala Muhammed International Airport has suffered disruption due to incessant industrial action and protest by workers of the China Civil Engineering Construction Company (CCECC).

The terminal which is amongst the five new terminals under construction in Lagos, Kano, Abuja, Enugu and PortHarcourt since 2013 has in recent times faced a lot of setbacks.

Vanguard was at the construction site of the new terminal where the workers were protesting and gathered that the workers were protesting against the decision of the management of the company to lay them off gradually.

It was further found out that about 3,000 workers had been sacked in June 2015 and more workers were on the line to be sacked by the management of the Company.

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The workers who were protesting and chanting solidarity songs with inscriptions on placards “Are we slaves to the Chinese?”, “They don’t care for us, they only care for themselves. We don’t have good take-home pay and we heard that they got the permission of the Governor Akinwunmi Ambode of Lagos State to shut down all their construction sites across the state.

Speaking to Vanguard one of the worker, Pastor Douglas Banahene, an Electrical Engineer of the company said that the decision of the company to lay off its workers

was because it did not want to hand over the workers to the new company, that was about to take over from it.

Pastor Banahene affirmed that CRCC Construction Company Limited has bought over CCECC but that CCECC has refused to give details of each worker to the new company in order for them to be properly absolved rather they decided to sack them.

He said “Before we came here, we went to Alausa on Wednesday to lay our complaints because what we are passing through is difficult and we cannot bear

it as workers anymore which has been for years now, so we decided to meet the Governor to intervene for us, to see how the problem can be resolved but right now, we are here to stop our workers who are still working, we have gone to all our sites across the state to stop our workers pending when they resolve the issue. The management have been sacking us unnecessarily” “Right now we say they should pay us off, nobody is working again, casual and staff, we are demanding an amount as our pay-off, staff N800,000 and casual N600,000 for each of us apart from our main salary because they are owing us for the month of June 2015” “They say the minimum wage of a Nigerian worker is N18,000 but we as CCECC workers, we are not captured in the constitution of Nigeria, why?

We only have holidays when China is on holidays, we work from Monday to Sunday. 1n 2013, I celebrated my Christmas in CCECC. Now they have been sacking us, they don’t let us know before they even sack us” he added.

Efforts to meet the management of the company to get their own side of the story proved abortive as none of the management staff was on ground during the protest of the workers.

Also, efforts to contact the General Manager Federal Airports Authority of Nigeria (FAAN), Mr. Yakubu Dati to comment on the disruption of work at the new terminal building proved abortive because our correspondent learnt that he was in a board meeting as at the time of filling in this report.

Aviation stakeholders differ on proposed national carrier

By LAWANI MIKAIRU

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VIATION stakeholders have been reacting to Wednesday’s call by President Muhammadu Buhari for the Ministry of Aviation to hasten up the setting up of a national carrier. Most of them have called for caution in order not to repeat the mistakes that led to the death of Nigerian Airways.

Reacting, Dr. Kashim Shettima, President, Skyjet Aviation Services said the President needs to have the forensic audit of why Nigeria airlines are failing and get debt-ridden before venturing into the business.

According to him “In my own opinion, I think the President needs to be properly briefed on what the current situation is. He needs

to hear the truth and nothing but the truth. There should be a stakeholders' meeting with President, where he will meet face-to-face with the industry players such as unions, airline operators and so on. Does the President know the cost of running an airline now? Does he know that a national carrier will have to be given subsidy from time to time?”

“Why do we have to re-invent

what happened to Nigeria Airways? I hope it is going to be business because aviation is nothing but a business. This might be a nightmare. In as much as this is a good dream, sentiment must not replace reality.”

But Mr Balami Isaac David, President, National Association of Aircraft Pilots and Engineers, NAAPE, said his members support it with all sense of responsibility.

34 — Vanguard, MONDAY, AUGUST 10, 2015

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Vanguard, MONDAY, AUGUST 10, 2015 — 35

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36 — Vanguard, MONDAY, AUGUST 10, 2015

Vanguard, MONDAY, AUGUST 10, 2015 — 37

Economy Stories By EMEKA ANAETO, Economy Editor

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ENTRAL Bank of Nigeria’s ( C B N ) Business Expectations Survey (BES) has revealed that business confidence was positive in second quarter (Q2) 2015 across most sectors.

