FEBRUARY 16, 2015
AWARDS - From left, Mr Demola Kolade, Executive Director, Mr Thompson Ajayi, Chief Accountant, and Mr Paul Omekwe, National Sales Manager, all of Brian Munro Limited, and Mr Okey Akpa, Managing Director, SKG Pharma Limited, during the 2014 Distributor Awards held by Brian Munro Limited, last Wednesday in Lagos. PHOTO: Kehinde Gbadamosi.
Industry leaders move against mandatory listing on NSE zManufacturing, oil and gas sectors to be worse hit zWe disagree with compuslory listing - NSE BY FRANKLIN ALLI & NAOMI UZOR
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NDUSTRY LEADERS in the country are making frantic efforts to halt passage of the Private Companies Conversion and Listing Bill into law by the National Assembly. They said the bill being sponsored by the Deputy Chairman of the House of Representatives Committee on Capital market, Hon. Chris Emeka Azubogu, would not help the business climate in Nigeria and should be withdrawn.
The draft bill which is premised on the provisions of Section 16(2) (a) (b) and (c) of the Constitution of the Federal Republic of Nigeria 1999 has passed the second reading on the floor of the House of Representatives as at the last quarter of 2014. The Industry leaders drawn from multinational corporations like PricewaterHousecoopers (PWC); Shoprite, British America Tobacco; Shell and Chevron, FrieslandCampina including leaders of the Organised Private Sector (OPS) have unanimously kicked against the Bill and are now harmonising their
position ahead of the Public Hearing of the Bill. Financial Vanguard learnt that the sponsors of the Bill had advanced the following arguments to justify the introduction of the bill: “Conversion to public companies and listing on the Stock Exchange would increase the hitherto private companies' access to long term funding from the capital market , leaving the banks to cater for the funding needs of the real sector. “The Bill will boost operations at the Stock Exchange and increase the sector ’s contribution to the
GDP which is considered smaller compared to other emerging economies. The sponsors also argued that the Bill will promote financial inclusion and move the economy from the current dominance by informal sector to formal sector. Also, section 1 of the Bill provides that existing private companies that should convert to public liability companies and be listed in the Stock Exchange market within 12 months of their conversion, shall have shareholders’ funds in excess of N 40 billion, annual turnover in excess of N40 billion and total assets in excess of N80 billion. According to the bill, the asset value of a private company shall be determined based on the gross values of the company’s assets as recorded in its balance sheet at the end of the last audited financial year, while the annual turnover shall be based on the gross revenue of the company from income, into or from Nigeria, arising from the sale and rendering of goods and services, and the use of the company’s assets in a manner that yield interest, royalties and dividends. The bill, however, makes no provision for the minimum percentage of the share capital to be offered to the public but seeks to grant tax incentives to companies caught by the bill. The tax incentive, which is for five years after listing, varies with the percentage of shares listed by the qualifying companies. The proposed tax incentives offered by the bill are “(a) companies that list at least 40 percent of the issued share capital shall be eligible for a tax incentive at a rate up to one-third of its applicable income tax. (b)Companies that list 30 percent of its share capital shall be eligible for a tax incentive up to one-fourth of its applicable income tax; (c) Companies that list 20 percent of its share capital shall be eligible to a tax incentive at a rate up to one-eight of its applicable income tax. Qualifying companies will also be entitled to tax deductible expenses on: “All expenditure incurred by the companies for the purposes of listing on any securities and 60 percent of Securities and Exchange Commission related fees for listing. It was also learnt that Section 8 of Continues on page 22 C M Y K
22 — Vanguard, MONDAY, FEBRUARY 16, 2015
Cover Story
Vocation and technical education – A key to improving Nigeria’s Development (4)
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PROMO DRAW: From left: Miss. Simisola Abass, representative of the Lagos State Lottery Board (LSLB); Mrs. Nwosu Esther, representative of Consumer Protection Council (CPC) and Miss. Yetunde Kotoye of Retail Proposition, Sterling Bank Plc at the third Sterling Gunners Promo Draw held at the weekend in Lagos.
Industry leaders move against mandatory listing on NSE Continues from page 21 the bill creates offences and penalties: “A person who contravenes any of the provision of the bill commits an offence and is liable on conviction to imprisonment for a period of not less than two years. Where the offence is committed by a body corporate, the corporate body shall be liable on conviction to a fine of 10 percent of its annual turnover for each year of default. And where the offence was committed with the knowledge, consent or connivance of a director, employee or secretary jointly or severally, all the directors, employees and secretary that have taken part in the commission of the offence shall be liable on conviction to a fine of N1 million for each month of default or imprisonment for a period not below two years or both.” Reacting to the bill, Alhaji Remi Bello, President, Lagos Chamber of Commerce and Industry, LCCI, noted that the bill under consideration has elicited concerns from various stakeholders in the business community, especially LCCI member companies. “Our preliminary review of the proposed bill shows that it will impact negatively on local and foreign investment and the broader economy. It may also lead to considerable loss of revenue to the government and break up of companies to circumvent the requirement of the Bill. Also, the Nigerian Stock Exchange may not have the depth and liquidity needed for the investment arising out of the mandatory listing of these companies,” he said. He urged the Organised C M Y K
Private Sector to harmonize its position with a view to positively influencing the direction and content of the bill before it is passed into law. Corroborating this position, Mr. Bimbo Atlola, Deputy Chairman LCCI Commercial Law & Taxation Committee, also warned that the bill, if eventually enacted into law either by the 7th or 8th National Assembly, has serious implications for the private sector, especially the manufacturing, energy and telecommunications sectors. He said that the bigger picture is that the manufacturing, the oil and gas, power and the telecommunications sectors will certainly be the worst hit by this obnoxious bill in the unlikely event that same is passed into law by the government. According to him, foreign companies operating in these sectors, especially in the last two and half decades, and the assets acquired by these corporate players in these sectors will make them easy preys to this scheme. “The bill certainly has serious implications for the oil and gas sector. Exploration and production including ancillary technical services are highly capital intensive and as such, key operators in the Nigerian oil and gas industry, especially in the upstream sector, are automatic candidates for the compulsory conversion and listing contemplated by the bill. Indeed, it may be safely argued that every active oil block owning private companies including some marginal field operators will be caught by the regime of this bill and a few private key
players in the downstream sector will also not be left out. The recent liberalisation and privatisation of the Nigerian electricity sector following the enactment of the Electricity Power Sector Reform (EPSR) Act of 2005 also makes the emerging Nigerian electricity and power sector another target of the bill. Continuing Mr. Atlola said “All the Global System for Mobile (GSM) communication operators in Nigeria are certainly automatic candidates of the bill as they will be caught by the qualifying threshold created by section 1 of the proposed bill. The Private Companies Conversion and listing bill is retrogressive in several respects. The passage of the bill, in its current form, signifies a drastic shift in Nigeria’s policy on foreign direct investment with implications for the Nigerian energy sector. According to him “It is important to reiterate that the bill applies to enterprises owned by Nigerians and nonNigerians alike and this will certainly discourage foreign investments in virtually all the major business sectors in Nigeria including the oil and gas, emerging electricity and power sector. The tax incentives contemplated by the bill also appear discriminatory and unfair as same is available to private companies listed on the stock exchange pursuant to the provisions of the proposed Act but not available to those companies that got listed voluntarily. Nigeria can also hardly afford the potential revenue loss to be occasioned by the tax incentives Continues on page 23
he focus is on the roles of technology and vocational education in enhancing entrepreneurial skills that will equip students for entrepreneurship education in Information and Communication Technology (ICT.) driven technological environment. The world has become globalized and the future prosperity depends on comparative advantage. This comparative advantage hinges on people and their technical or technological sophistication. Towards this, some crucial entrepreneurial and technical skills needed by the students in colleges of education (technical), polytechnics and universities to meet the trends in a global economy is analyzed. Technology education is to be considered as the key agent of technology development, either as a way of developing human capacity, increasing the shield work force for modernization, industrialization, environmental development or as a matter of personnel freedom, developing capability and empowerment. Technology education is increasingly recognized to be central to both the origins of technological development and challenges and to the prospects for Technology successfully dealing with them (Alam, 2009). Decision education is makers at all levels, need increasingly timely, reliable access to knowledge generated by recognized to be technology and technical central to both education to introduce the origins of rational policies that reflect a better global understanding technological of complex technical, development and economic, social, cultural challenges and and article issues concerning the society, and our to the prospects environment. Technical for successfully decision making and priority dealing with setting is an integral part of overall development them planning and formation of technology development strategies. Above all, technology education is a human right and, as such, should receive priority in the allocation of national resources. It has become very necessary not to only keep technology education bound to the role of manufacturing skilled manpower but also to economic development and global economy. In Nigeria, technology education was previously not seen as fundamental for national development, or for the economic development, but for the school dropouts, and other social and political development within the nation and for individuals. Hallak (1990) argues that technology education is also linked to human resources development and that this has an impact on more than just economic growth, but also an impact on the wider development of individuals and societies. According to him, it contributes to: (a). Individual creativity, improved participation in the economic, social and cultural roles in society. (b). Improved understanding of an individual and heir respect for others, thus promoting social cohesion and material understanding (c) Improvement in health and nutrition. (d). Improved chances of economic development. (e). Improved technological development. (f). Socio-cultural change. (g). Democracy and equality (h). Ecological development/quality of life (increasing people’s awareness of their environments).
