Financial vanguard 27042015

APRIL 27, 2015

BY BABAJIDE KOMOLAFE, ADERONKE ADEYERI, TUNDE OJO, OLACHI USUWA

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ank customers are divided over the reduction in the amount of foreign exchange that can be accessed for overseas transactions through Naira debit/ credit cards.

Two weeks ago, the Central Bank of Nigeria (CBN) reduced the limit on Naira debit card for overseas transactions to $50,000 per person per annum from $150,000. It also reduced the limit for daily withdrawal to $300 per day from $1,200 per day. The reduction is on Naira denominated MasterCard or Visa Card, linked to bank accounts in Nigeria.

A cross section of bank customers who spoke to Financial Vanguard on the policy were however divided on the necessity and impact of the policy on the economy. While some criticised the reduction, saying it would hurt their businesses, others commended the reduction, saying it would help curb wastage of foreign exchange and corruption.

Criticising the new limit, Mr. Chiedu Igwe, an importer said, “The idea of reducing the debit card limit to $50,000 per person per annum is discomforting. I travel out often to get items for my trade and that aside; I spend money on vacations using a Naira debit card. So with this new limit on debit card, how am I going to keep up with my business and personal foreign exchange needs while I am overseas? I wish the implementation of the policy could be re-adjusted if possible to help businessmen like me.

Another businessman, “Mr. Lekan of LakeSide Clothing said, “I am not comfortable with the reduction, because I travel overseas to purchase most of what I sell in my stores. I make use of my debit card for shopping whenever I travel abroad, and I travel more than once in a year.

So this new limit will disrupt my business plans.”

Corroborating these views, Mr. Umaru Hassan, a customer of Diamond Bank, Apapa, said that the reduction in limit is not good for business people, as most of them always travel abroad to purchase

Mixed reactions trail limit on debit cards zBanks commence implementation goods and conduct other business related activities that involves the use of money. “The idea of reducing the limit to $50,000 per person, per annum is an indirect way of reducing their ability to do business”, he said, adding that the CBN should reverse the policy.

On the contrary, veteran producer, director and actor, Prince Jide Kosoko commended the reduction, saying it would help curb the outrageous spending of many Nigerians. He said, “CBN has brought up the policy to redeem the value of the Naira. I know

this will not go well with some Nigerians but the CBN has the power to do it. Many Nigerians travel abroad and spend their annual savings within one month in the name of holidays”.

Similarly, actress Ronke Ojo, commended the reduction saying it is another means of eradicating corruption. “It is obvious that electronic banking has generated some hiccups in the economy.

However, the policy is a means to curb our excesses and eradicate corruption in the country,” she said.

According to Mr. Harrison Owoh, Chief Executive Officer, H.J Trust Bureau De Change, “The reduction in limit would minimise the various abuses associated with the use of Naira debit card overseas, like round tripping. He noted that some people use the card to withdraw dollars abroad at cheaper exchange rate, and then import the dollars and exchange them at higher exchange rate.

Banks commence implementation Meanwhile, banks have commenced implementation of the reduction in limit on Naira debit card Continues on page 22

CONFERENCE - From Left, Senior Adviser on Public -Private Partnership to Oyo State Government, Folake Akinleye, Managing Director, Bank of Industry, Rasheed Olaoluwa, Deputy Governor, Oyo State, Otunba Moses Adeyemo and Executive Director, Small and Medium Enterprises, Bank of Industry, Waheed Olagunju at the Commissioning of Zonal Office, Bank of Industry in Ibadan.

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22 — Vanguard, MONDAY, APRIL 27, 2015

Economy 35 ships laden with fuel, other products, berth in Lagos

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hirty-five ships are expected to arrive in Lagos Ports with food items, petroleum products and other goods from last week Thursday to May 10, according to the Nigerian Ports Authority (NPA). The NPA said in Lagos that the ships would sail in with general cargo, palm oilein, bulk, sugar, ethanol, bulk gypsum, bulk wheat, bulk fertiliser, bulk rice, second-hand vehicles, petrol and fresh

CONFERENCE - From left: Manaing Director, SKG Pharma, Mr. Okey Akpa; Director, Enterprise Development Centre, PAN African University Lagos, Mr. Peter Bankole; and General Manager, SKG Pharma, Mrs. Pat Iloba, during the company's Trade Partners' conference in Lagos on Thursday.

Mixed reactions trail limit on debit cards Continues from page 22 for overseas transactions by informing their customers about the new limits For example, GTBank in an email message to its customers said, “We write to inform you of the Central Bank of Nigeria’s (CBN) decision to reduce the Foreign exchange spending limit on Naira MasterCard from $150,000 to $50,000 per annum.

This means that you can spend up to $50,000 in a year using your GTBank Naira MasterCard when abroad (shopping online at foreign stores, ATMs and POS). In addition, the daily cash withdrawal limit for the Naira MasterCard has also been reduced to $300 per day.

Please see below the new limits for both spending using your Naira MasterCard and cash withdrawal abroad”.

Similarly, First City Monument Bank (FCMB), informed its customers via an email message saying, “Dear Customer, the new foreign exchange spending limits on your FCMB card is shown below. This means that when you are abroad, you can only spend up to $50,000 or its equivalent annually (shopping online at foreign stores, ATMs and POS). In addition, the daily cash withdrawal limit for FCMB cards have also been reduced to $300 or its equivalent per day.”

Limit not applicable to Domiciliary Accounts Meanwhile, there are indications that the reduction in limit is being misinterpreted to include use of Naira debit cards for local transactions and, also debit cards linked to Domiciliary accounts.

Indications to this effect emerged from a circular issued by the CBN, Director of Trade and Exchange Department, Mr. Olalekan Gbadamosi. The circular titled, “Clarification on Circular of April 13, 2015. Re: Usage of Naira Denominated Cards Overseas, stated, “It has been observed that some sections of the public are giving different interpretations to the recent circular on the usage of Naira debit denominated debit cards overseas. It has therefore become necessary to provide the following clarifications: For the avoidance of doubt, the circular refers to naira denominated cards (debit and credit) to be used overseas only.

Debit/Credit cards used locally are not affected by this circular.

Debit/Credit cards linked to customers' Domiciliary Account to be used overseas are not also affected. Authorised dealers are to take note and bring this to the attention of their respective customers.”

Deutsche Bank fined record $2.5 billion in rate rigging inquiry

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.S. and British regulators fined Deutsche Bank $2.5 billion and its British subsidiary pleaded guilty to criminal wire fraud as it became the eighth financial group to settle allegations of rigging interest rate benchmarks.

The record penalty in a seven-year investigation that has shredded the banking industry ’s reputation takes the total fines imposed on some of the world’s top financial institutions to more than $8.5 billion. Twenty-one C M Y K

traders and brokers face criminal charges.

U.S. regulators fined Germany ’s largest bank $2.175 billion and British watchdogs imposed a 227 million pound ($341 million) penalty for its role in a scam to manipulate the London Interbank Offered Rate (Libor) and its Euribor cousin - together benchmarks for hundreds of trillions of dollars of financial products and loans worldwide.

Britain’s Financial Conduct Authority (FCA) said the

misconduct involved at least 29 Deutsche Bank individuals including managers, traders and submitters based mainly in London but also in Frankfurt, Tokyo and New York.

It accused Deutsche Bank of inadequate systems and controls, failing to provide timely, accurate information and misleading the UK watchdog by claiming its German regulator BaFin had prevented it from sharing a report, when this was untrue.

fish. It said five ships laden with rice, crude palm oilein and bulk malt had already arrived at the ports waiting to berth. The NPA also indicated that nine other ships had sailed in with petrol.

“Five more ships carrying base oil, kerosene, aviation fuel and diesel are also waiting to berth.

Another 25 ships are currently at the ports, discharging crude palm oilein, bulk rice, buck wheat, general cargo, containers, bulk sugar, bulk gypsum, petrol, bulk gas and kerosene,” it said.

Promasidor delighted with entries for 2015 Quill Awards

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romasidor Nigeria Limited, makers of Cowbell, Loya, Toptea and Onga and, promoters of the prestigious Quill Awards in Nigeria, has expressed delight at the number and quality of entries submitted so far for this year ’s edition of the awards.

In an interview in Lagos, the company ’s Head of Legal and Public Relations, Mr. Andrew Enahoro, disclosed that with barely a week left for the entries to close, journalists working with national and regional newspapers in the country are still rushing in their entries on a daily basis.

He noted that the trend of the entries received and uploaded since January 29

2015, when the call for entries opened shows that journalists have keen interest in the seven award categories which are Brand Advocate of the year; CSR/Industry Report of the year; Best Photo story of the year; Best Report on Nutrition; Best Report on Children; Education Reporter of the year; and Future Writer of the year.

Enahoro said: “For each of the categories, a winner will emerge. Winners from each of the categories with the exception of the winner of the Best Photo Story of the Year will be given high-end laptops while the winner of the Best Photo Story of the Year will be given a highend camera. The overall winner of all categories will proceed on a four-week certificate course in Journalism at the highly acclaimed Thompson Foundation in the U.K.

British Airways offers summer discounts

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ritish Airways has announced discounts for the coming summer fares in its Club World, World Traveller and World Traveller Plus to a range of worldwide destinations from Lagos and Abuja, Nigeria. The discounts apply to all existing and potential customers of British Airways, who want to get great deals on flights to the United Kingdom, Europe or North America when booked from 16th April to 15th May, 2015 and for outbound travel from 16th April to 30th November, 2015.

With this offer, World Traveller customers can fly to Europe from $257 and to North America from $541.

Customers on the World

Traveller Plus however can fly with $1,585 to North America and those on the Club World can fly from $3,599.

Commenting on the discounts, British Airways, Regional Commercial Manager, West Africa, Kola Olayinka, said the latest offer was in line with the company’s desire to offer great deals to customers desirous of spending as well as celebrating with their family members and friends abroad during the summer period.

Olayinka added, “We are always determined to offer our customers good value for their money and continuously support them with amazing discounts, especially during the summer, when most of them will be travelling outside the country to see their loved ones.”

Vanguard, MONDAY, APRIL 27, 2015 — 23

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o ensure that Nigeria’s growth can be wide, inclusive and sustained, the incoming Muhammadu Buhari administration must focus on building infrastructure, institutions and people.

Nigeria has big infrastructure gaps, which represented huge costs to businesses and to people. Over the past three decades, per capita output of electricity in Nigeria remained virtually flat. Only 16 per cent of all roads are paved, compared with 58 per cent in South Asia. The investment needs to address this is in the region of billions of dollars.

Good enough, Buhari realises that Nigeria needs to improve governance, transparency and create sound economic frameworks for growth which is building institutions.

Building institutions rather than individual office holders by the government, would ensure that revenues and benefits from mineral resources could be better captured for national budgets and generating more jobs. Nigeria needs to build people to reap the dividends of its rapid population growth.

An increase by even one percentage point in the working age population could boost GDP growth by half a percentage point. For this to happen, however, good jobs need to be created in the private sector.

Today, only one in five people in Nigeria finds work in the formal sector. This must change. With wider access to quality education, healthcare and infrastructure services, Nigeria can change all of that.

Buhari does not need a magic wand to achieve this.

In the nation’s archive are volumes of development plans that long charted a path towards these lofty economic goals or ideals.

The nation’s set objectives in the third National

What Buhari must do to move economy forward (2) development plan are what Nigerians are clamouring for today.

The plan had envisaged increase in real income of the average Nigerian; even distribution of income among individuals and social economic groups in the country; reduction in the level of unemployment; increase in the supply of high level manpower; reduction of t h e dependence of the economy on a narrow range of activities; balanced development – t h e achievement of better balance in the development of the different sectors of the economy and various geographical areas of the country; increased participation by Nigerians in the ownership and management of the productive enterprises; greater selfreliance, that is increased dependence on internal resources in seeking to achieve the various objectives of society.

What is required of the Buhari administration is increased efforts to achieve optimum utilisation of Nigeria’s human and material resources; development of

technology; reduction in rural-urban migration; the promotion of a new national orientation conducive to greater discipline, better attitude to work and cleaner environment.

The main economic thrust of the Buhari administration should be in the direction of increased self-reliance and

resources are to be freed for pressing development needs.

There will be no room for subsidy. It must free resources for development. This strategy will demand a greater spirit of innovation, hard work, and greater utilisation of domestic resources and in particular, the involvement of the masses especially at the local level in the development process.

Buhari must make a conscious effort to mobilise the Nigerian masses for the implementation of the new Nigeria vision. If China could successfully mobilise its populace to achieve the second largest economy position out of obscurity, yes, Nigeria can. Nigeria and China have certain things in common, a growing population, an emerging middle class that constitutes a huge market for industrial products and a huge land mass. Yes, Nigeria can move into the league of top economies of the world. All that Nigeria needs is an effective leadership. Like Peter Drucker said: “Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.

For Nigeria to succeed in this regard, the new government must be

Buhari needs to return Nigeria to its roots, plans, strategies and push to become relevant in the eyes of other nations; this will require greater sacrifices as he has told his political friends and foes considerable reduction of Nigeria’s continued dependence on the external sector in general and the Petroleum sector in particular.

If Buhari pursues these objectives rigorously, Nigeria would no longer be playing a catch up game in the global economy.

Buhari needs to return Nigeria to its roots, plans, strategies and push to become relevant in the eyes of other nations. This will require greater sacrifices as he has told his political friends and foes especially in terms of established consumption habits if

perceived as fairly delivering basic services to all Nigerians rather than prioritising its own constituency.

Moreover, Buhari will have to be inclusive and avoid the pitfall that many African countries still suffer - that of political rather than meritbased appointment to government positions that require technical skills. A qualified and dedicated cabinet will have to be established if the social, economic and political challenges of Nigeria are to be addressed and eventually eradicated.

Although the Nigerian economy seems to be growing, the economic growth benefits have failed to trickle down to the larger population. A recent study points out that considering Nigeria's income per capita only, nothing has changed since 1970.

Nevertheless, the country has become much richer thanks to the exploitation of its oil resources. Thus, despite being the biggest economy in Africa, Nigeria ranks 160 out of 177 countries on the scale of the Human Development Index (HDI). The wealth remains concentrated within a few individuals, most of whom have strong political connections. This has to change and that is the real change Nigerians are yearning for.

Economy

APCON to support creativity initiatives

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he Advertising Practitioners Council of Nigeria (APCON) has pledged to continue to support creative initiatives in the advertising industry in order to encourage talented young individuals.

