World Bank plans universal access to banking facilities by 2020 by Vanguard Media Limited

OCTOBER 21,

2013

World Bank plans universal access to banking facilities by 2020 *As Nigeria secures $1.4bn support

BY OMOH GABRIEL

Business Editor just back from Washington

t a major forum convened by the World Bank Group at the just concluded IMF/World Bank Group Annual Meetings in Washington DC, bankers, financial leaders and government functionaries of member countries set a goal of achieving universal financial access by 2020 as a way to accelerate economic progress and reduce extreme poverty. The leaders at the forum included Nigeria’s Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala. According to the World Bank spokesman for Africa, Agustin Castro, the goal is of utmost importance since 2.5 billion adults worldwide are ‘unbanked’ and almost 200 million micro to medium enterprises in developing economies lack access to affordable financial services and credit. This, he said, the bank considers as a major obstacle to reducing poverty levels and create much needed new jobs. Also, the Minister of Finance, Dr. Okonjo Iweala, told journalists attending the meeting at a post annual press briefing that Nigeria has secured a $1.4billion support facility from the World Bank to speed up the development of the power sector and infrastructure in Nigeria. She said

“The World Bank has pledged to support Nigeria’s power sector and infrastructure development with about $1.4 billion. The World Bank is planning to set up a global infrastructure facility and Nigeria would be among the first countries to benefit considering its population and infrastructure needs.” According to the World Bank Group “More than 50 countries have now made commitments to financial inclusion targets. “If they fulfill their commitments, if other countries also set bold targets, and if the private sector responds by unleashing its resources and know-how – then we can reach universal access by 2020,” said Kim. In a dialogue with Her Majesty Queen Máxima of the Netherlands – who is the United Nations Secretary General’s Special Advocate for Inclusive Finance for Development and the Honorary Patron of the G20 Global Partnership for Financial Inclusion – Kim noted that financial inclusion can be a powerful accelerator of economic progress, and can help achieve the World Bank Group’s goals of eliminating extreme poverty and building shared prosperity. The importance of universal access to financial services was also emphasized by Queen Máxima who pointed out that every person and every business in any country deserves that opportunity. The priority of broadening financial

inclusion to individuals and small businesses globally was underscored by a panel of government and business leaders. “Beyond ensuring universal financial access, a challenge which we all face is to ensure that financial services are available to meet the range of household and enterprise needs,” remarked Ngozi OkonjoIweala, the Coordinating Minister of the Economy and Minister of Finance of Nigeria who recently launched Nigeria’s financial inclusion strategy. “Rwanda has an ambitious vision for financial inclusion, and I am pleased to say that we have made significant progress already towards that target, almost doubling formal financial inclusion from 21 per cent of adults in 2008 to 42 per cent in 2012,” said John Rwangombwa, the Governor of the Central Bank of Rwanda. “When low-income workers or poor families gain access to basic financial services, they gain a foothold on the first rung of the ladder toward prosperity,” Kim said. “Access to savings accounts, credit or remittances can help families afford essential services like water, electricity, housing, education and health care. When firms gain access to financial services such as credit or insurance, they can reduce business risks, expand their firms and create more jobs.” Low cost, accessible transactions instruments and bank accounts can provide a gateway to this

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CURRENCY BUYING CENTRAL DOLLAR POUNDS EURO FRANC YEN CFA WAUA RENMINBI RIYA KRONA SDR

154.81 247.4793 209.9843 170.1583 1.5758 0.3011 236.7172 25.3429 41.2772 8.1452 237.4791

155.31 248.2786 210.6625 170.7078 1.5809 0.3111 237.4818 25.4252 41.4105 28.2361 238.2463

SELLING 155.81 249.0779 211.3407 171.2574 1.586 0.3211 238.2463 25.5075 41.5438 28.327 239.0135

CBN Exchange rate as at 18/10/2013 range of financial services. Setting and then achieving countryled national targets will open the way toward broadening financial inclusion, Kim said. Adopting ambitious financial inclusion commitments can unleash privatesector innovation and investment, helping advance the goals of eliminating poverty and building shared prosperity. Constrained access to finance for small businesses in many emerging markets hinders their growth and

Continues on page 18

C M Y K

18 — Vanguard, MONDAY, OCTOBER 21, 2013

Cover Story

The Basic Guide to Starting Your Business Part 5 WHO IS AN ENTREPRENEUR? here are many differing views on what makes someone an entrepreneur and what an entrepreneurial venture is. The term itself is believed to have originated from French, coined by a French economist, JeanBaptiste Say, in about 1800, who defined an entrepreneur as “one who undertakes an enterprise , especially a contractor, acting as intermediary between capital and labour ”. But it was first defined in English by the Irish economist Richard Cantillon, as ” a term applied to the type of personality who is willing to take upon herself or himself a new venture or enterprise and accepts full responsibility for the outcome”. The definition of entrepreneur is not limited, as various writers and world renowned entrepreneurs have given it various meanings. For instance, one of the great motivational speakers and writers of our time Robert Kiyosaki, in his book “ Retire Young, Retire Rich” defined an entrepreneur as “someone that sees an opportunity, puts together a team, and builds a business that profit from the opportunity”. As you can already see, the word entrepreneur is inexhaustible. According to the Merriam-Webster online an entrepreneur is “one who organizes, manages, and assumes the risks of a business or enterprise”. A more detailed definition given by Daile Tucker, an entrepreneur herself, who in her own words describes an entrepreneur as “a person who has decided to take control of his future and become self employed whether by creating his own unique business or working as a member of a team”. Something that keeps coming up about entrepreneurs is their ability to see opportunities and make the most of it, not

From left: Director, Brands & Communications, Etisalat Nigeria, Enitan Denloye; Obi of Onitsha, Igwe Nnaemeka Achebe; Director and Curator, African Artists' Foundation (AAF), Azu Nwagbogu; and Curator, World Press Photo, Paul Ruseler, at the Lagos Photo Foundation and 'Etisalat showcasing World Press Photo' VIP Preview Exhibition, held at Eko Hotel & Suites, Lagos

World Bank plans universal access to banking facilities by 2020 ability to generate much needed new jobs. Most of the 2.5 billion adults who lack accounts at formal financial institutions often use informal methods to save, borrow and secure their assets. These undermine efforts to reduce poverty levels worldwide. Kim emphasized that by energizing all the parts of the World Bank Group, the institution is committed to fulfilling its role as the leading global partner – for both public-sector and private-sector institutions – in supporting countries as they work toward these goals. According Castro, while the goal of achieving universal financial access by 2020 as a way to accelerate economic progress and reduce extreme poverty is ambitious, the World Bank President, Jim Yong Kim, assured that universal access to financial services is within reach, attributing it to new technologies, transformative business models and ambitious reforms. During the meeting and in line with this set goal, the Central Bank of Nigeria was one of the 45 signatories of commitments to financial inclusion worldwide (the Maya Declaration) that include: Creating an enabling environment to harness new technology that increases access to and lowers the costs of financial services; implementing a proportional framework that advances synergies in financial inclusion, integrity, and stability; integrating consumer protection and empowerment as a key pillar of financial inclusion; and utilising data for informed policymaking and tracking results. In her own press briefing, Dr Mrs Ngozi Okonjo-Iweala C M Y K

Continues from page 17

The programmes include saving one million lives; instant cash transfers, improving nutrition for children, immunisation, HIV/Aids and anti-malaria programmes

said “The World Bank Group, that is the World Bank and the International Finance Corporation (IFC), the private sector arm of the World Bank, through the World Bank president has made it known that they want Nigeria to be one of the focus countries in sub-Saharan Africa. This means that they are willing to work with Nigeria to invest hundreds of millions of dollars. “They have a lending programme of about a billion dollars a year, but they are willing to use that and pull in more resources from the U.S. through the Power Africa Initiative, using the offices of IFC to help us address infrastructure problems. Continuing she said, “They want to concentrate on power, and they are already actively working with several private companies that want to work in Nigeria. A break down of the $1.4billion pledge showed that $700 million dollars is made up of guarantees from the International Bank for Reconstruction and Development for the power sector as well as $700 million

dollars investment pledge in power transmission sector,” She added that the meeting also focused on how to improve the bank’s social safety network programme in Nigeria. Okonjo-Iweala said that the bank and the Federal Government would collaborate on a 400 million dollar social safety net programme which would key into the existing programmes already running in the country. The programmes, she said, include, saving one million lives; instant cash transfers, improving nutrition for children, immunisation, HIV/Aids and anti-malaria programmes among others. She said the programme under conditional cash transfer would be used to scale up the project on cash transfer in education in Kano State to improve the number of out-of-school children, especially the girls. According to OkonjoIweala, Nigeria also got pledges from the bank to help improve statistics. The minister reiterated that the 2013 budget was on course describing some speculations on the budget in the media as false. “We have spoken to the National Assembly on the amendments and they have done something and we have decided to continue with the implementation. Please, 2013 budget is being implemented. What is being perpetrated by some sections of the press, that somehow the 2013 budget has fallen apart and not implemented, is false. This budget is being implemented, it still has some issues here and there, but we’ve decided to go ahead to find a solution and take care of the missing money to pay people involved under the SURE-P programme”, she said

minding the risks they will undertake. Entrepreneurs are generally in competition with themselves and believe that success or failure lies within their personal control or influence. So it is very important for you, when starting a business, to be sure that you can identify opportunities, make the most of them and have the wherewithal to thrive even in the midst of risks and unforeseen circumstances and that is why carrying out a self analysis cannot be over emphasized. Entrepreneurs are leaders, prime movers, authors, pacesetters, investors and risk bearers. They are usually pioneers who strategize and formulate the rules for the general interest of the enterprise for others to follow. An entrepreneur conceives an idea and brings it to life through systematic and wellarticulated planning, driven by the passion and the need to achieve uncommon things. An entrepreneur not only assumes responsibility and the risk for a business operation with the expectation of making a profit, the entrepreneur also generally decides on the product, acquires the facilities, and brings together the labour force, the capital and production materials. Simply put entrepreneurs are people who choose to see positivity where negativity abounds. Bear it in mind, however, that if a business succeeds, the entrepreneur reaps the reward of profits; on the other hand, if it fails, he or she takes the loss. S u c c e s s f u l entrepreneurs are not perfect people but are brilliant, productive, and articulate; it takes both the heart and the head to successfully run an entrepreneurship. Also note that an entrepreneur is an inspirer, a motivator, a coach, a great listener, attentive, consistent and enthusiastic.

Vanguard, MONDAY,OCTOBER 21, 2013 — 19

his article was first published last November. As Nigerians prepare for a national dialogue the hopes and wishes of Nigerians is that the conferees come up with a Nigerian dream that give every Nigerian a sense of hope and inspire patriotism. Every American knows there is an American dream. Party affiliations are made along this dream. Every so often, the American presidents remind the people of the American dream. The dream is people centered and people oriented. This, over the years, has fired every American to hope for the best and be assured that the government is there to cater for his best interest. The last presidential election in the US brought to mind again the American dream. The re-elected Barrack Obama spoke gloriously of this dream. He said “If there is anyone out there who still doubts that America is a place where all things are possible, who still wonders if the dream of our founders is alive in our time, who still questions the power of our democracy, tonight is your answer. “Let us resist the temptation to fall back on the same partisanship, pettiness and immaturity that have poisoned our politics for so long. Let us remember that it was a man from this state who first carried the banner of the Republican Party to the White House, a President Goodluck Jonathan party founded on the values of self-reliance, individual other than revenue sharing, passion may have strained it, liberty, and national unity. crave for power, stealing and must not break our bonds of Those are values we all share, embezzlement? That is why in affection.” And to those and while the Democratic our politics, we kill, maim and Americans whose support I Party has won a great victory destroy opponents as if we are have yet to earn – I may not tonight, we do so with a in a game of winner takes all. have won your vote, but I hear As Nigerians prepare to your voices. I need your help, measure of humility and dialogue, will Nigerian and I will be your president determination to heal the divides that have held back politicians and leaders learn too. of basing party manifestos on To ask, what is the strength our progress.” The American dream caused values? Can Nigeria begin to of Nigeria? What makes men, who believe in America re-emphasis societal values Nigeria the giant of Africa? Its to form political parties based instead of hero worship and land mass, certainly not. on shared values of self- money? Yes, Nigeria is a multi Natural resources, no! What reliance, individual liberty ethnic society, but does that make Nigeria great are her and national unity. This is one make us enemies and forget people. But over the years, Nigerian leaders have not thing that makes America our past? Reflecting on America’s past, realised this. They feel oil and great. What about our own Obama said, “As Lincoln said gas resources, mineral and country? What values do our to a nation far more divided land is what makes the political parties enunciate than ours, “We are not country what it is. How else enemies, but friends…though can we explain the neglect of

What is the Nigerian dream, hope and future

As Nigerians prepare to dialogue, will Nigerian politicians and leaders learn of basing party manifestos on values? Can Nigeria begin to re-emphasis societal values instead of hero worship and money?

the human resources in Nigeria? Neglect of the education sector? Obama said, “The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals, democracy, liberty, opportunity, and unyielding hope. For that is the true genius of America – that America can change? In Nigeria, ideas have no place; it is all about money; by whatever means it is achieved is nobody ’s business. That is why we are the way we are, noise and motion but no movement, no progress. Let us all ask our past and present political,

social and economic leaders if our children should live to see the next century. What change will they see? What progress will we have made especially in this period of mass unemployment where those without godfathers stay five years without hope of securing any form of gainful employment? President Goodluck Jonathan must know now that this is his chance to make a difference. This is his moment to bring hope to Nigerian youths; to put the teeming army of young graduates roaming the streets endlessly in search of jobs back to work and open doors of opportunity for those that are now in schools. The forthcoming National Conference offers yet another opportunity for Nigeria to bounce back to reckoning. The conference must come up with principles that will give hope to all Nigerians. It must come up with a Nigerian dream. What will make every Nigerian want to die serving his country, a Nigeria that cares for all, a Nigeria that provides hope for all, a land of equal opportunity for every Nigerian citizen, a country where no citizen will be treated as a stranger in any part; a country where any of its citizens can aspire to become the president through hard work; a country that celebrates excellence not mediocrity. The National Conference must come up with logical ideals that will create an egalitarian society. That will be a dream every Nigerian will be proud of.

Business & Economy

BoG should allow foreign investment in microfinance sector G

hana Institute of Governance and Security wish to strongly bring to the attention of Bank of Ghana and the Ministry of Financial and Allied Services to critically take into consideration to allow foreigners and foreign Direct Investment into the Microfinance Industry in Ghana. Microfinance sector is an emerging industry in Ghana which is helping many individuals and small and medium enterprises to grow their businesses but what we have realized painfully is

thatof late the microfinance institutions lack capital injection into their businesses, technology and experiences to prosper the sector. Indeed, recently microfinance institutions are spread across the length and breadth of this country but lack proper systems to make them effective and, more efficient. Clearly, there are several reports pointing to the fact that the microfinance institutions are suffering, to the extent that their customers can not have access to their savings and their fixed investment and the situation is causing anxiety

and panic within our society and causing harassment to their employees. In fact, all those threats are coming upon the staff as a result of the fact that microfinance operators lack liquidity to serve their customers. Critically, most of the microfinance is facing these difficulties as a result of multiple factors which have affected this country most was the Supreme Court matter which Ghanaian has gone through eight months in this year and the policy of stopping of Chinese involvement in the galamsey

operation has triggered most of the suffering and causing panic withdrawals in the microfinance business. Indeed, to address these situation and challenges facing microfinance industry we wish to propose to the central Bank and the Government of Ghana to convince and open the door for foreign Direct Investment , capital injection, fresh knowledge and technology to help safe the microfinance sector from collapsing soon. Mostly appropriately, we wish to say the investment into microfinance industry and the

overall benefits of foreign direct investment for developing countries’ economies especially the financial sector are well documented In fact, given the appropriate policies and preparedness by Bank of Ghana and the stakeholders for a basic level of development, involvement by foreigners will demonstrate in the microfinance sector that foreign direct investment triggers technology spilovers, assists human capital formation contributes heavily to international trade integration, of microfinance concept across the globe. C M Y K

20 — Vanguard, MONDAY, OCTOBER 21, 2013

Business & Economy BRIEFS WTO boss laments delays in settling trade disputes

he World Trade Organisation (WTO), has warned member countries that their refusal to increase their budget is causing a logjam in dealing with trade disputes. In a confidential budget proposal sent to Reuters, WTO Chief, Roberto Azevedo, told the 159 member countries to expect delays in adjudications by WTO panels “for the next while” and “serious difficulties and delays” for appeals in the next two years. “The Appellate Body can expect the budget proposal sent to WTO members on October 2. Such an increase in the number of appeals, on top of the increasing complexity and size of the average appeal, will put a huge strain on the resources of the Appellate Body and its Secretariat in the course of the next biennium.” The current lawsuits include a multi-billion dollar fight over subsidies for Boeing and Airbus, a challenge to Australia’s landmark tobacco packaging laws and a dispute about Chinese exports of rare earth metals.