However the report also indicated that businesses were constrained by insufficient power supply, high interest rate, financial problems, competition among other operating environmental issues.

The survey report also indicated that businesses showed greater optimism for improved business conditions ( m a c r o e c o n o m i c environment) in the third quarter (Q3) 2015 as they expect a decline in inflation and borrowing rates as well as appreciation of Naira.

The Q2 2015, national Business Confidence Index (BCI) registered 55.5 points.

At a confidence level of 62.9 points for Q3, businesses expect increased volume of activities in even as the employment outlook index for

CBN survey indicates positive business confidence Q3 2015 registered 39.4 points, far below average.

About 62.3% of businesses in the industrial sector had

expansion plans for Q3 2015 while the services sector had 66 per cent, according to the survey report.

In Q1 survey respondent firms were optimistic on the macro economy as they expected business conditions and operating environment to improve. The optimism was driven by the opinion of respondents from the services sector (7.2 points), followed by wholesale/retail trade (4.1

South Africa’s Liberty to spend up to $80m on two Nigeria deals

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IBERTY Holdings plans to invest up to USD80 million (N16 Billion) on two deals in Nigeria by year-end, as part of a five-year strategy

by South Africa’s No.4 insurer to expand further into subSaharan Africa, its chief financial officer said.

Like rivals, Liberty is expanding elsewhere in Africa as growth prospects attract the attention of corporate executives and promise to

•President Buhari

US investors eye Nigeria’s auto sector T

here were indications that investors from United States of America (USA) are expressing interest in Nigeria’s auto industry following the recent visit to the USA by President President Muhammadu Buhari The Counsellor for Economic Affairs, USA Embassy in Abuja, Mr. Alan Tousignant, said the recent visit to the U.S. has triggered a flood of enquiries from potential American investors on the country ’s automotive industry.

According to a statement issued by Mr Bello Rasheed, the Principal Executive Officer

points) and industrial (1.6 points).

Respondents’ optimism in the volume of total order and the internal liquidity position, buoyed the volume of their business activities in the current quarter. Similarly, the positive outlook in access to credit by the majority of firms upped the financial condition of firms in the review quarter.

(Information) of National Automotive Design and Development Council (NADDC), Tousignant gave this hint when he visited the Director-General of the NADDC , Mr Aminu Jalal, last weekend in Abuja to make enquiries on the Nigerian Automotive Industry Development Plan (NAIDP).

Tousignant, according to the statement, was at the NADDC to get answers for the deluge of enquiries from the American government and its business community on the NAIDP. According to the statement, Jalal told his visitors that two

American automobile giants, Ford Motors and General Motors, had confirmed their interest in starting vehicle assembly operations in 2016.

Jalal also explained that Nigeria is the largest economy in Africa with very huge market for automobile. He stressed that the auto policy is intended to transform Nigeria into a major vehicle manufacturing hub for leveraging on Nigeria’s abundant trainable labour force and material resources especially petrochemicalbased.

The statement further added that Jalal told Tousignant and

members of his team that with a population of over 170 million, Nigeria could not continue to run an import dependent economy.

NAIDP was launched by the Federal Government in 2014 to limit excessive automobile imports and promote massive investments in affordable made-in-Nigeria cars.

Stakeholders had expressed fears that the Buhari administration would discard the policy, but he used the U.S. visit to assure investors of his commitment to the development of the auto industry.

increase the number of people who can invest in insurance to protect their wealth.

“We have been negotiating with some parties in Nigeria to acquire some stakes in their businesses and we’ve made quite good progress in that regard,” Casper Troskie, Liberty’s chief financial officer, said in an interview.

The company, which is targeting mostly corporate clients in east and west Africa, plans to spend about USD393 million bulking up in those markets in the longer term, Troskie said.

Liberty said businesses outside its home market hardly grew during the period due to weak investment markets in east Africa.

Liberty, majority owned by South African lender Standard Bank, reported a six percent in headline earnings per share, a measure which excludes the impact of a black economic empowerment scheme and other one-off items, for the six months to the end of June.

Net client cash flow, or the difference between money received from customers and money given back, fell 11 percent, by a slowdown in single-premium inflows from corporate clients.