APCON Registrar, Mr Garba Kankarofi, told the News Agency of Nigeria (NAN) in Lagos that the council would also support institutions where advertising practitioners work.

“We have so many talented

youths and individuals in the industry that need to be encouraged to bring out the best in them. The advertising

industry is a creative industry that requires visions, ideas, concepts and talents to carry out their

works, “ Kankarofi said. The registrar said that the council hosted a Mass Communication student of

Gemalto launches software to protect bank customers from online fraud

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emalto, a digital security firm launched its newly integrated transaction monitoring software, the Ezio Dynamic Fraud Manager, which is used to track fraud

related bank transactions.

The company, in a statement, said that the new software had the capacity to protect bank customers from fraud and give them a unique user

experience.

“The Ezio Dynamic Fraud Manager enables real-time calculation of the actual risk of individual online transactions.

the University of Lagos, Miss SimileOluwa Fayombo, three weeks ago.

“The student is the award winner of Roger Hatchuel Academy based in the United Kingdom. The competition was organised among mass communication students in various institutions within and outside Nigeria. We in APCON are proud of such a winner from Nigeria and I am indeed sure that Nigeria will also be proud of her, “ he said.

Kankarofi said that APCON would not relent in supporting any individual, group and institutions that would make the industry to flourish.

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24 — Vanguard, MONDAY, APRIL 27, 2015

Business & Economy

Africa CEO Forum: What does the election of Muhammadu Buhari mean for doing business in Nigeria?

Mark Okpanachi Ogah

“Buhari`s victory will boost investors' confidence in Nigeria. In the last 16 years, the Nigerian government has been ruled by highly corrupt people in office, but with the emergence of Buhari and his zero-tolerance for corruption, our institutions will be strengthened.

Because Buhari is assertive, strong-willed and above all, experienced, which is the mother of all lessons, there will be very minimal if any negative influence or any form of Godfatherism, which has been a bane in the Nigerian political circle.”

Mark Okpanachi

•Leopold Ebegbuna

Glenn Davies, Singapore:

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r. Buhari’s election is a game changer for Nigeria and for Africa as a whole. The very nature of how this election was won shines a positive light on Africa’s largest economy and sends a clear signal to the rest of the continent. Not only does the election mark the first time an incumbent president has lost a re-election in Nigeria, but it has done so without violence, although this still remains a high risk. This is a great start to what I believe will be Nigeria’s turning point moving forward.

Buhari stands for change and this is exactly what Nigeria needs. Nigeria’s growth has been impressive to watch and a prodigious place to do business over the past few years. More recently though, this growth has slowed and the country marred by harrowing violence and the rise of extremist insurgents. Mr Buhari will need some ‘quick wins’ to settle the country's nerves and prove why he was elected. First priority on the cards will be to carefully and strategically choose his team this will be key to his success.

Then shortly after look to address the main issues headlining being Security and defeating Boko Haram, addressing falling Oil prices - countering this with new positive stimulating measures, and of course, commencing the arduous and incredibly challenging process of ridding the country of corruption. I feel Mr Buhari can then focus on some more positive key initiatives such as better infrastructure, industry diversification and creating new jobs and opportunities.

There’s no doubt that Mr C M Y K

•Glenn Davies Buhari’s success will have given Nigeria new credibility on the African and international stage. This will translate into heightened interest from neighbouring countries and international allies keen to work with Nigeria, and will be extremely positive for the economy overall.

But it won’t be an easy road monumental challenges lie ahead. I don’t think Mr Buhari n e e d s to overcomplicate things though to make a real difference in Nigeria. If he simply only focused on two issues - Security and Corruption - he will go down in the history books and Nigeria will overnight be a better place. Getting these two right will rev up the economy and let the world know Nigeria is open for business.

Glenn Davies is Group CEO of Inigmah

Leopold Ebegbuna

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eopold Ebegbuna: "I see Muhammadu Buhari struggling to redress Nigeria’s major challenges. The President-elect promised an end to the Boko Haram insurgency that has killed thousands of Nigerians and forced over a million to become

•Andrew Diack, Internally Displaced Persons, IDPs. He campaigned on a reputation as an anti-corruption crusader, and made populist pledges such as stipends for poor people and health care for all, etc.

The reality is that by the time

He will battle with increasing tax, improving the currency, the external reserve, etc. The result is likely to be some form of austerity big social spending programmes, such as universal health care, may have to wait Buhari takes office at the end of May, he’ll inherit a treasury depleted by the global drop in the price of oil, Nigeria’s biggest export, he will be left to figure out how to put an end to Boko Haram insurgency, the IDPs, fighting the entrenched corrupt practices which had flourished for years,

etc.

Fulfilling his election promise of change will be herculean especially starting with those who sponsored and supported his election within his party.

My concern is that his ability to deal with these individuals, who are perceived to be corrupt, will determine his success at the macro level.

Besides, at 72 years, largely not cerebral, and largely out of tune with the principles of modern day economic indices and technology, I see him struggling to redress Nigeria’s major challenges. He is likely to be overwhelmed by them leading to slowing down in the processes and in some circumstances, abdicating responsibilities. Yes, Buhari may be pious, it remains to be seen his capability for curing Nigeria’s challenges especially corruption and insecurity. He is not likely to have the resources to fully execute his campaign promises of universal health care, monthly $25 payments to vulnerable people and defeating Boko Haram, etc. With the oil accounting for over 70% of total revenue, now around $50 per barrel, he will battle with increasing tax, improving the currency, the external reserve, etc. The result is likely to be some form of austerity - big social spending programmes, such as universal health care, may have to wait, the task of rebuilding the northeast, crucial to putting an end to Boko Haram, may be difficult.

If he can reduce the wage bill of politicians and civil servants, who alone account for the huge recurrent expenditure, he will remain very popular among the masses.

Leopold Ebegbuna is MD/ CEO of Rising Light Global Company

Prince A. Olumuyiwa Latunde,

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campaigned and voted for a candidate with a good pedigree in the person of Gen. Buhari. I’m glad this change has finally come and without sounding too spiritual, God has a purpose in this and it’s my prayer that we, as Nigerians will not miss it again. His election marks a new beginning and turning point for so many things, notably addressing the issue of stealing public funds with impunity and reducing waste across the board. This must stop.

Buhari is a true Nigerian, a leader of repute; leadership corrects many things because of its features such as

prudence, integrity, boldness, calmness, good decisionmaking because of good listening, religious and most times, they don’t come with too many words but actions.

Our new President is not lacking in any of these qualities.

We have experienced him in “Khaki” and now “Babariga.” He should be a rallying point to unite Nigeria and get everyone committed. God bless the late Dora Akunyili, it’s time to have a genuine rebranding.

Once again, in the comity of African Nations, Nigeria will take her place and set a good example for others to follow; build infrastructure and genuine base that justifies the largest economy in Africa through aggressive production, mechanized farming and developing human capital like India that will measure up to any job in this global village instead of drugs and internet fraud.

Prince A. Olumuyiwa Latunde, President, Emilaug Energy

Andrew Diack, South Africa

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t is saddening that we as Africans celebrate a peaceful transition which in this day and age, should be the norm. In a positive light, great progress was made and hopefully indicates a brighter future. A major concern is Boko Haram and hopefully will be dealt with decisively.

I’m not that informed of the new incoming president (Muhammadu Buhari). What are his aspirations/goals for Nigeria and the region? Is he someone of honour/integrity who is committed to making the transition? What support does he have from his ministers and are they capable of delivering? These are all questions I currently don’t have a viewpoint on. As for me doing business in Nigeria, that is my goal. About time we started utilising our resources to make this continent the power house it should be.”

Andrew Diack, Founding Member, Cyber Logistics

Culled from Africa Business Panel with over 14,000 members. This is the largest Online B2B Market Research Panel in Africa.

Members are guaranteed a large amount of privileges. On a regular basis, we consult African CEOs about their views on business.

Vanguard, MONDAY, APRIL 27, 2015 — 25

Business & Economy

NIPC boss blames protest on directors, insists on change

BY FAVOUR NNABUGWU

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he change process sweeping through the Nigerian Investment Promotion Commission (NIPC) may not have gone down well with some directors of the Commission whom were alleged to have instigated the recent protest against the Executive Management of the agency.

NIPC’s Executive Secretary, Mrs. Saratu Umar told Journalists at a press briefing in Abuja Wednesday, that some key directors of the Commission that are not in tune with her change process, are fomenting trouble in the office so they can cover up their activities in the company.

She said that some directors were indicted by the Commission’s audit of its account books and want to frustrate her effort at all cost in order to prevent being exposed and prosecuted.

She told the Media that the findings of the audit findings revealed that several million of naira were misused by the directors who spurred the staff to kick against her.

She however denied spending or contracting her office furniture which the protesters alleged gulped over N30 million, adding that her office is still as it was when she assumed office According to her “My office is still the way I met it when I assumed duty; I have not changed anything. Anybody can walk in and see for himself. I felt there were pressing issues that needed attention, so I did not spend any N35 million furnishing my office. That you can confirm. Repositioning the agency for optimal service delivery is my top priority but those who are used to the old ways of doing things are the ones misinforming the staff.”

She also denied issuing queries to staff, stating that it is not her responsibility to do that whilst the Director of Administration is there to see to that.

She explained that some of the staff members allegedly queried by the director in charge of Human Resources, Mr Mutawali Kukawa, were actually those found to be perpetual late comers, pointing out that no management would condone any act of indiscipline by its workers.

Though, she admitted errors in the queries issued as some staff that had proceeded on

leave were also not spared.

“The Director, Human Resources, told me that it was just a memo he issued seeking explanation on why the affected staff should come to work late or even absent themselves from work for days.

But I pointed out to him that those on leave were also included, which should not be so because they have genuine reasons for being away, so it is unfair to punish them and I asked him to go and correct that” “On the issue of query, I said they needed to make it more

explicit, that it was not a query but memo, because we are trying to avoid them thinking it was a query because somebody will ask, if it was a query why am I withdrawing it? But today, we were expecting to conclude the matter, only to come and find the gate locked, and that tells me that the indicted directors are bent on causing problems because the issues raised have been exhaustively addressed.”

Umar further explained that the Director was working to redress that when the protest

started. “I can understand the agitation of the staff, because the message was wrongly conveyed; there was a communication gap which the indicted directors exploited”.

Umar further debunked the allegation that she issued over 150 queries to staff, and that about 600 files were lying on her table unattended to since November 2014 not until she got hint of the protest before she shed off some of the files on her table.

PARTY - From left: Sam Onyemelukwe, Managing Director, Trace; Omotayo Otitoju, 1st runner-up, Airtel Trace Music Star Nigeria; Jitey Peters, Winner Trace Music Star Nigeria and 1st runner-up Airtel Trace Music Star Grand Finale; and Segun Aderinokun; Head Youth Segment, Airtel Nigeria, during the Airtel Trace Music Star Grand Finale Viewing Party at the Vapors on Saturday.

Seplat , FBN Capital, others close $1.4bn loan facility

BY PRINCEWILL EKWUJURU

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eplat Petroleum D e v e l o p m e n t Company Plc, FBN Capital and London Stock Exchange , LSE alongside a consortium of other Nigerian banks have struck a $1.4 billion seven years secured term facility acquisition deal.

The new facility, alongside a new US$300 million three year secured revolving credit facility provided concurrently by international banks, refinanced Seplat’s existing

debt portfolio to ensure a robust capital structure and strategically position the Company for future oil and gas acquisition opportunities in Nigeria.

Commenting on the transaction, Austin Avuru, Chief Executive Officer of Seplat, noted “We are pleased to have extended our banking relationships with several existing and new lenders, both Nigerian and international. This successful re-financing, which commenced several months ago, significantly enhances our already robust capital structure and underscores the quality of our asset base”.

Kayode Akinkugbe, Managing Director of FBN Capital Limited said: “FBN Capital is very proud of the instrumental role it played in assisting Seplat to structure the local financing to optimize its capital structure”. He went further to state that the FBN Holdings Group is delighted to assist the growth of indigenous oil & gas companies within the sector and will continue to deploy its extensive debt arranging experience and structuring expertise in executing complex and robust transactions in record time”.

Itua Pack introduces German flux pump technology to Nigeria

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tua Pack Limited, a pioneer of product processing and packaging technology industry in Nigeria has introduced German flux pump technology into the country.

Flux is a world renowned brand for the highest standards in pump technology. It all started in 1950 when the German company first manufactured electric barrel pumps according to its own designs and patents. Continually increasing customer demands stimulate the company policy of ongoing development of new, high quality pumps to meet various market needs.

Today FLUX- GERATE GMBH offers a wide range of products which can be configured individually. For instance Flux pumps are used in the chemical and pharmaceutical industry, in machine and plant construction and in electroplating companies, in sewage treatment plants and in the food industry. Whether as a stand-alone or a system solution, Flux quality means long useful life, excellent economic efficiency and a maximum of safety.

According to the Service Engineer of the company Mr. Akinyemi Awodele each of these products has its specific functions, which he enumerated thus: Mixers – offers a complete range of mixers for agitating, mixing, dissolving, stirring and diluting low to medium viscosity liquids. The complete range of mixers is based on a modular design, allowing the user to select the individual component part to meet its specific requirement; Flow Meters – maximum measurement accuracy, ensure absolute safety, control and reliability in liquid handling be it manual, automatic or computerized dispensing operation of different liquids; Vertical Centrifugal Immersion Pumps – with high delivery rates centrifugal immersion pumps combine maximum efficiency with a robust and reliable construction, resulting in a pump that provides the ultimate in process security, especially for transferring corrosive or abrasive fluids.

26 — Vanguard, MONDAY, APRIL 27, 2015

Banking & Finance

BY BABAJIDE KOMOLAFE

Fidelity staff donate water treatment to Nigerian Navy

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taff of Fidelity Bank Plc. working under the auspices of the Fidelity Helping Hands Programme (FHHP), a special vehicle for the Bank’s Corporate Social Responsibility (CSR) practice constructed water treatment plant and donated computers and other office equipment to the Nigerian Naval Medical Centre, Naval Dockyard, Victoria Island. Lagos.

Commissioning the project, Managing Director/Chief Executive Officer, Fidelity Bank Plc. Nnamdi Okonkwo said that the Bank, as a socially responsible institution, takes pride in its humble accomplishment in entrenching the culture of true and responsible citizenship among staff members through regular training programmes and integration exercises in the Bank’s various business offices. “It is this passion for our country and our people that has motivated the staff driven initiative which we fondly call the Fidelity Helping Hands Programme”.

