Financial vanguard september 02 2013

SEPTEMBER 2 ,

2013

CBN compels banks to buy dollars to halt naira depreciation

BY BABAJIDE KOMOLAFE

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he Central Bank of Nigeria (CBN) on Friday compelled banks to buy dollars at N160.5 per dollar, in a bid to halt the four day depreciation of the naira at the interbank foreign exchange market.

The unusual intervention forced the interbank exchange rate to N162.05 per dollar on Friday from N163.7 per dollar on Thursday, translating to 165 kobo appreciation for the naira.

This was in sharp contrast to the steady depreciation suffered by the naira from Monday to Thursday. From N161.47 per dollar the previous week, the naira depreciated by 183 kobo to N163.7 on Thursday.

Miffed by this trend, and the likelihood that it would persist, the CBN entered the interbank market selling dollars to banks. Investigation revealed that the intervention was

11.30

-0.20

2,454.00

-56.00

16.35

-0.04

conducted between 1pm and 1.30 pm, just before the market closed by 2pm.

Foreign exchange dealers who confirmed this development to

Vanguard, under condition of anonymity, said the apex bank came in heavily, and practically forced dollars on banks. According to them,

unlike previous interventions, where the apex bank usually request for banks’ two way exchange rate quote, and sell to banks with attractive exchange rate, this time, the apex bank just called each bank, and sold specific amount of dollars at specific Continues on page 22

From Left: Executive Governor, Lagos State, Mr. Babatunde Raji Fashola; Managing Director and Chief Executive, Guinness Nigeria Plc, Mr. Seni Adetu and Governor, Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi at the Johnnie Walker Blue Label/CNBC Africa All Africa Business Leader Award for West Africa held at the Intercontinental Hotel, Victoria Island...Wednesday 28-8-2013. PHOTO; Kehinde Gbadamosi

107.85 -0.95 107.62

-1.18

CURRENCY BUYING CENTRAL

SELLING

DOLLAR 154.76 155.26 155.76 STERLING 239.8316 240.6064 241.3813 EURO 204.8249 205.4866 206.1484 FRANC 166.3371 166.8745 167.4119 YEN 1.5745 1.5745 1.5847 CFA 0.294 0.304 0.314 WAUA 233.8924 234.648 235.4037 RENMINBI 25.2879 25.3701 25.4522 RIYAL 41.2627 41.396 41.5294 KRONA 27.4543 27.543 27.6317 SDR 234.5078 235.2655 236.0231

CBN Exchange rate as at 30/08/2013

Oil edges lower as UK lawmakers reject Syria attack

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rent crude oil fell on Friday in choppy trading as fears of Middle East supply disruption receded after Britain said it would not join any military action against Syria. Oil prices were still on track for their biggest monthly gain in a year, with Brent up more than 6 percent in August, after unrest cut output in Libya by around 1 million barrels per day (bpd) and production fell in Iraq, Nigeria and elsewhere.

Upward momentum for prices

appeared to have stalled after Britain’s parliament defeated a proposal by Prime Minister David Cameron that could have led to UK involvement in an attack on Syria. The decision was a setback for U.S.-led efforts to respond to Damascus over the alleged use of chemical weapons against civilians, although U.S. officials suggested President Barack Obama would be willing to proceed with limited actions against Syria even without specific promises of allied

support.

Oil prices briefly rose on news that U.S. Secretary of State John Kerry is expected to make a statement about Syria, a U.S. government source said.

“I think the U.S. has been fairly resolute in what they’ve been saying, so I guess Kerry’s going to map it out this morning,” said Andy Lebow, vice president at Jefferies Bache in New York. It’s definitely a loose market Continues on page 22 C M Y K

22 — Vanguard, MONDAY, SEPTEMBER 2, 2013

Cover Story

The Basic Guide to Starting Your Business Part 5

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Minister of Tourism Culture and National Orientation Chief Edem Duke, and Director of Tourism, Johnson Odekina at the 20th General Assembly of UNWTO hosted by Zambia and Zimbabwe in Livingstone, Zambia.

CBN compels banks to buy dollars to halt naira depreciation Continued from page 21 exchange rate, ranging from N160 per dollar and N160.5 per dollar.