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38 — Vanguard, MONDAY, AUGUST 10, 2015

International Business

China exports fall as lower demand, strong yuan hurt growth C

hina’s exports declined more than expected in July, hobbled by a strong yuan and lower demand in the European Union, and adding pressure on Premier Li Keqiang to stabilize growth.

Overseas shipments fell 8.3 percent from a year earlier in dollar terms, the customs administration said. The reading was well below the estimate for a 1.5 percent decline in a Bloomberg survey and compared with an increase of 2.8 percent in June. Imports dropped 8.1 percent, widening from a 6.6 percent decrease in June, leaving a trade surplus of $43 billion.

Along with weak domestic investment, subdued global demand is putting China’s 2015 growth target of about 7 percent at risk.

The government has rolled out fresh pro -expansion measures, including special bond sales to finance construction, but has held off weakening the yuan as China seeks reserve-currency status.

“Exports are no longer an engine for China growth — no matter what the government does, it’s just impossible to see strong export growth as in the past,” said Bank of Communications economist Liu Xuezhi. “It means additional slowdown pressure, and it requires the government to be more aggressive in the domestic market.” Liu said China is likely to accelerate infrastructure spending as fixed-asset investment is the “the most immediate and

effective” way to stimulate growth.

China’s exports to the European Union fell 2.5 percent in the first seven months of 2015 from a year earlier, while shipments to Japan dropped 10.5 percent.

One bright spot was exports to the U.S., which expanded 9.3 percent. The slump in exports “compounds downward pressure on China’s economy and threatens to bring exchange rate depreciation onto the table as a tool to restore competitiveness,” Tom

Orlik, chief Asia economist at Bloomberg Intelligence, wrote in a research note on Saturday.

The People’s Bank of China has adopted a vice-like grip on the yuan, allowing little movement of the currency in the onshore market. The currency ’s closing levels in Shanghai this week matched the tightest range recorded since a fixed exchange rate ended a decade ago.

“On a trade weighted measure, China’s yuan appreciated sharply since

FROM LEFT: Mr Olivier Thiry, Managing Director, Chief Executive Officer, Promasidor Nigeria Plc, Mr Festus Tettey, Head of Marketing, Promasidor Nigeria Plc, and Mr Andrew Enahoro, Head Legal, and Public Relation, Promasidor Nigeria Plc, During the Press Briefing on CowbellPedia for secondary School in Nigeria, Organised by Promasidor Nigeria Plc, Held on Thursday 6-8-2015, At Just Media Studio, Kayode Street Ogba, Ikeja Lagos. PHOTO; Kehinde Gbadamosi

US investors flood embassy with enquiries on Nigeria’s auto industry – Official

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United States Embassy in Abuja says President Muhammadu Buhari’s recent visit to the U.S. has triggered a flood of enquiries from potential American investors on the country ’s automotive industry. The embassy ’s Counsellor for Economic Affairs, Mr. Alan Tousignant, said this when he visited the Director- General of the National Automotive Design and Development Council (NADDC) weekend in Abuja.

According to a statement issued by Mr Bello Rasheed, the Principal Executive Officer (Information) of NADDC, Tousignant visited to make enquiries on the Nigerian Automotive Industry Development Plan (NAIDP).

The statement reported Tousignant as saying that he was at the NADDC to get C M Y K

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2014,” said Liu Li-Gang, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. “Meanwhile, external demand remains weak as also shown by the poor export turnout in Taiwan and South Korea.” A yuan depreciation is not a policy option because of the government’s desire to make it an international reserve currency, Liu said.

The government will be “more aggressive in easing monetary policy and lowering taxes,” he said.

answers for the deluge of enquiries from the American government and its business community on the NAIDP. It said that the DirectorGeneral of NADDDC, Mr Aminu Jalal, and the council’s Director of Policy and Planning, Mr Luqman Mamudu, received and briefed the U.S. team The statement said: “ Tousignant said that there had been an upsurge in the amount of business enquiries from America since the recent visit of President Buhari to the U.S. “He told the NADDC DG that quite a number of the latest enquiries from potential American investors were on the Nigeria auto industry.

“Therefore, he needed to know about applicable staff structure, incentives, availability of skilled

personnel, current total installed capacity, local value addition and industrial clusters and infrastructure.

He also asked questions on applicable safety standards, annual national vehicle demand, export potential to other countries, among others.” The statement said that the NADDC DG, Mr Aminu Jalal, was excited by the “keen interest shown by American companies and businessmen in the industry”.