Commending the bank for the donation, Admiral Superintendent, Naval Dockyard Limited, Rear Admiral Sylvanus Chinweuba, who represented the Chief of Naval Staff, said that the donation is a demonstration of the commitment of Fidelity Bank to the welfare of its community. He assured that the equipment would be judiciously used and encouraged the bank to extend this gesture to other areas of the armed force.

While commending the staff of the Human Resources Division of the Bank, who in their little corners, contributed their widow’s mite to construct the water treatment plant and provide office equipment for the Naval Medical Centre, Okonkwo noted that Fidelity Bank is the only bank in the country where staff members contribute their salaries to embark on projects that impact on the lives of their host communities.

“Fidelity Bank strives to reinforce strong, healthy Community Relations by identifying with communities in activities that are most relevant to them.

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he Bank Verification Number (BVN) initiative will help to boost retail credit in the banking industry by helping banks to identify and blacklist fraudulent customers, Managing Director of the Nigeria Interbank Settlement System (NIBSS), Mr. Ade Shonubi, who is responsible for the implementation of the BVN, stated this in a statement, explaining that once banks are able to identify and blacklist fraudulent customers, they would be encouraged to extend loans to those customers that are credit worthy and do not have any record of being delinquent borrowers.

The BVN is an initiative aimed at protecting bank customers and further strengthening the Nigerian banking system. It is an initiative of the Central Bank of Nigeria (CBN), in conjunction with the Bankers’ Committee meant to address the safety of customers’ funds, avoids losses through compromise of personal identification numbers and other criminal activities in the industry.

Shonubi noted that apart from the challenge of identifying customers, a major hindrance to retail credit in the Nigerian environment was the perception that most Nigerians are crooks who would look for ways of

COMMISSIONING - From Left: Commander, Naval Medical Centre, Rear Admiral Jeremiah Onubi, Managing Director/Chief Executive Officer, Fidelity Bank Plc. Nnamdi Okonkwo and Admiral Superintendent, Naval Dockyard Limited, Rear Admiral Sylvanus Chinweuba at the commissioning of the Water treatment plant, computers and other office equipment donated by staff of Human Resources Division of Fidelity Bank Plc.

BVN will boost retail credit —NIBSS CEO failing to repay loans. He pointed out that the BVN would address this problem by helping to identify and distinguishing fraudulent Nigerians from law abiding and honest citizens.

He said, “When the BVN project came up, there were three key things. First and

most important of all is for us to identify our customers and to identify them uniquely across banks and across accounts. So, once you have BVN, even if you have 10 bank accounts, it is the same BVN that will be tied to the bank accounts. Now, relating to identifying is the possibility

Sterling Bank partners firms to boost education

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terling Bank Plc has signed a memorandum of understanding (MoU) with some firms in the education sector to digitise and simplify learning process at all levels of education.

The partnership is also to make the learning solutions affordable for students in primary, secondary and tertiary education levels.

Some of the partners include HR & P Solutions, Netlibrary Nigeria Limited, QC-Investment Limited and the DFID-Deepen Programme.

Speaking at an event held in Lagos, the Executive Director, Finance & Strategy, Sterling Bank, Mr. Abubakar Suleiman noted that fundamental to the

progress of any nation is education.

He said the objective of the initiative is to transform education and make it ‘sexy’ again for people to want to invest in education and also for start-up companies to see education as where there is a clear demand.

The bank’s executive director added: “The idea is to digitise all the educational contents and make it cheaper for the students to afford. We are to develop devices that would provide digital solutions for student.

“We also recognise that the government does not have the resources. There is nowhere in the world where the government provides all the needs of the society. So, it is clear that as some point, financial intermediation is

required. We have also looked at our partners and they have the same desire.

“Most of them are trying to take advantage of modern technology, firstly, to make it cheaper and more affordable for people to access education.

Secondly to also make sure that we are providing the relevant education because as things evolve, if you stay with the traditional educational methods, you will not be prepared for the new world.

“Like every partnership, this is not charity. Sterling Bank is not a charity organisation, neither is any of our partners.

The intention is not sustainable unless there is a sound economic logic behind it. So, whatever we are doing is to make sure that five years from now, this partnership is something that is still ongoing.

of banks blacklisting people who have committed financial infractions. It could be fraudsters; it could be people who have gone to forge documents because what happens today is that the same guy will go to a bank, commits fraud, then runs to another bank and because there is no way of tying all these activities across. So, we found out that there were quite a lot of losses related to these individuals from one bank to another.

Consequently, he said the BVN would allow lenders begin to build retail credit. He explained: “This is because a concern for bank is, if I lend you money now and you go away, how do I identify you?

So, you find that the entire retail consumer lending is to people with formal employment, that is why you see everybody running to the oil companies to say ‘let’s give your staff car loan; let’s give your staff consumer loan; let’s give your staff TV loans.’ But there are a lot of self-employed people working in smaller organisations, who should also benefit. “Nobody wants to take the risk on them because if they resign today and run off, how are you going to get your money?

Once they have bank accounts, the BVN allows us to identify them.”

Vanguard, MONDAY, APRIL 27, 2015 — 27

Banking & Finance

Council moves to ensure best practice in banks’ IT Standards

BY BABAJIDE KOMOLAFE

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he Council of Information Technology Standards (IT Standards Council) in the banking industry has commenced moves to ensure global best practices in the way banks deploy and use of information technology to drive their services.

The Council is reviewing the IT Standards Blueprint to align with current realities and trends and is also planning to drive an industry wide remediation exercise on the gaps identified during the baseline assessment that was conducted last year on the banks.

Indication to this emerged when Deputy Governor, Operations, Central Bank of Nigeria, Alhaji Suleiman Barau met with the outgoing IT Standards Council members to discuss the activities of the Council and progress made against their mandate within the last two years.

The need to define IT

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MEETING - From left: Chidi Umeano ( Head, Shared Services, CBN), Suleiman Barau (Deputy Governor, Operations CBN), Callistus Obetta (Standard Chartered Bank) and Niyi Yusuf, (Country MD, Accenture) during the meeting of the IT Standards Council with the CBN Deputy Governor.

Standards for the industry arose in 2010 during the Industry infrastructure transformation programme where the CBN in conjunction with the Bankers Committee sought to identify ways to reduce the significant high cost to income ratios of Banks within the industry as well as improve operational

efficiency. This transformation programme is coordinated by the Shared Services Office in the Central Bank of Nigeria and is the driver of the collaborative strategic response by the Financial Services Industry to realize reduction in the industry annual cost base.

IT which is the key driver of

FCMB intensifies competition for low cost funds *Acquires 500,000 new customers

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Ecobank’s money transfer service for Okpekpe Road Race

irst City Monument Bank (FCMB) Limited, a subsidiary of FCMB Group Plc has intensified its quest for low cost funds by acquiring 500,000 new customers in its operating year ended December 31st 2014. Meanwhile Shareholders of the FCMB Group has approved the payment of a cash dividend of 25 kobo per ordinary share, for the year ended December 31, 2014.

Speaking at the AGM, the Chairman of FCMB Group, Dr. Jonathan Long, stated that the Group, which comprises First City Monument Bank Limited, FCMB Capital Markets Limited and CSL Stockbrokers Limited, ‘’has achieved a strong and sustained growth over the past three years”, adding that during the past year, the Group continued the profitable development of its core banking, capital markets and stock-broking businesses”. This he added is reflected in the huge number of customers acquired by FCMB Limited during the year.

Also speaking at the AGM, the Group Managing Director/Chief Executive of First City Monument Bank Limited, Mr. Ladi Balogun, pointed out that the Bank made considerable progress on the priorities it set out last year, including accelerating market share in retail banking, primarily through consumer finance; enhanced investment in customer experience as a means of growing customer base and containment of operating expense.

He disclosed that following the Bank’s renewed focus on retail banking, ‘’we acquired 500,000 customers in 2014. We also supported 278,518

borrowing customers during the year with loan disbursements which demonstrates the broad impact we are having on the economy”. According to him, the Bank also provided greater convenience for its retail customers by rolling out 245 new ATMs, just as it migrated more customers to alternate channels.

Balogun told the shareholders that, ‘’we are very much on course to build a dominant retail banking business well diversified across lending, savings deposits, bancassurance and payments. Overall, we are confident this progress and momentum will be sustained, as we continue to grow our market share through service excellence and improve our efficiency ratios”.

Commenting on the development and the financial statements of the Group, the Coordinator of Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, commended the Board and Management of FCMB Group Plc for the performance and dividend payment, despite the particularly challenging operating environment for banks in 2014. He added that, ‘’the increase in the Group’s profit from N16b in 2013 to N22b in 2014 is commendable. It is a clear signal that things are looking up. We are also happy that FCMB has emerged as a strong player in retail banking and from what we have seen so far, we are optimistic that the Bank will continue to wax stronger ”.

banking was however lagging global best practices; limiting banking operating efficiency, cost effectiveness, regulatory information and risk management practices. To address this gap and provide guidelines for application and utilization of Information Technology, Industry IT Standards were defined to articulate and provide a point of reference for the utilization of IT. The IT Standards cut across different IT capability areas and include those to improve information security, IT service management, and systems availability and information exchange.

The achievements of the IT Standards Council within the last 2 years include: the release and publishing of the IT Standards Blueprint to Industry in January 2014 and the hosting of the blueprint on the CBN website; The development of an aggregate rating system that will be used to rate the compliance of banks individually and as an industry to these Standards; And lLastly the conduct of a Baseline assessment of three priorities 1 IT Standards on the Deposit Money Banks (DMB) to determine their level of compliance to the Standards.

Barau commended the Council on their achievements and assured them of his continued support and the support of the CBN. He reiterated that the mandate given to the Council was an important one and would go a long way to drive the adoption of world class IT Standards in the Nigeria Financial Services Industry, enabling the Industry reap the full benefits of its investments in Information Technology.

cobank Rapid Transfer has been named the official money transfer service for the 3rd Okpekpe 10km road race scheduled for May 16th in Okpekpe town, in Edo State. The Okpekpe Race, now an International Association of Athletics Federation (IAAF) Bronze Label Race will attract over 3000 local and international professional athletes. Also sports enthusiasts from across the world are being expected.

Announcing the bank’s premium partnership in Lagos, Ecobank’s Deputy Managing Director, Tony Okpanachi, said the Ecobank Rapid Transfer is best suited for the competition that has grown to have global recognition.

According to Mr. Okpanachi, the Ecobank Rapid Transfer is an innovative money transfer services available within Nigeria and countries in Africa where Ecobank is present. “The service was conceived out of the need to provide quick, convenient, accessible, and reliable money transfer services for customers and non-customers of the bank”.

Okpanachi is optimistic that the Ecobank Rapid Transfer will provide the muchneeded ease of financial transactions during and after the competition, and urged all the participants to avail themselves of the opportunities provided by the bank.

In his words: “This is an Ecobank proprietary send and receive money transfer product available in all Ecobank branches in Nigeria.

The product allows you to send and receive money where Ecobank has its footprint within Nigeria and in over 36 countries in Africa.

It is our way of supporting this international race to ease the burden of fund transfer. ” The Rapid Transfer he reiterated is very suitable for sports men and women, schools/students, travelers, parents, foreign nationals residing in Nigeria.

The Okpekpe Race which holds on May 16 has received endorsements from local and international athletes as well as governments across the continents of the world.

28 — Vanguard, MONDAY, APRIL 27, 2015

Corporate Finance

Fidson’s PAT increases by 307%

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idson Healthcare Plc has recorded a 307 per cent growth in Profit After Tax, PAT for the financial year ended December 31, 2014.

Specifically, the company recorded a PAT of N631.8million in 2014 as against N154 .9 million in preceding year. It also recorded a growth in Profit Before Tax, PBT by 250 per cent for the financial year under review. The PBT stood at N249.6 million as against N249.6 million in 2013.

According to the result released on the Nigerian Stock Exchange,NSE, the company reported a modest growth in revenue of 5 per cent Year on Year, YoY. The Earning Per Share, EPS of the company increased from N0.10 in 2013 to N0.42 in 2014.

Fidson grew its gross margin by 7 per cent, from N5.1 billion in 2013 to N5.4 billion in 2014 while operating profit increased marginally by 5 per cent with operating margin remaining at 15 per cent of revenue.

Despite the economic challenges, harsh market conditions and increasing financing cost faced during the year, cash flow improved with the company ’s cash position increasing by 51 per cent from 2013. The increase in long term debt during the year is as a result of the issuance of a 5-year fixed rate Bond to refinance some expensive short-term debt andaugment working capital requirements.

The company ’s focus on extensive brand building of its innovative and high quality products enhances its financial growth and its ability to maintain significant market share in key disease areas. This is supported by robust sales and distribution channels as well as persistentdiligence in ensuring products’ integrity through various anticounterfeiting initiatives.

Fidson’s ultra-modern WHO Good Manufacturing Practice (GMP) compliant plant, where she would manufacture IV fluids in addition to existing product offerings is scheduled to be operational before the end of 2015. This would broaden the company ’s products base, increase its capacity and consequently profitability and growth opportunities.

FORUM - Managing Director, May & Baker Nigeria Plc, Pharm. Nnamdi Okafor presenting a plaque to Mrs, Abosede Kazeem, Managing Director, Tanimola Pharmacy Limited at the 2015 Customers Forum of May & Baker Nigeria Plc held in Lagos

302 capital market operators meet new capital base requirements … 144 operators yet to comply

BY PETER EGWUATU

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bout 302 capital m a r k e t operators have so far complied with the new capital base as directed by the apex capital market regulator, Securities and Exchange Commission, SEC .

The commission had announced a new capital base for the various categories of capital market operators, in which

deadline for compliance was extended from December 31, 2014 to June 30, 2015.

According to the latest data obtained from the SEC, out of 449 registered capital market operators, 302 operators have met the new capital base , representing 67 per cent compliance, while 144 operators are yet to meet the new capital requirement.

Details showed that out of 235 registered Broker/Dealer, 135 operators have met the new capital, representing 57 per cent compliance, while 98

operators are yet to comply; For Issuing Houses, out of 72 operators, 66 operators have met the new capital, representing 92 per cent compliance, while six are yet to comply; For Registrar, out of 22 operators, 15 have met the new capital base, representing 68 per cent, while seven are yet to comply; For Trustees, out of 28 operators, 12 have met the capital base, representing 43 per cent compliance; For Rating Agency, Out of five operators, three have met the

capital base, representing 60 per cent, while two are yet to comply; For Fund Managers, Out of 87 operators , 71 have met the new capital base, representing 82 per cent compliance level, while 16 operators are yet to comply.