Vanguard, MONDAY, FEBRUARY 16, 2015 — 23
There has been series of reactions to the story: Diesel mafia are ripping off Nigerians. Here is one of such reactions BY EMEKA AKABOGU ESQ. y home generator is no guzzler, yet my heart always skips a beat at the sight of my monthly diesel bill. In my side of town on the Lekki-Epe Expressway, the price of diesel is between N145.00 and N160 depending on the station. Interestingly, it often costs me less to buy at the stations that sell for N155.00/litre than at those that sell for N145.00/litre. That however, is the subject for another day. The truly befuddling question is why the more than 50% crash in crude oil prices has left the price of diesel unaffected. The bigger concern is that diesel is a deregulated product, and challenges that seem to (but I have been one of the fiercest do not necessarily) justify the advocates of deregulation of prices that we pay. First off, petroleum prices in the last with the naira in limbo against few years. Is there now cause the dollar, banks have been to question the argument for extremely circumspect about opening Letters of Credit in deregulation? favour of oil marketers. The The Facts In January 2015, the forgettable and tragic international price of gas oil experiences of 2008 are still (as diesel is technically very fresh for many, and have referred to by oil traders) encouraged an abundance of averaged $445 per metric caution. More directly, banks have tonne. A metric tonne of diesel could yield an average been seeing the short end of of 1,120 litres of diesel, the stick in the RDAS market, depending on the density of regularly getting only a slim the particular specification. percentage of what they bid Converted to naira, the for. Diesel not being as much international price of diesel of a priority as PMS for LCs, per litre has been about has to contend with fewer N74.00 in the period under opportunities for opening of and necessarily, review. Factoring collateral LCs, costs including foreign importation. There is also a exchange, freight, port and nagging suspicion by many storage, the landing cost of that the naira is going to fall diesel in Nigeria per litre is further, and many do not want between N85.00 and N90.00. to be caught in-between a Actual ex depot price in transaction when that January has averaged happens. As a result, fewer N95.50k. Diesel is therefore LCs are opened for diesel and being sold at a minimum there are fewer persons able premium of N50.00 in to import the product. Yet the ex depot price of Nigerian stations for every diesel (for January 2015) litre. averaged N95.50. For the very Perception and Reality Marketers of petroleum fear of foreign exchange risk, products are often seen as a many importers are ready to cartel of rampaging shylocks quickly sell-off stock from the that will stop at nothing to jetty tanks. With no such risk make profit. They are attaching to retail distributors, however faced with significant coupled with the slow turnoperational and business around for supply from the few importers, retailers look to
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Why price of diesel remains high padding profit from the pumps. The result is the N50 premium per litre of diesel. Competition seems meaningless in this context as obvious pricing agreements amongst retailers ensure that consumers are robbed of the benefit of a deregulated and potentially competitive
players sitting over champagne glasses can agree a minimum price with no correlation to global or even local market realities and trends. The prospects of innovativeness, customer appeal and expanded options that are the drivers of the deregulation advocacy could
The forgettable and tragic experiences of 2008 are still very fresh for many, and have encouraged an abundance of caution market. Profiteering is the name of the game, and consumers seem helplessly at the mercy of its hard-nosed players. Deregulating PMS This diesel scenario does not bode well for the deregulated PMS regime that I have severally advocated. I know as a fact that many market operators are also keen on having that market deregulated. Such deregulation will be meaningless if some dominant
be stillborn, with the real fear that Nigerians will be left the worse for wear. Even the operators would lose in such a scenario, as the market will not be one of skills or expertise or uniqueness but an open sesame for all comers and a sure road to oblivion. Obviously, successful deregulation needs effective regulation. Regulatory oversight The truth is that retailers and marketers who have struck price agreements are
not breaking any law in Nigeria. In the first place, there is no regulatory framework for competition, or in this case, anti-competitive practices. Though the Minister of Petroleum has the power to fix the price at which any particular class of petroleum products may be sold (section 6(1) of the Petroleum Act), President Umaru Yar ’adua had by executive order in 2009, removed diesel from the class of price-regulated petroleum products. However the Petroleum Products Pricing Regulatory Agency (Establishment) Act of 2003 states one of the agency ’s functions to include prevention of “collusion and restrictive trade practices harmful in the sector ”. This is the nearest provision there is to prevent abuse of market positions through cartelisation. Unfortunately, this provision on its own confers no powers on the PPPRA to rein in anticompetitive practices since neither precise price nor price range has been fixed which retailers could be alleged to have colluded to breach. This is expected to be one of the areas where a strengthened legal regime for the agency under the Petroleum Industry Bill will ensure more precise powers of regulatory intervention. But pending the PIB what should be done? I think the Honourable Minister of Petroleum Resources should use the strong suasion powers of her office and prevail on retailers to temper their greed simple.
Emeka Akabogu is the Chairman, OTL Africa Downstream
Cover Continues from page 22 proposed by the bill, especially now when emphasis is being placed on tax revenues following the dwindling oil price in the global market. “It is also my view that the objectives sought to be achieved by this bill can otherwise be achieved through other lawful means. This bill and the underlying rationale for same, in my view, simply reinforces the need for an amendment of the Companies and Allied Matters Act, provisions of which had
Indus tr s mo or ting on NSE Industr tryy leader leaders movve agains againstt mandat mandator oryy lis listing long become obsolete and largely devoid of contemporary relevance. The CAMA simply need to be amended to address the challenges giving rise to the bill. “While increased listing of companies on the stock exchange is healthy for the economy, compelling private companies to do so will be patriotism taken too far,” he stated. “The Private Companies Conversion and listing Bill, 2013 is retrogressive and
unconstitutional. What the government should do, in my view, is to put in place a legal framework that will encourage private companies to fall over themselves to get listed. The National Assembly may make laws granting irresistible and mouth watering tax waivers and other incentives to private companies seeking public status and thereby creating a compelling business case for listing. While increased listing on the floor of stock exchange is good for the economy, to force private
companies to list is unethical and smacks of dictatorship. Some Nigerian families would rather have their companies dead than to go public. “The bill, if passed, will make Nigeria less attractive for foreign investors and starve the emerging energy sector the much needed foreign investments. No prudent foreign investor will invest in an economy that guarantees no security of investment. The bill is ill conceived and should be vehemently opposed by the organized private sector,”
Atilola maintained. In his remarks, Kola Adeeeko, Head Corporate Services Division, NSE, gave the perspective of the NSE, saying “The concept of compulsion is totally unacceptable to the Exchange; NSE wants quality companies to be on the Exchange. We are not in support that the Bill should be thrown out outright but any company that will be listed on the Exchange should have good corporate governance; we disagree with the whole
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24 — Vanguard, MONDAY, FEBRUARY 16, 2015
Insurance
Insurance products to be sold at parks, filling stations — NAICOM Stories by FAVOUR NNABUGWU
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he National Insurance C o m m i s s i o n (NAICOM) is making plans to introduce parks and filling stations as selling points for insurance products. The Commission said the need to provide multi-channel outlets to sell insurance products
has become imperative for the industry’s customers to buy insurance products at ease. Commissioner for Insurance, CFI, Mr. Fola Daniel, made this known to insurance correspondents, in Benin, Edo State. Daniel said, “The major parks could serve as agents of insurance companies even the filling stations as
outlets to sell insurance products.” He stated, “The Commission will come out with a guideline that will include them into the multi-channel outlets for insurance products” Daniel believes that multi channel strategy for underwriters offers a prime example of a key piece of the experience puzzle as mobile and social media provide
convenience and ease of use to customers, and will continue to grow. According to him, “It is only in this country that one buys a new car and drives on the road without a number plate and insurance. If one buys a new vehicle in the US, it is right at the showroom that a number plate is fixed to the vehicle and insurance to go with it.” The CFI said the
introduction of parks and filling stations will not only entice more people to buy insurance but will serve as touchpoints to sell insurance products in addition to insurance agents and brokers. To build trust, Daniel maintained that insurers will therefore need to design distribution strategies that can cater for present day-to-day demands of their clients
and also position them to serve tomorrow’s need thus making multi-distribution strategy critical for revenue generation and expansion. He said insurers need to maintain strong customer acquisition and retention rates to ensure sustained organic growth, adding that the multi-distribution will not only help insurers to address changing customer needs but also help them address a range of technical issues that are having profound effect on both the life and non-life market. Multi-channel refers to the distribution of insurance products through multiple distribution networks, ranging from direct networks and agents to brokers, garages and filling stations including major supermarkets.
…Says low public trust, awareness biggest challenge of industry
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ow public trust and awareness are still the biggest challenges confronting the nation’s insurance industry, and has continued to be worrisome to the National Insurance Commission, NAICOM. Commissioner for Insurance, Mr. Fola Daniel, sated that regrettably, the biggest challenge of the insurance industry is still low public trust and awareness. Daniel said, “The biggest challenge of insurance industry still remains low public trust. If the public do not trust insurance companies, people will not buy insurance. The other challenge is awareness. People are still not aware of insurance”. He cited an instance, when a rich man was educated on insurance and the need to buy insurance, he remarked that the man was shocked by the percent of premium he was to pay and quickly insured all his property, adding that the said man has since imbibed the culture of insuring his property and promptly too. C M Y K
Vanguard, MONDAY, FEBRUARY 16, 2015 — 25
Business & Economy
Transparency Int’l seeks crackdown on money launderers …says 100, 000 suspicious accounts exist in Swiss banks By EMMA UJAH, Abuja Bureau Chief
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r a n s p a r e n c y International, TI, has advocated a crackdown on money launderers and the banks that aid them in the illicit funds transfers across the globe. A statement by TI yesterday challenged national authorities and their security agencies to halt money laundering which deny citizens the muchneeded resources for national development. According to the global antigraft body, national judicial processes are often inadequate in tackling money laundering as those indicted are often given light sentences. It disclosed that as many as 100,000 accounts are held in Swiss banks by individuals and corporates where investigations have shown that many of them actually hold concealed funds. “Banks need to oversee their employees and enforce higher ethical standards, which have to be reflected in the tone from the top, the performance management system and remuneration. Evidence of money laundering abounds, but for the greatest part, investigations have only
resulted in corporate fines with almost no criminal prosecutions of individuals. “Actions by national judicial authorities to end this criminal behaviour are largely absent. This lack of senior management accountability sends a signal to the corrupt individuals and corporations laundering cash, and to their banks, lawyers and other agents who assist them in their crimes, that in this area
there is impunity. This is wrong,” the Chairman of the Board of Directors of TI, José Ugaz, said. TI said that UBS, one of the largest banks in Switzerland, has already confirmed that it was being investigated by the US authorities to determine whether it helped Americans evade taxes or otherwise. Much of stolen funds from Nigeria by past leaders were traced to Switzerland which
has been considered as a haven of stolen money. A recent report of the African Union and the UN Commission for Africa, revealed that Africa loses more than $50bn every year in illicit financial outflows as governments officials and multinational companies engage in fraudulent schemes aimed at avoiding tax payments to some of the world’s poorest countries, impeding development projects and denying poor people access to crucial services.
CONFERENCE - From left Kunle Osilaja, Head, Ecobank Capital Nigeria, with panel speakers, Kamar Bakrin, Helios Capital; Wole Famurewa, Moderator, Markets Editor, West Africa, CNBC Africa; James Vincent, Qatar National Bank; and Edem Dzakpasu, Nedbank at the Ecobank Capital 2015 Investment Banking Conference held in Lagos.