Although, the depreciation of the naira commenced on Monday, it aggravated on Thursday as the interbank rate rose from N162.275 per dollar to N163.7 per dollar, translating to 162.5 kobo depreciation.

Foreign Exchange Dealers told Vanguard that, the market expected the CBN to intervene on Thursday and as a result most banks sold significant portion of their dollar stock, with the

expectation of replenishing it with cheap dollars from the CBN. But the apex bank did not intervene as expected on Thursday, and this left many banks with vulnerable dollar positions. This prompted flurry of demand, which triggered the depreciation of the naira at the close of business on Thursday.

Dealers however expressed satisfaction with the intervention, saying it is good for the market. “At the end of the day, everybody made money, and the market is stabilised”, a dealer, who spoke under anonymity, told Vanguard.

But a bank executive

described the stability as artificial. Speaking he said, “It would have been good for the CBN to stop artificial fixing of the exchange rate and allow the naira to find its true level. But the action of the apex bank is necessary for economic security. If the CBN allows the naira to depreciate by ten per cent, the first thing that will happen is that prices will go up, the pump price of petroleum products will also rise, and this will further aggravate the rise in prices, the result would be mass protest across the nation. So we are buying economic security by fixing the naira artificially.”

Oil edges lower as UK lawmakers reject Syria attack Continued from page 21 that’s just headline-focused right now.”

Brent crude for October fell 21 cents at $114.95 a barrel by 10:59 a.m. EDT (1500 GMT), after earlier reaching as low as $113.63. U.S. crude for October delivery fell 70 cents to $108.10, after hitting a low of $106.75.

“The pendulum is now swinging back in the direction of declining risks,” said Eugen Weinberg, global head of commodities at Germany’s Commerzbank.

“The market priced in too much of a risk premium, so prices are coming down,” he said.

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The U.S. Energy Information Administration said this month global supply disruptions reached 2.7 million bpd in July, with analysts saying outages have risen since then.

Libya’s crude exports have shrunk to just over 10 percent of capacity from three ports, out of a possible nine, as armed groups have tightened their grip on its major industry. Maintenance in Iraq in September is also expected to cut supplies.

Increased production by Saudi Arabia and the possibility of an emergency oil stocks release by the International Energy Agency (IEA) could offset the

disruption.

Supply from the Organization of the Petroleum Exporting Countries has averaged 30.32 million barrels per day (bpd), down from a revised 30.50 million bpd in July, a Reuters survey of shipping data and sources at oil companies, OPEC and consultants found.

The U.S. Energy Information Administration said on Thursday oil markets were well supplied, despite a recent spike in prices. The EIA also released a report saying global spare oil production capacity, excluding Iran, in July and August was slightly higher than during the same period last year.

cannot be over emphasized.

Entrepreneurs are leaders, prime movers, authors, pacesetters, investors and risk bearers. They are usually pioneers who strategize and formulate the rules for the general interest of the enterprise for others to follow.

An entrepreneur conceives an idea and brings it to life through systematic and wellarticulated planning, driven by the passion and the need to achieve uncommon things.

An entrepreneur not only assumes responsibility and the risk for a business operation with the expectation of making a profit, the entrepreneur also generally decides on the product, acquires the

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WHO IS AN ENTREPRENEUR? here are many differing views on what makes someone an entrepreneur and what an entrepreneurial venture is. The term itself is believed to have originated from French, coined by a French economist, Jean-Baptiste Say, in about 1800, who defined an entrepreneur as “one who undertakes an enterprise , especially a contractor, acting as intermediary between capital and labour”. But it was first defined in English by the Irish economist Richard Cantillon, as” a term applied to the type of personality who is willing to take upon herself or himself a new venture or enterprise and accepts full responsibility for the outcome”. The definition of entrepreneur is not limited, as various writers and world renowned entrepreneurs have given it various meanings. For instance, one of the great motivational speakers and writers of our time Robert Kiyosaki, in his book “Retire Young, Retire Rich” defined an entrepreneur as “someone that sees an opportunity, puts together a team, and builds a business that profit from the opportunity ”. As you can already see, the word entrepreneur is inexhaustible.