Commenting on the recapitalisation issue, the Acting Director General, SEC, Mr. Mournir Gwarzo said, the operators are all aware of the gracious extension the SEC Board granted. We set up a market Committee comprising SEC, Nigerian Stock Exchange, NSE and Central Securities Clearing System, CSCS which have been working with Trade Groups to address related issues. Based on the latest returns we have received from operators the level of compliance is encouraging although we will conduct a verification exercise at the end of this recapitalisation to confirm compliance.

Commenting on the activity of the commission in the area of strengthening and refocusing the SEC, he said “We are streamlining the operations of the Commission to focus on its core mandates as apex regulator. We believe this will make us more effective and efficient. We have worked on a new organisational structure which will be fully implemented this year.

On the empowerment of trade groups and Self Regulatory Organisations, SROs, he said “ As we focus on the big issues, we are committed to empowering Trade Groups and SROs to play more important roles in regulating their members. An example is the new Complaints Management Framework which we have released that ensures investor complaints are dealt with more swiftly starting from the operator, to the Trade Group or SRO level before reaching

May & Baker returns to profitability, rewards customers

BY PETER EGWUATU

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ay & Baker Nigeria Plc, has returned to profitability in the financial year ended December 31, 2014, just as it rewarded customers for their contribution in lifting the company higher.

Result for the year 2014, shows that the company recorded a 990 per cent growth in profit. From a pre-tax loss position of N11.4 million in 2013, the group recorded a pre-tax

profit of N101.1 million.

Similarly after tax profit rose by 161 per cent from a negative of N103 million in 2013 to a positive of N63 million in 2014. This was achieved on a group turnover of N7 billion, against N6.3 billion in 2013, a growth of 10.2 per cent.

Cost containment and efficient resource utilisation were responsible for the positive signals by way of reduced financing charges, distribution, sales and marketing expenses all which combined to deliver healthier bottom-line.

Key extracts of the audited report and accounts of May & Baker for the year ended December 31, 2014 made available by the Nigerian Stock Exchange (NSE) showed a growth of 10.2 per cent in sales for the group.

The company boosted its operational profitability with 16.2 per cent increase while sales and marketing expenses dropped by 3 per cent and finance costs also dropped by 4.2 per cent. However, finance cost still remains a challenge to the company.

Meanwhile, the management of May & Baker

Nigeria Plc has assured its customers that it would continue to value their inputs and feedback in the decisionmaking process of the company.

Managing Director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, gave this assurance at the company’s customers’ forum. According to him, the company revived the annual national customers’ forum not only to reward outstanding performance but to engender better intimacy with and obtain feedback from its customers.

Vanguard, MONDAY, APRIL 27, 2015 — 29

Corporate Finance

SEC set to revive corporate bonds market, Commodities Exchange

By NKIRUKA NNOROM

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he Securities and E x c h a n g e Commission, SEC, has said that it is taking steps to address the perceived dormancy in the corporate bonds market.

The Acting Director General of SEC, Mr. Mounir Gwarzo, disclosed this while briefing of capital market correspondents at the end of the first quarter of 2015 Capital Market Committee, CMC meeting in Lagos.

He stated that members of the CMC are already considering suitable ways to revive that segment of the bonds market, hitherto dominated by the Federal Government Bonds.

“We looked at the corporate bonds market, which has been quite dormant and we looked at ways to revive the market because it has always been dominated by the FGN bonds,” he said Gwarzo also emphasized the need to revitalise the Commodities Exchange, saying that the committee mandated to chart ways to revive the Exchange has come up with a report, which implementation will soon commence.

According to him, “The house was very concerned by the fact that we do not have a very vibrant commodity exchange and we are happy with the new acting managing director, who has been in the system since the inception and she is very excited that

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BRIEFING - From left: Managing Director, Skyway Aviation Handling Company Limited {SAHCOL}Mr. Oluropo Owolabi; Representative of International Air Transport Association (IATA) and Mrs. Ewemade Atake and President, Association of Foreign Airlines in Nigeria (AFAN), Mr. Kingsley Nwokoma at a press briefing marking the end of SAHCOL safety week held at the Murtala Muhammed International Airport, Ikeja, Lagos. she wants to get the exchange going.

“Happily enough, the market already has a committee and the committee has submitted an extensive report on the ways the exchange will be revived. So the house has mandated the Commodities Exchange to look at that report and where it needs any advice or intervention from the market, we will do so.”

Speaking on funding for Investment and Securities Tribunal, IST, the acting DG said, “We have a committee

that is comprised of SEC, the Nigerian Stock Exchange, NSE and the Central Securities Clearing System, CSCS, on the funding of IST. In the first instance, we agreed that part of our fees should be ceded to IST; we all recognise the importance of IST to this market. It has played a very important role and it also play a role to the investors as well.

“So between the three organisations - SEC, NSE and CSCS, we have ceded some amount of fees that we pay to IST. But moving forward, we

Access Bank’s profit before tax up 21% in Q1

By NKIRUKA NNOROM

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ccess Bank Plc has recorded a growth of 21 percent in its profit before tax for the first quarter ended March 31, 2015. During the quarter, profit before tax rose to N16.5 billion as from N13.6 billion posted in the corresponding period in 2014.

The bank also announced profit after tax of N13.7 billion, which was up 11 percent from N12.3 billion in recorded Q1 2014.

Its gross earnings was up 34 percent to N76.7 billion for its first quarter ended March 31, 2015, compared to N57.3 billion posted in the same

Despite earnings beats, expectations dim for later quarters

period in 2014.

The group audited International Financial Reporting Standard, IFRS, results for the period showed that the bank’s net interest income grew by 17 percent to N46.4 billion from N39.6 billion in Q1 2014, benefiting from a loan portfolio growth in 2014 and improved yields on fixed income securities.

The non-interest income of N30.4 billion in Q1 2015 compared with N17.6 billion in Q1 2014, increased by 47 percent, supported by growth in net trading income.

Operating income of N54.0 billion grew by 28 percent in Q1 2015 compared to N42.2 billion in the corresponding

period, while the return on average equity (ROAE) of 19.2 percent in Q1 2015, improved by 50bps from 19.7 percent in Q1 2014.

Commenting on the results, Herbert Wigwe, the Group Managing Director, noted that the bank’s financial performance in the first quarter of 2015 marks steady progress towards key strategic objectives. “Our focus remains on the delivery of sustainable value to our shareholders. We continue to deepen and broaden our toptier corporate relationships whilst optimising and growing our diverse retail customer base to support lowcost liability growth,” he said.

have made certain suggestions to IST. It is either they become part of the judiciary so that they will be funded from source or the market will find a way to incorporate them. For now, we think that with the little money we are giving them, we are empowering them to do their job.”

Commenting on the level of preparedness for take-off of the Investors’ Protection Fund, he admitted that the Fund could alleviate some of the fears investors have that stop them from investing in the market, saying, “SEC has taken a giant step in setting up the investors’ protection fund and some huge amount of money has also been set aside for the fund. The board of the IPF has almost been constituted.

The names of the members have been drawn. What now remains is to constitute the board.”

“It has been agreed that one or two operators that have problems and have gone through our Administrative Proceedings Committee department will be beneficiaries of the IPF. What we are doing now is verification because immediately the IPF came on board; many people came up saying they have issues. So, immediately we finish our verifications, we should be able to pay some amount of money,” he added.

ost U.S. companies so far this earnings season have managed to beat Wall Street profit forecasts despite weak sales, but investors hoping corporate headwinds have died down may need to temper their enthusiasm.

Of the 169 Standard & Poor’s 500 companies that have reported so far, 71 percent beat earnings estimates, many of which were modest to begin with, Thomson Reuters data showed. But they did so with help from share buybacks, cost-cutting and other measures, instead of robust sales growth.

Despite those beats, analysts are now trimming their profit and sales expectations for the second quarter on the belief that the stronger U.S. dollar and sharply lower oil prices, widely held to have hurt firstquarter results, will continue to dampen business growth for a while.

“The fact that you’re seeing some companies beat on the bottom line is not going to change the story. You’re going to see some pretty ugly numbers over the next couple of quarters,” said Dan Suzuki, senior U.S. equity strategist at Bank of America-Merrill Lynch in New York.

World’s biggest for-profit college chain plans $1bn IPO

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aureate Education Inc., the largest forprofit college network in the world, is interviewing banks for a $1 billion initial public offering in the U.S., people with knowledge of the matter said.

The company, whose honorary chancellor is former President Bill Clinton, has been meeting with potential underwriters for an IPO that could value the education juggernaut at about $5 billion, said the people, who asked not to be named discussing private information. The company, based in Baltimore, owns 84 universities, mostly in emerging markets.

Laureate was taken private in a management-led $3.8 billion buyout in 2007, backed by an investor group including KKR & Co. and Citigroup Inc. C M Y K

30 — Vanguard, MONDAY, APRIL 27, 2015

C M Y K

Vanguard, MONDAY, APRIL 27, 2015 — 31

Homes & Housing By YINKA KOLAWOLE

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o u s i n g microfinance, otherwise known as microfinance for housing or incremental financing, is regarded as the application of a microfinance based approach to housing finance.

While the concept ‘housing microfinance’ is relatively new in development circles, the practice is not.

Access to housing and access to housing finance by low income earners is a critical development issue facing most countries around the globe. Many households in Africa are unable to access mortgage finance either because it does not exist or because it is inaccessible.

UN Habitat notes in a report the predominance of two extreme outcomes of current shelter systems that are being witnessed today affordable shelter that is inadequate, and adequate shelter that is unaffordable.

The report goes on to state that within the next 20 years it is unlikely that conventional sources of finance will be available in many developing countries for investment on the scale needed to meet projected demand for infrastructure and housing. With deficits in public budgets and the persistence of weak financial sectors, the situation seems untenable. Throughout subSaharan Africa, income levels are such that the majority of households cannot afford to buy the least expensive house, even if mortgage finance were available.

Opportunities Nigeria represents a potentially huge market for housing development, mortgage and housing microfinance lending. At the Africa GRI 2014 delegates highlighted the fact that despite high transaction costs, the returns are high.

The Global Real Estate Institute (GRI) is a global club of senior real estate investors, developers and lenders that runs its activities through a collection of annual meetings focussed on different regions of the world.

The delegates noted that while the government and its various institutions are paying substantial attention to the mortgage market, the potential of the housing microfinance market is increasingly being acknowledged. With a population of more than 100 million low-income people and a small mortgage market, housing microfinance has

Housing microfinance: Panacea for Nigeria’s housing deficit

A joint housing project between LASG and First World Communities Ltd. in Abijo, Lagos enormous potential in Nigeria.

Accessible mortgage With an aim to ensure that all Nigerians are able to own a home, the Federal Government is using three strategies – land swap initiatives, affordable and mass housing schemes and accessible mortgage finance.

In addition to unveiling the Nigerian Mortgage Refinance Corporation (NMRC), the federal government also launched a national N960 billion housing scheme for labour union members. Similar to the NMRC, the Lagos State government launched the Lagos Home Ownership Mortgage Scheme (Lagos HOMS). A Public Private Partnership (PPP) initiated by the government and administered by the Lagos Mortgage Board (LMB), it aims to support first time buyers in the state to purchase decent homes through accessible mortgage finance. When the scheme was flagged off in February 2014, 1,104 housing units were completed and 3,156 units were at various stages of completion. Both NMRC and Lagos HOMS are PPPs and this is fast becoming one of the key strategies used by the government to drive the growth of housing delivery.

As well as the private sector, the government is working with non-governmental and non-profit organizations to deliver homes to low-income earners.

With a population of more than 100 million lowincome people and a small mortgage market, housing microfinance has enormous potential in Nigeria The Lagos State Government also established the Lagos State Co-operative Home Ownership Incentive Scheme (Lagos CHOIS) to provide housing for low and medium income households.

The state government entered a partnership agreement with First World Communities Limited under the CHOIS initiative in 2005 to build 10,000 houses in three senatorial areas of Lagos namely; Abijo, Agbowa and Badagry. As part of the agreement, Governor Babatunde Fashola recently commissioned CHOIS City, a 460 housing unit residential estate located in sub-urban Agbowa-Ikosi in Epe. In 2013, the Federal Mortgage Bank of Nigeria (FMBN) launched its Informal Sector Cooperative Society Loan Scheme, designed to enable informal

sector participants to access the benefits of the National Housing Scheme. FMBN’s Managing Director, M r.

Gimba Ya’u Kumo, explained that scheme will provide a platform for members to form housing cooperatives to access loans for estate development. To qualify for the facilities, participants are expected to make a minimum monthly contribution of N450 for at least six months. The scheme involves the issuance of e-collection cards to contributors, which will in turn streamline the collection process and cut out deficiencies of manual collection, while allowing contributors real time access to their contribution records.

The loan facility offers borrowers a 24 months repayment period at 10 percent per annum for houses worth not more than N5 million.

Also in the same vein, Prime Asset Housing Cooperative Multi-purpose Society, a private initiative, was established to enable people pool resources together for the purpose of owning their homes. The Home Ownership Savings (HOS) plan of the Cooperative is to facilitate pooling of savings towards securing or meeting required deposit payment for a property (built or landed), mortgage financing or any such expenditure geared to facilitate members’ house ownership drive.

Housing supply The private sector continues to deliver new housing units for the luxury and highincome bracket. It is estimated that the formal and informal private sector provides over 80 percent of the housing stock in Nigeria.

Though there is insufficient data on the proportion of private, government and individual contributions to the housing stock, it is general knowledge that the incremental building by individuals on land purchased by private land owning families is the most prevalent, particularly with respect to housing low and medium income groups.

Nigeria’s housing deficit is estimated to be over 17 million units and growing at about 780 000 units yearly, due to the high cost of building and slow construction process. Of the 17 million unit deficit, Lagos State is estimated to have a deficit of one million.

Between 1999 and 2011, the state government built 3,766 housing units in 17 housing estates, averaging 316 units annually. In the last five years, however, the rate of delivery has improved drastically. In 2012, the total number of units delivered into the market was slightly above 1,500 units and this rose by 48.2 percent with 2,299 housing units delivered in 2013. However, this is still not meeting the demand.

Way forward Centre for Affordable Housing Finance in Africa (CAHF) has undertaken various research initiatives to explore the state of housing microfinance across subSaharan Africa, highlighting innovation and providing recommendations for attention by financial institutions and governments.