Indigenous consortium plans two 1,000 MW plants in Nigeria …Plans training, engagement of 74,000 youths By CHRIS OCHAYI
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consortium led by FirstGate Group has signed a Memorandum of Understanding, MoU, with the Federal Government to build two separate 1,000MW gas-fired and solar plants in Nigeria. The Minister of Power, Prof. Chinedu Nebo, signed the MoU on the project with a timeline of four to five years on behalf of the government Chief Executive, FirstGate Business Intermediaries Ltd, Kelvin Asogwa who signed the dotted lines at the Ministry’s headquarters in Abuja, promised that the project will assist in the realization of Mr. President’s Power Sector Transformation which is cruising at a high
speed. Asogwa said the consortium will train a total of 74,000 Nigerian youths in various technical trades, just as he disclosed that the capacity building platforms overseas will take place in South-Korea and Turkey. According to him, “the partnering overseas companies have accepted to train Nigerians after which they would be engaged when the plant must have come on stream”. Tagged Tax-Holiday, the scheme is designed as part of the MoU for these countries to train Nigerian youths he said. When asked about its financial and technical capabilities, Asogwa said that the Group has the muscle and assured that the dream will come true, adding that the process is like
a circle; from the beginning, it entails training, and later trainees will be absorbed to work in these plants. Already, the group has acquired 27,000 hectares of land in Kogi State, he stressed. The Minister after the signing ceremony spoke about Government’s resolve to do anything that would bring more electricity that could be accessed by Nigerians. He commended FirstGate Group for this initiative and indeed working closely with the South-Koreans who have developed solar energy technology well ahead of others. Prof. Nebo said SouthKorea has developed solar energy to power a cluster of industries and trade zones adding that FirstGate would benefit immensely from the
Asians in developing appropriate technology for battery storage systems and other Hi-tech uses from solar technology. The Minister warned FirstGate Group to make haste while the sun shines by executing the content of the Agreement, stressing that MoU not realized soon will become dead. He also raised the issue of financing, as key in the realization of the project, for the 2 plants it would be in the region of 2 billion USD times 2, Nebo said. The Minister also promised to assist in the areas of licensing, permits and reports, stressing that the ministry will ensure that all these processes are hastened.
Oil tops $60 for first time in 2015
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il rose above $60 a barrel on Friday for the first time this year, bringing gains this week to 4 per cent, supported by signs that deeper industry spending cuts may curb excess supply. Also supporting oil, euro zone economic growth a c c e l e r a t e d unexpectedly in the final quarter of 2014 as the bloc’s largest member, Germany, expanded at more than twice the expected rate. The price of Brent crude collapsed from $115 in June to $45.19, the lowest in almost six years, in January due to oversupply. Since January, mounting signs of lower industry spending have helped prices rally by more than 30 percent. Apache Corp, a top U.S. shale oil producer, said on Thursday it would cut capital spending and its rig count in 2015 following the price collapse, keeping its output growth mostly flat. Brent for April delivery was up $1.12 at $60.40, after trading at a high of $60.54 earlier in the session. The March contract expired overnight. U.S. crude was up 80 cents at $52.01. “During the last weeks, crude oil rebounded driven by improved market sentiment and by expectations that low prices will lead to lower supply growth in 2015,” said Daniela Corsini, analyst at Intesa Sanpaolo, in a report. Besides Apache’s update, Royal Dutch Shell’s chief executive said supply might not be able to keep up with growing demand as companies reduce budgets, and France’s Total announced investment and job cuts. “Seeing today ’s prices, supply will probably not keep pace with this growth. It may even decline, as prices are close to cash costs,” said Shell Chief Executive Ben van Beurden.
26 — Vanguard, MONDAY, FEBRUARY 16, 2015
Interview
Postponement of election has led to investor paralysis —REWANE I think from the beginning, 15 to 20 percent devaluation is more than adequate. So anything around N195/$ and N200/$ will give you fair value and the currency will still be fragile but it will begin to strengthen after that. In a developing and mono-product economy like Nigeria’s, what should be the priority of monetary policy? Is it inflation targeting and currency defence or economic growth and employment?
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ismarck Rewane is the Managing Director/Chief Executive of Financial Derivatives Company Limited. He is one of the leading economic analysts in the country. In this interview, he proffered solutions to the continued depreciation of the naira, and also commented on how investors are reacting to the tension generated by the postponement of the election. He also offered some advice to the eventual winner of the election, while highlighting opportunities in the stock market for investors. BY BABAJIDE KOMOLAFE & JONAH NWOKPOKU The CBN is trying to avoid further devaluation, is it the right thing to do or is it achievable? I don’t think the CBN is trying to avoid devaluation. I think what they are trying to do is to time it and do it appropriately but we don’t have the luxury of timing anymore. We have to do the right thing now. And the right thing to do is to actually reduce the amount of uncertainty, and therefore the nervousness, the jittery and the panic. We have moved from a situation where we had
the luxury to pick our choices to where our choices are now picking us. And the question is that we now need to bite the bullet. When you bite the bullet, the market will correct it. That is, if you move the currency to as much as a fair value, then the amount of naira available to everybody to buy the dollars will be reduced and naturally the naira will appreciate in the long run. But in the short run, there will be devaluation and everybody will absorb it and when they absorb it, we will now have to deal with how to make the forward adjustment
which is an appreciation of the naira that will come after devaluation. I know that in the past you predicted that this is what the value of the naira is supposed to be like, given the current situation, what will be your estimate of what the naira exchange rate should be?
So what are the unknown unknowns? We don’t know whether there will be an election? We don’t know what is going to happen in the North East? We don’t know whether the election will be postponed again. We don’t know whether there will be an interim government, we don’t know whether there will be an annulment
No, monetary policy has limited things to do with growth. Monetary policy is about stability. It is short term oriented. The fiscal policy is that which has to deal with growth where you have to deal with taxes, revenues, investment and expenditure and all the other things, including incentives. So the ministry of finance, the ministry of economic development and ministry of investment would deal with that. The monetary policy authorities look at inflation, currency, the economic value and the reserves and use the monetary policy to make sure that they control inflation, money supply and exchange rates. That is what we call the holy trinity of monetary policy. So the Central Bank has nothing directly to do with growth but it helps and reinforces fiscal policy. Therefore monetary policy looks at monetary conditions and uses monetary policy on a countercyclical basis to slow down our economy when it is overheated or to engineer and accommodate our economy when it is contracting, to make it grow again or to make it more accommodative. There is this idea that the Central bank should be targeting more of growth instead of inflation. Maybe that is a new thought but there is what is called leading and lagging indicators. We look at growth to see whether monetary policy is being counterproductive. Growth is an output measure while monetary policy issues are financial measures and you can measure it in naira, dollar or interest rate terms. But GDP growth is output, if you produce 200 tubers of yam, 200,000 barrels of oil that is the output that you measure. So, if the monetary policy is accommodative, it will naturally lead to an increase in growth but that does not make monetary policy to be in charge of fiscal policy activity. There are certain circumstances where the fiscalist, who are in charge with stimulus, stimulating an economy
Vanguard, MONDAY, FEBRUARY 16, 2015 — 27
Interview or curtailing with austerity, that is a different set of responsibility and activity whilst the inflation targeting is a monetary policy framework where you have the nominal anchor. The nominal anchor is the interest rate but at times, you have the dual anchor, the interest rate and exchange rate and they are used to bring down inflation if you think that inflation has gone out of the range. And that is a different set of skills, different set of variables and a different mindset, totally different when you are chasing growth on one hand and to an extent development. Development is institutional and physical infrastructure. I want us to distinguish this. But you see, because we are in a confused state, we are comingling so many things by trying to comingle fiscal issues with monetary issues. But the problem with comingling issues is that your vision gets blurred, you are not focused. You begin to chase many things with a conflicting agenda. How has the election, the preparation, the campaign and the postponement impacted the financial market?
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olitical Science is a study of struggle for power while politics is a struggle for power. In both cases, it creates its own uncertainties. Uncertainties are the by-products of risks. Risk has a price. And the price of risk ends up in what we call volatility. So, the higher the uncertainty, the higher the risk, and the higher the risk, the higher the volatility and the higher the volatility, the higher the premium that you pay for this volatility. So anything that increases risks, increases volatility, and anything that increases volatility, increases the price of the product which in this case could be currency or the interest rate. So a certain level of risk is required. So that level of risk which is acceptable risk, when you cross a threshold where it becomes difficult and the premium begins to get higher. So what has happened because of election uncertainty, that is one, the postponement even heightened the uncertainty, which has increased the risk and increased the volatility and increased the price which Nigeria is paying for these unknowns. So like somebody said, the known unknowns are now more than the unknown unknowns which leads to INVESTOR PARALYSIS. So what we now
need to do is to increase the known unknowns, so that they are higher than the unknown unknowns and that will give us a positive quotient which naturally will reduce the risk. So what are the unknown unknowns? We don’t know whether there will be an election? We don’t know what is going to happen in the North East? We don’t know whether the election will be postponed again. We don’t know whether there will be an interim government, we don’t know whether there will be an annulment. You see, what you see, is what you get, but what you don’t see is what gets you. So until the unknown unknowns are less than the known unknowns, w begin to get worried and my natural reaction is to run away. So in the face of where we have gotten ourselves to, what do you think Businesses should do? Nothing! But you see, people just vote in favour of their fears, once I am afraid, I run. So if you douse my fears, I won’t run. For instance, if you see a man standing on the road with blood all over him and with a cutlass in his hands, do you want to find out if it is a human blood? I don’t think so. At your presentation recently, you said that for the past three years, the FDI has been on a continuous decline, beyond the election, what do you think must have been responsible for this? First of all, oil prices are
challenges facing the nation’s economy, what will be your policy recommendations to whoever wins the elections?
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When you have a son and someone from outside comes and says, it’s like this your son has a malaria and the child denies it. It is because he does not want to be given an injection. That is where Nigeria is, they don’t want the injection.
coming down, you didn’t pass the Petroleum Industry Bill (PIB), and there are so many things. Inflows come as a result of so many things. Some of them are global. In this case, the global inflows to emerging
markets have increased, ours have reduced. So if you are of good behaviour, people will come. If you are a good musician, there will be a lot of people in your audience, but when you see the audience start reducing, one year, two years, three years, then maybe you have to change your song. Irrespective of the outcome of the elections, do you see the stock market closing with significant gains?
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o! I think the market will go down until after the elections. And then it starts to recover. It will not be positive but it would have recovered towards the end of the year and starts recovering by the beginning of next year. Given
the
current
t is to accept the reality that Nigeria is an oil poor country, not an oil rich state. Oil poor because we produce, 12, 000 barrels for every one million people, compared to 295, 000 barrels per every one million people in Saudi Arabia. We cannot call ourselves an oil rich country. Therefore we have to manage our resources more efficiently. We have to reduce leakage and we have to be strategic. What do I mean? We cannot do everything that we wish to do. We have to prioritise on those things that will make impacts. What are those things? Road and rail transportation, oil and gas, education, health, and then refinery, ports and all the rest. So basically, we have to emphasise those things that have a multiplier effect. And we have to give up a number of things. We have to disequilibrate our economy and make adjustments we can on factor prices. We have to shift subsidies from intermediate target to final targets. That is, rather than subsidise universities, we subsidise the students. You create university autonomy so that universities charge the correct fees, but then the students will get scholarship from their states. Despite the challenges in the economy, definitely there must be some opportunities for investors, what are these opportunities and how can they take advantage of it? There are big opportunities on things that are not import dependent like stocks, insurance, fast moving consumer goods, food processing, logistics stocks, etc. So anything that is not too import dependent, or company that is not over borrowed provides opportunities for investors. What is happening in the economy now was predicted by several analysts, including you, about three years ago, why did the authorities ignore these predictions? You see the policy maker and the Nigerian public are in denial. For example, when you have a son and someone from outside comes and says, it’s like this your son has a malaria and the child denies it. It is because he does not want to be given an injection. That is where Nigeria is, they don’t want the injection.