According to the MerriamWebster online an entrepreneur is “one who organizes, manages, and assumes the risks of a business or enterprise”. A more detailed definition given by Daile Tucker, an entrepreneur herself, who in her own words describes an entrepreneur as “a person who has decided to take control of his future and become self employed whether by creating his own unique business or working as a member of a team”.

Something that keeps coming up about entrepreneurs is their ability to see opportunities and make the most of it, not minding the risks they will undertake.

Entrepreneurs are generally in competition with themselves and believe that success or failure lies within their personal control or influence. So it is very important for you, when starting a business, to be sure that you can identify opportunities, make the most of them and have the wherewithal to thrive even in the midst of risks and unforeseen circumstances and that is why carrying out a self analysis

Entrepreneurs are leaders, prime movers, authors, pacesetters, investors and risk bearers.

They are usually pioneers who strategize and formulate the rules for the general interest of the enterprise for others to follow.

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facilities, and brings together the labour force, the capital and production materials.

Simply put entrepreneurs are people who choose to see positivity where negativity abounds. Bear it in mind, however, that if a business succeeds, the entrepreneur reaps the reward of profits; on the other hand, if it fails, he or she takes the loss.

Successful entrepreneurs are not perfect people but are brilliant, productive, and articulate; it takes both the heart and the head to successfully run an entrepreneurship. Also note that an entrepreneur is an inspirer, a motivator, a coach, a great listener, attentive, consistent and enthusiastic.

A lot of people go into business for the sole reason of making money; this is not a good idea. It’s not a good idea because the main ingredient for success is missing.

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 23

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HE Minister of Finance, Dr. Ngozi Okonjo-Iweala, while inspecting a cold rolling mill facility in Ilorin last week was reported to have said that the current regime of interest rates in the country was too high for the productive sector of the economy. She described the 20 percent lending rate being charged by commercial banks on loans obtained by industries as outrageous. The minister stated this in Ilorin, Kwara State, during her pre-commissioning visit to the ultra modern cold rolling steel mill complex of the KAM Industries, Ilorin.

The statement coming from her, the Minister of Finance and Coordinating Minister of the Economy is serious enough to call for soul searching on the part of government key functionaries. For several decades now, interest rates unfortunately, this seems not to per cent. Given the structure of have always been a problem in be the case. Dr. Okonjo-Iweala Nigerian banks that they run on the Nigerian economy. There is the Chairperson of the 90 days deposit and the very has been no government, since Goodluck Jonathan high cost of running the the late 1980s when interest administration’s economic institutions, it is fairly difficult rates were deregulated, that has management team. It is obvious for them to lend long-term as not complained about high that issues of fiscal and well as not charge high interest interest rate in the country. monetary policy conflicts are not rate to cover their cost, as doing So far, none has been able to resolved at the economic so will lead to mismatch of address the issue. management team weekly funds. The CBN has not helped It is certainly shocking to the meetings. The Central Bank matters. In recent times, in an financial sector and those, who Governor, Sanusi Lamido attempt to fight inflation, it has are literate in economic matters Sanusi, in his usual candour unwillingly withdrawn about to hear her voice out her

Is interest rate another ghost hunting Nigeria?

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frustration in the open. That interest rates are too high in Nigeria for the development of the real sector is no longer news, what will be news is if interest rates drop to a single digit for investors to access credit easily.

As an economist and a development banker, Dr. Okonjo-Iweala knows too well that high level of interest rate is detrimental to the economy.

It is surprising however, that she has to wait until she saw what an indigenous entrepreneur has done in the face of harsh economic environment for her to say that the current regime of interest rate in Nigeria is unsustainable.

The expectation of Nigerians, when she was announced as the minister of finance and the coordinating minister of the economy, was that she would use her vast experience at the World Bank as a development economist to harmonise monetary and fiscal policy in this government.

But

Some other companies have had to close down their factories. As a result of this poor performance of the industrial sector, many workers have been retrenched and this has further aggravated the unemployment problems in the country.

has made it clear to those who care to listen that the mandate of the CBN is to manage inflation. For this reason, the CBN monetary policy committee has kept monetary policy rate at 12 percent in the bid to tame perceived threat of inflation. Monetary policy rate is the barometer that swings the direction of interest rate in an economy.