“Our work is focused on supporting the growth of a housing micro-lending sector in Africa, with more players supported by more investors, reaching more clients,” it stated.

Generally, in Africa, high income earners use their own resources to build or buy houses for themselves outrightly, the middle class and low income earners finance their own construction gradually over time. Housing microfinance makes it possible to address housing needs progressively, step-by-step, towards a larger housing vision.

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32 — Vanguard, MONDAY, APRIL 27, 2015

Interview

BY EBELE ORAKPO

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igeria has all the indices for greatness so one wonders why it is not great. Some have pointed at poor leadership and followership, corruption, poverty etc as culprits but one tends to agree with a popular Nollywood actor, Mr. Nkem Owoh who in one of his movies, wondered aloud if Nigerians were made by God’s apprentice. Nigeria is blessed with abundant natural and human resources, highly talented and resourceful people, high quality natural resources, yet, it seems to be moving round and round in circles. In this interview with Professor John Aroye Okhuoya, Professor of Mycology and Director, African Centre for Mushroom Research and Technology Innovation, University of Benin, he speaks on how Nigeria can partake of the multi-million dollar mushroom industry.

Introduction: I had my first degree in Microbiology here. I was one of the first 100 students of the University of Benin when it was Midwestern Institute of Technology. Thereafter, I worked briefly in the Rubber Research Institute and then went abroad for my PhD. I came back in 1981 and started lecturing in 1983 in the Department of Botany (now Department of Plant Biology and Biotechnology, University of Benin.

I became a professor in 1995. I have been training undergraduate and post-graduate students in Mushroom Science. species in Nigeria are Pleurotus tuber-regium or tuberous mushroom Interest in mushroom: I grew up in the rural area and we (very common in South-East and used to go for mushroom hunting in used in cooking egusi soup. It the village, collecting wild produces tuber in the dry season and mushrooms for sale in the evenings. then in the rainy season, they break My father gave me some information the ground and begin to produce on the different mushrooms that we fruiting bodies. The tuber, referred ate. That was how the interest came. to as sclerotium, is the form the I have developed this area of mushroom uses to hibernate in order research over the years and at a point, to survive the harsh conditions of the we felt that this university should be dry season. In our folklores, it is a reference point. We introduced believed that for the native doctor to Mushroom Science in our see the future, he will have to make a curriculum. At undergraduate level, paste of the tuber, and rub his eyes we have Introduction to Mushroom and he will see visions.) Other edible Science, and then I developed a species are: Lentinus squarrosulus, master’s and PhD programmes in Auricularia auricula, Lepiota sp, Termitomyces spp, Volvoriella Mushroom Science.

Mushroom production is still very esculenta, Lycoperdon spp among low in Nigeria hence many of our others. people still depend on collection of Differentiating poisonous mushrooms from the wild. This is from edible mushrooms: fraught with the danger of collecting In our traditional system, Nigerians poisonous with edible ones.

Commercial farming holds the key to have always eaten mushrooms. In the the eventual elimination of South-East, they eat a lot of occasional mushroom poisoning in vegetables and mushrooms. In my own area in our population.

Edo North, we have Categories of mushrooms: There are four main categories of mushrooms in our mushrooms.

Edible mushrooms (those you can d i e t a r y eat as food); Medicinal mushrooms system, so used in taking care of certain ailments; our elders Poisonous mushrooms (these are knew the deadly). There are also mushrooms difference. that are both medicinal as well as They had edible. Then the last category is the their own of Miscellaneous group which contains ways mushrooms whose values are not yet identifying them but we established. refer to those ways Nutritional values: old Edible mushrooms are rich in as protein, B-vitamins and contain w i v e s ’ moderate amount of vitamin C. They f a b l e s are, however, low in carbohydrate b e c a u s e and are generally preferred to fresh they are not vegetables because weight for weight, r e l i a b l e . o r the body absorbs all of mushrooms F eaten without wastes. Common edible e x a m p l e ,

Commercial farming holds the key to the eventual elimination of occasional mushroom poisoning in our population

Mushroom production is still very low in Nigeria hence many of our people still depend on collection of mushrooms from the wild

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* Prof. John Okhuoya.. . edible mushrooms are preferred to fresh vegetables because weight for weight, the body absorbs all of mushrooms eaten without wastes

Nigeria must tap into mushroom market —

... Market forecast to reach $50,

*Edible Lentinus squarrosulus mushroom growing on a dead mango tree they tell you that when you see a mushroom with flies perching on it, it shows it is edible because it did not kill the flies. That is not reliable because there is a mushroom called Amanita muscaria. Flies perch on it though it is not edible. It is noted for its hallucinogenic properties so when flies eat this mushroom, they fall into stupor, temporarily dead and at the end, they recover. So you

cannot rely on that method of identifying edible mushrooms. But the point is they have been able to identify the ones they eat right from the beginning and they have stuck to those ones. Here at the centre, we have our own ways of identifying them using chemistry but we advise people to eat those ones that are known to be edible.

What we do at the Centre: The essence of our research is to ensure that

Vanguard, MONDAY, APRIL 27, 2015 — 33

Interview we get the mechanism/technology to produce edible mushrooms so that our people can easily access them. That is what is happening in the UK and other developed countries; they cultivate and sell edible mushrooms in the market. If you rely on collecting from the wild, you are likely to collect both edible and poisonous mushrooms. That is why we are advocating that in Nigeria, we have gotten to a stage where we should be eating cultivated mushrooms. The beauty of it is that the species we have in Nigeria are very delicious a n d comparable with any type of mushroom from any part of the world. So the purpose of this centre is to first of all, document as much as possible, all available identifiable mushrooms in the whole of West Africa Sub-

We are developing the technology; we can fortify our garri, bread, rice and other foodstuff with mushroom mycelium so you will not be eating ordinary garri

Mushrooms and health: In Ghana, there is a strong belief that making a paste of Pleurotus tuber-regium and rubbing it on a malnourished child, will make the child fatten up. I don’t know how true that is. Mushrooms have a high percentage of protein, amino acids and all other minerals that help in development of our immune system.

For those who want to lose weight, it is very good.

A lot of products have been developed from mushrooms. For example, a product used in the treatment of arthritis from ganoderma, a mushroom from China, and so many other such products. We can produce them here. We have ganoderma tea, mushroom tea etc.

Mushrooms have been indicated in the treatment of HIV/AIDS. You can have our garri, rice, bread, etc fortified with mushroom mycelium so you will not be eating ordinary garri, but garri that is fortified with a lot of protein. That is our vision. We are developing the technology.

AIDS treatment: As a matter of fact, WHO sponsored

the multi-million-dollar PROF IKHUOYA

,034.12 million by 2019

*Prof. Okhuoya (l) and his former student, USbased Prof. Omo showing off Lentinus edodes (shiitake), edible and medicinal mushroom region, particularly Nigeria, and have a gene bank because right now, most of the mushrooms we used to eat as children are disappearing as a result of deforestation. This is the best time for us to begin to store some of the ones that are still available so that we can have our own gene bank for future use. Apart from meeting our national needs, contributing to national nutritional diet, we can also begin to export and earn foreign exchange. That is what we are doing here - we train people, create capital, and as much as possible, simulate people to be interested in mushroom farming.

one of the top mushroom scientists to develop some mushroom products that helped to treat an AIDS patient in South Africa. What that product did was t o We have enhance worked out t h e appetite different the substrates using of patient agricultural because one of waste like t h e banana leaves, things stems, oil palm we see w i t h fruit fibre, oil A I D S palm bunch, patients is that banana peels lose and corn husks they appetite, which we treat l o s e weight chemically a n d gradually die. It was found that when their food was fortified with mushroom, the appetite increased and they ate more, put on weight, and started living healthy lives.

Forex earner: Mushroom is a foreign exchange earner for many developed countries; a multi-million-dollar business in America, Europe, much more in China and other Asian countries. They use it for medicinal

and nutritional purposes. Most of the mushrooms we have in our supermarkets are imported. We can produce them here in large quantities.

Chief Olusegun Obasanjo started a mushroom farm which is no longer producing because of the technology involved in producing exotic strains.

Some of our local farmers are now trying to produce our tropical mushrooms. We have developed many local species and strains that are succulent, sweet and delicious which we can recommend and assist farmers in growing if they wish to go into mushroom farming.

Environmental cleanser: The mushroom also plays a lot of role in environmental cleansing. We have found that some mushrooms are able to absorb heavy metals from the environment and so when you grow some edible mushrooms in a polluted environment, they absorb the heavy metals so you cannot eat them, they become agents of filtration, trying to filter those chemicals that are dangerous to health from the environment.

Bioremediation: One of my students did his PhD on bioremediation. He found out that some of our mushrooms when grown on soils that have been so bastardised through pollution, can rejuvenate the soil through increased biomass.

Cultivating mushrooms: It is quite easy. Like I said, we have spent quite some time to study our indigenous mushrooms. We have done a lot of survey in different parts of the country, on the type of mushroom they eat, the history behind most of the mushrooms etc., and we have developed the technology using local resources to grow them.

Mushroom cultivation involves five major stages: Bed preparation: You prepare mushroom bed using different substrates. We have worked out different substrates using agricultural waste like banana leaves, stems, oil palm fruit fibre, oil palm bunch, banana peels and corn husks which we treat chemically.

Spawning (mushroom seed planting). After a while, the mycelium will grow and run through the system and in few days, you see the whole place white. If you leave it like that, you may never get fruiting bodies so we do what is called casing.

Casing: You cover it with calcium carbonate soil and you are by that act telling the mushroom to stop vegetating and grow up, you divert the mushroom from vegetative to productive phase. When you put that soil, the mushroom is shocked, it is being starved of nutrients so it starts looking for a way of survival.

It tells itself, ‘before I die, let me produce my kind.’ So it begins to produce spores because it wants to survive and in the process, it begins to have fruiting bodies which the farmer harvests.

Picking or harvesting: After a while, the mushroom is ready for harvest.

The first day you harvest, after two or three days, you harvest again, until the fourth or fifth time when the yield will be decreasing and then you can stop.

Packaging: The final step is packaging.

Each step requires careful handling for best results.

Not all mushrooms follow all the above five steps. Some species require specific conditions for their growth and development.

Spent substrate: The beauty of this farming process is that even the spent substrate can be used for growing other vegetables. It will become organic fertiliser so nothing is wasted.

The Centre: University of Benin was kind enough to sponsor this centre and it was commissioned by President Goodluck Jonathan last November. Within a short time, we have achieved so much in the areas of capacity-building, mushroom production, and our target is to raise farmers that can produce in commercial quantities. We will stimulate people to go into making mushroom products for health, medicinal and nutritional purposes.

It is a simple thing but it has taken us a long time to get to where we are today. We are hoping that the government, corporate organisations and private individuals will come in here, use our technology and expertise to go into business and develop whatever product they want to develop.

We will assist them because we have the expertise.

*Edible mushroom, Volvariella volvacea growing on oil palm bunch

*Edible mushroom growing on dead part of a living tree

34 —Vanguard, MONDAY, APRIL 27, 2015

Insurance Stories by ROSEMARY ONUOHA

REDAN ready for Buhari’s 1m houses

BY FAVOUR NNABUGWU

R

eal Estate Developers Association of Nigeria (REDAN) has affirmed its readiness to join hands with the President-Elect, General Muhammadu Buhari, in actualising his promise of one million housing development yearly.

REDAN’s newly elected President, Rev Ugochukwu Chime, who gave the assurance in Abuja.

According to him, “REDAN has set up a committee to come up with a road map on housing development as a position paper to be presented to the new administration for implementation. “We will also work closely with the administration to ensure that the Land Use Act is amended.

REDAN will step up its advocacy and liaison with the National Assembly to expedite the passing of the Land, Housing, foreclosure law; Mortgage and Real Estate related laws proposed by government with the National Assembly since 2006.”

The REDAN president also said its members will work with respective government agencies and research institutes to ensure reduction in cost of obtaining permits and approvals relating to land for mass housing development. “We will focus efforts on land administration in favour of real estate developers; develop technology to utilize local materials and achieve considerable cost of construction; encourage green construction; ensure members adhere to standard in process and product s of housing development and; comply with National Building Codes and extant laws on land and housing construction. We shall collaborate with stakeholders in the government, built industry and business spheres to step up artisans, trades and craftsmen /women training and re-training to empower Nigerian citizenry especially the large population of youths,” he stated.

He assured that the association will work closely with the National Assembly to make REDAN an Act of the National Assembly that will ensure standard in the housing sector.

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he Nigerian Council of Registered Insurance Brokers (NCRIB) can now access the database of LIMRA, a world acclaimed financial services research consultancy body, following its admission.

Conveying the NCRIB admission during the 2015 International Business trip of the Council’s delegates to Malta, Europe, the Operation Head of LIMRA Europe, Middle East and Africa, Carla Baldivia said with the admission, NCRIB would now have access to the database of the association and be able to access yearly global financial reports by the body.

“As a LIMRA member, your Council will now have access to all the research, webinars and market facts in addition to the information centre that gathers resources from more than 128 periodicals” Baldivia noted.

Responding, the President of the NCRIB, Mr. Ayodapo Shoderu who led the Council’s delegation noted that the NCRIB has a vision of exploring all avenues to place the Council and its members on the global plane.

He said, coming on the heels of similar admission by the British Insurance Brokers Association (BIBA), Shoderu said that the challenges before NCRIB members was now higher in a bid to match up with its growing global reputation.

Also, during a lecture on customer service, brokers were told to imbibe multiple integrated channels of customer service in order to meet the yearning needs of today’s clients.

According to Senior Regional Executive of LIMRA,

BRIEFING - From left: Solomon Ikeanyi, Publicity Secretary; Abiodun Adebimpe, Secretary General; Akeem Oyewale, Vice President; Kemi Adewole, President; Taiwo Sonola, Vice President; Bunmi Arowosafe, Financial Secretary; all of Association of Asset Custodians of th Nigeria at the 4 Investors' Conference press briefing in Lagos.

NCRIB gains wider acceptability with Limra’s recognition Mr. Manolis Kyriacou, current and future customers have high expectations for service quality through all channels they could utilize to connect with the provider.

“Insurance intermediaries that successfully deliver their services competently will most often improve relationship and outcomes with their policy holders,” he said.

As a leading insurance and financial services trade association, LIMRA’s purpose is to be the trusted source of

industry knowledge. It currently provides research, learning and development programs to more than 850 financial services companies throughout the world.