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Corporate Finance
SEC, NAICOM pledge better collaboration to discipline erring coys
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he Securities and E x c h a n g e Commission (SEC) and the National Insurance Commission (NAICOM) will collaborate for better enforcement against insurance companies that misappropriate funds raised from the capital market. This disclosure was made by the Acting Director General of SEC, Mr. Mounir Gwarzo, who hosted the Management of NAICOM on a courtesy visit at his office in Abuja. The Deputy Commissioner, Technical, NAICOM, Mr. Muhammad Kari, had highlighted a few cases currently being investigated by NAICOM where funds were raised from the capital market and applied for personal gain. According to him, the cases necessitated the involvement of SEC as apex regulator of the Nigerian capital market with the responsibility of protecting investors. Responding, Gwarzo suggested closer cooperation between the two regulatory bodies to ensure erring persons or institutions are swiftly brought to book. “We are ready to work closely with NAICOM to resolve these cases” Gwarzo said. Presently, collaboration between the two institutions happens within the framework of the Financial Services Regulation Coordinating Committee (FSRCC). However, Gwarzo believes the collaboration could be even stronger and more result oriented if the two bodies were to set up an inter-agency committee. He said “The FSRCC was established to facilitate collaboration across the entire financial system. But beyond that platform, we need to create an interagency committee involving specific contact persons between our two institutions who will strengthen the synergy between our respective areas of oversight”.
Market conditions not favourable to IPOs this year — EXPERTS By NKIRUKA NNOROM
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he present market sentiment which is expected to be sustained in the first half of the year does not support any market listing or an Initial Public Offer, IPO, in 2015, experts at United Capital Plc have said. This is contained in their end of year review titled, “Nigerian Economy and Financial Markets, 2014 Review and 2015 Outlook: ‘Tales of Two Halves’. Already, the stock market started the year on a negative footing and has been down for most part of the year. Resultantly, the market capitalization of all listed equities dropped by 16.6 percent in just one month, closing at N9.847 trillion as at the close of business on Friday, January 30, 2014, from N11.478 trillion at the end of transactions on December 31, 2014. They noted that: “Following the twin stellar performance of the equities market in 2012 and 2013, the market saw two major listings in 2014 by Seplat Petroleum Development Company Plc and Caverton Offshore Support Group in April and May respectively. The dual listing of Seplat on the Nigerian Stock Exchange, NSE, and the London Stock Exchange, LSE, in April 2014 marked the first IPO on the NSE since the market crash in 2008. “Seplat listed its shares on the main board at N576.0 (£2.10) per share, making it the first upstream oil and gas company listed on the NSE. Following this, Caverton listed its 3.35 billion shares at N9.30 per share, adding N32 billion to the total market capitalization of the exchange.” They however stated, “Though we expect to see capital raising exercise by listed companies, a public offer is not expected.” They further observed that the equities market in 2015 would be shaped by key global and domestic factors, ranging from interest rate hike in the US and UK, falling oil prices, exchange rate instability and possibility of further devaluation of the Naira. Others include the effect of falling oil prices on government finance, expenditure and
SEMINAR - From left, Dr Gbolahan Elias, Partner, Gbolahan Elias and Co; Mr. Tola Adeyemi, Partner and Head, Audit Services, KPMG; Chief Timothy Adesiyan, President, Nigerian Shareholders’ Solidarity Association (NSSA) and Mr. Goodluck Obi, Partner, Audit Services, KPMG at the Nigeria Shareholders’ Solidarity Association (NSSA) Seminar organized by KPMG in Lagos. consumption and the ripple effect on company’s earnings, effect of the CBN’s tightening stance on banks’ performance and earnings, pass-through effects of devaluation of cost of imports and inflation, bearish sentiment, as well as attractive pricing and dividend yield. They noted that given the dominance of foreign investors in the
equities market, the impact of a capital flight from frontier and emerging markets on the back of interest rate hike in the US and UK will have a significant impact on the market. “The benchmark rate which have been at a low of 0.25% since 2009 coupled with liquidity boost from
quantitative easing drove capital flows into emerging and frontier markets. A hike in interest rate by the US Fed coupled with impressive numbers in the US which could lead to a better performing US equities market would lead to capital flight and also reduce inflow into Nigerian equities,” they said in the report.
Stockbrokers seek close ties with CBN to resolve market downturn By NKIRUKA NNOROM
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tockbrokers in the nation’s capital market have called for a closer cooperation with the Central Bank of Nigerian, CBN, to tackle the dwindling fortune in the market. Speaking on behalf of other stockbrokers during the visit of the CBN governor, Mr. Godwin Emefiele, and his team to the Nigerian Stock Exchange, NSE, Mr. Sam Ndata, who is the doyen of the stockbrokers, said that the cooperation became necessary in view of the negative impact some monetary policies of the CBN have on operation of the market. He assured the apex bank of their readiness to work with it in developing the market, saying, “I can assure
you that we are ready to cooperate and work with you, particularly in developing local talents because we believe that we have the resources like you said, we have the talent and we have the answer to turn around this exchange to the delight of whole Africa. “It is not just the largest in terms of size, it is also the largest in terms of resources, and that is why we want to work very closely with you.” Ndata also called for a more regularly meeting between the capital operators and the central bank to thrash out issues in the CBN’s monetary decision that could have the capacity of undermining the growth of the capital market. He said, “We hope we can formalize this meeting so that there will be regular interactions and regular exchange of views between
us because some of the measures that are taken by the monetary side, even when they are good measures, often conflict with the interest of the capital market. “We believe that if we have an established forum (we used to meet with your predecessor, but that is when the occasion demands), it will augur well with the market. “I will suggest that we formalize this and met more often with the central bank to exchange views on how some of your monetary policies are going to affect the capital market and iron out the differences, so that you can help us in developing the market.” He, however, decried the preference by regulatory authorities for foreign experts in the country, saying that more attention should be paid
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Corporate Finance
PZ Wilmar invests N12.4bn in vegetable oil production plant BY PRINCEWILL EKWUJURU
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Z Wilmar Nigeria Limited, a subsidiary of PZ Nigeria Plc, a quoted company on the Nigeria Stock Exchange, NSE said it invested about N12.4billion ($75 million) in its vegetable oil production plant , as it expects 100 percent local content input in five years. The Managing Director of the company, Santosh Pillai disclosed this at the reward ceremony of Devon Kings vegetable oil ‘Cruise promo,’ where its trade partners were rewarded with prizes worth over N30 million, which included cars and cash prizes in the Lagos zone of the promo for their performance in the 2014 financial trading year. Speaking on local material input in the company ’s production process, Pillai said, currently, 15 to 20 percent of its local production comes from local raw material, “this is because we just stated the plantation in Cross river state .” He noted. He stated further that the 26,000 hectares farmland in Cross River state on which the plantation rests is part of the company’s object to see that in the next five years 100 percent of the plantation will form significant portion of the company’s products. Explaining the rationale behind the promo, Pillai who said PZ Wilmar is a Joint Venture between PZ Cussons and Wilmar International started operation in 2013 in Nigeria clarified that the purpose of any promotion is to ensure that trade partners are able to reach their consumers in a much more attractive manner and get the right kind of returns for the investment they have made. He said Kings is a significant brand and when the company introduced the 5 litres “ we wanted to ensure that the consumers understood the value of the product. We cannot reach the consumers fast unless we create incentives for the trade partners and make the product available and equally make the consumers aware of it”. C M Y K
INTERACTION - From left : Secretary General, Association of Professional Bodies of Nigeria, Jacqueline Odiadi; 1st Deputy President, Dr. Omede Idris; President, Mr. Foluso Fasoto; and 1st Vice President, Chartered Institute of Stockbrokers, Mr. Oluwaseyi Abe, during a board meeting on Extra-ordinary General Assembly Political Interaction in Lagos.
NB declares N37.2bn dividend STORIES BY PETER EGWUATU
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he Board of Directors of Nigerian Breweries, NB Plc has declared a total dividend of N37.2 billion for the 2014 financial year. The amount represents a pay out of N4.75 (four naira seventy five kobo) per ordinary share of fifty kobo each. According to the company, the total dividend of N37.2billion has been recommended by the board for shareholders’ approval at the 2015 Annual General Meeting, AGM. A statement released by the Board, said the company had earlier paid an interim dividend of N9, 453, 380, 540.00 (nine billion, four hundred and fifty three million, three hundred and eighty thousand, five hundred and forty naira only) that is, N1.25 (one naira twenty five kobo) per ordinary share of fifty kobo each in October 2014. Thus the final dividend will be N27, 751, 853, 108.00 ( twenty seven billion, seven hundred and fifty one million, eight hundred and fifty three thousand, one hundred and eight naira only), that is, N3.50 per ordinary share held. If the proposed final dividend is approved, it shall be paid subject to a deduction of withholding tax, on the 14th of May 2014 to all shareholders whose names appear on the company ’s Register of Members at the close of business on the 4th of March 2014. The statement signed by Mr. Uaboi Agbebaku, Company Secretary and Legal Adviser revealed that the company recorded a
revenue of N266.3 billion in 2014, a 0.8 per cent decline from N268.6 billion revenue in 2013. The results from the company ’s operating activities showed a profit before tax of N61.4billion and a profit after tax of N42.5billion for the year under review. Agbebaku said despite the challenging circumstances in 2014, the Company was able to return creditable results for the year due in part to her Cost Leadership and
Innovation agenda. “In the course of the year under review, the Company concluded the legal process which culminated in a merger with Consolidated Breweries Plc resulting in an enlarged company. The effective date of the merger was 31st December, 2014. The reported performance does not include the results of the dissolved Consolidated Breweries Plc”, the statement said. “The beginning of 2015 has
seen a continuation of the challenging business environment with even more impact on disposable income. However, our Company is poised to maximize the economies of scale arising from an enlarged company formed from the merger with the dissolved Consolidated Breweries Plc, with a view to creating more value for shareholders. Our innovation and Cost Leadership agenda will be enhanced in 2015 and, the Company is also in a position to take advantage of any upswing in the economy and maintain its market leadership”.