According to the statement, Jalal told his visitors that two American automobile giants, Ford Motors and General Motors, had confirmed their interest in starting vehicle assembly operations in 2016.

“The NADDC DG explained that Nigeria is the largest economy in Africa with very huge market for

automobiles. He stressed that the auto policy is intended to transform Nigeria into a major vehicle manufacturing hub for leveraging on Nigeria’s abundant trainable labour force and material resources especially petrochemicalbased. “ Jalal told Tousignant and members of his team that with a population of over 170 million, Nigeria could not continue to run an import dependent economy,” the statement said. NAIDP was launched by the Federal Government in 2014 to limit excessive automobile imports and promote massive investments in affordable made-in-Nigeria cars.

Stakeholders had expressed fears that the Buhari administration would discard the policy, but he used the U.S. visit to assure investors of his commitment to the development of the auto industry.

NIMC to deploy authentication, verification service link to MDAs, banks

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he National Identity Management Commission (NIMC) says it has completed plans to deploy the National Identification Number (NIN) authentication and verification service link to all Ministries, Departments and Agencies (MDA’s) and banks.

Mr Chuks Onyepunuka, NIMC’s General Manager, Information Technology and Identity Database, disclose this to newsmen in Abuja.

Onyepunuka said that the deployment was part of the commission’s strategy to ensure the success of the proposed September commencement of the mandatory use of NIN. He said that NIMC had already deployed the authentication and verification service link to one of the security agencies and would soon extend to other agencies.

Onyepunuka also said that NIMC was discussing with the MDA’s and banks to enable them ascertain the infrastructure to achieve the deployment of the NIN authentication and verification service link.

“These institutions include the banks, Nigeria Immigration Service, Ministry of Aviation, Joint Tax Board, State House, National Universities Commission, National Pension Commission, Joint Admissions and Matriculation Board, and National Health Insurance Scheme. Others are the Federal Road Safety Commission (FRSC), Federal Inland Revenue Service (FIRS), among others.

Government institutions and agencies require the biometrics of individuals to offer functional services or for security reasons.

“They are required by law to key into the NIMC National Identity Database for the purpose of identity management and verification,” he said.

Onyepunuka said the verification and authentication would be done both online, which has two approaches, and the offline platform. The online version has the web portal approach used for NIN verification alone, while the desk top is a robust windows based approach that allows enrolee conduct the NIN verification,” he explained.

He added that, on the presentation of NIN or the fingerprints, the individual or organisation requesting such proof would utilise the online NIMC verification service to confirm such identity.

Vanguard, MONDAY, AUGUST 10, 2015 — 39

Advertising & Promotions

How First Bank, PayPal partnership aid contactless transaction STORIES BY PRINCEWILL EKWUJURU

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INCE the introduction of Automated Teller Machine, ATM, Nigeria shoppers have used credit and debit cards in several transactions, locally and internationally running to millions of Naira The adoption of this payment system has helped drive the use of plastic money rather than cash.

Its introduction has also helped in facilitating business transaction, an indication that use of cards have risen in the last one year.

However, the fast growing card culture and the rapid acceptance by the Nigerian populace has led to increased competition and innovation by banks which are the delivery vehicles of these cards.

Of the banks, First Bank of Nigeria, FBN Plc’s partnership with Paypal, one of the largest global online payment processors and the bank’s ability to control a sizeable portion of the market is largely on its innovative and differentiated product offerings occasioned by the paypal platform.

According to the bank’s Group Head, Marketing and Corporate Communications, Mrs. Folake AniMumuney:”our card products have been specially designed to give convenience and support customers domestic and international transactions. With increased transaction activities and a good number of domestic/ international travels, it is

essential our cardholders are informed of existing rewards and partner locations where they can use their cards at discounted rate on purchases.”

On this note, Vanguard conducted an investigation on the viability of the bank’s credit/ debit cards to authenticate the workability of these cards by users.

The investigation showed that customers with the bank’s Firstonline card have been able to get absolutely things needed to make most of their shopping, while they travel for holidays or in Nigeria.

Some persons spoken to at

the Muritala Mohammed International Airport, MMIA, some travellers spoken to who are signatories to the Firstonline card said they were going to do most their transactions overseas with their firstonline inspired paypal card which they described as a unique offering by the bank.