Serving its members for nearly 100 years, these financial services firms turn to LIMRA first for research, serving as a catalyst for new ideas, to better understand the industry, and plan for the future, learning and development programs, to assess, train, and increase

distribution productivity, as well as develop the next generation of corporate leaders and connections with industry leaders and peers through study groups, committees, and conferences.

The tour was rounded off with visits to leading insurance companies and brokerage companies such as Middle Sea and Assikura Insurance Brokers where delegates had robust insights into operation of insurance business in Malta.

AACN set to host investors’ conference in London T

he Association of Assets Custodians of Nigeria, AACN, has said that it is set to hold its fourth annual investor conference in London.

The conference which is billed to hold on 7th of May has the theme, Nigeria: Navigating changes, extracting opportunities.

Speaking to journalists in Lagos, AACN President, Mrs. Kemi Adewole, said that the purpose of the event is to provide expert insight on Nigeria’s current market trends, and an opportunity for significant interaction among the various Nigeria capital market operators and investors.

She said that the 2015 investor conference will host

speakers representing the regulators and key market operators such as Governor of the Central Bank of Nigeria, CBN, Mr. Godwin Emefiele; acting Director General of the Securities and Exchange Commission, SEC, Mal. Mounir Gwarzo; Executive Director, Market Operations and Technology, Nigerian Stock Exchange, NSE, Mr. Adeolu Bajomo; and MD/ CEO of the Central Securities Clearing System, CSCS, Mr. Kyari Abba Bukar.

Other speakers participating in panel discussions include Dr, Abraham Nwankwo, Director General, Debt Management Office, DMO; Mr. Bolaji Balogun, MD/CEO Chapel Hill Denham; Mr. Bola

Onadele. Koko, MD/CEO FMDQ OTC Plc; Mr. Bola Ajomale, MD/CEO NASD Plc; Mr. Bayo Olugbemi, President of the Institute of Capital Market Registrars (ICMR), and some major foreign portfolio investors and global custodians.

Adewole said, “AACN continues to strive for greater efficiency in Nigerian capital market, with a firm understanding of the importance of bringing the players in the market together. The 2015 investor conference will provide a platform to facilitate dialogue between foreign investors and Nigerian capital/ financial market operators, while keeping participants

abreast of Nigerian securities market developments.”

Founded in 2009, the members of the association are Citibank Nigeria Limited, First Bank of Nigeria, First City Monument Bank, Stanbic IBTC Bank, Standard Chartered Bank and United Bank for Africa.

The association is dedicated to establishing global best practice standards in all aspects of the Nigerian securities market and the development of the market, including promoting the custody business in Nigeria and making the Nigeria securities market more suitable for investors.

Vanguard, MONDAY, APRIL 27, 2015 — 35

“Unsold Nigeria crude grows as buyer interest falls”.

PUNCH, Thursday, April 9, 2015, p 41.

T

he story by Femi Asu, went on to state that “Weak buying from Asia and other regular buyers of Nigerian crude oil has left a large overhang of March, April and May cargoes, it was learnt”. For those who might not fully understand the implications of that report, it is necessary to spell them out.

The first casualty, and it has been in that position since last year, is the 2015 budget which is now nothing more than an academic exercise. With crude oil prices hovering between US$45 and US$60 per barrel, the budget which out-going Finance Minister first based on $78 per barrel crude oil price, had by February been dropped in the dust bin. Now, with volume supplied imperiled by weak demand from our traditional customers, it is obvious that the Age of Crude is surely over in Nigeria – at least for a while.

Incidentally, this is not the first time this will be announced on these pages. In an article published in December last year, titled THE AGE OF OIL IS OVER FOR NIGERIA, the point had been made that the forces which had driven the global price of crude oil to the low levels it reached then and also reduced the demand for Nigerian crude are not only long-term in nature, but they were then just gathering momentum. The news report

Nigeria without oil is now a reality above only points to the major economic crisis facing the nation – starting immediately. By the time President Jonathan hands over the leadership of Nigeria to Buhari, the country would have once again been classified as a near bankrupt economy. Our earnings from crude oil will just about be sufficient to pay for all the foreign loans taken by the Federal and state governments.

For Buhari and Nigeria, lightening has struck twice in a life time. By the time he was propelled to the Head of the military junta in December 1983, Second Republic politicians, at Federal and state levels had frittered away the first crude oil bonanza and left Nigeria with a huge debt which later became our debt trap. By October 1985, President Babangida, who toppled Buhari, was already lamenting that, “It is true that we have run through one of the greatest financial bonanzas that ever happened to a nation in need; so fast and so recklessly that we may wonder if ever happened at all!”

The harsh measures which Buhari took, which should have produced salutary effect, were denounced by

the same Nigerians who had to pay salaries before the been impoverished. Today, as elections will now start we approach a democratic defaulting in payments. change of government, we Governors going on May 29, can surely repeat what 2015, will simply abscond Babagida said about the from their states and leave bonanza which Second their successors to face the Republic politicians wasted. outrage of public servants.

From 1999 till date, Unpaid contractors politicians representing all constitute the third set of the political victims of the Every economic parties have change in the once again catastrophe fortunes of run through Nigeria. It is a n o t h e r invariably almost certain b o n a n z a manifests itself in that any m o r e contractor, still the banking sector – recklessly unpaid by any than in the which had actually government 1 9 8 0 s .

— Federal, placed itself in Buhari, once State or Local again is fated harms way by – and who is to inherit a not wellfinancing the buynational connected purse totally out of International with the depleted by Oil Companies, President, sixteen years Governor or of Obasanjo, IOCs, by local Chairman, can Yar’Adua and investors forget about Jonathan, at the centre. State governors, being paid for a long time to especially those newly come. The in-coming elected, will also find governments, cash strapped themselves wishing they meet current obligations, and never ran for office. Even having failed to receive the those who are continuing in kick-backs from over-inflated office face a massive revolt of contracts will not be in a hurry public servants and the to pay past debts. The great Nigerian populace as they wave of defections from PDP will increasingly fail to fulfill to APC is partly a reflection their election promises. of the desperation of So, the second casualties of contractors whose money is the impending economic trapped as their former doom are the public servants. benefactors leave office.

Even states which struggled Hundreds of thousands of

contractors face personal bankruptcy; and, their banks also risk being savaged by the consequences of both crude oil calamity and the change of governments nationwide.

Abandoned projects will proliferate.

Every economic catastrophe invariably manifests itself in the banking sector – which had actually placed itself in harms way by financing the buy-out of International Oil Companies, IOCs, by local investors. The rush for the gates by the IOCs should have served as a warning to Nigerians who had more money than sense, and their bankers, that something must be wrong, if so many multinationals are leaving. Even IOCs who had taken the position of “ wait and see” in the past are no longer waiting – because they have seen enough. And, what they see is a nation whose oil exploration is no longer attractive.

Finally, PIB is dead. Twice the Jonathan administration presented the bill to the National Assembly, NASS, and, twice government lacked the WILL to see it through.

The PIB which would have benefited the oil-producing areas immensely will now be buried in the graveyard of procrastination and presidential inertia. Decades from now people from the Niger Delta will continue to shake their heads that one of their sons allowed this opportunity to pass. For the folly of leaders; people perish.

Micro-Finance

LAPO awards scholarship to 700 students Stories by PROVIDENCE OBUH

L

APO Micro finance Bank (MfB) has awarded scholarship to about 750 students who are children of it's clients who meet the requirements set by the scholarship board, targeting 100, 000 scholarship by 2022.

The bank conducted a scholarship ballot exercise across all the zones of its operation in the country and 1000 students qualified for the scholarship but 750 who meet the requirement would benefit the scheme.

Speaking at the annual scholarship ballot exercise in Lagos, Managing Director, L APO MfB, Mr. Godwin Ehigiamusoe, said that about 5000 beneficiaries have C M Y K

emerged from the scheme which started in 2007.

He explained that the essence of the balloting was to make the process of selection of beneficiaries as

transparent as possible and to justify the confidence repose on the organization by the clients over the years.

Ehigiamusoe said, “ we target in the next five to seven

years about 100,000 student will benefit, since we started in 2007 we have continuously been doing it on annual basis and we will continue to provide the scholarship. We

started with 32 students in 2007, by 2014 we have done 5,000 students but 2015 we are doing 700, we hope to do 1000 or five thousand next year.

Cold Stone Creamery débuts in Ikeja City Mall

C

onscious abut proximity, Cold Stone Creamery (CSC) Nigeria, makers of premium ice cream has made its début at the Ikeja City Mall to benefit customers within the environ.

CSC is owned by Eat N’ Go, a restaurant group whose mission is to become the premier food operator in Africa, offering ice cream experience including: Ice Cream, Ice Cream Cakes, Shakes, and Smoothies the way you want it.

Speaking at the shop opening ceremony, Marketing Coordinator, Cold Stone, Mrs. Timilehin Lajubutu, said that there are alternative cream for everybody but according to demand, “for people who are on the big side, we have something for them, such as: low fat yoghourt, healthy mix-in, nuts,coconuts fruits, smoothies and purely ice cream for the generality. She said that CSC was officially launched in September 2012 and has grown to 13 stores across Nigeria including, Lagos, Ibadan and Enugu.

LAUNCH - From left: Mr. Eniola Ositelu, Marketing Manager Ikeja City Mall, Mrs. Timilehin Lajubutu, and Mr. Uzoelum Chukwunalu, Marketing Coordinator and Operations Manager, Cold Stone Creamery Nigeria, Mr. Olusola Adeeko, Human Resource Manager, Eat‘N’Go Nigeria and Mrs. Temilola Akinmuda, On Air Personality with Cool FM Nigeria during the launch of Cold Stone Creamery at Ikeja City Mall.

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36 — Vanguard, MONDAY, APRIL 27, 2015

Vanguard, MONDAY, APRIL 27, 2015 — 37

E-Commerce

LAUNCH - From left: Consultant, Digital Financial Services, Department for International Development (DFID), Ms. Susie Lonie; Chairman, Board of EFInA, Mr. Yemi Cardosa and Consultant, Digital Financial Services, Ms. Lesley-Ann Vaughan during the launch of EFInA Request For Proposal 6 event and workshop in Lagos.

Can Jumia sustain affordability drive without compromising quality?

Stories by JONAH NWOKPOKU

O

ne of the most notable features of online shops, since online retail debuted in Nigeria, is its cheap prices of goods.

Compared with the offline market prices, these online shops, despite free shipping services and high cost of logistics, still manage to maintain clear edge in terms of price while still offering quality goods.

One of the online shops that has maintained this tradition since inception is Nigeria’s pioneer online retailer, Jumia.com.ng. They have consistently maintained competitive pricing in almost all items on offer. How do they accomplish this? How have they been able to sustain this despite the recent devaluation of the Naira? Why are their products always cheaper? Are they packaging counterfeited products online and selling to Nigerians? This is because most times, their prices are so ridiculously low that they can’t but arouse suspicion.

An investigation into some of the prices Jumia offers for some products showed a consistent competitive pricing with even international online retailers like Bestbuy.com and Amazon.

Take for instance the Samsung Galaxy S5 – Copper Gold. This goes for about $569 on Amazon.com which when converted into the local

currency, the Naira will be about N119, 000 depending on the exchange rate. The same product goes for $499.99, about N105, 000 on another international retailer, Bestbuy.com. These prices exclude the shipping cost including the customs and clearing duties, should one decide to buy from these stores. However in Nigeria, this same product goes for between N100, 000 and N105, 000 in different online stores.

It’s only Jumia.com.ng that sells the product at N95, 230, according to the price information available at their website at the time of this report.

Take also the Blackberry Passport. This could only be obtained at Jumia.com at N119, 500 against the N126, 000 to N130, 000 that it could be obtained from other online stores nationwide. This price also comfortably beats a retailer like Bestbuy.com where the device goes for about $667 which is about N133, 400.

Besides the electronic segment, home appliances also enjoys favourable rates on Jumia such as the Emel Plastic Electric Kettle-P006-White which goes for about N10, 875 whereas the cheapest price it can be bought elsewhere is about N12, 200.

More so, in categories like fashion, their prices also beat that of their competition by at least 2 per cent. For instance,

a pair of Vanessa’s secret’s shoes which cannot be found anywhere below N9, 000 in other online stores is available at N6, 495 on Jumia.com.

About quality There is no gainsaying it, that with many online retail shops springing up in recent

Compared with the offline market prices, these online shops, despite free shipping services and high cost of logistics, still manage to maintain clear edge in terms of price while still offering quality goods

times, the price reduction has been motivated more by the quest to beat competition. This has also meant some compromises on the quality of goods. In some unregulated online marketplaces, the prices are even so ridiculous

that one only needs some common sense to realise there has been compromise on quality. In this regard, some shoppers who have shopped from Jumia said from their experience, the quality of goods offered on the platform is not compromised.

Chukwudi Ozonna told Vanguard, “I was sceptical about this online deals especially the quality of the products since they are always willing to offer cheaper prices.

But then one day I needed a television for my children’s room. I saw a 22 inch LG TV on Jumia at N21, 900. I was sceptical about it but then after I prized it offline and saw that the same TV goes for N29, 000, I decided to give it a try. I have used that TV for two years now; it has never had any fault. It was an original LG product. I don’t how Jumia does it but I do know they do sell quality products at very affordable rates.”

Jumia and affordability Speaking to Vanguard in an exclusive interview on how Jumia Nigeria maintained its cheap rates, Co-Managing Director, Jumia Nigeria, Dr. Jonathan Doerr said: “Jumia does not sell at cheaper rates because it offers inferior products. We are able to offer products at affordable prices which are less than other online retail companies and those of brick and mortar stores due to its wide assemblage of brand partners. You just name it, from Apple to Infinix to Lego, Samsung, L’oreal and more, Jumia has been able to forge lasting and favourable partnerships with the biggest brand who are able to offer Jumia their products at reduced tariffs and sometimes even exclusively. These brands are happy and always willing to work with Jumia due to a proven track record of service delivery, customer satisfaction and guaranteed volume of sales.

According to him, the company leverages on its huge customer base, and its resultant economies of scale to drive down cost.

He said, “Speaking of guaranteed volume of sale, in economics, there is a concept called ‘Economies of Scale’.

This concept explains that there are cost advantages which certain enterprises enjoy due to their larger size, output and scale of operation.

Being that Jumia Nigeria is the biggest online retail store in Nigeria, accessible and patronized daily by tons of Nigerians nationwide, it only adds up that unlike the others, Jumia Nigeria can now afford to plummet profit margins and provide lesser priced products to customers due to a reduced overall operating cost.”