CIS, consulting firm sign MOU on frontier partnership
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s part of strategic move to boost its revenue base , the Chartered Institute of Stockbrokers (CIS) has signed a Memorandum of Understanding (MOU) on frontier partnership with Business In Nigeria Events Limited(BINEL). Under the frontier partnership, BINEL Limited would assist the institute to coordinate its high profile events and ensure profitability. The events which include the famous Annual National Stockbrokers’ Conference and Annual National Workshop require high capital outlay in view of their professional and national relevance. The institute’s major events thrive on attendance by top government functionaries and eminent people from the Organised Private Sector, OPS including top class professionals. By the new business partnership, BINEL would henceforth package, and market the high profile events of the CIS in order to generate revenue, sponsorship and ensure maximum attendance quality audience subject to the agreement between the two organisations. Commenting on the MOU, the President and Chairman of Council of the institute, Mr Albert Okumagba described it as historic. In his words “ The institute has a strong
strategic plan that requires huge capital to execute; hence, the partnership agreement would advance the realisation of the vision, mission and core values of the institute. Okumagba explained that the broad objective of frontier agreement is to raise the bar for the institute’s revenue base for enhanced execution of its laudable programmes.” BINEL’s Managing Director, Mr Christian Udechukwu explained that the company would deploy all its platforms to enable the CIS realise its revenue mobilisation objective. Udechukwu expressed optimism that his company is blessed with human capital that can drive the new relationship with the institute. BINEL is a frontline professional consulting firm renowned for assisting clients to organise high profile events that can generate income in the final analysis. The firm would work very closely with the Programme Committee of the CIS to have relevant information needed for organizing any event. Meanwhile, the institute had signed an MOU with many notable organisations to mobilise 150,000 young graduates to enrol for its Professional Diploma in Securities and Investment Examination.
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Homes & Housing By YINKA KOLAWOLE
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he Federal Government recently r e-appointed Mr. Gimba Yaú Kumo as Managing Director of Federal Mortgage Bank of Nigeria (FMBN) for a second tenure of four years. In this interview, he assesses the mortgage industry in Nigeria and the plan to recapitalize FMBN for better performance. Excerpts. How would you describe the mortgage industry in Nigeria at the moment? The mortgage industry in Nigeria is just starting if you look at the size of our contribution to the GDP is less than one percent but my target before I leave here is that we should be able to contribute at least 15 percent. That is why we are putting a lot of issues on ground to be able to drive this process. And how do you do that? If you look at the National Housing Fund (NHF) that we are managing, out of the 170 million population less than one percent are the one contributing so we said this is not good, how do we reach the other segment of the society that are not in formal employment. Have you resolved the issue of NHF concerning some of the states that pulled out? As at today, we have only six states that are not in NHF and most of those states, particularly Lagos, what happened is that they have formed co-operative societies on their own. They have registered with us, so they are contributing indirectly to NHF. The other states, we are talking to them and as soon as possible we will see what we can put on the ground. This is because workers want to see actual action; they want to see the mortgages created. This is what we are trying to do in all the 36 states, to be able to build the houses, create the mortgages and at the end of the day we will be able to convince them. But I can assure you that in the next 10 to 11 months all the states will be back. How many mortgages do you hope to create in the next four years? It depends on availability of funds, but I hope to create based on the memorandum of understanding with NLC, TUC and NECA, we should be able to do at least four million. With your re-appointment as MD, how do you intend to improve the fortunes of FMBN? We will work to continue to provide quality and affordable houses to Nigeria and strive
Nigerians can’t afford more than singledigit mortgage — FMBN MD to improve the bank’s balance sheet to modify its standing as a financial institution Our strategy will involve developing pro-active and effective strategies to attract offshore funding for affordable housing to Nigerians as well as improving service delivery to NHF contributors across the country. We also plan to look at improvement of members of staff welfare across board to ensure a well motivated workforce and profitable operations. The new management will also ensure the completion of ongoing housing estate projects under the Ministerial Pilot Housing Scheme nationwide and the completion of the Goodluck Jonathan Legacy Estate in Kaba District in the Federal Capital Territory, FCT will be vigorously pursued. As a returning member of the team, I have had the privilege of experiencing the various challenges facing the FMBN as well as the housing sector in general. We have tried to improve on the little we find on ground, people say we did well but we are just starting and we hope within the next few months we will be able to do more so that the results of the efforts will be realized. We have set an agenda for ourselves and chief among them is the recapitalization of the bank. We have made substantial progress on that, in the next few weeks we will see results on the table. How soon is the recapitalization and how much are we looking at? Very soon, timing is very essential. There are few issues now. You know we are in politics so government will concentrate more in that area now but we have been promised as soon as possible. What we have requested for is N250 billion. But at the moment there are a lot of competing needs, security, infrastructure but I know that they will do it. Do you think a single digit mortgage rate can be sustained given available economic indices? Yes, our rate has always been single digit, our estate development loan or construction loan is 10 percent, our mortgages are at 6 percent and we also intend to extend that same rate to the informal sector so that we can make the houses affordable to them. Nigerians
*Gimba Yaú Kumo, MD, FMBN
Nigerians cannot afford any anything above single digit because the average income is very low, that’s why we are providing a buffer whereby they are able to pay cannot afford any anything above single digit because the average income is very low, that’s why we are providing a buffer whereby they are able to pay. Like we took the minimum wage of N18, 000 as a base, with that you can be able to do a mortgage of N450 monthly. So this is the minimum the informal sector beneficiaries are expected to pay but this will be difficult for some of them so we are looking at a subsidy. Is there any way that PMBs can be prevailed upon to charge single digit interest rates? If you say government, you are talking in terms of agencies that deliver mortgages. On the
government side for now it is only FMBN that is really delivering mortgage. And our mortgage is single digit, six percent. We charge our mortgage at the rate of 6 percent on a long tenure basis, 15, 20 and even up to 35 years Why is it difficult for developers to give Nigerians affordable houses? The houses are expensive in the sense that cost of materials for constructing these houses are also high. So, there is need for reduction in the cost of cement, there is need for a reduction in the cost of iron rod and other accessories that will make up the houses. Once that is done, I think it will go a long way in reducing the cost of the houses. These are the issues we are trying to address. If you look at the earning of Nigerians, particularly somebody who earns N18, 000, which is not up to 100 dollars going by today’s exchange rate, that person is not in a position to buy even a one bedroom apartment going by the present structure. So what we are working together with the ministry to see if we can have discount on some of the inputs that make up the house like discount on cement, discount on rods for construction and also hat we are trying to do on our own
is to introduce new building methods that will now reduce the cost of houses. We just came back from Thailand with officials of FCDA, Ministry of Lands, and Housing and Urban Development. After the Tsunami, they commissioned seven universities to do research on affordable and sustainable housing. We have seen the development in that country. We took sand from Kuje here and they took it to three of the universities. It was discovered that it is even 17 times better than their sand. So they are producing some blocks for us with less than 5 percent cement content. So if we do that, that issue of affordability will be addressed. Apart from addressing the issue of affordability, we want to address the issue of delivering quality houses. This is because most of the houses, particularly in Abuja, for which some of the mortgages have been created; you will end up paying for a mortgage for 20, 25 years. How are we sure that these houses will also last up to that time? We want to check that aspect because for us to be able to give you mortgage for a particular tenor, we have to make sure that the house will be able to stand within that period. With the support of Nigerians, these are some of the things we want to do. Accessibility to land is still an issue, how do you plan to tackle it? I agree with you, but we have put a MoU in place whereby we are working with various state ministries of land and we are also working with the various labour organizations for the land to either be allocated to us as a government bank or to be allocated to labour directly. Why we are doing that is to reduce the cost because if you allocate it to the developer directly he will put any cost he likes on the property. And we insist that particular government that is allocating whether it is a state, federal of even a local government that the land should be allocated freely particularly on the houses that we are building for NHF contributors. I am happy to say that as at today in all the six zones where we have pilot projects we are doing on the ministerial pilot scheme all the land that have been given to us is donated free by the various state governments.
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“People are saying you people said you will do [by December 2014] 6,000MW, yes! We have the capacity standing..” Professor Chinedu Nebo, Minister of Finance, PUNCH, January 28, 2015, p 38.
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hat statement by the Minister was tucked into a report which screamed, POWER GENERATION DROPPED BY 2,042MW. The story went on to state that “Peak generation for the country as of Tuesday was out at 3,865MW, while 3,331MW was the figure for the off-peak generation.” Meanwhile, the first month of the year has come to an end and the nation is still receiving less than 4,000MW steadily, despite the lies by the PDP and the Minister’s widening credibility gap. Professor Nebo simply cannot stop making promises which will not be redeemed; he can also not keep his mouth shut. And, when he opens it, another futile promise drops. What sort of a Minister is this? Hundreds of Ministers have graced the offices of the Federal Government since Alhaji Abubakar Tafawa Balewa, Prime Minister of Nigeria, formed his cabinet in 1959. None had made as many promises as Nebo and
Can this man be serious? 2 none had been so devoid of remorse when he fails to keep them. What sort of man is this? On the occasion in reference, he was up to his old tricks again. According to him, “by 2016, we expect to get up to 10,000MW; and, by 2017, to get 12,500MW’. Who in his right senses will believe this man anymore? Who will believe a man who had failed each and every time he promised? Yet trillions of naira worth of investment is riding on this; not to talk of the future of Nigeria. While the man’s credibility has been eroded to nothing, he can nevertheless be counted upon to ensure that everything that will work against the interest of Nigerians is implemented. Last week, Nebo was at his worst when he proclaimed as follows: “Less than 50 per cent of Nigerians are metred. How do you collect your money? The commercial losses are huge and
We can also stop being so responsible, consume power and pass the bill to others to pay. Even the village idiot can easily see that if enough people select that option, the DISCOs will be liquidated in no time at all unfortunately somebody has to pay for it. And unfortunately again, it is those who are paying that are penalized to pay for those who are not paying [underlining mine].” Since the Minister has not denied making that statement, then it must be assumed that he was correctly quoted. And, if so, it stands as the most irresponsible statement by a public official ever in history. The plain meaning of the
unfortunate (to use Nebo’s words) declaration can be reduced to LEGALISED ROBBERY by the Federal Government of Nigeria and its unfortunate (to use the word again) Minister who would have been better left in the classroom. Like several million Nigerians, honest and responsible citizens, who pay their bills monthly, I deeply resent being told by a thoroughly misguided Minister that we must be forced to pay somebody else’s
bills simply because both the Government and the stupid owners of DISCOs, who invested in the sector, started off without asking the question “How do you collect your money?” While still on the issue of resentment, the Minister needs to be told that he had made a statement which might form the basis of a class action suit involving several thousand customers of Eko Electricity Distribution Company and me and the Company. We would not only demand for restitution but for punitive damages for willful embezzlement of our hard earned money. To be quite candid, it is remarkable that a Professor could not understand the full implications of what he said. The Professor had also inadvertently raised another option available to those of us who have been responsible. We can also stop being so responsible, consume power and pass the bill to others to pay. Even the village idiot can easily see that if enough people select that option, the DISCOs will be liquidated in no time at all. The banks, which also financed their investment will also be in deeper trouble than declining crude oil prices had already brought upon them.