China’s economic growth picks up in Q3

hina’s economic growth picked up pace in the July-to-September period, the first rise in three quarters. The world’s second-biggest economy grew 7.8 percent from a year earlier, up from 7.5 percent expansion in the previous quarter. The official figures also showed growth in industrial output, retail sales and fixed asset investment. After years of blistering growth, China has seen its pace of expansion slow recently and there have been fears that growth may slow further. China has set a growth target of 7.5 percent for the year. Analysts said the latest numbers indicated that it was likely that Beijing would meet this. “This is an indication that China’s economic growth is holding up in a range which is within the comfort zone of both the Chinese policymakers as well as global watchers,” said Song Seng Wun, a senior economist with CIMB Research . C M Y K

Manufacturers want FG to restructure export-related agencies Stories by NKIRUKA NNOROM

he Federal Government has been urged to restructure all export-related agencies to take further stimulus measures and support industries to expand export in the country. Delivering his welcome address at the 46th Annual General Meeting of Manufacturing Association of Nigeria, Ikeja Branch, the chairman, Rev Isaac Ade Agoye, said it was necessary step that would offset the faltering and slothful domestic demand. Ade Agoye further called on the government to introduce new incentives and faithfully implement existing concessionary duty rates on raw materials not available locally. He said, “The government should also ensure the immediate crafting of a National Policy on gas pricing that will eliminate monopoly and reduce the number of beneficiaries on the value chain as quick wins that will improve the lot of manufacturing concerns and cushion the effect of the seemingly intractable business environment. “The Central Bank of Nigeria should be mandated to quickly put in place strategic framework that will enable banks resume normal lending to the real sector at single digit interest rate to avert further strangulation and total collapse of business activities in the economy.” He affirmed that qualifies a nation for the tag ‘developed economy’ is the presence of a virile manufacturing sector, adding that Nigeria would remain in the community of developing countries except the enabling environment required for manufacturing to thrive is created. However, all hope is not lost yet, but government needs to urgently and seriously consider some of the issues militating against manufacturing and deliberately put in place a mechanism that will bring down the cost of doing business and enhance competitiveness, he stated. On energy supply to industries, Ade Agoye said, “The recurring debacle of unavailability and unsustainability power (energy) did not allow the manufacturing sector to attain

its full capacity and operate optimally, as cost of sourcing for alternate power (diesel) eat deep into operational cost, leaving an insignificant profit margin. “The current comatose state of the oil and gas sector that ideally should be the engine of wealth creation, growth and development in the

country is worrisome. The 2012 MAN Economic Survey of 470 member-companies revealed a mixed performance during the year under review. Average capacity utilisation declined by 2.21 percent from 48.90 percent in December 2011 to 47.82 percent in December 2012.

“However, on half-yearly review basis, industrial capacity utilisation recorded improved performance of 49 percent in the first half of 2012 when compared with the closing figure of 47.82 percent for the second half of the year. The gradual upward movement in the capacity utilisation that was recorded in the first half of 2011 started to fall by the last half of 2012,” he added.

Olumide Emmanuel Foundation distributing food items at Sango, Ogun State, in commemoration of the World Poverty Day

Tourism, arts & culture key to Nigeria's economic development C

hief Executive Officer of the Nigerian Stock Exchange, NSE, Mr. Oscar Onyema, has said that promoting tourism and harnessing arts and culture is an important strategy of achieving the nation’s goal of economic development. Speaking while receiving the Minister of Tourism and Culture and National Orientation, Mr. Edem Duke, who paid a courtesy visit o the Exchange, Onyema said that the NSE is building a liabrary of Nigerian arts as part of its contribution to supporting local content, adding, “and as part of our collection we have pieces from renowned Nigerian artists as well as up and coming talents.” He stated that with growth a diversified tourism sector can contribute to the growth of small and medium businesses, generate employment and economic progress for millions of Nigerians in many related sectors. Onyema said, “Over the last few months, as I have travelled across this country, I have been impressed by the remarkable improvement in our infrastructure, cultural assets, and economic landscape along with the

expansion of hotels, restaurants, and entertainment venues. “Nigeria records millions of visitors annually. Increasingly, these visitors are drawn to Nigeria for leisure and business purposes and, there is great potential for expanding this number. Indeed, a thriving tourism sector will establish Nigeria as a leading destination for business, investment and human capital for both local and foreign clients. I can only imagine that if all Nigerians were to embrace and build on the vision that has been established by the Ministry of Tourism, Nigeria’s role as the giant of Africa would be solidified.” He noted that in order to build a globally competitive tourism sector, enterprises – both small, medium sized and large often require access to capital, saying that the stock market could be used as a vehicle to achieve the goal. “As The Exchange builds awareness and attracts local and international investors, we wish to partner with the ministry and its agencies to showcase the benefits and initiatives of the stock exchange within the tourism

sector. One way is to include our collaterals in hotels, airports, museums, cultural centers and embassies across Nigeria and globally. “From hospitality and construction through agriculture to telecommunications, there is a huge opportunity to attract small and medium sized businesses to the Alternative Securities Market (AseM) at the Exchange, which is specifically for emerging companies with high potential for growth in Nigeria,” he added. Speaking at the event, Duke said, “It is our desire to make the platform of the Nigerian Stock Exchange, its membership, and traders to ensure that we can reposition the tourism sector and in deed begin to grow it as a profitable sector and as one that can help us in the transformation agenda of the this administration; we seek to create jobs and wealth across the land” He noted that the ministry has identified 230 potential tourist centers in Nigeria, saying that it requires public and private partnership initiative to develop such centers.

Vanguard, MONDAY, OCTOBER 21, 2013 — 21

Business & Economy

From left: Engr. Taofiq Tijani, Commissioner for Energy and Mineral Resources, Hon. Lanre Ogunyemi, Chairman House committee on Energy and Mineral Resources, Lagos state House of Assembly, Gov. Babatunde Fashola of Lagos state, Mrs. Adejoke Orelope-Adefulire, Deputy Governor of Lagos state, Mr. Wale Tinubu, General Chief Executive Officer, Oando Plc and Mr. Mr. Reginald Ihejiahi, Managing Director and Chief Executive Officer, Fidelity Bank Plc, during the commissioning of Alausa Power Project in Ikeja, Lagos, on 17/10/2013. Photo: Bunmi Azeez

Rocky Electronics, LASG partner to reduce unemployment By WILLIAM JIMOH

ocky Electronics Cash & Carry Ltd. is set to partner Lagos State Government to reduce unemployment in the state through the establishment of an institute that will help produce indigenous engineers, who will be experts in fabrication of both software and hardware components of computer.

Speaking during the opening ceremony of a new outlet called ‘Smart Mobile Device’ in Lagos, the company’s Managing Director, Mr. Lawrence Ezeigbo, said this is part of the company’s efforts to develop Nigerian manpower, most especially those that will understand technology for self-reliance. “We hope that in the next five years, the number of unemployed youths in the

county would have reduced drastically because the smart mobile communication institute would have trained a lot of Nigerian youths on various technologies, thereby reducing our patronage of foreign experts while creating employment opportunity. “We have thoroughly carried out our assessment of the current educational learning system and we have identified the need to provide students with learning materials at the

most cost effective rates to the government and that is one way of appreciating our customers,” he added. Speaking on the newly launched subsidiary, Mr. EberechukwuDuru,Smart Mobile Device's Managing Director, said the subsidiary will help in the distribution of its products across Nigeria and in the West Africa subregion with a wide range of mobile devices at an affordable price. Duru added that the establishment of the new subsidiary is in line with the company’s vision of becoming Nigeria’s foremost indigenous mobile devices company by being number one in every market it serves. According to him, the company is driven by a mission to deliver to its diverse clientele high quality products and value adding services that creatively and efficiently provide solutions to their unique needs tailored into all spheres of mobile technology. He added that the mobile mall has developed mutual trade relationships with key accredited local and international dealers and distributors of wide range of products tailored to meet the mobile technology needs. “We have also built up a professional, customerfocused and well-motivated workforce with the expertise to provide exclusive valueadding services to our customers in major cities in the country, as well as in Ghana, Abidjan and Benin, adding that they are currently working on opening a branch in Liberia.

Institute plans advocacy on loan, risk management By DOTUN IBIWOYE

he Chartered Institute of Loan & Risk Management of Nigeria, CILRM, has announced plans to undertake an advocacy programme on government policies, especially as pertaining to financial matters. Speaking at the induction/ conferment ceremony of CILRM, the Chairman of governing council of the institute, Chief Oladipo Abiodun Bailey, stated that the evolving and highly competitive global economic scenario has made it essential for professionals in the field to fill the void in the discipline. Bailey affirmed that the demand for top flight efficiency and effectiveness, has made it essential for professionals to focus on loan and risk management as it is in the more advanced C M Y K

countries and a number of emerging economies of the world. “The evolving and highly competitive global economic scenario with its demand for top flight efficiency and effectiveness has made it essential for specialist professional focus on loan and risk management as it is in the more advanced countries and a number of emerging economies of the world. The Chartered Institute of Loan and Risk Management of Nigeria is established primarily ‘to fill the void in the specialist professional discipline practice, thereby complementing the noteworthy contributions of individuals, academia and other professional bodies, to the development and growth of sound loan and risk management practice in Nigeria. "Let me point out that the Chartered Institute of Loan and Risk Management of Nigeria is the solo professional body authorised

by the government to regulate and control the practice of the profession in Nigeria today. He added: “The institute shall endeavour to perform her role of advocacy on government policies on financial matters, including loan and risk management issues in the Nigerian economy and continue to foster organisations to participate and contribute their skills for the purpose of furthering the objective of the institute. Minister of Environment, Arc. Darius Dickson Ishaku, also noted that risk is inherent in the daily activities of economies and the decisions affect the outcomes from intended or unintended effects of company operations. Represented by Mr Kevin Ihebinike of the Federal Ministry of Environment, the minister said that recent cases of explosion of a fertilizer plants in the USA and the building collapse of a garment factory in

Bangladesh readily comes to mind in risk management. He also stressed that locally, cases of possible on-site soil groundwater contamination from underground hydrocarbon storage tanks exists. According to Ishaku: “Environmental Risk Management, ERM, is defined as the identification, assessment, prioritisation of environmental risks resulting from natural events , , processed products, fronts and industrial activities that may pose threats to the ecosystems, animals and people followed by coordinated and economical application of resources to minimise, monitor, and control the probability and/or impact of these unfortunate events or to maximise-the realisation of opportunities, companies and organisations must assess, mitigate, and monitor these risks. “As mentioned earlier, it is appropriate that ERM be applied to all phases of project/facility."

BRIEFS British SMEs more confident but funding concerns persist – survey

ritain’s small and medium-sized businesses are more confident about their prospects than they have been for three years but still want banks and the government to do more on funding, a survey by software company Sage said. Business confidence in Britain rose 4.1 points on 2012, to 62.55 out of 100, ahead of all the euro zone countries surveyed, including France, Portugal, Spain and Germany, according to the poll of more than 11,000 enterprises across 17 countries. But more than half said British companies were not getting the financial support to grow, with 54 percent saying banks were not doing enough, and nearly three quarters saying the government needed to put more pressure on lenders. Sage Chief Executive Guy Berruyer said in an interview that good news on the British economy in the last six months, including the IMF upgrading its growth forecast earlier this month, had filtered down to SMEs. “However, if businesses are to take advantage of the upsurge of economic confidence, then they need access to a wide range of funding sources,” he said.

Microfinance sector close to being 100% insured

arely two years ago, a crisis-ridden microfinance sector, was struggling to integrate into the formal finance sector. In 2013, the sector is close to being 100 per cent insured, as it has emerged as one of the largest platforms for marketing of insurance products. The sum insured in the microfinance sector now stands at more than its gross loan portfolio. As on June 30, sum insured through microfinance institutions (MFIs) stood at Rs 35,300 crore and the gross loan portfolio of the MFIs at Rs 21,300 crore. Of the 24.8 million-odd clients of MFIs, 23.2 million lives are insured, according to Micro Finance Institutions Network (MFIN) data. (The data does not include that of SKS, the second largest MFI in the country).

22 — Vanguard, MONDAY, OCTOBER 21, 2013

Corporate Finance BRIEFS Goldman Sachs cuts costs as revenue tumbles 20%

oldman Sachs Group Inc., the world’s most profitable securities firm before the financial crisis, said earnings were little changed as the bank cut costs in response to a 20 percent drop in revenue. The firm increased its dividend by 10 percent. Shares of the company fell as revenue of $6.72 billion fell short of the $7.35 billion average estimate of 17 analysts surveyed by Bloomberg. Third-quarter net income rose to $1.52 billion, or $2.88 a share, from $1.51 billion, or $2.85, a year earlier, the New York-based company said in a statement. Chief Executive Officer Lloyd C. Blankfein, 59, is lowering expenses to show investors his firm can deliver higher returns while it waits on a cyclical climb in trading and investment-banking revenue that hasn’t arrived. The stock has traded below 1.5 times book value for the past 3 1/2 years, the longest such streak in the company’s history.

Wall Street climbs in wake of Washington deal, IBM drops

.S. stocks rose on Thursday as investors assessed the ramifications of an agreement by lawmakers in Washington to raise the U.S. debt ceiling and end the partial shutdown of the government, but a decline in IBM pulled the Dow lower. Congress had on Wednesday approved an 11th-hour deal to end a partial government shutdown and pull the world’s biggest economy back from the edge of default that could have brought about financial calamity. The political wrangling has led some investors to believe the U.S. Federal Reserve will have no choice but to leave its fiscal stimulus measures in place for at least several months as the damage caused to the economy becomes apparent. A Reuters survey showed economists have grown less optimistic about prospects for the economy as the fight over fiscal policy takes its toll. “The scare that was created by the lengthy delay in resolving the issue has created a situation that has taken Fed tapering off the table for a considerable period. C M Y K

Stories by NKIRUKA NNOROM

he introduction of the new trading engine, X-Gen, by the Nigerian Stock Exchange, NSE, will likely prolong the current downturn in the stock market in the last quarter of the year, said analysts at BGL Securities Limited. In its review of capital market activities for nine months to September, 2013 and outlook for fourth quarter and 2014, the equity research firm said, “A number of key developments in the stock market in recent times worthy of note include the September 30th migration of the NSE trading platform to the X-Gen platform, a modern and robust trading platform with multifunctional capabilities. “The platform is set to change the structure of transaction in the market as it allows order automation, multiple channels interaction and real time integration of stockbrokers’ web access to the market such that investors can see and may be trade directly through their brokers’ platform real time.” However, “The learning curve for brokers on the use of the newly installed X-Gen trading platform is expected to contribute to the current drag in the performance of the stock market in the last quarter of the year,” BGL affirmed. In the report titled,

From left: Mr Feyi Olubodun, Director, Strategic Planning, Insight Communications Ltd; Dr Iby Uraih, Chief Consultant, Proventures Limited; Mr Olayiwola Afolabi, Executive Director, Media Planning Services and Mr Kayode Olageshin, MD, Towncriers Ltd. during the ADVAN Excellence Marketing Awards entry screening in Lagos.