Banks are allowed to charge about four percent above the policy rate. Here already, the prime lending rate will be 16

too wide for comfort. This is where policymakers have failed yet again. The government has not asked the banks why they pay as low as three per cent on deposit and charge borrowers as much as 21 percent. Is government not supposed to protect the interest of depositors? Are the banks the ones that make the policies?

What then is the role of the CBN in regulating the banks, just to fight inflation and every other thing can go haywire?

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N1trillion from the banks being 50 percent of public sector deposit in banks. This has created some scarcity of funds.

Going by the law of supply and demand, the price for money will go up when available funds cannot go around those who need it. Here is where government has been taking undue advantage, because it can afford to borrow at any cost.

Certainly, the banks have not helped the economy either. The gap between deposit rates and lending rates has always been

drop in interest rates will be a great relief to the ever ailing Nigerian economy.

This is the consensus of bankers, industrialists and economists. The question has always been how do you achieve this in Nigeria? The government is aware that a drop in interest rates will be a great relief to customers. Local investors are having difficulty with the current rates of interest.

It has scared off would-be investors to approach the banks for loans. Yes, if the situation is allowed to continue much longer, banks may face a situation where there is lot of idle cash balance in their vaults.

The current interest rate arrangement has succeeded in realignment of banks’ portfolio.

Big customers, who can negotiate favourable terms of interest on their deposits, are known to arm-twist banks and

Cover Fisheries contribute 5% to GDP, says official

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he Federal Department of Fisheries (FDF) on Friday, said the fisheries subsector contributes about five per cent to the National Gross Domestic Product (GDP) through the export of shrimps.

Ms Foluke Areola, the Acting Director of FDF, told newsmen in Lagos that the sub-sector was a major contributor to food security.

“This sub-sector also earns foreign exchange for the country as well,” she said.

Areola said the sub-sector also contributed significantly to employment-creation, incomegeneration, while it is also a source of raw materials for the

food and animal feeds industries. The contributions of the fisheries sub-sector to Nigeria’s economy and the ongoing Agricultural Transformation Agenda is very

significant. The fisheries subsector contributes about five per cent to the GDP and this is significant through the export of shrimps.

“It contributes to national

food security, employmentcreation, income-generation, poverty alleviation and foreign exchange earnings,” she said.

Areola said that the subsector generated an average

move money out of current account to call or time deposit accounts. This is what is encouraging Ministries, Departments and Agencies of government to fix their allocations as deposit for the “oga at the top” to earn interest on. This is why many top government functionaries do not see any need to address this issue.

The reality is that high interest rates coupled with the falling naira has really not been in the interest of the Nigerian economy. In real terms, the downturn in the Nigerian economy which began more than 20 years ago has worsened. The industrial index, inflation, unemployment and idle capacity in industries bear witness to the bad state of the Nigerian economy. Capacity utilisation has fallen drastically from about 56 per ent to 45 percent. In some sectors, it is as low as 30 percent. In the first quarter of this year, sales volume of most companies had fallen and many companies are experiencing cash flow problems.

Some other companies have had to close down their factories. As a result of this poor performance of the industrial sector, many workers have been retrenched and this has further aggravated the unemployment problems in the country.

The consensus is that a drop in interest rates will reduce the cost of borrowing and thus production cost. This, it is believed, will motivate domestic investment and push the economy towards growth. This will not be achieved by mere wishes. It requires conscious efforts by all economic agents in Nigeria, Madam Minister.

of about 50 billion US dollars (about N8 trillion) annually through shrimps export. “Over the years, on the average, we have been exporting shrimps worth 50 billion US dollars annually. Its enormous, and it is a lot of money for a country,” she said.

Industrialisation: MAN seeks support of stakeholders

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anufacturers Association of Nigeria (MAN) on Friday called on government and other stakeholders to work for the rapid industrialisation of the economy. The Chairman of MAN, Dr Michael Daramola, made the call at the Annual General Meeting of the South-West Zone of the association held at Ikogosi

Warm Spring Resort in Ekiti.