Micro-Finance
CIBN pledges support for MFBs, lauds AMfB's financial inclusion strategy Stories by PROVIDENCE OBUH
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hartered Institute of Bankers of Nigeria (CIBN) has assured continued support for banking industry, especially the Micro-finance Banks (MfBs) sub-sector operating in the country to realize their objectives, commending Accion Microfinance Bank (AMfB) for its commitment to financial inclusion. President/Chairman of Council, CIBN, Mrs. ‘Debola Osibogun, gave the commendation during her visit to the bank’s head office in Anthony, Lagos. She further commended the bank’s relentless support for the development of microfinance and efforts towards empowering microentrepreneurs and lowincome earners.
Osibogun said that the bank contributions to the institute’s endowment fund would further engender professionalism and stimulate improved performance by students writing the CIBN Microfinance Certification Examinations.
“This is a valuable contribution towards supporting capacity building for the microfinance banking sector and by extension, the economy at large,” she said, encouraging MfBs in the country to work out processes of accessing the intervention
fund provided by the Central Bank of Nigeria for economic development as well as develop business strategies that would enable them attract targeted customers. She stated that the Institute’s core mandates includes determination of the standards of knowledge and
skill to be attained by persons seeking to become members of the banking profession; conduct of professional examinations leading to the award of certificates as may be prescribed by the Institute and ensuring the furtherance, maintenance and observance of ethical standards and professionalism among practitioners of the banking profession in Nigeria.
ChamsMobile, Skye Bank to launch virtual Visa card in Nigeria added: “the bank chose to
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hamsMobile in collaboration with Skye Bank Plc has entered into agreement to launch a Virtual Visa Card in Nigeria an entirely digital payment card for online and mobile use. In a statement, Deputy Managing Director, ChamsMobile, Mr. Gavin Young, expressed
excitement in partnering with Skye Bank on the new virtual payment solution, developed with the company ’s international joint venture partners Bancore and Global Technology Partners (GTP). Young explained that with the virtual visa card offering on mobile phones, millions of Nigerians will have access to payments and make purchases, along with a range of other services, by using a
Visa card from their phone and other electronic devices, with the benefit of access to the global digital economy. “E-commerce savvy users can shop securely online and those without a formal banking relationship will suddenly have the means to make their money work for them and move towards financial inclusion,” he said. Head, E-Channels, Skye Bank Plc, Mr Akinwale Ojo,
work with ChamsMobile, and its card processing partner GTP, based on careful consideration of the benefits all parties could bring to the table and in consideration of how the bank could best serve the millions of Nigerians with this product and particularly those who may be financially excluded, requiring a low cost yet fully inclusive financial services offering.”
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People in Business the type of business we do are not ruled out. We are fully aware that the security of lives and property is the focus of every well-meaning government, and as such, we are up to date with all the regulatory expectations in respect of our services. Consequently, we have gone into partnership with the government in areas of customised hybrid security products to assist in balancing their obligatory mandate towards safe- guarding lives and property of citizens. We cannot overlook the urgent need for prevention of kidnappings, armed robberies and other related criminalities that occur on a daily basis across the country.” Okafor also added that, “ A c c e s s Telecommunication Link Ltd has given birth to a new company, Eagle Eye followed by Access Gold.
We are enhancing lives through improved technologies — OKAFOR BY VERA SAMUEL ANYAGAFU
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r. Edwin Obiora Okafor is the CEO/MD, Access Telecommunication Link Service Limited, an indigenous company with Head office in Jakarta, Indonesia. Noted for his remarkable commitment to telecommunication and hybrid security technology, Okafor was determined to ensure that all Nigerians receive the best of his services at an affordable price. Shortly after his university education, he ventured into entrepreneurship, then manufacturing and provision of security services across countries, including Nigeria. With his research and development centre in Jakarta, Indonesia, Okafor was able to provide reliable and advanced security system to enhance and deal with some of the security challenges facing Nigeria. In this interview with Vanguard, the IT wizard spoke on many issues, especially the need to have Nigeria properly equipped with the necessary IT products for the security of all and those who may have come into Nigeria for one business or the other. Excerpts; Background Shortly after obtaining a Higher National Diploma (HND) in Electronics Engineering, Mr. Edwin Obiora Okafor proceeded overseas for further training on hybrid technology to compete with other hybrid technology experts. Back in Nigeria, his expertise was sought by two N i g e r i a n Telecommunication service companies, followed by a foreign telecommunication service company, where he relentlessly contributed his quota towards providing quality telecommunication services to Nigerians. Striving to be on top of his game, Okafor floated Access
Telecommunication Link Service Limited in 1992 and with a research and development outfit in Indonesia, he was able to accomplish his vision and dreams of giving Nigerians the best in respect of hybrid technology. What we do Okafor said that Telecommunication Link Service’s hybrid security solution is customised to
No country will overcome challenges of insecurity by using a commercialised security products to fight crime help citizens and governments checkmate various levels of criminality in the society. “The service ensures that citizens and foreigners in the country go about their businesses without fear. The fact is that management of companies in Nigeria, especially foreign investors are not comfortable with the security challenges facing the country. Most foreign investors are afraid of investing in Nigeria because there is no security solution. It is worthy of note here that no country will overcome challenges of
insecurity by using commercialised security products to fight crime. “Our solution can streamline insecurity and assure a track record of any criminal action any time, any where, because we specialise on building a customized security solution based on the nature of the insecurity they intend fighting, “In addition, we have invested resources and energy into operational development initiative that will support our chronological growth target. Our company has trained engineers on the board which give R&D support service for any product developed by us, we go the extra mile to train our customers in any product developed by us and ensure that our products are customerfriendly and stand the test of time.” Challenges "We are rarely challenged with having to deal with counterfeiting products. Although we may encounter hurdles arising from technical issues in some situations, it never hampered provision of quality services to our customers. The issue of maintenance appears worrisome sometimes, but in all, we have been able to maintain a standard unequalled. Gathering components “A good number of the components we use come through our head office in Kalibata city square in Jakarta, Indonesia, and for the fact that we have proven our worth in terms of providing quality services, most telecommunications companies in the country have signed us on as strategic partner to produce, install and maintain their customised security base devices, PABX equipment, hybrid security technology telecom products, etc. “We are technically driven
to deliver the utmost service in security system, IT and Telecommunication support services. We are synonymous with building excellence and specialised services and will continue to introduce innovative products to satisfy the needs of our new and existing valued customers.” Business regulatory requirements “Of course, the regulatory requirements expected for
“In the past, we have had cases of kidnappings, assassinations, bank ATM frauds, and robbery attacks, where lives and goods worth several billions of naira were lost. On many occasions, these unfortunate incidences occur at nights and odd hours, and being aware of that we are in the age of technological advancement, we have worked tirelessly to improve the quality of human existence by protecting and enhancing their lives through our improved technologies. “With the presence of these companies in Nigeria, Nigerians are sure of receiving the best of a world class security device to fight crime, as our security solution surpasses the security devices currently being used in both government and private establishments across the country. Same is applicable to our telephone sets, Digital PABX equipment, GPS Tracker and other devices."
Vanguard, MONDAY, FEBRUARY 16, 2015 — 39
Aviation
AON decries redundancy of 327 pilots NCAA to sanction airlines over indebtedness
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he Nigerian Civil Aviation Authority, NCAA has declared that it would sanction all airlines that are indebted. The Director General of NCAA , Captain Usman Muhtar, who made the declaration, added that erring airlines who fail to pay up their outstanding debts and remit their current payments would face appropriate sanctions. According to him,”all operating airlines who are indebted to the authority should commence remittance of outstanding and current payments or appropriate sanctions will be applied in full” Captain Usman however appreciated the airlines operators including the foreign airlines for their efforts to ensure safety and security in all their operations. He said that while the primary safety lies in the purview of the operators, the regulatory authority would continue to provide the regulatory framework that would increase their value chain. The NCAA DG further urged the operators to adhere to their maintenance schedules and train their staff to allow for symmetrical working relationship with the well trained staff of NCAA. While enumerating his policy for the year 2015, Captain Usman stressed that his focus was anchored on the training and retraining of staff of the agency. According to him, the Authority will not rest on its oars but will ensure a greater efficiency and sustenance of the robust regulation that has been the hallmark of the NCAA. He said this while speaking to the management and staff of the Authority on his policy outlook in 2015 at the aviation house premises. Usman reiterated that quite remarkably 2014 was an accident free year, however, complacency will have no place in our regulatory functions rather it will be strengthened by adequate training of staff this year.
Stories By LAWANI MIKAIRU & DANIEL ETEGHE
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hairman of the A i r l i n e s Operators of Nigeria, AON, Captain Nogie Meggison has decried the inability of the Federal Government to provide job opportunities for about 327 pilots who are currently in search of jobs in the aviation industry. This is coming on the heels of the statement credited to the Minister of Aviation, Mr. Osita Chidoka that all the private jet operators must have a Nigerian pilot onboard as this would help in creating employment for them. According to Captain Meggison, “as at today, we have about 327 unemployed pilots who are registered and looking for jobs. The Minister made a statement, he said there are 90 airplanes and private jets operating in Nigeria with foreign registrations. If you take that alone, there are two sets of crew per airplane so if you even say 90 - and we are saying its about 140 or 190 but he says 90 - but even if we take 90 alone 90 are two sets of crew per airplane because they cannot fly continuously” To him, it was logical for the government to create jobs for the people noting that any private jets operator or anybody flying in Nigeria was expected to take Nigerians in the cockpit as this would create jobs and take people. He said “it is only logical and mutually benefitting and makes more sense
SEMINAR- From left: Mr Paul Uduk, Managing Director, Vision and Talent Ltd; Mrs Jameelah Ayedun, Chief Executive Officer, CR Services and Mr Ibrahim Salau, Managing Director, Environmental Accord Nigeria Ltd, during a 'Train the Trainers' seminar on mastering Training and Facilitation Skills organised for Chief Executive Officers by Vision and Talent Ltd in Lagos. and when any airline operating and taking from the government create avenues to create jobs for the people. It is not a novel idea that Nigeria is standing alone to say that any cockpit operator or anybody flying in
Nigeria is expected to take Nigerians in the cockpit. This will create jobs and take people off the street” “A country with 180 million people you can count the number of people flying. As they say, one in every four
NAHCo partners NSCDC to boost airport security T
he Nigerian Aviation Handling Company (NAHCoAviance) has entered into a partnership with the National Security and Civil Defence Corps in order to enhance security at the Murtala Muhammed
International Airport, MMIA, Lagos. Disclosing this development to newsmen, Head, Corporate Services, Nahco aviance, Mr. Bashir Ahmed Gulma said that the agreement brought about the deployment of about 25
Dana Air to commence daily flight operations to Owerri the country.