New trading engine to prolong stock market decline – Report “Economic Note: The Nigerian Capital Market in the First Three Quarters of 2013”, BGL team said the market is consequently expected to close with about 30 percent performance. Giving further analysis of activities in the market, it said the sub-national bond space may remain flat for the rest of the year and the first quarter of 2014, while the second phase of power companies’ sales would increase loan syndication in the market.

The company noted in the report that the primary market window is probably getting rejuvenated with an estimated N125.2 billion raised by different listed companies through that window, adding that the success recorded by most of the companies would encourage more companies to come to the market for public offers in the near term. It said, “For the first nine months of the year 2013, the Nigerian Capital Market enjoyed some impressive rally. The rally experienced

Corporate governance: Five 7up directors shun AGM

ll may not be well with 7up Bottling Company Plc as five of the nine directors of the company were absent at the company's 2013 Annual General Meeting held recently in Lagos. This drew the ire of the shareholders, who chided the board and management for continuing to accommodate directors that continually absent themselves from board meetings, saying that their action smacks of irresponsibility and negligence of duty. Vanguard checks revealed that the directors, Alhaji Ahmadu Yaro, aged 85, Mr. Ziad El-khali and Chief Farid El-Khali were absent from the four directors’ meeting held within the year, while Otunba Adekunle Ojora, 81, attended the meetings by proxy. Vanguard further gathered that Zaid El-Khali, Farid ElKhali and Ojora have no shareholding in the company as at year ended 31st March, 2012 and 2013, while Yaro sold down his interest in the

company from 417,613 shares in 2012 to 110,795 ordinary shares in 2013. Speaking at the yearly meeting in Lagos, which was almost stalled due to shareholders refusal to re-elect two of the directors, (Yaro and Ojora), Mr. Nona Awoh, a shareholder activist, said the company will not continue to pay directors that absent themselves from meetings. “I have raised this issue for four consecutive years and nothing has been done about it. Directors should be paid based on the duties they performed, not just for being part of the board. Five directors are even absent from this meeting (the annual general meeting) without apology,” he said. He, therefore, demanded for a breakdown of the N4.78 billion administrative expenses accumulated within the year to determine what each director earned, saying, “you will be surprised that they were paid for not attending the meetings.”

Speaking in the same vein, Mr. Adebayo Adeleke of Independent Shareholders Association of Nigeria, ISAN, and Mr. Godwin Anono, President, Standard Shareholders Association of Nigeria, SSAN, said, “Aged directors should go home and rest; any director that is not willing to work should step aside for others to take over. There are so many people that will be interested in the job. These aged directors do not actually add any meaningful thing to the progress of the company.” Earlier, the chairman, Faysal El-khalil, said that continuing high prices of key manufacturing inputs had significant impact on the operating margins during the year. However, “With the help of aggressive sales and marketing initiatives, we were able to grow the volume significantly in the second half of the year and mitigate the impact of sluggish sales and price roll back in the earlier months,” El-khalil stated.

could be tied around factors such as the rub off effect of 2012 year end, impressive valuation of blue chip companies, growing investor confidence and significant increase in foreign inflow into the market. Further underscoring how attractive the market has been so far in the year, the return of the equities market peaked at 40 percent in June, while the implied market to market yield on the 10-year bond reached a 2year low of 10.5 percent earlier in the year.” Continuing, the report said, “The performance of the Nigerian bourse so far in 2013 has been very impressive despite the price corrections experienced at some point. In the earlier part of the year, the market extended bullish trend of late 2012 with a peak to date return of 40.1 percent on June 11, while the NSE All Share Index and market capitalisation reached fiveyear highs of 40,012.66 points and N12.8 trillion respectively. “There was, however, reversal of the market rally from the 12th of June as the NSE ASI fell daily consecutively until it got to as low as 35,832.16 points on the 1st of July. The factors attributable to this include profit taking and perhaps portfolio re-allocation to relative more attractive fixed income instruments by investors and later the announcement by the US Fed of a possibility to commence tapering of it quantitative easing policy. The market has since corrected to around 28 percent gain as at the end of September.”

Vanguard, MONDAY, OCTOBER 21, 2013 — 23

Corporate Finance

Pension fund assets to hit N10trn by December Stories by PETER EGWUATU

he Nigerian pension fund assets is being anticipated to grow to N10 trillion by December 2014 following expected increase in the return on investment by Pension Fund Administrators (PFAs). Mr. Abayomi Sanya, Chairman, Organising Committee of Stockbrokers Annual Conference disclosed this, weekend at a press briefing in Lagos, saying that pension funds which is being anticipated to grow to N10 trillion by December 2014 should not be allowed to lie idle in the banks as such fund could be used to finance the infrastructural needs of the country. The 17th annual conference of the stockbrokers according to him has been scheduled to hold from October 30, 2013 and will attract dignitaries from both private and public sectors According to the Stockbrokers Organizing Committee Chairman, “ The conference will avail opportunities to stockbrokers to learn how to package new instruments that can help fund infrastructure such as power, roads, housing etc. We also expect quoted companies to know various instruments used in raising funds to meet their operational challenges. This is because, we have observed that most companies that want to raise money from the capital market don’t know how to go about it and even the kind of instruments that would suit the purpose for which such fund is needed. In fact, we need consultants to help in this regard.” He further stated that stockbrokers, quoted companies on the Nigerian Stock Exchange (NSE) and other stakeholders in the capital market are expected to be at the conference where various issues will be learnt. “The theme of the conference is Power, Housing, Energy, Oil and Gas Challenges. A lot of development has occurred in terms of structure, product development and these are the things that we are expected to know. The Federal Government is making some effort to ensure that power works and we as stockbrokers are keying into such laudable effort.

“Capital market is the bedrock of any economy and to that extent; we should portray what the capital market can do. The power revolution is capital intensive; where is the money going to come from to fund such a sector? So the Nigerian capital market is expected to play critical role in

infrastructure development” Sanya noted. He further disclosed that at the forth coming conference facilitators from both international and local would brief stockbrokers on how to trade effectively in the secondary market and other windows. He advocated the use of the capital market in addressing

most of the infrastructural needs of the country such as housing deficit in Nigeria. Abayomi-Sanya noted that the Nigerian capital market has not been maximally explored to play a major role in making fund available for housing and urban development in Nigeria.

From left: Director General, Standard Organisation of Nigeria (SON), Dr Joseph Odumodu; President, Auto Spare Parts and Machinery Dealers Association (ASPAMDA), Dr Anthony Ughagwu; and Director Special Duties, SON, George Okere, during the SON sensitization meeting with ASPAMDA in Lagos on Friday

PZ Cussons records N15.1bn sales in Q1 P

Z Cussons Nigeria has recorded sales of N15 bn for its first quarter (Q1) 2013 (end August). This represents 4.6 per cent growth Year on Year, (y/y)while Profit Before Tax (PBT) and Profit After Tax (PAT) advanced by 49.5 per cent y/y to N1.3 billion and 31.6 per cent y/y to N806 million respectively. FBN Capital Research disclosed this in its report released weekend, stating that the company recorded a gross margin expansion of 399 basis points (bps) y/y to 26.4 percent supported the y/ y improvement in PZ’s Q1 PBT despite a 26.4 per cent y/y rise in Operating Expenses (opex.) According to FBN Capital, “To a lesser extent, net interest earnings of N197million helped. PAT of N806 million grew 31.6 per cent y/y compared with N612 million in Q1 2013.”

In our view, favourable base effects i.e. a challenging 2013 was the driver behind the strong y/y growth in earnings. Sequentially, sales declined 23.9% q/q. However, this is attributable to a seasonally weak Q1. A gross margin contraction of 536bps and relatively flat opex q/q led to a sharper q/q decline in PBT. PBT and PAT were down 66.3% Quarter on Quarter (q/ q ) and 64.1 per cent q/q respectively. Compared with our estimates, while sales were 6.6 per cent behind the N16.1billion we were looking for, PBT and PAT were in line. Consensus estimates show full year sales and PBT forecasts of N79.9 billion and N8.8 billion for 2014 respectively. We do not expect any major revisions to these estimates, though they imply a strong first half (H2) 2014 is expected. PZ Cussons recently launched palm oil refinery,

constructed as part of the joint venture with Wilmar, continues to increase production levels on a monthly basis. As a direct result, a new consumer brand, Mamador – an edible oil - was introduced into the local market during the quarter. However, market penetration at this initial stage is difficult to assess. According to an interim management statement by PZ Cussons (the parent company), new product launches are also planned over the coming months across all categories. According to FBN Capital, “Year-to-date, PZ Cussons Nigeria shares have outperformed the broad market index. The shares have gained 41.1 per cent Year to Date ( ytd), compared with 33.0 per cent for the All Share Index.”

BRIEFS BoE says rate rise unlikely in 2014

ank of England’s chief economist, Spencer Dale, says economic conditions are unlikely to improve enough to merit a rise in interest rates next year. In a question and answer session on the social network Twitter, he said the UK would need to see sustained growth before rates rose from the 0.5 percent level. Earlier this week he said that rates could rise in 2014 if conditions were strong enough. Dale is one of the nine people at the Bank that set monetary policy. As might be expected from a central banker, Dale gave little in the way of surprises in his answers on current monetary policy. In its latest minutes, the Bank’s Monetary Policy Committee (MPC) said it would make no change to the £375 billion of monetary stimulus it is providing through its quantitative easing (QE) programme. The programme, brought in to give an extra stimulus because interest rates could barely be cut below the current record low of 0.5 percent, has been criticised by some for helping the financial markets and the banks, by making money cheap, rather than the economy as a whole.

Google shares hit $1,000 after strong earnings

oogle shares have topped $1,000 for the first time after the company reported better-than-expected earnings. The company posted a 36 percent jump in net profits to $2.97 billion for the July-toSeptember period. Shares in the giant online search and ads company rose more than 13 percent to $1,006, and are now up 41 percent since the start of 2013. Google’s revenues also beat forecasts with a 12 percent rise year-on-year. “We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device,” Google’s chief Larry Page said in a conference call with analysts.

Company Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc 1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc Livestock/Animal Specialities Livestock Feeds Plc CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc Chellarams Plc John Holt Plc SCOA Nigeria Plc Transnational Corporation UACN Plc CONSTRUCTION/REAL ESTATE Building Construction/Structure ARBICO Plc Constain (WA) Plc CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc Real Estate Development UACN Property Development Real Estate Investment Trusts Skye Shelter Funds Union Homes Real Estate Investment CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc

Opening Price (N) 0.50

Daily Stock Market Report Closing Price (N) 0.50

Opening Price N

Quantity Traded 2,000

Year High 0.50

Year Low 0.50

E.P.S.

P.E. Ratio

0.50 44.13 35.00

10,000 284,800 878,936

0.50 24.58 8.30

0.50 14.53 6.40

0.10 7.33 2.75

50.00 2.77 4.37

3.90

860,822

0.66

0.48

0.11

15.00

1.65 4.41 1.30 5.32 1.63 63.00

1.65 4.41 1.30 5.32 1.64 65.00

10,000 1,000 1,100 50 22,748,247 1,325,488

2.54 7.60 8.82 8.28 1.82 42.50

1.45 6.43 5.89 5.52 0.50 28.70

0.16 0.31 0.00 0.35 0.24 6.89

5.18 20.74 0.00 15.77 3.64 4.14

77.00 8.46

5.05 1.09

20 107,100

4 2,720,390.38

77.00 8.46

10,244 133

62.26 8.28

32.96 3.01

4.11 4.73

10.11 2.26

16.69

141,873

20.15

11.59

1.69

7.33

100.00 50.00

1,000 -

100.00 -

97.00 -

11.75 -

8.51 -

0.50

785

10.54

9.52

0.00

0.50

100

0.50

0.00

3.29 3.40 2.15 65.00 2.17 1.16 7.36 1.85

4.32 3.40 2.15 65.00 2.17 1.16 7.36 1.85

286 199,200 150,750 38,038 201,704 751 100 20,000

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

ICT Computer Based Systems Courteville Investment Plc

0.66

550,700

0.52

0.50

0.10

10.00

Computers and Peripherals Omatek Ventures Plc

0.50

1,500,500

0.50

0.00

12.50

16.83 2.29

16.83 2.07

200 5,000

9.31 3.59

3.25 3.25

0.00 0.01

1.43 0.00

0.50

3,000

50,000

0.50

4,000

1.47

0.50

0.00

22.00 7.70 38.85 9.50 190.00 0.50 1.81 99.00 5.10 2.20 10.93

23.00 7.95 38.85 9.50 186.20 0.50 1.81 99.00 5.10 2.20 10.93

2,583,101 79,005 40,667 179,617 44,671 2,000 500 239,178 213,193 15,000 30

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

1.71 2.70

982 2,717,101

6.91 3.60

0.50

43,595

0.50

0.00

15.55 246.01 21.40 171.88 0.74

50,000 487,713 254,726 956,772 3,000

4.63 255.00 7.10 100.00 1.01

2.23 186.00 5.23 72.50 0.93

0.00 9.95 0.41 5.08 0.00

0.00 19.98 16.29 22.22 0.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

68.00

6,290

51.49

,39.00

2.69

13.92

Food Products Dangote Flour Mills Plc Dangote Sugar Refinery Plc Flour Mills Nigeria Plc Honeywell Flour Mill Plc National Salt Co. Nig Plc UTC Nigeria Plc

Tools and Machinery Nigerian Ropes Plc

7.85

8.69

8.26

9.50 11.30 83.00 2.99 12.39 0.70

9.50 11.80 83.22 3.00 12.34 0.70

924,921 2,930,899 1,843,366 1,054,980 823,900 3,410

19.90 16.20 95.00 6.60 6.70 0.88

4.31 4.02 57.00 2.31 3.80 0.50

0.00 0.91 4.09 0.39 1.01 1.13

16.91 14.38 16.89 16.92 5.75 8.83

NATURAL RESOURCES Chemicals BOC Gases Plc

7,478

9.20

6.80

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

55.00 1,000.00

57.00 1,040.00

1,754,971 80,057

37.27 840.10

8.33 400.00

1.35 25.43

27.61 32.84

Household Durables Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc

32.27 4.18 1.93

32.27 4.27 1.93

60 382,282 10,200

36.19 5.54 2.88

33.96 2.91 2.88

13.89 0.61 0.00

2.44 7.07 0.00

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

38.00 61.04

39.50 61.04

457,737 162,452

41.02 47.39

21.02 27.60

0.82 1.44

4.39 32.91

FINANCIAL SERVICES Banking Access Bank Plc Diamond Bank Nigeria Plc Ecobank Transnational Incorporated Fidelity Bank Plc First City Monument Bank Plc Guaranty Trust Bank Plc Skye Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc Insurance Carriers, Brokers and Sector African Alliance Insurance AIICO Insurance Plc Continental Reinsurance Plc Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guinea Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mansard Insurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Unity Kapital Plc Universal Insurance Plc Wapic Insurance Plc Microfinance Banks Fortis Micro-Finance Bank Plc NPF Micro-Finance Bank Plc Mortgage Carrier, Broker and Sector Abbey Building SOC Aso Savings and Loans Plc Resort Savings & Loans Plc Union Homes Savings Plc Other Financial Institutions Africa Prudential Plc Crusader (Nigeria) Plc Deap Capital Management & Trust Plc FBN Holdings Plc Nigeria Energy Sector Fund Royal Exchange Assurance