He said growing the manufacturing sector was fundamental to sustaining economic development.

“The manufacturing sector remains the soul of every economy because it creates jobs, improves living standards and helps to grow domestic wealth, especially when they are export- driven.

A strong manufacturing base is expected to also help to prevent or minimise huge import tendencies. No major nation has managed to transform itself from a poor nation to a rich nation by relying solely on import of raw materials without a vibrant industrial sector,” Daramola said. Also speaking, the guest speaker, Prof. Sunday Otokiti,

said that significant effort must be placed on manufacturing for the country to achieve its objectives.

Otokiti, in his lecture entitled, “Re-Evaluating Manufacturing Potentials in South-West Nigeria said: Manufacturing has proved to be a driver and core instrument adopted by the developed countries.

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24 — Vanguard, MONDAY, SEPTEMBER 2, 2013

Business & Economy BRIEFS Diageo’s ‘JW Gold Reserve’ enters market

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IAGEO Brands Nigeria has introduced Johnnie Walker Gold Label Reserve, dubbed “the celebration blend” into the Nigerian market.

Johnnie Walker Master Blender, Jim Beverage, was on hand at the unveiling event to combine a selection of hand-picked, premier whiskies to create a bold blend of intense flavours.

Speaking at the launch, General Manager, Diageo Brands Nigeria, Mr. Felix Enwemadu, said, “We are excited to introduce Nigeria to Johnnie Walker Gold Label Reserve – a whiskey that turns special moments into legendary occasions. This whiskey appeals to a stylish, discerning set, who enjoy celebrating life’s milestones.

Our Golden Reserve is the ultimate toast to Nigeria’s celebratory spirit: a bold, smooth and complex blend.”

“The “Gold” in the whiskey’s name refers not only to the hue of the drink, but to the prosperous history of the blend’s malt supplier. The Clynelish Distillery’s water source flows from the Kildonan hills, where gold deposits were discovered in the 19th Century, meaning that gold is at the source of this premier whiskey, he retorted.

Continuing, he said: “Gold is more than just a colour, it is a testament to success and a reason to celebrate. Our iconic blend is set to be a great triumph in the Nigerian market, where a premium, international spirit was needed,” Enwemadu added.

Johnnie Walker Gold Label Reserve is part of the super deluxe range of Johnnie Walker whiskies, and marks the continued evolution of the brand.

The entrance into the Nigerian market provides consumers with a compelling option when it comes to choosing a celebratory drink.

Aganga reiterates FG’s commitment to reducing cost, time of doing business T

HE Minister of Trade and Investment, Mr Olusegun Aganga, has reiterated the Federal Government’s commitment to reduce cost and time of doing business in the country. Aganga said this at the opening ceremony of the Lagos-Kano-Jibiya (LAKAJI) Agricultural Growth Corridor Investment Summit

in Abuja, organised by the United States Agency for International Development (USAID).

“For the first time in the country’s 53-year history, the power sector has been completely privatised. And as you are aware, we already have a Memorandum of Understanding (MoU) for

Frrom left: Professor Olukemi Odukoya, Dean, Faculty of Pharmacy, University of Lagos; Dr lolu Ojo, National Chairman, Association of Industrial Pharmacists of Nigeria; Professor Fola Tayo, Pro Chancellor and Chairman of Council, Caleb University and Pharmacist Olumide Akintayo, President, Pharmaceutical Society of Nigeria during the launching of 2 million Naira research grant by AIPN to Pharmacy faculties of Nigerian Universities. Photo by Lamidi Bamidele.

Illegal exportation of kola nuts thrives, says association T HE Kola Nut and Bitter Kola Marketers and Exporters Association of Nigeria have raised alarm over the existence of illegal exportation of the products.

President of the association, Mr Adebayo Babadara, told newsmen in Abuja that such exporters used channels that were robbing government of much needed revenue.

Babadara said that Nigeria produces over 70 percent of global kola nuts and bitter kola output.

“The revenue accruing to the government from the

exportation of the nuts is not at par with their local production volume. We call on government to put control measures in place to check illegal exportation of these important medicinal and economic crops.

“For the government to earn more income from these crops, we will like to work with the government in this regard.”