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ana Airline has indicated its readiness to begin its daily flight operations to Owerri airport in a few weeks time. Disclosing this development to newsmen, Chief Commercial Officer of the airline, Obi Mbanuzuo said that such move was part of the airline’s expansion plan to convey passengers to their various destination across
black men is a Nigerian why can’t we have one in every four African aviator to be a Nigerian? If you take the position today, you will probably be talking of one in every one hundred aviator out of Africa to be a Nigerian”
According to Mr. Mbanuzuo “Dana Air is prepared to commence daily flight operations to Owerri in the coming weeks as part of its expansion drive to make its unique services readily available to all” The Airline’s Chief Commercial Officer further pointed out that in the spirit of valentine season, the airline has introduced a promotional fare in its business class which was pegged at N27,000.
While unveiling the valentine promotional fares, Mr. Mbanuzuo stressed that with such fares in place, it would afford most of the airline’s guest to travel at ease and comfort with a lot of leisure during their trips. “We want to encourage our guests to travel for leisure and business in style and comfort this season and this initiative is part of our commitment to continually offer pocket friendly fares across our sales channels” he said.
NSCDC operatives at the Cargo terminal of the airport. Mr. Gulma pointed out that Civil Defence operatives were deployed to assist in improving security at the cargo terminal since the fracas ensued between men and officers of the Nigeria Customs Service and licenced agents in November last year which led to the closure of the Cargo terminal for about two weeks by the Federal Government. According to him ,”Armed operatives of the NSCDC had since January taken up positions in various sections of the terminal. They would have the responsibility to further enhance the security of the terminal. The operatives who are about 25 in number would complement other security arrangements already put in place by the ground handler, who also has a subsisting MoU with the Nigeria Air Force”.
40 — Vanguard, MONDAY, FEBRUARY 16, 2015
E-Commerce
Carmudi, Berger auto dealers renew deal to boost online marketplace
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igeria’s online car marketplace, Carmudi has renewed its partnership with auto dealers at West Africa’s largest auto market, the Berger Auto Market in Lagos. The dealers, under the auspices of United Berger Motor Dealers Association expressed their desire to continue their partnership with the online car marketplace, Carmudi in Lagos last week. Speaking at the event, the General President, United Berger Motor Dealers Association, Hon. Metche Nnadiekwe, told journalists that the Carmudi platform has brought a new dimension to their business especially by helping to boost their market exposure. “The world is changing and we have to change with it. And that is why we have been enjoying the partnership with Carmudi. They have been helping to sensitise our customers through the internet. Their platform has helped us to reach more customers event beyond Lagos state which was hard before now."
WaraCake.com launches officially in Lagos
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araCake.com, an online cake making platform has launched officially in Lagos. WaraCake which means ‘Come buy some cake’ now operates as an e-commerce gifting platform. The platform works by aggregating different cake merchants and bakers across Nigeria to provide customers with a myriad of gift options. Waracake’s model allows it eliminate the bottlenecks associated with the conventional cake purchase process. WaraCake had a soft launch and has been operating offline since October 2014; delivering cakes to customers across Lagos state. Also, in early 2015, WaraCake started accepting orders from customers in Abuja. It has now officially launched on February 13, 2015 and orders are now being accepted on the online platform. C M Y K
PARTNERSHIP - From Left: Mr. Arnuad Davigne, Managing Director, Online Classifieds, Africa Internet Group, Hon. Metche Nnadiekwe, General President, United Berger Motor Dealers Association, UBMDA, Apapa, Lagos, Monday Otabor, Chairman, Sahen Park, UBMDA and Christian Keller, Managing Director, Carmudi Nigeria at a partnership renewal event with Berger auto dealers in Lagos.
N50bn Aba Mega Mall to go online Stories BY JONAH NWOKPOKU
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REENFIELD Assets Limited says its Aba Mega Mall being constructed at the cost of N50 billion (about three-hundred-million
dollar) will go online on the day it is commissioned. “We are going to have Aba Mega Mall online. So the ecommerce of this mall will commence operation at the commissioning. What that means is that if you can’t come
Konga, NIPOST partner to drive e-commerce logistics
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he Nigerian Postal Service has launched its partnership with Konga.com, Nigeria’s online mall, with the opening of a collection centre at the University of Lagos Post Office. The UNILAG collection centre is the first in a series of collaborations by the two parties to address logistics and delivery issues experienced by e-commerce operators in Nigeria. These include a shortage of secure and conveniently located places where customers can pick-up their purchases, and also return items that do not meet up to their expectations. Remarking on the launch of the partnership between NIPOST and Konga, the Honourable Minister of Communication Technology, Dr (Mrs) Omobola Johnson reiterated the Federal Government’s commitment to transforming NIPOST into a viable, socially conscious yet profitorientated entity. According to her, “The first Post office in Nigeria was established over 160 years ago and NIPOST has been fulfilling its mandate of
providing universal access to postal services ever since. Furthermore, the Post office has grown to become the most extensive retail network in Nigeria.
down to the mall to shop, you can shop online, wherever you are in the country. Even if you are in Lagos or Abuja, you can shop from any shop in the mall and it will be delivered to you at your location,” said Paul Obanua, Group Managing Director of the company. According to him, the project when completed and operational will stimulate economic activities in the state and the entire SouthEast and South-South regions of the country. He also stated that on completion, the project would be the first mall with a dry port in Nigeria and Africa as well as the biggest mall in the continent.
“The dry port is going be a 30,000 square meter bonded warehouse, which affords people of the South-East the opportunity of getting their goods in, on time. So, they don’t suffer time wastages, due to port congestion at our various sea ports. “We are going to also offer good storage facilitiesautomated climate controlled facility. So this mall is going to be a one-stop-shop. And by the second phase, you are going to have a 100-room hotel come up here at the Aba Mega Mall. “So, we are going to have a section that will be called the Aba Business Resort, so that you have your events here, like conferences and when you are in the South-East, you can also lodge in and do your business.”
Elite Employee Quest debuts, targets 5000 job seekers
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lite Employee Quest competition, an initiative of the online enterprise solution, PushCV .com has unveiled officially in Lagos. The Elite Employee Quest, according to CoFounder of PushCV, Somto Ifezue is aimed at searching out 5,000 of the best qualified job seekers and placing them into gainful employment in organisations. “The programme is aimed at testing and assessing these candidates, to test their employability before we could place or publicise them to the companies in the labour market,” Ifezue told Vanguard on the sideline of an event to announce the competition before stakeholders in Lagos. He said interested and qualified candidates who want to be part of the competition “can apply online and take a couple of tests on online and we get back to them after a week.” “The programme is expected to run for six weeks. Every week, the candidates are given tasks and are assessed by our stakeholders and partners. Every week they enter a different stage until the end of four weeks. By the fifth week, we start doing real interviews and at the end of the day, we come up with ranking process based on how fast a candidate has been able to complete a task. In the end, we have the final 5, 000 and
their names being published in the media,” he explained. Also speaking on the competition and its place on addressing the challenge of unemployment in Nigeria, Olumide Soyombo who is a board member of Leadpath Nigeria, a PushCV Investor, told Vanguard that the Elite Employee Quest initiative does not just seek to employ job seekers but to empower them with the requisite skills needed to thrive in the labour market. “Platforms like these are here for enablement and capacity building. Most times we talk about unemployment in the country but what about employability? How many of these people are actually employable? So what is different from what PushCV is doing apart from job placement is that they also have initiatives around capacity building,” he said. PushCV which started operations in March, 2014 and has processed over 70, 000 applications as a recruiter, said its key drive is to provide a level playing field to help talented individuals secure jobs based on skills, knowledge and experience and put them in front of appropriate employers.
Vanguard, MONDAY, FEBRUARY 16, 2015 — 41
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42 — Vanguard, MONDAY, FEBRUARY 16, 2015
Banking & Finance
FCMB boosts cashless policy with mobile POS terminals
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irst City Monument Bank (FCMB) Limited has unveiled a Mobile Point of Sale (MPoS) terminal, called FCMB PayPad. The Bank said the introduction of the new product is a demonstration of its commitment to further support the growth of Small and Medium Scale Enterprises (SMEs) and the success of the cashless policy initiative in Nigeria. The FCMB PayPad is a portable device that allows merchants securely process payments in a seamless manner, driven by a robust mobile application on a smart phone or tablet. It can easily be customized to suit the needs of merchants. This could range from inventory management to airtime vending. The device can be obtained from any FCMB branch across the nation at no cost to the merchant. In a statement, the Bank
said that the FCMB PayPad provides a more secure, simple and efficient payment solution to merchants in the Nigerian market. It easily synchronises with any smart phone or tablet running the customised application that is freely downloadable from the app store. The benefits of the device, includes availability of transaction details via SMS, email and paper print and long lasting rechargeable battery which ensures fewer recharging frequency. It is also portable (smaller than a mobile phone) which makes handling very convenient. According to FCMB’s Executive Director, Service Management and Technology, Mr. Nath Ude, the robust nature of FCMB PayPad makes it very reliable for secured transaction processing for merchants that run mobile businesses and also for small, midsize and large merchants. He added that, ‘’it is also the device of
choice for businesses in the ecommerce space that operate door-to-door delivery and need secured payment processing”. Mr. Ude continued by saying, “the FCMB PayPad is truly a payment device that will revolutionize how
secured payment processing is done in fixed locations and on-the-go. It is one of the innovative products from FCMB designed to enhance customer experience across all touch points and help merchants to grow their businesses in a sustainable manner ”, he said. First City Monument Bank (FCMB) is a member of FCMB Group plc, which is
one of the leading financial services institutions in Nigeria with subsidiaries that are market leaders in their respective segments. Having successfully transformed to a retail and commercial banking-led group, FCMB expects to continue to distinguish itself by delivering exceptional services, while enhancing the growth and achievement of personal and business aspirations of its customers.