Lack of access to big data hindering e-payment growth – Obi

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hief Executive Officer of eTranzact International PLC, Mr. Valentine Obi has identified lack of access to big data as a threat to the growth of electronic payment in Nigeria. He disclosed this know while speaking as a member of a panel discussion at the just concluded Mobile West Africa held in Lagos.

According to him, “One big prerequisite for financial inclusion and fraud control for financial institutions is a check called “Know your Customer (KYC). It is one of the biggest challenges we face in the payments industry, and all players can come together to help solve this issue.”

He said: “The telecommunications companies own a lot of user data and can help the payments platforms by sharing this data. There is a big need for the telecommunications companies to share data in order to safeguard and protect customers from fraud just like banks share data with the switching platforms.”

Google profits buoyed by ad revenue US technology giant Google reported a 4 per cent increase in profits to $3.59bn, as strong advertising sales helped boost the firm’s bottom line.

Google said advertising sales for the first three months of 2015 were $15.5bn, an 11 per cent increase from the same period a year earlier.

Total revenue also increased by 12 percent to $17.3bn, but like other US firms, the company was hurt by the strong dollar.

Shares in the firm rose more than 3 percent in trading after markets had closed.

There had been fears on Wall Street that profits would be weaker due to investment in new businesses and weaker advertising revenue as more people access Google via mobile devices, where advertising rates are lower.

38 — Vanguard, MONDAY, APRIL 27, 2015

Vanguard, MONDAY, APRIL 27, 2015 — 39

40 — Vanguard, MONDAY, APRIL 27, 2015

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Vanguard, MONDAY, APRIL 27, 2015 — 41

Economy

Foreign Portfolio Investments expected to increase in Q2 Stories By EMEKA ANAETO, Economy Editor

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midst concerns over sudden flattening of the bull run in the Nigerian stock market, dealers are speculating large inflows of Foreign Portfolio Investments (FPIs) on the heels of the post election market rally.

World’s biggest sovereign wealth fund (SWF), Norway’s Government Pension Fund Global (GPFG), is said to be refreshing its interests in the Nigerian market after a tactical ‘hold action’ late last year.

Many dealers were working on the expected surge in the FPIs after the elections but the deals which were said to worth over USD20 billion were not yet concluded as at last week.

Last year, GPFG added five African states to the number of countries it approves as marketplaces for trading in equities. It is keen to take advantage of the pace of economic growth across Africa to garner profitable returns on equity investments.

Its investments in Nigeria, as at the end of 2014 was USD63 million (about N12 billion), which included stocks in companies listed on the Nigerian Stock Exchange (NSE).

About USD15.6 million (N3 billion) or 23.5 per cent of the fund’s investments in Nigeria went into the stock of Zenith Bank while USD13.9 million (about N2.8 billion) or 21 per cent of the FPI went into Guaranty Trust Bank’s stock.

The least in the allocation of its FPI in Nigeria went into Access Bank stocks at USD2.1 million

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•Mr Mounir Gwarzo, Acting Director General of Securities and Exchange Commission (about N400 million) or 3.2 per cent.

Other stocks that benefited from this FPI include International Breweries Plc, Larfarge Africa, Nestle, Nigerian Breweries, Seplat Petroleum, Stanbic IBTC Bank and UACN Plc. The Norwegian SWF which has extended its FPI to include five more African countries in total has investment in 169 companies in Africa.

Although the slump in global oil prices has hurt Nigeria, Africa’s largest economy, the

International Monetary Fund (IMF) as well as several global

The least in the allocation of its FPI in Nigeria went into Access Bank stocks at USD2.1 million (about N400 million) or 3.2 per cent

economy watchers still project impressive growth rates for Nigeria and Sub-Saharan Africa generally. Also, the number of middle-class households in the region has grown exponentially in the last decade. The Norwegian SWF is, therefore, determined to pour more cash into this emerging market, according to Ventures Africa, a major African economy publication.

“Which new markets we enter depends on which markets are available for investment, what market opportunities there are, and market standards,” the fund said in its latest report.

“We will continue to add new markets to the portfolio as soon as they meet our requirements for market standards.”

Although only 0.7 percent of the USD814 billion of The Norwegian SWF’s investment was in the continent by December 2014, the fund appears poised to increase its equity outlays in Africa. In a strategy report for 2014 – 2016 released last year, Norges Bank Investment Management (NBIM), manager of the Norwegian SWF, said it would add external mandates as it enters into new markets and segments.

It said it expects to have 100 external mandates by 2016, with the share of funds managed by external bodies expected to have risen by 5 percent. ”We use external equity managers for the majority of our emerging markets investments and for all our investments in frontier markets,” the fund said.

2015 Federal Budget: Matters Arising — Afrinvest

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he Nigerian Federal House of Representative on Thursday passed the sum of N4.5tn budget for the 2015 fiscal year with an increase of N135.4bn over initial proposal submitted in November 2014. In addition, the House has adopted an oil benchmark of US$53.0, daily oil production of 2.3mbpd, exchange rate of N190.00/ US$1.00 and fiscal deficit/GDP ratio of 1.1%.

Surprisingly, no provision for fuel subsidy was made in the approved 2015 Appropriation Act. A further review of the 2015 proposed budget shows a 4.3% increase in total expenditure to N4.5tn in 2015 from N4.7tn in 2014. In the same vein, capital expenditure dipped significantly by 50.3% from N1.1tn in 2014 to N0.6tn in 2015 despite the infrastructure deficit in the country.

In spite of the acclaimed plan of the Federal Government to reduce overheads, recurrent expenditure (non-debt) increased 5.6% from N2.5tn in 2014 to N2.6tn in 2015, accounting for 58.8% of the total expenditure.

Debt service now accounts for 21.2% of the total expenditure on the back of the persistence Y-o-Y increase in debt service (+33.9%). This will continue to be a sting in the tail for the government in coming years.

A further breakdown of the debt service shows that about N894.6bn and N59.0bn will be used for domestic and foreign debts respectively. Nevertheless, as a result of the rebasing of the GDP, fiscal deficit to GDP stayed flat at 1.1% in 2015.

Consequently, the new Government will be confronted with the challenge of

Technical hitch hampers transactions in Nigeria’s Bonds Market

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rade on local debt was stalled after the glitch affected central bank’s trading platform, traders said, adding that they were concerned the problem that started on Wednesday could run into next week, threatening bond settlement in the interbank, Reuters reported last weekend. “(There is) no trading currently going on in the market as a result of the unresolved technical glitch on the central bank’s platform,” one dealer said.

“We have seen fresh interest by some offshore investors, mostly a roll-over of matured funds and local pension, which has driven up demand for local debt before the glitch,” a senior traders said, referring to a technical fault that hit trading.

Overnight lending rates halved to an average 6 percent on Friday from 12.25 percent last week after central bank retired large matured bonds and treasury bills in the week, boosting liquidity in the market, traders said. However, the technical glitch that hit the CBN’s trading platform hindered major fund transfers and placement in the market.

“The market liquidity was boosted by repaid matured bonds and treasury bills worth about 806 billion naira (USD4 billion), but because of the technical fault, many traders were unable to transfer or place money in the market,” one dealer said.

implementing the 2015 budget in view of the current economic realities of lower oil proceeds. Meanwhile in anticipation that the Transition budget would likely become law before the eventual take-over by the new Government, the Buhari led incoming administration has highlighted avenues to increase the country’s revenue sources. As a result, the next Government has proposed to run a lean government whilst blocking the various revenue leakages.

Afrinvest, Nigeria’s leading finance and investment house, reasons that although, the execution of the 2015 budget may pose a challenge for the incoming administration, savings from the various leakages and cost reduction may go a long way in supporting the successful implementation of the 2015 budget.

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42 — Vanguard, MONDAY, APRIL 27, 2015

Agric

MAY: Nigeria’s month with history as Adesina seeks to lead AfDB

BY JIMOH BABATUNDE WITH AGENCY REPORTS

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he month of May is going to be a special year in the annals of Nigerian history as General Muhammadu Buhari will be sworn in as the President of the country having defeated the incumbent, President Goodluck Ebele Jonathan.

In the same month of May another Nigerian, Dr. Akinwunmi Adesina, the current Minister of Agriculture and Rural Development, might be elected the President of the African Development Bank as the financing institution is electing a new president to replace the incumbent President Donald Kaberuka.

Dr. Adesina, who has gotten the support of General Buhari, will be slugging it out with a number of toplevel finance officials in the region who have equally announced their interest in running for the position.

Other candidates short-listed for the post along side Dr. Adesina,are Ethiopia’s Finance Minister, Sufian Ahmed; Cape Verdean Finance Minister, Cristina Kamara; current Vice President of the Islamic

Development Bank, Birama Sidibe and Chad’s Finance Minister, Kordjé Bedoumra.

According to the AfDB Board, the selection of the most eligible candidates to succeed President Donald Kaberuka was done by a Steering Committee of the Board of Governors at a meeting held in Abidjan on 11 Feb. Kaberuka is currently serving his second five-year term as AfDB President.

The out going AfDB President, Donald Kaberuka, many watchers of the financing institution said has taken the bank to an enviable height that anybody coming must be able to do more .

It is here that Dr. Adesina Akinwumi wealth of experience come in to to tackle some pressing challenges in AfDB as many believe that the bank faces competition for influence in Africa from emerging players like China.

Realising the expectation from the bank, Adesina has promised Africa a bank that will increase private sector lending to curb widening inequality on the continent.

“I see a bank that needs to do more

in the private sector,” Adesina said.

He would focus on “new financial instruments that can tap into these pools of money, give us lower interest rates and long-term capital that Africa can use towards development.”

He also promise to focus the bank’s own lending on projects that have trouble attracting private investors, such as water and sanitation in the poorest countries. The African Development Bank’s private sector lending was about $2.1 billion in 2013, up from $250 million in 2005, he said.

If elected, increasing access to energy through infrastructure expansion would be his top priority, followed by growing private sector jobs and industrialization, youth employment, reviving rural economies, and regional integration, he said.

For those who have followed Dr. Adesina’s career will not doubt his capacity to deliver when the chips are down.

Adesina was AGRA’s Vice-President for Policy and Partnerships for five years, before moving to his current role as Nigerian Agricultural Minister.

While at AGRA, Akin Adesina helped

farmers and agro-dealers in Ghana, Kenya, Mozambique and Tanzania access over US$100 million in finance through the use of innovative financing instruments.

He also worked to design the risk sharing facility for the Central Bank of Nigeria, which leveraged US$3.5 billion of lending from banks to agricultural value chains.

In 2011 Adesina become the Nigerian Minister for Agriculture, and has implemented a range of measures which have resulted in significant changes in Nigeria’s agricultural sector.

One of these measures is his efforts to make Nigeria self-sufficient in rice production.

By encouraging greater involvement of private seed companies into the rice industry and providing farmers with subsidized access to seed and fertilizer, since 2012, rice production has increased by seven million tons, while net farmer incomes have risen by $2.5 billion. Nigeria is on-track to be self-sufficient in rice production by 2018.

Adesina has also been commended for transforming the Nigerian fertilizer industry by improving transparency into the supply and distribution of fertilizer, by ending the government’s role in the buying and distribution of seed and fertilizer.

Aviation Aviation Cabotage will save N200bn annual revenue loss — Agbakoba

By LAWANI MIKAIRU

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he introduction of Aviation Cabotage law will save Nigeria 200 Billion Naira annual revenue lose and stimulate the development of indigenous capacity and facilitate the pursuit for deep local participation in the aviation sector. This is the view of Dr Olisa Agbakoba, a Human right Lawyer, Aviation and Maritime Consultant.

Agbakoba made this view known during a seminar on setting aviation agenda for incoming government of General Muhammadu Buhari. He said the dwindling oil revenue has made it absolutely necessary for the incoming administration to focus on Aviation sector for economic diversification. And this, according to him, calls for an Aviation Sector Action Plan (ASAP). Cabotage law will compel the aviation sector to reserve certain percentage of the market for local airlines and stakeholders.

Agbakoba said “With about 170 million persons and regional economic potentials, 22 airports, a growing mass of flying middle class, Nigeria’s aviation requires massive C M Y K

revamping in terms of infrastructure, legal, institutional and administrative frameworks. “ “The Economic Benefits of Aviation and Performance in the Travel & Tourism Competitiveness Index Report 2013 states that the aviation industry supports tourism and international business by providing the world’s only rapid worldwide transportation network. Airlines transported 2.8 billion passengers and 47.6 million metric tonnes of air cargo in 2011, connecting the world’s cities with 36,000 routes. By providing these services, the aviation industry plays an important role in enabling economic growth and providing various economic and social benefits.”

COMMISSIONING - from left Mr Ishaq Naalah, Assistant General Manager, Business Development, Medview Airline; Mr Christophe Penninck, CEO, BiCourteney, Aviation Services Ltd; Alhaji Muneer Bankole, MD/CEO, Medview Airline and Mr Akin Akinfemiwa, Group CEO, Forte Oil PLC during the commissioning of the new Boeing 737 - 400 Aircraft acquired by Medview Airline on arrival at the Murtala Muhammed Airport, Ikeja, Lagos on sunday.

Photo Lamidi Bamidele

Med-view partners Firstbank on e-payment

By DANIEL ETEGHE

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he Med-View Airline said it has signed a partnership agreement with First bank of Nigeria for online payment platform called “MasterCard Internet Gateway Service” (MIGS).This was contained in a statement signed by its Chairman, Alhaji Muneer Bankole and made available to aviation reporters on Thursday in Lagos

The statement noted that the service would enable customers with Master/ Visa cards to make payments online anywhere in the world.

According to the statement, this is to ensure that Med-View brings its service closer to its numerous clients who desire to buy their tickets online within the comfort of their home or offices without stress.

“This option of payment is in addition

to the Interswitch platform designed mostly for customers with Naira Master cards.

“And the book-on-hold platform where customers could walk into any bank in Nigeria and pay for their reservations made online.To achieve this, customer can make reservation online and choose the option “I want to pay with Master/ Visa card” when they get to the payment platform,” it said.

Vanguard, MONDAY, APRIL 27, 2015 — 43

Advertising & Promotions

The good and ugly sides of CSR Stories by PRINCEWILL EKWUJURU

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o doubt, companies are increasingly recognising the strategic importance of building business practices that create sustainable economies, environments and societies. In the business world, Corporate Social Responsibility, CSR is an indispensable tool for corporate legitimacy and competitive edge.