The president also called on the government to support local production and modern processing of the nuts to boost the country ’s economy. He

GOL’s Lord’s dry gin wears originality seal

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RAND Oak Limited, GOL, has repackaged the Lord’s Dry Gin brand, giving it a ‘Seal of Originality,’ even as it unveils a new campaign: Lord of the City.

The originality seal which is endorsed by NAFDAC ensures that consumers are able to confirm the originality of the new Lord’s Dry Gin during C M Y K

another 10,000 megawatts of power plant.” The LAKAJI initiative, USAID’s new activity, hopes to build on the U.S. previous support to improve trade efficiency in Nigeria. It also hopes to support trade facilitation, transport and agribusiness investment intervention and is being implemented through

purchase.

Speaking at the unveiling of the re-packaged originality seal, the Commercial Director, Aare Fatai Odesile, explained that the seal will help to protect the interest and give comfort and confidence to the consumer that the product being consumed is the original.

According to him, “consumers are expected to look out for the ‘Seal of Originality’ on the cap of the new Lord’s Dry Gin, which will be scratched to reveal a 12-digit pin. This will be sent via SMS to the code number provided on the seal at no cost to the consumers.

announced the 3rd International Conference on Africa’s Indigenous Stimulants (ICAIS-3) to be hosted by Oyo Government in collaboration with the Federal Ministry of Industry, Trade and Investment, from Oct. 22 to Oct. 23. ICAIS is an initiative of Vertical Inspirations Organisation and the African Business Roundtable (ABR).

Mr Samuel Ortom, the Minister of State for Industry, Trade and Investment, said the conference was part of government’s efforts at boosting local production of the nuts.

Ortom added that the conference was aimed at sensitising the public on the investment opportunities in the stimulant sub-sector, which has huge potentials for national economic development. The minister added that if the need arose, government would come up with a policy to drive the stimulant sub-sector at the end of the sensitisation campaign.

the Nigeria Expanded Trade and Transport (NEXT T) activity.

The initiative prioritises work along the LAKAJI corridor, which is a major overland cargo transport route in the country. According to Aganga, the initiative is a key intervention that can affect the Nigerian economy positively. He urged investors to invest in the LAKAJI corridor, saying that it cut across 10 states of the federation. The minister observed that the summit would bring about growth in agriculture partnership and also fast track development in the sector.

He said that the success of the initiative was important as it meant more jobs for youths and development of the Small and Medium Enterprise (SME) sector.

Earlier, Amb. Martin Brennan of the U.S. explained that the summit would highlight the importance of agriculture as an opportunity for long-term investment in a competitive and growing sector.

He said that agriculture growth was increasingly being seen as the way to sustainable and inclusive economic growth.

“In Nigeria, the agricultural sector is the single greatest creator of jobs, providing employment for 70 percent of the population,” Brennan said.

He said that Nigeria had the potential to grow, process, and package foods. He reiterated U.S. President, Barack Obama’s pledge for a new focus on investment in Africa and the need for his country to engage more with the continent. In his remarks, Gov. Babangida Aliyu of Niger explained that the summit was instructive to the state’s renewed determination to strengthen its economic base.

Represented by his deputy, Mr Musa Ibeto, he said that as a hub in the corridor, the state had a major role in the project implementation because of its greater advantage in land mass. Also, the Gov. Rabiu Kwankwaso of Kano State stressed that the agricultural potential of the state was grossly under utilised.

He commended USAID for establishing the LAKAJI investment corridor, adding that the state’s agriculture would benefit from the investment.

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 25

Business & Economy

LCCI seeks stakeholders' meeting to revive manufacturing sector T

HE Lagos Chamber of Commerce and Industry (LCCI) has advised the Federal Government to hold a stakeholders' meeting on ways to transform the manufacturing sector. Mr Muda Yusuf, DirectorGeneral of LCCI, made the suggestion in an interview with the News Agency of Nigeria, NAN, in Lagos. He said that such meeting would enable government to formulate more favourable policies that would positively transform the manufacturing sector.

Yusuf said that improvement in the manufacturing sector would encourage vocational education and drastically reduce the rate of unemployment among youths. According to him, the meeting is necessary because the manufacturing sector only accounted for five percent of the nation’s Gross Domestic Product (GDP) in the last six months.