10.49 6.40 13.81 2.82 4.75 25.53 4.40 2.42 7.65 10.52 0.57 1.28 21.63

10.40 6.42 13.95 2.81 4.75 25.30 4.62 2.42 7.85 10.50 0.55 1.28 22.04

0.50 0.92 1.13 0.50 0.50 1.78 0.50 0.50 0.50 0.50 0.90 0.50 0.50 0.50 0.50 2.05 0.50 0.65 0.50 0.50 0.53 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.90

0.50 0.92 1.10 0.50 0.50 1.78 0.50 0.54 0.50 0.50 0.94 0.50 0.50 0.50 0.50 2.10 0.50 0.66 0.50 0.50 0.53 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.88

6.60 0.85

1.49 0.50 0.50 0.50

1.65 0.50 0.50 0.50

1.80 0.50 1.21 16.30 552.20 0.50

1.80 0.50 1.09 16.40 552.20 0.50

7,184,861 5,057,790 3,103,215 5,703,126 865,336 9,750,038 10,413,050 1,320,387 29,730,352 798,733 52,520,861 2,204,831 110,483,694 1,000 9,412,794 898,276 71,500 59,300 2,547,270 200 62,500 150 150 1,666,630 1,670,890 100 100 380 363,732 100,100 1,275,919 206,000 100 539,593 200 1,294,000 200 4,000 7,464 9,000,000 52,000 1,616,172

12.39 7.51 14.04 3.47 5.70 26.09 6.50 3.05 7.69 10.60 1.22 1.75 21.49

4.70 1.92 9.90 1.13 2.90 13.02 2.65 0.80 1.64 2.34 0.50 0.52 11.96

0.50 1.11 1.03 0.54 0.50 2.44 0.50 0.68 0.50 0.50 0.50 0.50 0.50 0.60 0.50 2.59 0.54 0.81 0.61 0.50 1.01 0.50 0.56 0.50 0.50 0.50 0.50 0.50 1.08

0.50 0.50 0.58 0.50 0.50 1.08 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.06 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

4,100 5,500

6.00 1.18

100 50,000 3,000 1,000

1.57 0.50 0.50 0.50

2,155,850 22,000 140,000 28,545,915 22,491

0.75 0.50 2.02 20.00 100 0.78

1.42 0.90 2.81 0.43 0.00 2.10 0.71 0.54 0.67 0.00 0.00 1.34 2.09

8.73 8.34 5.00 7.93 0.00 12.39 9.15 5.43 11.19 0.00 0.00 0.43 10.24

0.00 0.50 0.14 0.02 0.50 0.28 0.01 0.00 0.03 0.01 0.00 0.02 0.00 0.00 0.03 0.16 0.00 0.37 0.02 0.03 0.06 0.04 0.09 0.00 0.00 0.00 0.02 0.00 0.07

0.00 22.20 6.79 27.30 10.00 7.43 50.00 0.00 16.67 50.00 0.00 25.00 0.00 0.00 16.67 16.19 0.00 2.19 26.00 16.67 15.50 12.50 5.65 0.00 0.00 0.00 25.00 0.00 15.43

0.00 0.92

0.04 0.92

150.00 10.56

1.37 0.50 0.50 0.50

0.19 0.02 0.00 0.00

47.6 7 25.00 0.00 0.00

0.00 0.50 2.02 8.57 552.20 0.50

0.19 0.00 0.00 2.03 12.68 0.13

9.16 0.00 0.00 9.85 43.55 6.00

P.E Ratio

2.23

16.99 250.00 20.99 170.00 0.74

Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc

E.P.S

9.71 18.03 6.71

INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc

2.01

Year Low

376,316 10,599,417

ICT Telecommunications Starcomms Plc

103.50 19.52 1.33

Year High

10.56 0.87 0.21

Pharmaceuticals Ekocorp Plc Evans Medical Plc Fidson Healthcare Plc Glaxo Smithkline Consumer Nig May & Baker Nigeria Plc Neimeth International Pharm Nigeria-German Chemicals Plc Pharma-Deko Plc

103.50 19.51 1.27

Quantity Traded

103.50 10.64 0.03

IT Services NCR (Nig) Plc Tripple Gee and Company Plc Processing Systems Chams Plc

Closing Price N

103.50 15.69 1.41

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers Union Diagnostics & Clinicals Services

0.09

0.50 44.95 34.49

5.05 1.11

Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

as at Friday, October 18, 2013

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

1.71 2.74

5.94 1.47

0.19 0.44 2.62 0.20 0.09 0.00 0.00

0.5 0.25 0.00

9.05 14.13 0.00 0.00

39.60 9.16 0.00

6.50

6.35

Metals Aluminium Extrusion Ind Plc

10.50

10.55

500

12.39

10.70

0.13

85.77

Non-Metalic Mineral Mining Multiverse Plc

0.50

30,000

0.50

0.01

0.00

Paper/Forest Products Thomas Wyatt Nig. Plc

0.91

0.87

43,412

1.38

0.00

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

1.90 0.50

5,840 840

2.50 2.58

1.62 2.58

0.11 0.00

13.15 0.00

1.44

2,000

1.51

1.33

0.03

28.80

3.98 12.50 12.68 4.30 1.05 2.92 0.63

3.98 12.50 12.68 4.30 1.05 2.78 0.66

6,888 366 500 29,198 200 84,311 2,749,340

3.98 15.58 15.03 4.30 1.86 2.92 0.63

3.98 12.71 13.97 3.60 1.05 2.92 0.63

0.00 3.90 0.90 1.22 0.30 0.07 0.00

0.00 3.26 0.00 3.52 6.18 41.71 0.00

Mortgage Carriers, Brokers and Se Abbey Building Society Plc INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc

0.78

0.00 88.50 0.00 3.07

7.37

OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service

0.50

2,331,666

0.97

0.87

0.19

6.06

Intergrated Oil and Gas Services Oando Plc

10.70

4,084,559

78.97

27.99

1.73

4.17

20.50 0.50 31.75 58.33 119.00 36.14 164.00

20.50 0.50 34.99 64.30 118.00 36.14 167.00

82,191 29,000 770,418 415,400 224,169 8,098 26,531

37.10 0.70 5.59

0.50 0.50 3.89

4.93 0.00 0.61

7.40 0.00 6.99

163.50 2,100 240.00

141.00 63.86 195.50

6.11 2.98 14.63

11.11 19.23 17.07

0.50

1,000

200

0.50

100

0.72

1.32

374,483

3.65

1.30

0.21

2.65 0.25

0.60 11.12

Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc Hospitality Tantalisers Plc SERVICES Afromedia Plc Automobile/Auto Part Retailers RT Briscoe Plc Courier/Freight/Delivery Red Star Express Plc Trans-National Employment Solutions C & I LEASING PLC Hotels/Lodging Capital Hotel Ikeja Hotel Plc

1.31 4.60 0.50 4.55 0.72

4.68 1.26

709,600 1.26

3.67 65,000

0.50

22,000

1.64

4.55 0.70

10,000 506,445

400 2.07

0.01 0.51

0.90 3.00 1.33

0.00

0.04 0.34 0.92

12.75 8.19 4.91 11.25 34.09 2.12

Media/Entertainment Daar Communications Plc

0.50

5,000

0.50

0.48

0.00

Printing & Publishing. Academy Press Plc Learn Africa Plc Studio Press Nig. Plc University Press

2.07 1.65 2.52 3.85

2.07 1.65 2.52 3.80

21,524 63,932 100 159,478

3.68

0.25

12.19

0.00 6.82

3.17 0.30 0.00 3.60

0.54

27.69

Road Transportation Associated Bus Company Plc

0.79

0.77

401,000

0.80

0.50

0.00

Speciality Interlinked Technologies Plc

4.90

1,050

5.15

4.90

0.00

Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company

3.69 6.18

274,000 285,177

2.78 11.75

1.57 6.50

0.60 12.53

4.22 8.75

24 â&#x20AC;&#x201D; Vanguard, MONDAY, OCTOBER 21, 2013

Capital Market

Vanguard, MONDAY, OCTOBER 21, 2013 — 25

Banking & Finance

FBN conference: Participants seek mixed financing for infrastructure devt BY PETER EGWUATU

Kayode Akinkugbe, Managing Director, FBN Capital during his opening remarks that the company intends to host the event annually to ensure accelerated action towards exploiting the benefits inherent in enhancing infrastructure growth and development in Nigeria. “Nigeria’s potential can be unlocked through sustained infrastructure

articipants and stakeholders in both the financial and oil sectors of the Nigerian economy have stated the need for both local and foreign banks to collaborate in order to finance the huge infrastructural need of the country. The stakeholders agreed that the huge amount required to bridge the huge gap of infrastructure in the country cannot be provided by the local banks alone, hence the need for mixed source of financing. Mrs. Taba Peterside, General Manager, Listings Sales & Retention, Nigerian Stock Exchange (NSE),said, “ There is need for both the private and public sectors to access the capital market to finance the infrastructure requirements. Capital Market is a source for long-term financing and should be explored to complement other sources.” Recently, FBN Capital Limited, a subsidiary of FBN Holdings Plc hosted its maiden Project and Infrastructure Finance Conference in furtherance of conversations geared towards moving the nation forward in the quest for infrastructure growth and development. The well attended event saw local and foreign high level executives across key industries, regional financiers, consultants and advisors, as well as government agencies adopting a position that signposts a bright future for Nigeria. The participants agreed that the challenges are huge, but the potential for growth can be unlocked through sustained public private partnership initiatives, support from institutional and foreign investors, as well as well thought out regulatory policies. The conference highlighted the role of domestic banks in financing varying projects, need for more international participation, especially in funding huge opportunity in Nigeria’s infrastructural deficits, Nigeria’s gas reserves waiting to be explored, financing gas and power infrastructures as key areas of importance that all stakeholders should address. Mr. Kayode Akinkugbe, Managing Director, FBN Capital told participants

able to fund. “This fund cannot come from the banks alone. There is the need for institutional investors and foreign investments to bridge the funding gap. Greenfield IPPs will emerge to bridge energy gap. Government’s PPP commitment will fuel various infrastructure projects such as rails, roads, bridges,

‘Investors can choose to approach finance institutions and seek funds either as a corporate entity or directly through the projects, (Corporate Finance route or Project Finance)’

growth and development. FBN Capital remains committed to providing platforms and facilitating transactions that will position the nation to achieve this,” he said. Speaking on the nation’s power sector , Patrick Mgbenwelu, Director/Head, Project and Structured Finance at FBN Capital Limited, said Nigerian banks alone cannot fund the varying projects on-going in the country. According to him, specifically considering the nation’s power project alone, about $8- $12 billion would be needed yearly for the next 10 years to meet up with the large deficit of power demand and supply in the nation, which the banks alone would not be

airports among others,” he added. He explained that multibillion government projects will require private sector involvement, therefore creating need for Special Purpose Vehicles (SPVs) as obligator financial vehicles. According to him, investors can choose to approach financial institutions and seek funds either as a corporate entity or directly through the projects, (Corporate Finance route or Project Finance). Femi Akinrebiyo, Senior Investment Officer, International Finance Corporation, IFC, said local banks should be commended for their role so far in the power privatisation process, for taking risks and for

ensuring the needed fund is available to investors. Akinrebiyo points to the nation’s huge gas reserves as a critical factor in achieving the power reforms. “Nigeria is sitting on a huge reserve of gas” he said, adding that these could be explored and sold to countries that need it. He said Nigeria needs more gas companies to get this resource out to where they are needed, as it appears that only one or two companies are presently focusing in that aspect of the power sector. To shed some light on gas investment in the country for potential investors, Seven Energy, an indigenous Nigerian gas and oil exploration, development, production and distribution group, highlighted the challenges it has faced, as well as lessons learnt in financing gas infrastructure in the Niger Delta. The group identified Nigeria’s present significant opportunities for growth to include its large, young and urbanising population (170 million - the largest in Africa), its fast growing economy (2012 to 2017 forecast growth of 6.7 percent per annum), low levels of installed power capacity (6 GigaWatts (GW)) and power consumption, reliance on expensive diesel for power generation ($23.09 versus $2.50 for the equivalent amount at Seven Energy’s weighted average tariff)and increased governmental focus to develop power infrastructure to support economic growth with a target of 40 GW of installed power capacity by 2020 – the majority to come from new gas fired power station resulting in expected strong growth in demand for gas (11.3 percent per annum 2012 to 2025). With its experience, the Group advised new investors to work with partners to develop technical and operational know-how and appreciation of the opportunities and local environment, develop and pursue realistic project timetables and cost estimates, enter into key contracts early (such as procurement, gas offtakers), ensure direct engagement with local host communities to develop and maintain relationships for effective operations in that region.

BRIEFS Access Bank to unveil corporate internet banking solution

onsistent with its resolve to redefine customer experience through innovation, Access Bank has concluded plans to unveil Nigeria’s premier corporate internet banking solution. This was disclosed recently by the bank’s Group Deputy Managing Director, Herbert Wigwe, during the ongoing nationwide customer tour. The tour, which is on the back of the bank’s five-year corporate strategy evolved to strengthen relationship with its customers, is a tactical engagement channel for obtaining insights and deepening knowledge of the bank’s customers’ needs with a view to serving them better. Speaking on the revolutionary internet banking solution set for launching in the coming week, Wigwe said that “Large corporates, oriental businesses and other categories of businesses involved in the complex dynamics of daily business operations will have a superlative experience in managing their daily activities with the introduction of our corporate internet banking solution”.

WSI AXON holds digital marketing seminar

s a leading player and influencer in digital marketing, WSI-Axon has commenced preparation to host a national Seminar tagged “Propel Your Brand, Harnessing Digital Media Strategy ” in Lagos with international speakers of repute. “The digital marketing seminar will equip participants with knowledge of global changes and advancements within the digital marketing industry. Through a combination of case studies, best practice examples, and exercises, participants will learn strategies for finding, and engaging digital media.” said Chief Edirin Abamwa, CEO WSI-Axon West Africa. “The exclusive event will take place in Lagos st f rst om 31 October to 1 N o v e m b e r,” He said. “This exclusive seminar will equip attendees with advanced digital marketing strategies and tools”. They will learn how to strengthen and promote their positive corporate image online, while downplaying or removing negative listings or image online. C M Y K

26 —Vanguard, MONDAY, OCTOBER 21, 2013

Banking & Finance BRIEFS SAC Capital's deal with US prosecutors gets closer

deal between SAC Capital and U.S. prosecutors to resolve a criminal insider trading case against the firm could come in a few days, a source familiar with the matter said last week. Any potential deal between Steven A. Cohen’s SAC Capital and federal authorities would likely involve some admission of liability by the firm and a payment of more than $1 billion, the source said. A settlement, which has been under negotiations for several weeks, would be a blow to Cohen and his reputation as one of the greatest stock traders of his generation. But people familiar with the billionaire trader say he has been telling people he is looking to put the nearly seven-year long investigation of his firm behind him. The payment to the government would be structured as both penalty and forfeiture of trading profits allegedly derived from improper trading by Cohen’s hedge fund, the person familiar with the matter said.