Ecobank Capital hosts maiden Investment Banking Conference
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cobank Capital, the Investment Banking subsidiary of Ecobank Transnational Incorporated (‘ETI’) hosted its maiden Conference recently in Lagos, Nigeria. The Conference themed “Nigerian Economy Navigating the headwinds of Oil prices” brought together business and industry thought leaders to discuss the Nigerian Economy and how to navigate through the current headwinds. The event was attended by domestic and international investors, with the panel speakers including representatives from Helios Capital, Dangote Cement, Nedbank, Qatar National Bank and First-EPDC. Experts from Ecobank Research reinforced the need for the Nigerian economy to diversify. The team hailed the current Agriculture Transformation Agenda and emphasised the need for Nigeria to continue in its value capture
in key soft commodities value chain; On the Energy outlook, the need to recalibrate local crude oil funding dynamics was also raised. The Group Executive, Corporate and Investment Bank, Charles Kie highlighted the strength of the economy despite the headwinds. He stated that Ecobank is strategically positioned to provide the required support for industry players given the bank’s scale and industry experience. As closing remark, Moyo Kamgaing, Managing Director of Ecobank Capital announced that the investment bank recently closed a $1.5 billion landmark deal for Societe Nationale Des Petroles Du Congo (SNPC) for the company’s 5-year capital expenditure program and noted that Ecobank Capital is committed to providing innovative solutions for its clients.
Vanguard, MONDAY, FEBRUARY 16, 2015 — 43
Advertising Keeping hope alive with 'Airtel Touching Lives'
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t was especially pleasant to see that following the emotional and thought- provoking premier episode of C S R - f o c u s e d television series, Airtel Touching Lives, the tempo and delivery on promise has not dropped. The dynamics, emotion canduor of the beneficiaries, creativity and settings used as the backdrop
of the first episode remains a recurring decimal in episode 2. In fact, all the elements put together form a harmonious blend in the delivery of a truly captivating show that leaves one yearning for the repeat episode and the next episode – showing on Sundays on AfricaMagic channel 154. The second episode’s opening story was a breath of fresh air, a
reminder of how powerful and real the stories of the beneficiaries are and how this could be the lot of the viewer. Blessing Danladi, a young poet living with her widowed mother Rhoda, shows us with her simple, unassuming demeanor that dreams can be dreamt and can also be made to come alive. She has turned her love of spoken word into a skill, amazingly beyond her
years and circumstance. Her delivery of a poem she wrote rivals that of many a spoken word artists and gives hope
that this blooming artform has a body of upcoming practitioners. Her dream to be a doctor to in her words “to take care of people so they feel better ” is reminiscent of many of our childhood dreams.
However, I make bold to say we may have a Nigerian Maya Angelou on our hands. Her nominator, Joseph Yaba, proved that there is a river of human kindness still flowing in the hearts of Nigerians.
AAAN condemns unhealthy political campaigns
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he Association of Advertising Agencies of Nigeria, AAAN has condemned in totality the spate of unhealthy smear campaigns by the political parties and shadow interest groups
across the various media channels. The Association said that this is in utmost disregard of the advertising code and ethics of, Advertising Practitioners Council of Nigeria, APCON and
the AAAN, of which most of these political advertisements have been exposed without going through the vetting procedures and consequent approvals from the Advertising Standards Panel (ASP) of APCON. Our concerns are that the professional values of the advertising practice and indeed public sensibilities, as well as the very stability of the polity have been severely undermined by the continued character assassinations, wanton abuses, unrestrained attacks, threats and counter threats that have become the bane of the political communication building up to the elections.
Unilever plans increased sales profile for Close-up
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nilever Nigeria Plc says it has put plans in motion to increase the sales profile of its Close-up brand during Valentine’s day celebration by spreading love with its ‘cupid game.’ The company disclosed this while introducing the game to the media where Davido and Yemi Alade who are brand ambassadors to the game explained the mechanics of the game. Speaking, Brand Building Director of the company, Mr. David Okeme, said the brand through the game is developing a deeper relationship with consumers, particularly with young people which will invariably increase visibility of the brand in the market, as well as affect its market share positively during the val celebration and beyond.
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44 — Vanguard, MONDAY, FEBRUARY 16, 2015 Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997
“The report of the 14 Nigerian banks which were appointed as Asset Managers of Nigeria’s reserves was carried on the back page of The Guardian Newspaper of the 5th of October 2006. The report confirmed that “already deposits worth $7bn representing part of the Central Bank of Nigeria’s share of foreign reserves estimated at about $38bn had been released to the consortium of bankers”, according to CBN’s Head of Corporate Affairs, Mr. Festus Odoko. “In this event, CBN made good its promise to invite Nigerian banks which have consolidated a minimum $500m capital base to a “foreign reserves banquet” if they showed evidence of collaboration with internationally recognized financial houses. The Guardian report further confirmed that all 14 Nigerian banks are already associated with reputable affiliates, but it is not clear whether or not the M.O.U. between the parties involves joint responsibility for profits and loss, with global best banking practice and ethical standards, or if collaboration is simply formalised glorified correspondent banking! “Nonetheless, critics wondered if the 14 banks which had just raised their capital base under duress to N25bn could also raise additional capital of about N35bn in so short a space of time to qualify for management of CBN’s reserves; conversely, the apex Bank may have quietly dropped this requirement so as to pursue its declared agenda! “But whose interest is CBN serving? The sum of $7bn is a huge sum of money in any currency and disbursement of such huge
Where is the $7BN CBN loan to 14 banks? public funds should not be treated with levity. Although in the Guardian report “Mr. Odoko confirmed that the appointment of the 14 banks was ratified by the Investment Committee of the CBN on Tuesday, 3/10/06, the deposits worth $7bn had already been shared by Thursday morning, 5/10/06! The question is whether or not the returns from this huge investment will stimulate productivity and employment, and improve our social welfare. If not, who will benefit from this biggest ever single investment paid upfront by the Nigerian nation? Yes, you have got it, the 14 banks who will wear broad smiles to their overseas vaults! Although CBN did not declare what returns it demands from the 14 fattened beneficiaries, it is unlikely that banks will pay more than the prevailing international cost of about three per cent interest per annum for such placements! “Incidentally, the 14 favoured banks are at liberty to invest anywhere in the world! Thus, while we are pleading with foreign investors to come to Nigeria to support economic and industrial development, we are simultaneously exposing our hard earned foreign exchange, for minimal gain, to a consortium of Nigerian banks which have a consolidated capital base of less than $3bn, without asking for some measure of audit control or equity participation. “Nigerian banks have for so long found it unattractive to invest in the real sector, particularly the income and employment generating SMEs; so, it would be
foolhardy to expect that the largesse of an uncollateralised $7bn low interest loan would change their attitude to the Nigeria economy. The bizarre strategy of a minimal return of three to five per cent for a $7bn investment without an overtly declared time limit is amplified by CBN’s willingness to conversely pay interest rates of between 12 and 17 per cent for monies it borrows from these same banks.
I beg your pardon! Apart from the very lucrative business of changing naira for federally allocated dollars, what work did the CBN do to earn $7bn? “Nonetheless, in the event that the 14 banks are free to repatriate all or part of the $7bn back to the Nigerian capital market, it is not difficult to predict where their interests would lie: you have got it; the obvious destination would be further patronage of government’s treasury bills
and bonds where they can earn rates of return of up to 17 per cent from government borrowings! “Worse still, moneys so collected for sale of government bills and bonds are regrettably just kept idle in CBN vaults. “Mr. Odoko, the CBN mouthpiece had also claimed in the Guardian report quoted above that “the $7bn represents the apex bank’s share of the foreign reserves!’ I beg your pardon! Apart from the very lucrative business of changing naira for federally allocated dollars, what work did the CBN do to earn $7bn? The Constitution does not distinguish a share of dollar reserves, especially for the CBN; our crude oil earnings belong to the Nigerian people as constituted by the three tiers of government; the Senate and the House of Representatives would have defaulted in their constitutional duties if CBN is not invited to defend why $7bn of our reserves should be ‘given’ to 14 banks without oversight approval!” The preceding is a summary of the above article, which was first published on the 9th October 2006 in the Vanguard Newspaper. Not surprisingly, less than two years after Prof. Chukwuma Soludo’s lauded banking consolidation and assurances, most Nigerian banks tittered on the verge of collapse. There has never been any confirmation that the 14 banks repaid the $7bn “soft loan” granted by CBN before the 2008 banking crisis; consequently, it is possible that Nigeria’s $7bn reserves may have ultimately ‘gone with the wind’ during the ensuing financial meltdown! Nonetheless, such probable
default did not stop the banking sector from receiving additional largesse in excess of N5tn ($30bn) from lifelines from CBN and its surrogate, the Assets Management Corporation of Nigeria’s interventions, less than three years thereafter, between 2009 and 2010! CBN’s misguided generosity notwithstanding, the banking sector has remained resistant to providing the real sector with loanable funds at affordable rates to stimulate industrial rejuvenation, economic growth and increasing employment opportunities. If anything, the CBN’s selfstyled “own reserves” increased well beyond $40bn to fund CBN’s sporadic multipronged cash interventions to various subsectors; paradoxically, in spite of a still comatose real sector, the banking sector has since bounced back with bountiful profit postings, while unemployment, oppressive mass poverty and increasing national debt persist! In the above event, it may be necessary for the Economic and Financial Crimes Commission to take a closer look at the circumstances and the ultimate fate of CBN’s extraordinary loan of $7bn to the banks in 2006; Nigerians surely have a right to know. After all, if the CBN made the $7bn largesse to banks, a widely reported media affair, one should, indeed expect that successful application and liquidation of this soft loan should even be heralded by a much more ‘in your face’ media blitz to assure Nigerians of the wisdom of such intervention in the first place. Save the Naira, Save Nigerians!!
Business & Economy Seplat to defer oil projects, boost gas to beat plunge
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eplat Petroleum Development Co., a Nigerian oil producer that bought assets from Chevron Corp., plans to defer some oil investments while expanding gas output to survive low crude prices, company Chairman Ambroise Orjiako said. “We’re looking very strongly to compensate for the revenue drop by increasing gas production,” Orjiako said in an interview with Bloomberg TV Africa broadcast Thursday. There will also be “a lot of
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tightening” with the company deferring “nonessential” capital projects, he said. Seplat currently pumps about 70,000 barrels a day and is on course to meet its target of 85,000 barrels a day by next year. Small Nigerian oil companies pumping less than 100,000 barrels per day, have seen their revenue eroded by the more than 50 percent drop in crude prices since they peaked in June last year, analysts including Pabina Yinkere of Vetiva Capital Management Ltd said.
They’re further squeezed by higher production costs of about $30 for a barrel, compared with $15 a barrel for bigger oil companies such as Royal Dutch Shell Plc and ExxonMobil Corp. Seplat expects to double its gas-processing capacity to 280 million cubic feet per day by the end of first quarter when it completes expansion projects, Orjiako said. This would enable the company take advantage of higher domestic gas prices of $2.50 per thousand cubic feet approved last year by the government.
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