Like, Jude Agbosureme, said: “First bank needs to aggressively drive this message, particularly as the summer approaches, regarding the fact that users have an edge by signing on to Firstonline, and linking their Paypal accounts to enjoy automatic

higher spending limits without verification hassles.”

In Nigeria, FirstBank debit and prepaid cards are now accepted on the PayPal platform, Agbosureme hinted.

From what i understand said Jimoh Alo, “with the product the bank targets frequent International Holiday Makers, business persons / entrepreneurs, and high net worth individuals.”

With more than 50 million merchants and growing, PayPal boasts of over 100 million users across the world in 193 countries and regions with wide acceptance on merchant websites, preferable on eBay.

boosts sports betting profile

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ports betting portfolio in Nigeria has increased with the entrant of Superiorbetng.com, a digital sport betting game.

The Chief Executive Officer of the company, Mr. Tunde Adebayo said at a ceremony in Lagos that the unveiling of SuperiorBet is aimed at turning fun, excitement and relaxation into an empowerment for Nigerians.

According to him, in this game, participants place stakes on their selection of possible outcomes from different sports events on the Superiorbetng.com platform.

On the Superiorbetng.com platform, odds are attached to each possible outcome from available sports events, resulting in players winning cash prizes when their selected “possible outcomes” match the “actual outcomes” from the sports events in question. This digital gaming product is strictly for Sports Games (both ‘Real-life’ and ‘Virtual’),” said Mr. Adebayo.

Kasapreko launches new products

By ANOZIE EGOLE

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FROM LEFT: Matron, Echoes of Mercy and Hope Foundation, Mrs Funmi Adedokun; Program Officer, Women in Technology in Nigeria, Olamide Ogungbemi; Administrator, Echoes of Mercy and Hope Foundation, Mrs Anne-Marie Obikoya; Intel She Will Connect Spokesperson, Titilope Sonuga during a visit by Intel She Will Connect spokesperson to the Echoes of Mercy and Hope Foundation, in Lagos.

51 yrs after, OAAN commissions own building A

FTER 51 years of existence, Outdoor Advertising Association of Nigeria, OAAN, has commissioned its new ultramodern building, elects new executive to pilot affairs of the Association for the next two years.

Speaking during the commissioning, which also coincided with the 30th Annual General Meeting of the Association, the outgoing President, Mr. Charles Chijide, said that the relocation of OAAN corporate head office to a new ultra modern one story building complex was part of the major success recorded during his administration.

“Aside the newly commissioned building, capacity building has been slated to be a yearly training program. Having signed an MoU on behalf of the association, the University has

Superiorbetng.com

now agreed to rotate the training round major Universities in the United State of America. And the one for next year will be in partnership with Harvard University.”

“Also we have been able to actualised the resuscitation of poster award that has now gained international

dimension, capacity building in partnership with Dakota University USA. Our relationship with lawyers in media has been made more mutual, while we foster more partnership among members and regulators.”

He urged the incoming administration to be more focus

and committed, “aside from the newly commission office at Kofo Kasumu Avenue, Lakeview Phase 1 Estate, off Ago Palace Way, Amuwo Ododfin, the outgoing administration has recently acquired a parcel of land in Owerri, which we expect the incoming executive to follow up and secured.”

Chi Limited unveils ‘Chivita 100% or Nothing campaign

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hi Limited has unveiled a new marketing communication campaign tagged ‘Chivita 100% or Nothing’ as part of effort to reinforce its flagship’s brand proposition and strengthen the credential of the brand in the market.

The campaign which is deployed through Television, Digital, Out of Home, Consumer Activation and Point of Sales initiatives demonstrates the brand’s commitment to quality and excellence.

Speaking on the marketing campaign, Chi

Limited’s Head of Marketing, Mr. Probal Bhattacharya, said the campaign highlights Chivita 100% with purity, commitment & nothing but the best which is its recipe for premium quality, thereby providing all the ingredients for success, achievement & leadership” “We do everything possible to ensure that Chivita 100% lives up to its brand promise of goodness and the best there is. This also explains our partnership with the world’s most valuable football club brand because for us it is the best or nothing” he said.

asapreko, makers of popular Ghanian drink, Alomo bittters have launched two new products; Kalahari and Carnival strawberry into the Nigerian market.