JPMorgan to pay $100 million in latest ‘London Whale’ fine

PMorgan Chase & Co has agreed to pay the latest in a string of fines for the disastrous trades and admit wrongdoing, this time in a settlement with the U.S. Commodity Futures Trading Commission. The bank agreed to pay $100 million and admit its traders acted recklessly, the CFTC said on Wednesday. The bank was instructed to send the funds to accounts receivable at the CFTC’s division of enforcement. The settlement follows one month after it paid $920 million to four other U.S. and British regulators to resolve probes of the bank’s $6.2 billion in derivative losses involving its chief investment office. The episode has proven to be one that just about every regulator the bank deals with has wanted to investigate and levy fines The Justice Department, even after filing criminal charges against two former JPMorgan traders who allegedly helped conceal the losses, is still investigating whether to bring any action against the bank. C M Y K

BDAN designs strategies to tackle challenges of PPP financing By BABAJIDE KOMOLAFE

ank Directors Association of Nigeria (BDAN) is set to fashion out strategies to tackle the challenges of financing Private Public Sector (PPP) projects in the country. President of the association, O’lorogun (Dr.) Sunny Kuku, disclosed this at a press conference to announce the 2013 edition of the BDAN’s Stakeholders Forum. The theme of the Forum, which is scheduled to hold next month, is Public Private Partnership Innovations in Public Sector Financing. Kuku said that “The forum will identify and articulate the issues and challenges of PPP financing in the country, and also recommend measures or strategies that banks, other financial institutions and governments can adopt to navigate them in their quest to fund PPP sponsored infrastructural projects. Speaking on the rationale for the theme of the Forum, he said, “In order to address the funding deficit needed for infrastructural development some states have embraced Public-Private Partnership, either through concession or Build Operate Transfer (BOT)/ Build Own Operate Transfer (BOOT) with mixed results. “This is a major issue and that is where the banks come in. The banks have to help the private sector operators with a workable funding arrangement and also help source for other types of financial institutions to partake in the funding arrangement. While banks are willing to play their expected role in this regard, there are still issues and challenges that have to be resolved. “As a body of key decision makers in the banking industry, we consider it part of our capacity building role to bring up these issues and challenges for frank discussions among stakeholders, so as to generate a robust discussion on effective PPPs financing. And by so doing, BDAN would also be contributing significantly to on-going efforts to address the infrastructural gap in the country and thus facilitate economic development in Nigeria.” Also speaking at the press conference, BDAN General Secretary, Mr. Yemi Idowu said that the Association chose Lagos State Governor, Governor Babatunde Fashola, as guest speaker in view of infrastructural projects

From left: Dr Paul Orhii, Director General, National Agency for Food and Drug Administration (NAFDAC); Pharmacist Oluimide akintayo, President, Pharmacist Society of Nigeria; Prince Julius Adelusi Adeluyi, Special Guest; Dr Lolu Ojo, Outgoing Chairman, Association of Industrial Pharmacist (AIPN) and Mr Gbenga Falabi, Incoming Chairman during the inauguration of Mr Gbenga Falabi as new chairman of AIPN in Lagos on Friday. embarked upon by Lagos State, and its seeming pioneering status vis-à-vis the PPP approach. “If there is any state governor who has some experience when it comes to the advantage, disadvantage, lessons and challenges of using the PPP model to drive infrastructure development, we believe it is the Lagos State Governor. As our guest speaker, his paper will provide deep insights that will set the tone for discussions and recommendations by stakeholders attending the forum”, he said. Idowu explained that as the

umbrella body of Bank Directors established to provide a forum for improving the knowledge and the competence of bank directors, BDAN organizes the annual Stakeholders Forum to bring together executive and nonexecutive directors of banks, officials of other financial institutions, regulatory authorities, professional bodies and executives of other leading companies in Nigeria. “It is an opportunity for banking professionals to network and also share thoughts on the theme of the Forum,” he said.

He noted that recommendations made at the Forum have contributed immensely to improve formulation and implementation of policy in the country. He cited the example of recommendations made at the 2012 Stakeholders Forum, which include a regular review of the cashless policy to enhance implementation. “As you can see, the CBN at some points had reviewed some aspect of the implementation of the policy – the cash withdrawal limits, charges, and roll-out to other states”, he said.

IMF approves unification of discount rates for low-income countries By PETER EGWUATU

he Executive Board of the International Monetary Fund (IMF) has approved the proposed unification of discount rates used in external debt analysis for low-income countries. The proposal was approved by the Executive Board of the World Bank on the same day. According to statement from IMF, weekend, the unification of discount rates used in external debt analysis for low-income countries modifies and simplifies the system of discount rates used by the World Bank and the IMF in analyzing external debt issues in low-income countries.

Analytical tools affected by these changes include joint Bank-Fund Debt Sustainability Analysis (DSAs) and the computation of loan concessionality. Following the approach proposed in review of the Debt Limits Policy in FundSupported Programmes, discussed by the IMF’s Executive Board in March 2013, a single uniform discount rate will now be used for operational purposes. The new unified discount rate is set at 5 percent, a level broadly aligned with the discount rate currently used for calculating the grant element of long-term U.S. dollar-denominated loans. The World Bank stated that following an extended period of historically low interest rates in the advanced economies, the discount rate used in DSAs

had become a weak measure for discounting cash flows over the longer term. Estimates of the burden of debt service had been inflated, leading to an unjustifiable narrowing of the assessed borrowing space available to countries under the Debt Sustainability Framework for Low-Income Countries (LIC DSF). According to World Bank, the complex system of discount rates used for computing the grant element of individual loans also gave rise to anomalies, while frequent updating of these rates created operational difficulties. The new unified discount rate will remain unchanged until the completion of the next review of the LIC DSF by the Executive Boards of the World Bank and the IMF, scheduled for 2015.”

Vanguard, MONDAY, OCTOBER 21, 2013 — 27

Homes & Housing Finance

Affordable housing: FG urged to initiate 5-year rolling plan Stories by YINKA KOLAWOLE The Federal Government has been called upon to set up a robust five-year housing development rolling plan aimed at delivering affordable housing across the country. nd Speaking at the 2 National Housing Summit organised by the Nigerian Institution of Estate Surveyors and Valuers (NIESV) in collaboration with the Federal Ministry of Lands, Housing and Urban Development in Abuja, Mr. Hakeem Ogunniran, Managing Director, UACN Property Development Company Plc, said the plan should be for a period of 30 to 40 years, to be reviewed every five years. Other experts who spoke at the occasion made various recommendations aimed at charting a new course for the country’s troubled housing sector. They called, among other things, for the provision of intervention fund for the sector, review of the Land Use Act, ensure effective registration land system, streamlining of approval processes and ensure completion of infrastructure services on layouts before sale or allocation to developers to lower the cost of construction of houses in the country. They also urged the government tocreate laws to channel funds in dormant accounts of commercial banks and unclaimed dividends into the housing sector. In his opening address, NIESV President, Mr. Emeka Eleh, called for the creation of an enabling environment that will make the private sector the major driver of development in the housing sector. He also advocated a direct government intervention to bring down interest rates for mortgage to single digit levels. “As we clamour for a holistic reform of our land policy, we have also been calling for a review of certain sections of the Land Use Act like the consent provisions, which have become a huge impediment in the sector. Mortgage in the true sense does not exist in Nigeria, a situation where banks grant mortgages at 23 to 25 per cent interest rates for about five years or the like cannot conform to a proper mortgage. Our desire is for mortgages at single digit interest rate over a period of

20 - 30 years. This can have the effect of accelerating growth in the housing sector and homeownership,” he said. In his own contribution, Chairman of Housing Faculty of NIESV, Chief Kola Akomolade, said the failure of the Federal Government to treat housing as a social responsibility is the greatest constraint to housing development in the country. He also cited the constraints of accessing land for housing development associated with the failure to review the Land Use A c t .

“The issue of the high cost of building materials can only be addressed on a national level by removing customs and excise duties on building materials will also help reduce the price of finished products. Only the Federal Government has the capacity to do this. In similar vein, the lack of access to mortgage finance at affordable interest rate can only besolved at the federal

level by the institution of a national mortgage system that will make mortgage available loans available for the masses at an affordable rate of interest,” he added. In his response, Supervising Minister of Lands, Housing and Urban Development, Musa Mohammed Sada, said government is aware that the housing sector is beset with many problems, some of them operational and others institutional, adding that the main problems revolve largely around access to land and absence of sustainable housing finance infrastructure.

High-end housing development

FMBN targets delivery of 4m houses in 15 years

n a related development, FMBN’s Managing Director, Mr. Gimba Yau’Kumo, said the bank is planning to facilitate the delivery of four million houses to Nigerians within the next 15 years. Yau-Kumo, who was represented by the Maiduguri zonal coordinator of the bank, Alh. Mustapha Bukar, said this at the inauguration of the first phase of 88 housing units constructed for the staff of Federal Roads Safety Corps (FRSC) in Gombe, Gombe State. He said FMBN was partnering with Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and Nigerian Employers’ Consultative Association (NECA) to realise the provision of the four million housing units to workers. He said the bank had marketed 38 units of twobedroom and 50 units of three-bedroom bungalows to the FRSC for its nationwide staff housing project. “It is on this basis that FMBN has commenced the processing of affordable mortgage loans attracting just six per cent rate of interest and a tenor of up to 30 years, for officers and

men of the FRSC to purchase the houses. In order to help overcome the issues of affordability, FMBN has approved a flat rate of 10 per cent as equity contributions from beneficiaries toward the purchase of these housing units,” he said. Corps Marshal of FRSC, Osita Chidoka, said the Corps’ housing scheme

initiated about 15 months ago was to provide affordable houses for its personnel, adding that through a partnership with the FMBN and other private developers, the Corps will provide housing estates for the staff in Kuje area in Abuja, Yola in Adamawa State, Lagos State and Calabar in Cross River State.

FCTA, Millard Fuller to build 5,000 low-cost houses

he Federal Capital Territory Administration (FCTA) has released 4.6 hectares of land in Mamusa district to Millard Fuller Foundation and Federation of the Poor for the construction of 5,000 low-cost houses in the FCT. Minister of State for the FCT, Oloye Olajumoke Akinjide, presented an affordable housing allocation letter for accelerated development of a designated piece of land in the FCT to the Foundation. She said the project would bring succour to majority of the urban poor and low income earners in the territory. According to her, “this is part of the affordable housing programme of the FCT administration towards addressing the dearth of accommodation in the territory”. Akinjide reiterated the commitment of FCTA to ensuring a dynamic policy of decent and affordable housing for residents of the FCT. She disclosed that the affordable housing programme of was being executed through a public private partnership (PPP) initiative, with FCTA providing the required land as well as primary and secondary infrastructure, while the developer will provide the tertiary infrastructure.

BRIEFS Ebie blames government insincerity for housing woes

r. Samuel FortuneEbie, has blamed insincerity of Nigerian leaders as being responsible for inadequate housing for low-income earners in the country. Fortune-Ebie, a former Managing Director of Shelter Afrique, said the solution to the nation’s housing problems lies in providing marching grant for the developers and the mortgage sub sector. Speaking at a recent forum organised by the Presidential Technical Committee on Land Reforms to fine-tune the draft regulations on Land Use Act, he expressed shock at the refusal of government to provide an intervention fund for the sector as done in other sectors. He said that as significant as housing is in the hierarchy of human needs, it has often been omitted in successive government’s provision for Presidential Intervention Funds. “There was an intervention fund for the Aviation sector; there was intervention in the Power sector, there was intervention in the Banking sector, there was even intervention in Nollywood, but when it comes to housing, government will say it is not sustainable and that is the end.”

US mortgage rates inch up

verage US rates on fixed mortgages rose slightly this week, staying near threemonth lows, but could fall next week after lawmakers’ deal to avert a possible government debt default and reopen the federal government. Mortgage buyer Freddie Mac said that the average rate on the 30-year loan increased to 4.28 percent from 4.23 percent. The average on the 15-year fixed loan edged up to 3.33 percent from 3.31 percent. Mortgage rates began falling last month after the Federal Reserve held off slowing its $85-billion-amonth in bond purchases. The bond buys are intended to keep longer-term interest rates low, including mortgage rates. And rates stayed relatively low during the 16-day partial government shutdown. C M Y K

28 — Vanguard, MONDAY, OCTOBER 21, 2013

Vanguard, MONDAY, OCTOBER 21, 2013 — 29

30 — Vanguard, MONDAY, OCTOBER 21, 2013

Insurance BRIEFS Husband, wife sentenced for defrauding great-aunt

husband and wife convicted of defrauding a Blakely woman and her estate were sentenced to federal prison last week. Victor J. Santarelli III, 47, of Clearwater, Fla., was sentenced to 57 months in prison by Senior U.S. District Judge Edwin M. Kosik and was ordered to pay $74,390 in restitution. Tamara Santarelli, 44, address unknown, was sentenced to 70 months in prison and ordered to pay the same amount in restitution. Both were convicted in October 2011 of aiding and abetting mail fraud, aiding and abetting wire fraud and conspiracy, after a jury trial that lasted nearly a week. They were indicted by a federal grand jury in February 2011 on allegations they schemed to defraud Joann Striminsky, a great-aunt whom they cared for until she died in 2007.

550 bushfire insurance claims received, says Australia’s Insurance Council

nsurance companies have already received about 550 claims totaling 30 million AU dollars (28.9 million U.S. dollars) since the devastating bushfires broke out in New South Wales recently, the Insurance Council of Australia (ICA) said. The representative body of Australia’s general insurance industry said many of the claims that have been lodged are for a total loss of properties and the number is expected to climb over the next few days. “We expect this will rise quite sharply over coming days and weeks,” ICA spokesman Campbell Fuller said. He said the volume of claims was likely to exceed that of earlier blazes at Coonabarabran in New South Wales. Last week, the ICA declared a catastrophe for bushfireaffected regions of NSW where properties have been severely damaged or destroyed.

Stories by ROSEMARY ONUOHA

he Nigerian I n s u r e r s Association (NIA) has pledged to carry out an overview of post International Financial Reporting Standard (IFRS) implementation challenges to help member companies forestall the rigours they faced in getting their accounts approved by the National Insurance Commission (NAICOM). Financial Vanguard gathered that the Accounting Technical Committee of the NIA, which has played great role in the development of the industry ’s IFRS template and harmonisation will be saddled with this responsibility. Observers believe the step would help operators consolidate the knowledge they have gathered in aligning their accounts to international best practices. They noted that the effort would help reduce the stress the industry regulator NAICOM and operators are presently going through to comply with the IFRS requirements. According to NAICOM only 22 firms’ 2012 accounts have been approval, while 42 others have submitted their financial reports. The approved firms include, Mansard Insurance; ADIC

From Left: His Royal Highness Igwe Eze Benjamin Olikeagwu, Okosisi of Igando, winner of 32 inch TV set, Show anchor, Seyi Law and Yekini Adeola, another winner of a 32 inch TV; at the Star Win & Shine party, held at Aso Rock International Bar, Ikotun, Lagos.

NIA to review IFRS implementation challenges Insurance Limited; WAPIC Insurance Plc; Consolidated Hallmark Insurance; Oasis Insurance Plc; FBN Life Ass Limited; Continental Reinsurance Company Plc; AIICO Insurance Plc; Leadway Assurance Company Limited; Crusader General Insurance Limited; Crusader Life Insurance Limited; UBA Metropolitan Life Insurance Company; Zenith Insurance Company Limited; Unitrust Insurance Company Limited; Unity

Kapital Assurance Plc. Others are Standard Alliance Life Assurance; Custodian & Allied Insurance Plc; Regency Alliance Company; Royal Exchange Assurance Plc; Sovereign Trust Insurance Plc; Zenith Life Insurance Limited and Royal Prudential Life Assurance Plc. The responses made on the accounts of Prestige Assurance Plc; FIN Insurance Limited; Equity Assurance Plc; Sterling Assurance

Nigeria Limited are said to be under review. The accounts queried and awaiting responses are those of Law Union & Rock Insurance Company Plc; Wapic Life Assuarance Limited; Nem Insurance Plc; Crystal Life Insurance Plc; Oceanic (old Mutual); PHB Insurance Plc; Lasaco Assurance Plc; Cornerstone Insurance Plc; Great Nigeria Insurance and Lasaco Life Assurance.