Even as Foreign Direct Investment, FDI, is a keenly pursued objective of developing nations, its quest has lead to multinationals having access to emerging economies and when they are eventually admitted, the companies do not live up to the CSR demands of their host communities.

In Nigeria for example, Shell Petroleum Development Company, SPDC, Mobile Producing, MTN, Airtel, British American Tobacco Company of Nigeria Foundation, BATNF, Glo DHL, Promasidor, Guinness, Dufil, Nestle Nigeria Plc to mention but few, had come up with some development programs in host communities through their various Foundations in order to maintain their social license to operate, with focus in areas such as health, education and community-building. Yet, when particularly oil companies like Shell, Mobil, Total and BATN attempt to implement a CSR agenda, they are regularly a target for social activism on issues of malpractice.

Likewise, the water of life project embarked upon by Guinness Nigeria Plc in parts of the country only ran for a few months. A check at some of the water sites in Ajegunle, Agege, Ogun state and other places showed that the sites are lying fallow, this according to residents was as a result inability of water to flow from the taps after commissioning and that since then Guinness have not

PRESENTATION: Barrett Kofi,Marketing Manager AGYA APPIAH BITTERS Company Limited;Samuel Ohemeng,Production Manager, with Andrews Akolaa, Acting CEO, and Joseph Ajah,Managing Director Strategic and Pratical Nigeria Limited, during the media presentaion of AGYA APPIAH BITTERS in Lagos. PHOTO: AKEEM SALAU.

returned to find out how the project is performing.

Speaking, Franklin Emejo, a resident of Mba street in Ajegunle, said water stopped flowing few months after it was commissioned. The story was the same in Agege area for the Guinness water of live project.

In Ijebu-Ode consumers pay a token to fetch the water, the money Guinness said is to maintain the project.

The bore hole constructed by Dufil Prima Foods, owners of the Indomie brand had the same fate befall it as residents in Orile- Iganmu say water stopped flowing longtime ago, likewise in other parts the company cited the project.

Speaking, Andrew Ojei, a resident of Orile -Iganmu, said that some of the CSR activities are shams. His words, “it is a reap off in terms of tax reduction from the federal and internal revenue offices. It’s a reap off in terms of deceit of the citizenry who associate themselves with the brands.” Even though multinational investors or FDI inflow into multinationals or transnational corporations with the financial strength of some corporations larger than that of many developing countries; are expected to meet their CSR

Communities should be consulted before carrying out their activities, a community may require school but construct water which may not be their immediate need requirements, companies still remain adamant to plight of their operating communities.

A Non Governmental Organization, NGO, Water warehouse Nigeria official, Ngozi Maduekwe, said that the major problem is that most of the CSR projects are not the need of the people. “Communities should be consulted before carrying out their activities, a community may require school but construct water which may not be their immediate need, they may require road and you build them clinic, these are some of the problems associated with what she called unplanned CSR initiative.”

ICM rewards loyalty

By MILDRED IBRAHIM

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inners have emerge from the Ikeja City Mall Promo rewarded loyalty at its promo tagged: ‘Easter Eggtravaganza.’ The promo which was in three folds, first was the ‘Easter Bunny Promo’, to participate, shoppers dropped receipt of N5,000 purchase with their contact details at designated boxes placed at three entrances of the mall.

In a raffle draw, winners won gifts donated by participating stores. The stores include Mr Price, Cold Stone, Bheerhugz Cafe, Sports World, Nike, Swatch, Da Viva, black|Up, Bruno’s Place, Jack & Jones, Seven Eagle Spur Restaurant, Harmony, V

Shop, Shoprite, Mango, Enzzo, Diva Accessories, Kidz Country, KFC and much more. Six winners emerge from this promo.

Another section of the promo was the treasure hunt, called-’The Easter Bunny Treasure Trail’ where shoppers had to search twitter, Facebook and the Ikeja City Mall blog for clues about participating tenant stores to help them locate treasures(The Easter Eggs) strategically positioned inside participating stores. The clues were uploaded on the eve of Easter Sunday to ensure fairness in the whole process.

Only shoppers who purchased items worth N5,000 on Sunday were automatically qualified for the second phase of the promo.

However, even when these multinational corporations make so much profit, giving back to their host communities through the concept of CSR becomes a problem, asserts Igwe Odinaka, Head, Research at Orlick Communications. He stated that most of the multinationals fail to live up to laws governing their operations and activities, with regards to giving something back to society.

For example, Coca-Cola is mandated by USA law to contribute no less than $100 million annually towards the progress of Hollywood, the American movie industry. But in Nigeria, no such initiative is available for Nollywood.

It was the late Senator Uche Chukwumerije who tried in this capacity to institute the 1 percent contribution for CSR was frustrated along the line by some the multinationals.

Even though some CSR activities are riddled with deceit and controversy, their some companies that have performed well in terms of giving back to the society.

While Nigerian Breweries Plc has run a couple of reality TV shows and talent hunt events such as AMBO box office, rested Music Quest, these cannot be compared to Heineken’s support for the British Film industry as seen by the millions of pounds it pumped into Skyfall, a James Bond movie. Odinnaka retorted But Adelaja Toki of Toki Mabogunje and Company, argued that a company will generally be more proactive in its country of origin, when it comes to living up to its obligations. Its CSR activities in other countries would be only a small percentage of its profit, when it looks at the huge tax it pays on revenue it generates, as well as remunerations to the local staff.

Thus, the establishment of a business integrity movement and the subsequent coming into being of the Convention on Business Integrity, CBI with the support of leaders of thought like Dr. Christopher Kolade, Dr. Michael Omolayole, Mr. Akintola Williams, and Prof. Pat Utomi, among others.

CBI has as its objective, the promotion of ethical business practices, transparency and fair competition in the private and public sectors, amongst other things. Living up to its billing, the business integrity movement has since won converts among illustrious Nigerians and institutions.

Guinness Nigeria Plc, Access Bank, GTBank, MTN Nigeria Communications Limited, and SAP Nigeria, among others are signatories to CBI which aims to move the Nigerian business community towards a state of visible zero tolerance for corruption, and higher CSR performance by companies, yet this is lacking.

IID award produces 21 winners

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ith 21 kids that so far have emerged in the Indomie Independence day, IID award, search for the winner of the 8thedition has begun.

The Group Managing Director of Dufil Prima Foods Plc, Deepak Singhal, owners of the Indomie noodles brand, represented by Tope Ashiwaju, Public Relations/Event Manager of the company, while presiding over the press conference to usher in the th 8 edition of the heroes award, said the 2015 IID award where three kids who have braved the odds and displayed exceptional courage in the face of daunting challenges to save a situation would be selected, recognized, rewarded and then celebrated for their act of heroism.

The GMD went on to say that the three kids to be selected would have demponstrated remarkable acts of great courage despite the unfavourable conditions they found themselves.

According to him, “so far 21 children have received the awards and have their named engraved in gold in our hall of fame as heroes of Nigeria.”

We are about to start the process of discovering another set of heroic children," he stated.

Unilever increases ‘Knorr Taste Quest’ prize to N5m

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norr Taste Quest, an annual cooking competition organized by Unilever Nigeria Plc, has increased its Star prize to N5miilion.

The company disclosed this when the Brand Building Director, Foods, Mrs. Nsima Ogedi-Alakwe, spoke at the third edition press briefing of the competition tagged: ‘Master class,’ where she stated that the winner will get N5million.

According to her, the cash prize was premised on public opinion, while stating that with the amount the winner can still get a car of his or her choice.

Aside the N5million, the winner will receive kitchen equipments and cartoons of Knorr seasoning, she stated.She also noted that the prize of N1million and N500,000 will be won by the first and second runner-up respectively.

Ogedi-Alakwe, who said that registrationis on via

www.knorr.ng.

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44 — Vanguard, MONDAY, APRIL 27, 2015 Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

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igerians have become familiar with the irregular cycles of stable supply and intermittent scarcity in the market for various products, ranging from essential commodities, such as sugar, bread and salt to the equally important market for petrol and kerosene. Expectedly, prices of these items spiral whenever there is a supply deficit, while prices will collapse when supply levels are once again restored.

Indeed, in a free market, prices of goods and services faithfully follow this pattern; curiously, however, the money market in Nigeria (as well as in several other African countries) is one of the few exceptions, where a commodity (in this case money) which is alleged to be constantly in surplus, becomes increasingly expensive and costs well over 20% to borrow!

For some unknown reason, the management of these Economies remains in denial of the causative link between the ever-sliding rates of their domestic currencies against the dollar and the unceasing, unbridled, deliberate domestic creation of excessive cash surpluses by the respective monetary authorities. In the Nigerian experience, for example, the uninhibited increase and failure to successfully control money supply, made the attainment of a stronger Naira exchange rate impossible, even, when we “consolidated” best ever foreign reserves of about $60bn with extended imports payments cover.

Consequently, what has become an abiding feature in Nigeria, is the constant spectre of deliberately created domestic cash surpluses chasing rations of dollar

When $ became cheaper in the black market supplies, which are controlled by the Central Bank.

Clearly, wherever products are rationed, an insidious black market which will recycle scarce supplies for resale at higher prices will evolve; ultimately the black market price becomes a product of the extent of supply shortage and the number of ‘distributors’ in the chain before it reaches the final consumer. What is clear, nonetheless, is that a black market generally compromises supply sources and distorts market distribution to instigate higher prices and excessive profiteering in the sale of any scarce commodity.

Similarly, in the context of Nigerian’s foreign exchange market, the inability of our monetary authorities to successfully modulate the balance between Naira and dollar supply, in favor of the Naira, has led to an artificially induced dollar scarcity in a clearly vibrant and inexplicable government funded black market.

Consequently, in consonance with the characteristic feature of higher prices whenever there is market scarcity, it would therefore be an aberration if the black market price of the dollar ever falls below the official or interbank exchange rate.

Nonetheless, such an apparent price aberration, unexpectedly, transpired in the recent past in our own foreign exchange market!

Indeed, barely a week before the Presidential polls, market watchers noted that the black market dollar exchange rate had fallen from above N220=$1 to between N212 -

N215=$1; furthermore, between the weekend of the presidential polls and the Easter Holidays, the Naira further strengthened on the black market to below N210, while the official rate remained steady at about N197 = $1.

The real drama, however, came in the last couple of days before the state elections, when the Naira exchange rate in the black market strengthened below the official rate to sell, reportedly, for as low as N195=$1! The unexpected appreciation of the Naira in the black market was interpreted in some quarters as an expression of

The question, however, is whether or not such public sentiments are strong enough to make any black market forex dealer offload their stock of dollars at prices below the cost of purchase public confidence that Gen Buhari will ‘make’ the Naira stronger when he assumes power.

The question, however, is whether or not such public sentiments are strong enough to make any black market forex dealer offload their stock of dollars at prices below the cost of purchase; if not so, what then could have happened?

Well, a fall back to the solid ground of the law of supply and demand may provide us with a plausible answer. Thus,

Business & Economy

No plans to extend deadline for capital market operators — SEC boss

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he Securities and E x c h a n g e Commission (SEC) said that Sept. 30 deadline for new minimum capital requirement for market operators would not be extended.

The acting Director-General of SEC, Mr Mounir Gwarzo, said in Lagos that the commission had no plans to extend the deadline.

“The deadline has come to stay,” he said adding that the capital requirement would be implemented vigorously. The deadline is still September and progress is being made, C M Y K

the level of compliance has gone up but we are determined to keep to that September. 30, no shaking, no going back. There is no going back and we are happy the way we are receiving responses from all the capital market operators,” Garzo said.

SEC had on December. 19, 2013 issued a new capital requirement for capital market operators with December. 31, 2014 as deadline for operators to recapitalise. SEC in response to numerous representation from the capital market community, extended the recapitalisation deadline

to September. 30, 2015. The capital market regulator had earlier increased the minimum capital base for broker/dealer by 329 per cent from the existing N70 million to N300 million.

Broker, which currently operates with capital base of N40 million, will now be required to have N200 million, representing an increase of 400 per cent.

The minimum capital base for dealer increased by 233 per cent from N30 million to N100 million.

the Naira could only become stronger, if the monetary authorities significantly increased the supply of dollars, while keeping constant or actually also reducing Naira supply and demand. Well, there is no overt evidence that there was any significant unusual reduction in money supply, during the period in question, although the extended Easter Holidays may have, despite the availability of ATMs, reduced free access for huge movements of Naira for large transactions. So, if stronger Naira exchange rate in the black market was not the result of a significant difference in the Naira supply side of the equation, then we may turn to the dollar supply side for an answer. In otherwords, was there any apparent increase in dollar supply or did the hoarders of dollars decide to simply offload their holdings below cost price as part of their celebration of Muhammad Buhari’s victory?

There is nothing to suggest that CBN spiked its dollar supply to Bureau de Change during this period; if anything, the CBN has continued to intermittently reduce the amount of forex allocations to BDCs because of supply challenges.

Conversely, there were unconfirmed media reports of dollar bounties, which were deployed to attract votes throughout the federation by the political class in the last eight weeks and particularly in the two weeks between the Federal and State elections.

Evidently, the compact value of the dollar made it the currency of choice for easy movement for the job that had

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

to be covertly done to improve the chances of victory at the polls.

The actual value of dollars deployed for this purpose is not known, but it was certainly large enough to temporarily overwhelm subsisting Naira supplies with BDC operators to make the Naira relatively scarce against the dollar. It was consequently no big surprise therefore, that the heavy inflow of dollars into vibrant black market centres in Lagos, Kano, Ibadan, Port Harcourt, Abuja etc. quickly strengthened the Naira exchange rate below the official N197=$1.

The ready availability of a significant Cache of dollars for election campaigns is probably an indication that CBN’s attempt to reduce the menace of bulk importation of dollars since 2013 must have been an abysmal failure.

Clearly, the sales of dollars below the official interbank rate is probably also reflective of the usual bargain prices accepted for prime quality stolen goods. Thus, if the CBN did not suffocate the black market with dollar supply, then the political class which, presumably temporarily did so, did not care much about receiving market value for the dollars shared, probably because, in the manner of stolen property, they did not have to put in any shift to acquire the dollars they liberally spread amongst their supporters.

Expectedly, nonetheless, the dollar surplus was unsustainable and the Naira now once again exchanges in the black market for over N220=$1.

SAVE THE NAIRA, SAVE NIGERIA!!

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

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Media/Marketing E-Commerce Industry Micro Finance Graphics Department

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