The Company said the launching of the new products was to make Nigerians enjoy quality flavoured drinks at an affordable price.

Speaking, Managing Director of Kasapreko Company Nigeria Limited, Kojo Nunoo, said both brands were the outcome of painstaking research and development work to ensure that Nigerians enjoy quality products at an affordable price.

“We are giving full assurance to Nigerian consumers that every product from the stable of Kasapreko have been produce d to the highest of

production and quality assurance standard to ensure that the drinks meet all consumption requirements globally and most especially locally as evident by the NAFDAC product registration number,”. He said.

Speaking in the same vein, Marketing Manager, Peter Adegor said the two brands of the products had already debuted in Ghana and the decision to bring them to Nigeria was based on the identification of gaps in the spirit market in Nigeria.

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40 — Vanguard, MONDAY, AUGUST 10, 2015 Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

Yoyo naira exchange rates and common sense

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igerians were clearly bewildered by the recent wild swings in the Naira Exchange rate.

Regrettably, however, despite Godwin Emefiele’s earlier assurances to the contrary, Naira was officially devalued from N155=$1 to N165 and later to N197=$1 within his first year as Central Bank Governor.

Expectedly, the dollar rate quickly skipped beyond N220=$1 in the parallel market, while speculative dollar accumulation by hoarders and the subsequent denial of access to official forex to importers of 41 sundry items, later catapulted the parallel market Naira exchange rate beyond N240=$1. Notwithstanding, the CBN has again assured Nigerians, that the current Naira rate would be stable, as it is inappropriate for the tail (i.e. the small parallel market) to wag the dog.

Nevertheless, the CBN may have been in denial of the inflationary potential on the economy of the ultimately higher market prices for rice and 40 other items recently banned from official dollar purchase. Consequently, the inevitable reality of such inflationary push, will compromise the achievement of CBN’s core mandate for price stability for some time to come.

Furthermore, although parallel market Naira exchange rates improved immediately after the rejection of forex deposits from bank customers, such improvement will probably also be short-lived as this process will only constrict the primary source of dollar supply from CBN’s real time forex allocation to over 1,000 licensed Bureau de change (BDC) nationwide. It is certainly not best practice for Central Banks to formally fund BDCs, but CBN’s

apparent favorable disposition is clearly the result of the IMF’s misguided prescription which made such liberal dispersal of official dollars to BDCs as one of the conditionalities for debt exit in 2005-6.

Remarkably, monthly dollar supplies to BDCs often exceeded $1b when Nigeria’s dollar reserves approached the premium level of about $60bn; nevertheless, each BDC is currently entitled to $30,000 allocation weekly, while Nigerians with Naira denominated debit cards can still also obtain $300 per day directly from ATM terminals abroad at the official rate of N197=$1, up to a limit of $50,000 annually, i.e. down from the earlier stupendous $150,000 per person.

CBN’s sustenance of such liberal forex allocations is clearly inexplicable, especially, when infact, probably less than 1% of Nigerians earn $50,000/ annum, while dollar allocations to BDCs ultimately also fund imports of contraband and forex round tripping with the collateral threat to the survival of local industries and the disenabling economic dislocations.

Nonetheless, we have returned once more to the forgone era of multiple exchange rates, despite the attendant economic distortions of this practice; for example, while faith pilgrims enjoy forex rates at N160=$1, importers of 41 delisted items would endure N225-250/$, while fuel and all other imports are favored with the currently subsidized price of N197/$.

Clearly, the wide disparities between the different Naira exchange rates and the huge opportunity for gain will undoubtedly instigate sharp practices in the forex market.

Fortunately, the Senate has invited the CBN Governor to

explain the reasons behind Naira devaluation and the wild swings in the parallel market. Expectedly, Emefiele will identify increasing speculation and the drop in crude oil prices/revenue as the primary causes of the Naira’s predicament.

It would be unfortunate if the Senate is sufficiently gullible to accept drop in crude prices/ revenue as a plausible cause of Naira depreciation, without asking the CBN Governor to explain why the Naira exchange rate remained static and unexpectedly even depreciated marginally when crude prices conversely exceeded $140/barrel, and forex reserves exceeded $60bn after debt exit in 2006!