Kenyan mall attack may increase terrorism insurance demand — Report

emand for terrorism cover is likely to increase in East African countries after the recent terrorist attack in Nairobi, A.M Best rating company has said. According to a recent report by the company, A.M. Best expects businesses in Kenya and other countries of the East African Community (EAC) will seek further cover, given the proximity of the attacks and the heightened fear this may trigger for corporations operating in the region. The company said “While an increase in the purchase of terrorism insurance will not necessarily occur across the African continent, any rise in demand will

ultimately benefit the international reinsurance market, as African reinsurers generally do not have sufficient capacity or a strong enough credit profile to underwrite and retain a significant amount of these risks.” It will be recalled that the prolonged assault on the Westgate shopping mall, which was launched on Sept. 21 by the Somali-centered Islamic terrorist group alShabab, resulted in more than 60 people being killed. The report stated that in general, African reinsurers tend to retain more risk for certain lines of business, including motor, accident, medical expenses and life. Meanwhile, political and terrorism risks are not

commonly underwritten. “Those that do provide facultative placements are likely to maintain low net retention levels on these covers, with exposures predominantly ceded to international markets; given the limited capacity of the African reinsurance market for large, volatile risks Kenya has the largest insurance market in East Africa. Total insurance premiums reached USD 1.3 billion in 2012, with insurance penetration of 3.1 per cent. In common with other emerging insurance markets, there are compulsory cessions for reinsurance risks in Kenya involving Kenya Reinsurance Corp, ZEP-RE (also known as PTA Reinsurance) and Africa Re. “Given the limited appetite

for underwriting political risk insurance, the low retention ratios for this line of business and the absence of a terrorism reinsurance pool in Kenya, it is thought that Lloyd’s insurers are likely to assume the majority of the risk for the Nairobi attack. Claims for Kenya’s shopping mall will include physical damage and business interruption, although the Association of Kenya Insurers has stated that underwriters are expected to apply the “proximate cause principle,” which would mean vehicles insured against fire and theft would not be eligible for compensation. A.M. Best finds it highly unlikely that this loss will require Lloyd’s insurers to adjust their 2013 performance expectations, and the event is not expected to affect current ratings.”

Vanguard, MONDAY, OCTOBER 21, 2013 — 31

32 — Vanguard, MONDAY, OCTOBER 21, 2013

Vanguard, MONDAY, OCTOBER 21, 2013 — 33

E- Commerce

APCON set to tighten online advertising regulations STORIES BY JONAH NWOKPOKU

he Advertisers Practitioners Council of Nigeria, APCON is set to tighten regulations on all forms of advertising carried out through the internet medium. The Chairman of APCON, Lolu Akinwumi stated this while speaking to Vanguard on the sideline of an event to present corporate licences and certificates to some organisations under the new APCON regime in Lagos recently. He said that owing to unique challenges that online advertising pose for regulation, the regulation agency would partner with Google and other online classified ad operators in the country to strengthen regulation and protect consumers. According to him, ‘Regulating all advertising contents has always been and will continue to be APCON’s core

Multichoice rewards winners in 20th anniversary promo BY WILLIAM JIMOH

From left: Mr Niyi adeyemi, Business development Manager, Slot Systems Ltd; Mr Adebayo Shobanjo, Network Operations Manager, Infinix Mobility Ltd; Mr Peter Awotimehin, Star Prize winner; Mr Charles B, On Air Personaliy presenter, Rhythm FM; Mr Stanley Uzochi, General Manager, Slot System Ltd during the Infinix Alpha Big dream Promo held at Slot Office, Ikeja, Lagos on Friday. duty. We have the Advertising Standard Panel, ASP, which under the law, has the power and the responsibility to vet all advertising materials in all media including the internet for the Nigerian market.’

He however added that, ‘There are obvious challenges because the monitoring of the internet is something that poses its own problems but having said that, the council of APCON is working with

E-commerce: Operators leverage on social media for market expansion O

perators in the ecommerce space in Nigeria have expressed satisfaction over the roles that social media platforms especially facebook and twitter, play in their quest for market expansion and consumer education. The operators, who spoke to Vanguard on the roles the social media play as effective branding tools, said the platforms have become indispensable for operators in the e-commerce space, since they provide veritable opportunities for customer relations. They also argue that social media provide fast and convenient interface between operators and their target audience. “In terms of customer relations, the social media help you to grow your brand and build effective customer relations generally. Also it also provides interaction platform with customers as people who wants to buy from you get more information and have their questions answered directly by you about whatever product they want to buy form you. It also helps you deal with competition because people want to be sure they are getting the best deal and

BRIEF

if you are not there to assure them, they will move on to your competitor who has the information they need,” said, Chinma Nwaozuzu, who is the CEO of Girlyessentials Nig, Ltd, and grew his customer base on facebook to about fifty thousand before even launching his e-retail outfit. She explained that, “This is because generally customers will be skeptical about the products’ quality and authenticity, so you need to be there to provide such information. It also provides customers the opportunity to monitor and track the progress of their order. They may have ordered for a product and for some reasons have not been able to get it, so it is through facebook and twitter that they will get information on what is happening to their order at every point in time. So it is also tracking tool.” On his part, Ayodeji Oyinlola whose OLX‘s facebook fan page hit 200, 000 recently said, besides the interaction role that the platform plays, it also provides them an opportunity to engage their customers professionally.

“What we try to do is to engage our users on daily basis. We try to interact with our users and communicate our products and services to them on a constant basis. We professionally and constantly use the fan page to engage our fans,” he said. CapitalSquare set to unveil co-working space for tech startups In a bid to encourage young entrepreneurs in the tech scene, a membership based co-working space, CapitalSquare is set to launch in Lekki, Lagos. Speaking to Vanguard about the space, Modupe Macaulay, CapitalSquare founder, said the space would provide the right atmosphere suitable for creativity and innovation. Macaulay said, “Co-working is the practice of providing working spaces for startup entrepreneurs who cannot afford expensive office facilities to ply their trades.” She said, “This is to provide opportunities for young entrepreneurs who cannot afford the cost of a working space. With this platform, an entrepreneur must not wait to raise money to pay rent before starting up.

Google and the other online advert operators to ensure that there is enough control on the content that goes out of the websites of all the big organizations.’ When contacted on how they are regulating advertising through the internet medium, two of the leading online classifieds operators in Nigeria, OLX and Karewa, said they already have mechanisms in place that ensures that fraudulent contents are warded off and consumers protected. “We have people who read every ad submitted before it is posted and there are certain things that they look out for to ensure that it is not a scam. We generally take zero tolerance approach to that kind of entry and we do not let it go. We also report to local authorities like the police if we pick up such things. We know we cannot guarantee 100 per cent safety but we do all the things we can to protect our users,” said Ms Browyn Johnson, Head of Marketing, OLX Africa. For Nino Njopkou who is the Chief Executive Officer of Karewa.com, although regulating online advertising contents poses huge challenge for operators, the company has put in place several mechanisms to protect its users. He said, “On the Internet, fraud is a big issue that all User Generated Content, UGC websites confront.

s part of efforts to enhance the value subscribers derive from its services, MultiChoice Nigeria, a b pay-TV content provider on the DStv and GOtv platforms, has rewarded th first set of winners in its 20 anniversary promo. Two of the eighteen lucky subscribers drawn from a pool of thousands who qualified for the draws had BabanMallam Mohammed Kamilu and Mr Emmanuel Igoche, each winning a ticket to attend the 2014 Grammy Awards in the United States of America with their spouses. Other prizes won at the draw include; One year free subscription on GOtv plus bouquet for four subscribers; GOtv decoders for four subscribers; N200, 000 for four subscribers, and Walka 7 Handheld mobile devices for four subscribers. According to Mr John Ugbe, Managing Director, MultiChoice Nigeria, the company is providing value for customers which is what they have been doing consistently in the last 20 years without fail; adding that they will continue to reward loyalty to the brand and ensure that they keep up the services that endear the company to subscribers through excellent programming and premium content on both the DStv and GOtv platforms.

Konga contracts Fedex, UPS to boost distribution fleet BY PRINCEWILL EKWUJURU

n e-commerce retailer, Konga.com has gone into contract partnership with four courier companies, Fedex, UPS, Tranex and Courier Plus to boost distribution fleet. Alex Kamara, Chief Operating Officer of Konga.com disclosed this during familiarisation tour of the online retailer ’s warehouse measuring 120 Sqr feet, where he spoke on the mall’s distribution network and future plans of the retail shop, saying that Konga’s fleets are duly certificated by Nigerian Postal Services, NIPOST.

34 — Vanguard, MONDAY, OCTOBER 21, 2013 Oct 11 –Oct 17, 2013

Micro-Finance

LAPO advocates big banks’ linkage with MFBs Stories by PROVIDENCE OBUH

APO Microfinance Bank has called for linkages between big banks and microfinance banks in the country in order to reach the rural areas.

Speaking at the LAPO Microfinance conference and launching of a new product called “Supporting Female Entrepreneurs” (SUFEN) in Lagos, Mr. Godwin Ehigiamusoe , the Managing Director of the MfB, said linkage between the big banks and micro finance banks would go a long way to boost rural reach and financial empowerment of rural dwellers. He explained that SUFEN is tailored to support female entrepreneurs with the potential for growing their business by providing funds of an appropriate size, management and counseling support. Ehigiamusoe also disclosed that the bank’s customer has increased to one million since inception with about $1 billion loan disbursement. Ms. Evlyn Oputu, Managing Director, Bank of Industry, BoI, who was the guest speaker at the conference, harps on women empowerment. Speaking on the theme, “Financial inclusion

Goodwell West Africa plans to invest in Mainstreet MfB

and female empowerment”, Oputu noted that critical issues in achieving gender equality in the society like financial inclusion, access to capital and integration into value chains and new markets must be addressed. According to her, the efficient operation of increasingly knowledgebased economy was not only a function of adequate levels of available finance, a reasonably open trade regime for goods and services, but also dependent on the ability to tap into a society’s reservoir of talents and skills, especially among women. Oputu emphasised that countries that invest in promoting the social and economic status of women tend to have lower poverty rates. “The country has witnessed some economic growth within the last decade but the irony is that disparity has increased in gender and the social str ucture. Women entrepreneurs are woefully underserved. They have no access cheap funds and where they have access the flow of such funds is not sustainable. Women continue to be at the bottom of the pyramid. “If women entrepreneurs must grow from their micro level to become Small and Medium Enterprises, the structure of funding available to them must be addressed. Financial inclusion is multidimensional and such approach should be flexible by making sure these women are properly enlightened on how to embrace technology in order to access financial services”, she added.

microfinance investment vehicle (MIV) managed by Netherlands social investment company, Goodwell West Africa, in collaboration with Alitheia Capital, Nigeria based investment management and advisory firm, have announced plans to invest an undisclosed amount in Mainstreet Microfinance Bank (MFB). A statement said this will mark Goodwell West Africa’s third investment in Nigeria and fifth in West Africa, just as Goodwell Investments explained that Goodwell West Africa is a microfinance investment vehicle that aims to invest in “entrepreneurial based” microfinance organizations that are deemed socially responsible and commercially sustainable. Mainstreet MfB, is a subsidiary of Mainstreet Bank Limited, provides services to financially excluded individuals as well as micro, small and medium enterprises (MSMEs). The bank, based in outh Africa’s National Development Plan has Lagos, is a microfinance predicted that about 90 percent of available jobs institution which seeks to will be created by the Small and Medium Enterprises provide financial services (SMEs) sector in 2030. to unbanked individuals This is even as Research by the Human Resources and enterprises which Development Council has found that every two and have been traditionally half years, 75 percent of new businesses in South excluded from the formal Africa fail. financial system. To this end, JP Morgan assigned Aurik Business Since its launch, the Incubator and Raizcorp to provide business support bank whose operation to 10 early stage or growth stage enterprises. commenced in 2009 has These include a catering services company, a grown and attracting over medical products courier, a fashion design school, 60,000 clients, providing an action sports gear retailer and a construction support services supplier to the mining sector. financial services to The project also offers investors a pipeline of strong individuals and micro and SMEs requiring funding. Cadiz Asset Management small businesses, through its Protected High Impact Fund, GroFin and primarily through Imprint Capital has already signed up as investment associations and partners. cooperatives. The bank Meanwhile, JPMorgan Chase Foundation, which operates eight branches in has invested more than $1m in the SME Catalyst Lagos state and has 95 for Growth programme, plans to set it up as an employees. independent non-profit organisation by next year. “Mainstreet is According to the council’s finding, “A well positioned to consolidate structured incubators or business development its progress to date and support services can help small businesses grow leverage its knowledge on their revenue and employ more people. its chosen markets and “Increased revenue and job growth were the results growing relationships from a JPMorgan Chase Foundation two-year small with cooperatives and and medium enterprises (SME) pilot programme associations to scale launched in February last year to find ways to rapidly and meet the strengthen SMEs, which are considered vital to the needs of its growing client future growth of the South Africa economy. base,” Goodwell noted.