Plausible reasons for the price contradictions in the forex market have, lately, also agitated the minds of individuals as well as critical interest groups. For example, one, Matthew Somoye suggested in the Guardian

C B N ’ s sustenance of such liberal f o r e x allocations is c l e a r l y inexplicable, e s p e c i a l l y, when infact, probably less than 1% of Nigerians earn $50,000/annum

environment and also reduce the pool of excess Naira liquidity that drives corruption in the public service.”

Finally, in its editorial of 6/ 8/2015, titled “CBN and the economy”, the Guardian Newspaper examined the origin and trajectory of exchange rate management and concluded as follows: “For Nigeria to begin to close the gap by facilitating extensive investments that create jobs, Buhari should urgently stop both the politically dictated wrongful withholding by CBN of Federation Account dollar allocations and their simultaneous substitution with freshly printed naira amounts by not only directing the country ’s public sector and autonomous forex to be transacted appropriately but also allowing the apex bank the leeway to professionally carry out its statutory mandate”.

Instructively, the CBN is clearly familiar with the recommendation of dollar allocations for dollar denominated revenue and indeed the Vision 2020 blueprint’s ‘monetary policy thrust’ also recognized that its adoption would strengthen the Naira exchange rate ad significantly reduce the rates of inflation and cost of funds.

In retrospect, after over 5years of denial, the CBN adopted this enabling payments system in its “Strategic Agenda for the Naira” in August 2007.

Regrettably, the initiative was Dead on arrival as the incumbent Attorney General, one Andoaka, summarily truncated the reform as unconstitutional. Sadly, the CBN authorities have become too timid since then to even contemplate this clearly enabling reform strategy that would induce price stability.

SAVE THE NAIRA, SAVE NIGERIANS.

advertorial of 5/8/2015, that the solution to a stable stronger Naira and the elimination of multiple exchange rates would be found in the supply side of the foreign exchange equation; Somoye therefore recommended as follows: “Every month, both the federal and state governments receive monthly allocations from crude oil dollar denominated revenue and CBN converts the Naira and gives out to States. This huge Naira volume chases few dollars which further fuels an already bad situation. CBN should change the order by paying the states and federal agencies in dollars” ....... “and for the commercial banks to buy the dollars from the state governments and sell to importers. The implication of this is that the so called FX that is scarce will not be that scarce, as genuine importers under eligible transactions can relatively find dollars from the interbank and the interbank will become rich again”.

Similarly, the Ikeja Branch of the Manufacturers’ Association of Nigeria concluded as follows in a Guardian advertorial titled “Manufacturers Association of Nigeria’s position paper on the management of foreign exchange in Nigeria to enhance the performance of the manufacturing sector ”:( Guardian 5/7/2015 edition, pg 50) “We, as manufacturers will be very satisfied if inflation falls to less than 2% while monetary policy rate is anchored on a rate between 13% so that cost of funds to the real sector will fall below 8% across the board! We are confident that the adoption of dollar certificates for the allocation of distributable dollar revenue will quickly bring about the desired industrially supportive

Business & Economy

Cyber risk, regulation, increasing tax burden top threats for insurance CEOs

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he findings of two recent reports by PwC that chart the top risks in the global insurance sector and the growth concerns of insurance Chief Executive Officers, CEOs shows that cyber risk, interest rates and growing tax burden were among the top risks for insurers.

This is indicative of how high these issues have become for the industry when looked at in conjunction with regulatory developments and the broader macro-economy.

One of the reports, Insurance Banana Skins 2015, a global study conducted by CSFI

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(Centre for the Study of Financial Innovation) in conjunction with PwC polled over 800 insurance practitioners and industry observers in 54 countries

This is indicative of how high these issues have become for the industry when looked at in conjunction with regulatory developments

including Nigeria,to find out where the greatest risks are in the next 2-3 years stated that regulatory risk emerged as the overall top risk for participants in the survey for the third successive time, underlining the deep impact regulatory change is having.

The report says that new rules governing solvency and market conduct could swamp the industry with costs and compliance problems. It could also distract management from the task of running healthy businesses at a time when the industry faces radical structural change.

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

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Group Business Editor Deputy Business Editor Energy Editor Asst. Business Editor Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Energy Reporter Industry/Agric. Reporter Maritime Reporter Insurance Reporter Capital Market Reporter

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