SMEs to generate 90% jobs by 2030

Vanguard, MONDAY, OCTOBER 21, 2013 — 35

Tax Matters

apital Gain may be defined as Gains arising from increases in the market value of capital assets to a person or corporate body, who does not habitually offer them for sale and in whose hands they do not constitute stock–in– Trade. Therefore, it is a tax chargeable at the rate of 10% on capital gains arising from the disposal of capital assets. Capital gains mainly represent the excess of disposal proceeds realized over the cost of the particular asset. ADMINISTRATION OF CAPITAL GAINS TAX The CGT is under the management of the Board of The Federal Inland Revenue Service (FIRS)and it is administered by the FIRS in respect of corporate bodies and individuals resident in the Federal CapitalTerritory including members of armed forces, police and foreign serving officers.The tax is also administered by the State Internal Revenue Service in respect of individuals based on the rules of residence. Under the provisions of the Act, tax liability will arise on Actual Year Basis (AYB) when a chargeable asset is disposed. An aggrieved taxpayer or the respective tax authority can appeal against the decision of the tax authority to a conventional court or to the Tax Appeal Tribunal (TAT) as the case may be. SOME HIGHLIGHTS OF THE PROVISIONS OF THE CGT ACT • CGT is chargeable at 10% on capital gains from the sale of capital assets. • Capital loss on disposal of any asset is not deductible from capital gains on disposal of any other asset even if both are of the same type. • Where consideration is payable by installments over18 months, the chargeable gain shall be apportioned to the affected assessment years in proportion to the amount of the installments payable in each of the years. • Chargeable gains are assessed on current year basis, • Roll-over relief is available to any company acquiring a new asset to be used for the purposes of the trade in replacement of an old one. • Gains arising from disposal of shares and stocks are currently exempted from CGT. CHARGEABLE PERSONS AND CHARGEABLE ASSETS CHARGEABLE PERSONS A chargeable person is one who deals in a chargeableasset. A chargeable person may be: • A limited liability

Essentials of Captal Gains Tax (CGT) company, • An individual A limited liability company will remit its tax liability to FIRS while an individual will remit to the SIRS, with the exception of individuals resident in the FCT. CHARGEABLE ASSETS Examples of chargeable assets are: • Options, debts and incorporeal properties. Incorporeal properties are assets that have values but are not tangible, e.g. goodwill, copyrights and patent rights. • Disposal of currencies other than Nigerian currency. • All qualifying capital expenditure under CITA, PITA, PPTA or any form of property created by the taxpayer • Chattels sold for more than N1, 000 in any tax year. PERSONS /INSTITUTIONS EXEMPTED By law, any ecclesiastical, charitable, or educational institution of a public character, statutor y or registered Friendly Society and co-operative society registered under the cooperative Societies Act are exempted. Same also applies to Local Government Council, purchasing Authority Company and corporation established for fostering economic development of any part of Nigeria. Also included in the the exemption list are, Trade Union registered under the Trade Unions Act, provided, The gain is not derived from the disposal of any assets acquired in connection with any trading or business activity carried on by such Institution or Society. The gain or profit is applied solely for the purpose of the Institution or Society. Other items on the list are the main or only private residence of an individual (including the gardens), Chattels disposed for not more than N1000.00 in a Year of Assessment, motor cars suitable for private use or a mechanically propelled road vehicle constructed or adopted for the carriage of passengers, life assurance policy, benefits from superannuation funds approved by the Joint Tax Board, gifts, Nigerian government securities, including treasury bonds, savings certificates and premium bonds, Nigerian currency, disposal of Stocks and Shares (effective 1/1/98), disposal of Investments in Statutory Provident Fund, or Retirement Benefits Scheme,

acquisition of the Shares of a Company either merged with, or taken over or absorbed by another Company, as a result of which the acquired Company loses its identity as a Limited Liability Company, provided no cash payment is made in respect of the Shares acquired, gains accruing to Diplomatic bodies and gains from disposal of Securities in a Unit Trust provided the

By FRANK OBARO

other payments made under a policy of insurance against the risks of any kind of damage or i njury to, loss or depreciation of any asset. COMPUTATION OF CAPITAL GAINS TAX • In the computation of capital gains that will be charged to CGT, the f ollowing steps should be followed:

The tax is also administered by the State Internal Revenue Service in respect of individuals based on the rules of residence. Under the provisions of the Act, tax liability will arise on Actual Year Basis (AYB) when a chargeable asset is disposed

proceeds are re-invested. THE PRINCIPLE OF DISPOSAL For the purpose of CGT, disposal arises where any capital sum is derived from a sale, lease, transfer, an assignment, a compulsory acquisition or any other disposition of assets. The disposal is deemed to have taken place even where no asset was acquired by the person paying such capital sums. Thus, specifically, disposal is deemed to have taken place where: i. Any capital sum is derived by way of a compensation for loss of office or employment. ii. Receipt of capital sum under a policy of insurance; iii. On receipt of capital sum in return for forfeiture or surrender of rights or for refraining from exercising such rights iv. Any capital sum is received as consideration for use or exploitation of an asset. v. Any capital sum is received i n connection with or arises by virtue of any trade, business, profession or vocation. NON-ALLOWABLE EXPENSES FOR THE PURPOSE OF CGT • Any allowable expenses under the provision of PITA, CITA and PPTA. • Any insurance premium or

deemed connected with the settler as well as any person connected with the settler; 3. Partners of a firm are deemed connected with one another as well as with the spouse of each partner; 4. A company is connected with another person if that person has control of it or if that person and persons connected with him together have control of it. ROLL OVER RELIEF • This arises where a sole trader, partnership or limited liability company carrying on a trade, dispose of one eligible business asset and replaces it with a new asset of the same class as that sold. The seller will be entitled to deduct the capital gain arising on disposal from the cost of the new asset thereby postponing the payment of CGT on such a gain.

• Roll over relief can be full,

partial or no roll over relief.

• The effect of this roll-over

relief is to reduce the cost of acquisition of a new asset with resultant increase in the capital gain arising on eventual disposal.

• Identify the sales proceeds on the disposal of the chargeable asset • Deduct allowable expenses from the sales proceed to obtain Net Sales Proceed. • Deduct cost of acquisition and other capital costs from the Net Sales Proceed to obtain the Capital Gains • Compute the capital gains tax liability by applying the applicable rate of 10% on the Capital Gains obtained above. The above steps can be placed in a better format as follows: NN • Sales Proceeds xx • Less: Allowable Expenses (xx) • Net Sales Proceed xx • Deduct: Cost of Acquisition (xx) • Capital Gains/(Losses) xx Capital Gains Tax @ 10% CONNECTED PERSONS Where in a transaction, one person has control over the other, a connected person transaction is said to have taken place. In such a situation, where transaction is not done at arm’s length, market value is used. Connected persons for this purpose include: 1. An individual wife or husband; 2. A trustee in settlement is

CLASSES OF ASSETS ELIGIBLE FOR ROLL-OVER RELIEF: Class I: a) Any building or part of a building and any permanent and semipermanent structure in the nature of a building, occupied and used only for trading; b) Any land occupied and used only for trading. c) Fixed plant and machinery which does not form part of the building Class II - ships Class III - Aircraft Class IV - Goodwill. However, the consideration arising on the disposal must be re-invested within Twelve months before or after the disposal before the rollover relief can be granted. SOME SPECIAL CIRCUMSTANCES IN CGT 1. Assets acquired by gift and later sold: the imputed cost is: i. The amount at which the asset was last disposed in a transaction at arm’s length if known, or if that is not known ii. The market value of the asset at the date of transfer. 2. Assets devolving on death and later sold, Shall for CGT purposes be deemed to be disposed of by him at the date of his death and acquired by the personal representative or other persons on whom the assets devolve for a consideration equal to: i. Where ascertained, price of the asset as at date of purchase; or ii. Where unascertained, market value of the asset as at that date.

36 — Vanguard, MONDAY, OCTOBER 21, 2013

“We are not looking for a stronger currency neither are we looking for a weaker one. People want to pay fees and investors want to know if they will have returns on investments. We will use the reserves, we will use interest rates, we have gone through difficult months; hopefully, the next few months will not be difficult. We will not allow the naira to be weakened and we are committed to that”. Governor of CBN, Sanusi Lamido, in September.

week after, the Central Bank of Nigeria banned the importation of dollars and other foreign currencies by announcing that no individual, group of persons or investors will be allowed to bring any form of foreign exchange into the country without its approval. Right about now, financial and economic policy watchers are asking the CBN in exasperation: “What then do you want?” Given the realities facing Nigeria, Lamido and the CBN are playing a risky game. The CBN Governor was right in his observation that that “we have gone through difficult times”, but he is building his policy on the vain hope that “the next few months will not be difficult”. Already, the prospects for the next few months are not better than those for the last few months. What analysts have not heard categorically from the CBN is the answer to an obvious question: “what will happen if the next few months are as difficult, or even worse, than the last few?” The factors responsible for the difficult last few months are generally wellknown to most people who take the trouble to monitor these matters. Nigeria is exportdependent and importdependent. This nation depends largely on the export of crude oil for a disproportional percentage of our national revenue. When the global crude oil market sneezes, Nigeria catches pneumonia. This year, there had been a chill in global

CBN takes desperate measure on foreign exchange – 2 demand for crude on account of slow economic growth in some of our major markets and; competition from other competing sources of oil to the global market. Those two would have been bad enough for the country. Added to our country’s woes was the unbelievably high level of stolen and spilled crude resulting in revenue shortfall of close to 11% of crude revenue. This has already adversely affected future shipments by legitimate exporters who must compete with the crude thieves for the business. Naturally, the thieves have the advantage – they can sell at deep discounts. Approximately 400,000 barrels of crude are involved and the government has no clue yet concerning how to reduce, let alone, stop the activities of the oil thieves. Given the combination of global competition and internal sabotage, none of which is under government’s control, Lamido’s optimism has assumed the nature of wishful thinking. The safest assumption can only be that crude revenue until the end of the year and in the short term, defined as twelve months, will remain below budget. The CBN will continue to deplete the external reserves in its vain effort to prevent devaluation officially – even when it is already a fact. In September, CBN drew $1.33 billion and might have to draw more in October. The question is: for how long can the CBN continue? Although the discussion on revenue shortfall has not been exhausted, let us now turn to the import related problems which will continue to drive down the value of the naira – whether the CBN likes it or not. In virtually every major aspect of our economic life, the nation is import dependent. Three sectors,

transport, food, and ICT, will serve to demonstrate the degree of our import dependence, meaning exporting the foreign exchange we earn. Once upon a time, Nigeria actually had two car assembly plants (Peugeot and Volkswagen), two tyre manufacturers (Dunlop and Michelin) and car battery manufacturers. Today, we have none. Today every nut and bolt in every car, truck or bus in Nigeria now has to be imported with dollars going out. Toyota, Mercedes Benz, Peugeot, KIA, HYUNDAI, FOTON, Susuki, HONDA, etc and their local distributors run all the way to the banks everyday, Nigeria gets deeper into a financial mess whenever our foreign exchange earnings don’t match our import needs. The story had been told so often, everybody can repeat it. About 70 per cent of Nigerians are engaged in farming. What most people don’t know is that only two per cent of Americans are so engaged. That means 112 million Nigerians are busy doing what only 6.4 million Americans do – feed their people. But while the USA is a net food exporter, Nigeria is the largest net importer of food. Dr Adewunmi, the Federal Minister of Agriculture stretches a lot of truths to the breaking point, but on our food import bill he mainly tells the truth. If the Federal government of Nigeria should ban the importation of rice, wheat, sugar, and frozen fish, uncontrollable riots will break out nationwide. Officially and illegally, Nigeria spends close to 25% of its annual GDP on food imports; meaning more crude oil dollars is shipped back abroad. When the mind turns to ICT, including the hardware and the GSM networks and the billions Nigerians spend

on them, while creating very little value, the dollar export involved is simply staggering. MTN, ETISALAT and AIRTEL are mostly foreign owned; only GLO breaks up the solid line up of foreign ownership. And, while we enjoy the rivalry between SAMSUNG, NOKIA, APPLE, BLACKBERRY etc, few of us stop long enough to think that all we are doing is exporting dollars. While it is true that the CBN is not responsible for the policies that will force us to stop consuming what we don’t produce, there is very little the CBN can do to stop us from doing what we have always done in the next few months. That explains why most analysts are skeptical that the Central Bank can defend the naira for long. Depletion of the external reserves will continue until the CBN cannot continue and then the inevitable will occur – devaluation of the naira. The CBN can only succeed if its efforts are complemented by appropriate fiscal policies. The Federal government recently announced plans to increase import duties on luxury cars; it also will henceforth purchase cars made in Nigeria in a bid to encourage local manufacturing. Those measures have been tried before – without long term benefits. There is nothing to suggest that this government and its successors will have the will to see it through. Yet without it, nothing will work. The CBN’s ban on the importation of foreign exchange by individuals and groups, as well as investors, would ordinarily have made no sense under the circumstances. Why stop the importation of dollars when the nation desperately needs them? But, that measure was dictated more by security concerns and the need to stop attempts by global money

laundering syndicates, as well as terrorists from using Nigeria as a transit pointy for illegal activities globally and especially in Africa. Finally, there is also a great deal of concern that the sudden upsurge in the importation of dollars might be related to the 2015 elections. Politicians with money stored abroad might be bringing them in to prepare for the elections. If so, government might simply force those involved to engage in electronic transfers and to use more fronts to launder the funds without stopping the flow of illegal funds. The CBN would probably have made a greater impact if it had monitored the movement of the illegal transfers, through a “Sting Operation, aimed at uncovering some of the kingpins of what is already a global ring of illegal transfers. Finally, the Retail Dutch Auction System might not work because success does not depend on the system which had worked elsewhere in the world. It might fail here because banks and customers will still find ways to cheat. The Retail Dutch Auction System was first introduced to our economy after the Structural Adjustment Programme was launched and it became clear that a controlled foreign exchange market cannot serve the economy which was becoming more market-led. Instead of the monthly allocation, via the Form M, the auction system was introduced. But, very quickly it degenerated into roundtripping and money laundering. Banks and their customers were demanding more foreign exchange than they needed. Scarcity of foreign currency was still an underlying factor – then, as it is now. Scarcity drives up prices – including exchange rates. And there is nothing the CBN can do about it. The question still remains: “What does the CBN want?”. It can’t succeed without a supporting fiscal policy. Right now, the Federal Ministry of Finance has not developed one.

Business & Economy

Small business confidence at 3-year high B

usiness confidence among small and medium-sized firms (SMEs) across the globe is at a three year high, according to a global survey of businesses, but access to credit and risk aversion remain a problem. The Sage Business Index Index 2013, an annual global measure of confidence across SMEs, showed that

confidence scores were at their highest level since the index began in 2011 as the global economy started to emerge from a prolonged period of economic crisis. The survey of almost 12,000 businesses across 17 countries was conducted by online interviews. Asked to plot their confidence on a scale of 1-100 on three core

areas affecting their business, confidence in their firms’ prospects had risen 5.5 points to 62.01 from a year ago. Confidence in their country’s economy had risen 6.38 points to 48.85. Reflecting that businesses were optimistic about a continuing recovery too, confidence in the global economy had risen 6.01

points to 48.60. Guy Berruyer, chief executive of the Sage Group which carried out the survey, told CNBC that while the results were “good news,” businesses in certain countries such as the U.K. still remained cautious on taking risks – an essential component of potential success in business.

“The only word of caution is that the attitude to risk remains quite conservative, in particular in the U.K. compared to other countries. I think that in a business environment where things are getting better for small businesses to take risk and to invest is important,” he said. “They can learn and try new things -they may fail but at least they will increase their confidence

Vanguard, MONDAY, OCTOBER 21, 2013 — 37

38 — Vanguard, MONDAY, OCTOBER 21, 2013

Business & Economy

NIPOST seeks harmonisation of policies in courier sector

r. Simon Emeje, the Head, Courier R e g u l a t o r y Department of Nigerian Postal Service (NIPOST), has called for the harmonisation of the various policies impeding the operations of courier service in the country. He told journalists in Lagos that the 3rd Nigerian Courier

Summit has been scheduled for Oct. 28, 2013. According to Emeje, the different policies of some government agencies are affecting the smooth operations of courier companies in the country.’ There is need to harmonise the various policies in the sector for effective operations.

“One of the objectives of the summit is to provide modalities for the harmonisation of the various agencies’ policies to ensure a level-playing field for courier operators in Nigeria,” he said. Emeje blamed the delay in delivering parcels and items across the country by courier companies on multiplicity of policies. “It has negatively affected

operations as an item that is supposed to be delivered within 24 hours will end up being delivered after a week.” Emeje expressed the hope that the summit would identify the various inadequacies, discrepancies and implications of the various policies. He stressed the need to ensure Nigeria’s conformity

with international treaties and conventions of Universal Postal Union on courier services as a signatory. “The objective of the summit is to provide modalities for a harmonised legal framework in the sector. “It is also aimed at streamlining the multiple taxes in courier operations,” Emeje added .

Ekiti attracts $300m investment to agric sector

ov. Kayode Fayemi of Ekiti said has said that the state received investments worth 300 million U.S. dollars in the agricultural sector in the last three years. Fayemi disclosed this at an empowerment programme organised for farmers in the state as part of activities organised to mark his three years in office. The governor, who also announced the provision of a N80 million credit facility to boost agriculture, presented cheques worth N100 million to 250 farmers to buy tractors. The governor said that the investments were from reputable indigenous and international agricultural institutions. He said one of the institutions, “New Vision Technology”, was establishing a 165 million-dollar agriculture city in the state. Fayemi said that Dutch Agricultural Development and Trading Company was also working to establish a high-quality cassava flour processing factory. “Vege-fresh has taken over the moribund Orin cassava processing plant and has successfully upgraded the capacity of the plant from 10 tonnes to 60 tonnes per day. “The rest, including Datlex, RENL, GIL, Arewa cotton, and Spectra, have also partnered with the state to actualise the vision of the present administration to make the state the food basket of the South-West.” Fayemi warned that the government would not tolerate non-farmers hijacking benefits meant for genuine farmers. He lauded the support provided by the World Bank, African Development Bank, UNDP, DFID and FAO to boost agriculture in the state. He said the state’s Youth Commercial Agriculture Development programme had empowered 250 youths to cultivate 1,900 hectares of cassava and plant 53,000 cocoa seedlings and 109,560 oil palm seedlings.

Windows 8.1 gets global release

icrosoft has released the Windows 8.1 update for its flagship operating system. The download seeks to address some of the criticisms levelled at the original version of Windows 8. In particular, the update restores the start button and allows a computer to boot up with a traditional desktop interface. The launch comes at a critical time for Microsoft as it seeks a new boss, with PC sales experiencing a long decline. Windows 8 sought to bridge the gap between touchscreen devices, such as tablets and smartphones, and more traditional form laptops and desktop machines. As such it had an interface built of tiles that could be tapped or swiped to open applications. However, many people found the tiled interface did not work well for some of the things they were used to doing with a computer.

Vanguard, MONDAY, OCTOBER 21, 2013 — 39

Advertising, Media & Marketing Stories by PRINCEWILL EKWUJURU A glimpse through trends in marketing initiatives will easily reveal that social media is developing as an important avenue for companies to build brands. The ascendance of social media rests on three fundamental human relationship values namely the self-expression it engenders through product education, its ability to share information with friends and the attention it generates through word of mouth. More importantly, social media enables brands to connect with customers in a way never before possible with scale. A brand’s equity depends on two things: the level of awareness it commands among consumers in its category and how positive the consumer is about what they know about the brand as perceived by its image. According to Managing Director of Chi Limited, Mr. Roy Deepanjan, “The need to inform consumers on the benefits of consuming 100 percent fruit juice as well as providing useful and life enhancing health tips necessitated our facebook page opening. We want to nurture long-term relationships with our consumers through the Chivita Premium Facebook Page in an engaging and mutually beneficial way” For instance, Chi Limited, makers of Chivita Premium fruit juice, entered the Nigerian market nearly three decades ago. During the period, the company worked hard to earn consumers’ loyalty and respect through its many flavours, promotions and campaigns. Along the way, Chivita became a household name. Nonetheless, the brand is set

A Story of Exceptional Service

Former Chairman, Manufacturers Association of Nigeria (MAN) Rev. Isaac Ade-Agoye (l), presenting 2012/13 Best Kept Industrial Premises Competition Award to QSHE Manager, Nigerite Limited, Mr. John Bamigboye at the Annual General Meeting of MAN, Ikeja branch, recently.

Social media, brand building and Chivita to grow bigger with its adoption of social media for brand building. Chivita Premium has a Facebook page that is growing daily and is full of action. The overwhelming response to the daily tips on Healthy & Natural Living by visitors to the page has resulted in over 70,000 clicks on the Like button within the short period of its introduction. In addition, thousands of visitors to the site engage in lively discussions on their daily experience with the brand. The following were deduced from Chivita’s Facebok page: “Chivita Premium is the best and original juice in Nigeria” and “I love Chivita, my day

is incomplete without a taste of the orange flavour” by some visitors to the page, it becomes easier to appreciate the premium value of the Chivita brand. Stanley Omeokwe, a follower of the Chivita Premium Page had this to say about the brand: “I have tasted all the flavours in Chivita. The flavours are incomparable with the flavours in other juices. Thumbs up!!!” another follower of the page, Promise Ozioma, said “I cherish Chivita so much because it is so nourishing.” The page parades several one liners like “nice,” “I feel good drinking Chivita,” “my best juice,” or “I love my Chivita,” in addition to clicks on Like button on comments that cumulatively run into thousands. Through Chivita Premium Facebook Page timeline, Chi Limited, educates consumers through the ‘Chivita’s go and do’ tips.

LG boosts profile, brings in Ultra HD TV L

G Electronics, LG has introduced into the market a 55 and 65-inch Ultra HD Television which expands its next generation TV lineup. Both Televisions coming under the model number LA9700, is designed with sliding speakers. The TVs although smaller in scale than the 84-inch model earlier launched, offers the same sense of immersion, picture quality and exceptional colour contrast. Speaking at the launch in Lagos, General Manager, Home Entertainment Division, LG Electronics West Africa Operations, Mr. Steve Ryu said: “By introducing 55 and 65 inches screen sizes, we are expanding the Ultra HD market, and further solidifying our position as the leader in next generation display technology.” According to him: The new TVs deliver 8.3 million pixels per frame. Thereby enabling the new models to achieve

this superior screen resolution is LG’s Tru-Ultra HD engine, which also up-scales any video format into crisp, nearUltra HD picture quality. Optimized with the company’s proprietary Super Resolution algorithm, the TruULTRA HD Engine maximizes image clarity, improves sharpness and eliminates any blurring caused by the up-scaling

process, he assured. Also speaking, Managing Director, Fouani Nigeria Limited, Mr. Mohammed Fouani, major LG distributor in Nigeria “It is a point of pride that we are able to bring the 55and the 65-inch Ultra HD TV to our consumers. Both TVs feature a built-in HEVC (High Efficiency Video Coding) decoder, which can play Ultra HD content directly from a USB flash drive, an industry first.

Bobo hosts musical skills competition for kids

oBo Food and Beverages Limited, BFBL owners of the Bobo brand has concluded plans to host kids between 5 to 11 years to a musical competition. The competition which is for pupils of primary schools; christened Bobo kids with voices, is themed: ‘The Nigeria of my dreams.’ The company which spoke through the General Manger, Sales & Marketing, BFBL, Mr. Lawrence Chimezie, said the

reason for this year’s theme is the fact that children are the future of the country, and it is important for them to have an attitude of patriotism and a sense belonging. According to the General Manager, Bobo kids with voices is an initiative aimed at growing the musical talent of primary school children as well as teaching them the beauty of teamwork, while pointing Lagos as the test location for the competition before it’s taken to other parts of the country. Chimezie pointed out that each participating schools is to enroll a minimum of five and a maximum of 11 pupils. He also said that schools are to obtain entry.

wo weeks ago, many organisations celebrated the customer service week. It’s quite heartwarming that the celebrations are catching on in this part of the world. Some companies took out adverts in newspapers to appreciate their customers. Of course, many also sent text messages (I received quite a few) and even offered commemorative gifts/freebies to customers that visited within that week. My advice: let’s celebrate our customers every day. In the spirit of the week, we threw a challenge to readers of this column to share stories of exceptional service received anywhere in Nigeria. We offered copies of two books – How to Serve & Keep Your Customers and 20 Universal Laws of Service Excellence – that are arguably the best on customer service written by a Nigerian, with a Nigerian perspective and for Nigerians, although the principles they espouse are universal. A reader who simply identified herself as Susan sent in a brilliant story of integrity, care and extra-mile attitude exhibited by a worker in Ecobank. I think the story is best told in her words. “My exceptional customer service experience occurred sometime last year at the University of Lagos branch of Ecobank,” Susan wrote. “I had gone to deposit some money into my account. However, for some unknown reason, I overpaid the bank teller by 10,000 Naira. On reaching home, I realised some of the money was missing. Later that day, I received a call from the bank asking to confirm my details and informing me of my mistake. I was then told to come for my money the following day. I was completely blown away, but very grateful to the bank staff when I received my money intact.” You know that banks advise customers to count their money before they leave the banking hall, as the banks would not be liable for any shortage noticed later on. So if you decide to over-pay the teller and walk away, as our people say, “you’re on your own.” Of course, there are still honest people around who would not sell their conscience for money, no matter the temptation. This teller in question was not only honest but she was also very meticulous. With the avalanche of cash the typical teller deals with, it could be a tough call to determine which customer overpaid. But this teller did. What’s more? The teller (or the bank) took the initiative to reach the customer before she would call – a case of catching the problem before the customer complains. Some other banks would have waited for the customer to complain and then asked her to prove she owned the money! No doubt, this is a story of trust-inspiring integrity, which Susan is not likely to forget soon. Although she didn’t say so, we can safely assume that she would easily recommend the bank to her friends and relations. And this is what we preach here: Convert your customers to eager advocates by giving them service that “blows them away,” to use Susan’s expression. Customer Service Awards The Nigerian Customer Service Awards will hold on October 31 in Abuja, to recognise organisations adjudged to have excelled in delivering exceptional service in various sectors. Using a combination of customer surveys and mystery shopping, the organisers have identified organisations that are deserving of such honour. This is a commendable move. The awards are the brain-child of a gentleman named Aliu Ilias. Although Aliu and I are yet to meet, we have exchanged phone calls and emails and I can tell you that his passion for customer service is infectious. Nigeria definitely needs more people like him and his team. A platform for you CustomerFirst, as you know, champions the cause of service excellence in the private and public sectors in Nigeria. To do this, we criticise, praise, teach, motivate, advise, encourage and learn. We’re delighted that quite a number of customer service representatives, marketing professionals, small business owners and those interested in service “tune in” every week. So, do you have suggestions on issues or service topics you’d like us to discuss? Let us know. Our mission is to help you excel in service, and enjoy the rewards that come with a reputation for service excellence.

40 — Vanguard, MONDAY, OCTOBER 21, 2013

Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

“The odds of setting foot in Europe are probably higher than one in twenty, and even then several of the fittest and extremely ‘lucky’ ones who make it are often hounded into asylum camps where they “enjoy” the status of glorified prisoners. In spite of the level of education and training attained back home, the toughest migrants, who manage to slip into civil society, barely earn subsistence wages with jobs that host citizens reject! Invariably, family expectations of the dividends of regular dollars and Euro remittances through Western Union ultimately confine most of these unfortunate African youths to a life of bare subsistence abroad!”

owever, some other African youths escape the torture of perilous journeys across hostile desert landscapes and turbulent oceans in rickety boats in search of jobs and a better life in Europe and America, by

abroad? Some analysts agree that the trend changed, when retrogression was promoted and corruption and inappropriate economic and monetary policies began to drive the business of government. Nigerians, who were earlier warmly and enthusiastically welcomed as affluent tourists (even without visa requirement) in Europe and America quickly became unwanted guests as erratic and self-serving monetary management made nonsense of the purchasing value of our currency and devastated the income profile of all wage and salary earners in our country. The ensuing brain drain to ‘greener pastures’ robbed us of most of our best intellects, and a collateral decay in educational infrastructure, led to rapidly tumbling standards in our secondary and tertiary institutions!. The work ethic collapsed, mediocrity thrived and not too long after President Shehu Shagari threatened to use our oil weapon to deal with the United States, Nigerians became regularly numbered amongst the World’s poorest,. The IMF-inspired Structural Adjustment Programme was grafted through the backdoor after 1985, and since then, in spite of bourgeoning dollar balances made possible by over 1000% rise in crude oil prices and significant leaps in production output, the freefall of the naira exchange rate has inexplicably continued unabated; the IMF-inspired naira devaluation has also faithfully served the same purpose of dislocating sustainable economic progress in many other African countries!

Where do the brightest and fittest go? virtue of winning the much celebrated and sought after immigration lottery tickets. Invariably, the immigrants in the above two entry categories do not often possess the specialist skills required in the host countries, and therefore, end up with poorly paid blue collar jobs! Another category of unforced ‘immigrants’ are the privileged children of the elite and middle class from several African countries. The immigration path for such youth is comparatively made much smoother and less hazardous by the capacity of sponsors and parents to outlay an average of about $50,000 annually for the education and upkeep of every child abroad! Thus, in spite of pervasive poverty in countries where majority of families live on less than $2/day (i.e. less than $1000/year), it is not unusual for the cost of education of the average middle class African child to result in a significant outflow of hard-earned foreign exchange. Indeed, if only 50,000 of the average annual UK visa applicants of over 180,000 are students, this could lead to an annual outflow of about $5bn (i.e. about N800bn); an amount, which is incredibly far in excess of the provision of N426.53bn for education at all levels nationwide in the 2013 budget! Thus, in spite of the incontestable reality of biting poverty and increasing national debt accumulation, middleclass and elitist African families may ironically be subsidising the cost of education in those better-

“Africans in the prime of their lives were forcibly plucked from their homes and families, bundled tortuously under deck and transported as human cargoes to be sold as slaves to plantation owners in the Americas and the West Indies about 200 years ago. Regrettably, in recent times, there is an unexpected twist to this macabre déjà vu! In spite of the pervading economic challenges, Nigerians, just like their counterparts in other African countries, make heroic sacrifices to educate and train our children only to gamble our investment thereafter on one throw of the dice. Indeed, families have been known to sell their prized possessions to sponsor promising ones amongst their children for the hazardous and often fatal road to find job opportunities abroad!”

The ensuing brain drain to ‘greener pastures’ robbed us of most of our best intellects, and a collateral decay in educational infrastructure, led to rapidly tumbling standards in our secondary and tertiary institutions!

endowed and more successful economies from whom we frenziedly solicit foreign development aid and loans! The other significant segment of African immigrants are those who are selectively head hunted; firstclass brains, hard-working and experienced university lecturers, innovators, accomplished artistes and talented sportsmen, who would otherwise add value to the resolution of our abiding domestic economic/social challenges are regularly identified and lured away with tempting offers and a facilitated immigration process. In the above event, if Darwin’s theory of natural selection and the survival of the fittest is anything to go by, the writing must be on the wall for those countries, who have unwittingly become victims of a unidirectional outflow of possibly the fittest and the brightest youths from their homelands, as the price they pay for the steady inflow of Western Union remittances from emigrants to address the foreign exchange shortages in their economies! In contrast

with earlier generations, who studied abroad, and regardless of the mode of entry, our youths today show very little inclination to relocate and contribute to development back home, because of the relatively unattractive foreign exchange equivalent of naira denominated salary packages! Thus, the net result of the sacrifice of our people and our collective self-denial for investment in youth education and human capacity building is ultimately a monumental and bizarre misapplication of the scarce human resources and material required for our survival and national economic development! So, how did the future of the African youth and by extension the economic viability of countries in the continent become so bleak? When did the selfless spirit of the founding fathers of African political freedom desert us? What was responsible for dampening the erstwhile eagerness of youths to return home after completion of their studies

SAVE THE NAIRA, SAVE NIGERIANS!!

Business & Economy

Nigeria exits FATF anti-money laundering list

he Financial Action Task Force (FATF), weekend, deleted Nigeria from its list of countries being monitored for anti-money laundering and counter financing of terrorism (AML/CFT) regimes. The FATF is the global standard setting body for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT). In a statement issued at the end of its Plenary meeting held in Paris, France, FATF said Nigeria is no longer subject to its monitoring process under its on-going global AML/CFT compliance process.

“FATF welcomes Nigeria’s significant progress in improving its AML/CFT regime and notes that Nigeria has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in February 2010. “Nigeria will work with GIABA as it continues to address the full range of issues identified in its Mutual Evaluation Report,” said the statement. The statement further said the removal of Nigeria from the list is evidence of her productive and continuous engagement with FATF and

GIABA to improve her AML/ CFT regime. “The outcome of the on-site visit of the FATF International Cooperation Review Group (ICRG) to Nigeria in September, 2013, noted that Nigeria has substantially completed the technical items on her Action Plan and that there is political commitment and institutional capacity to continue to implement AML/ CFT reforms. Recall that in October 2009, the FATF conducted a preliminary review of the Nigerian AML/CFT regime and identified some strategic deficiencies upon which the FATF engaged with Nigeria to develop an Action Plan to

included specific actions that Nigeria was expected to address in five areas, namely.

address those deficiencies. The Action Plan that was subsequently developed,

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