“The low output of the sector is due to policy somersault, multiple taxation, inconsistent power supply and illegal importation of goods into the country. These issues have

HE Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has urged the Federal Government to beef up security on the country ’s waterways. Mr Joseph Ogbebor, the Deputy-General Secretary, Operations, NUPENG, told newsmen in Benin that deploying more security personnel on the w a t e r w a y s would curb incessant theft of crude oil.

Ogbebor said: “If we really want to put a stop or reduce oil theft in this countr y, government should deploy more security personnel to the waterways.”

He said the waterways needed more surveillance, especially in the Niger Delta, adding that there was an increase in the activities of oil vandals in the region.

Ogbebor noted that instilling sanity and checking malpractice in the nation’s downstream sector will also check economic sabotage.

According to him, there is also need to carry out a C M Y K

Local production to reduce wheat importation by 50% — Adesina

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From left: Emmanuel Agu, Marketing Manager-Gulder, Legend & Life, Nigerian Breweries Plc.; Sunday Gyang, Gulder Ultimate Search 8 Contestant; Henry Akpede, Head of Creative, Insight Communications Ltd; Onyeka Okoli, Senior Brand Manager - Gulder, also of Nigerian Breweries Plc. and Imoudu Asekhame, Project Team Manager, Neo Media & Marketing at the regional screening exercise for this year's edition of Gulder Ultimate Search, at the Dan Anyiam Stadium, Owerri, Imo State. lingered for so long and something has to be done to check them and bring about rebound in the industries,” Yusuf said.

Yusuf suggested that the government should initiate more policies that would revive the manufacturing sector.

He said the

NUPENG urges improved security on waterways T

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holistic audit of the oil and gas sector of the economy.

“As a union, we have always made our position very clear: that government needs to step up security on our water ways to ensure that those responsible for illegal acts are apprehended. There is also need to do a complete audit of the oil and gas sector, because if there are insiders perpetrating economic sabotage, government can easily bring them to book. We have made this known severally, we are not happy about this development because it is not good for the system”, he said.

Ogbebor, who presided over election of executives of Warri Branch of Independent Marketers, urged the new Chairman, Mr Benjamin Ifeta, to carry all members along to avoid crisis. He commended the peaceful manner all candidates conducted themselves during the election. “We have advised the new executive to go back and carry everybody along. No other person will go back and conduct any

other election. The national secretariat of NUPENG, which is the highest decisionmaking body, is here; the election has been free and fair, and that is what NUPENG is known for,” he added. Ifeta polled 418 out of 469 votes cast to emerge as chairman. He promised to continue with his peopleoriented programmes.

importation of fake textile materials and the harsh business environment had hindered the desired change in the textile industry.

Yusuf said that the textile industry had little or no sign of improvement even with the N100 billion intervention fund.

NAN recalls that Mr. Herbert Ajayi, a former President of Nigerian Association of Chambers of Commerce, Mines, Agriculture and Industry, NACCIMA, said that about 800 Nigerian companies were shut down between 2009 and 2011. Ajayi said that the closure was due to harsh business environment, adding that many of those still in operating had serious challenges to be classified as ‘ailing.’

INISTER of Agriculture and Rural Development, Dr Akinwumi Adesina, has said that the recent local wheat production in the country will reduce the importation of the commodity by 50 percent.

Adesina said this in Abuja at a workshop on 'Strengthening the Support to Agricultural Research for Development of Strategic Crops in Africa (SARD-SC).'

Represented by Mr Akinbolawa Osho, the Director, Fertliser, Adesina said that the ministry had distributed seven tonnes of breeder foundation seeds to certified seed producers and companies in 2013. He observed that about 33,000 hectares would be cultivated in each of the wheat producing states in the country.

“Special technical training has been carried out across the value chain to enhance local wheat production, processing and quality control. Research institutes in the country and abroad were able to research and develop Nigeria’s own wheat and this has helped increase wheat production in the country.” Earlier, Rep. Mohammed Moguno, the Chairman, House Committee on Agriculture, gave an assurance that there would be collaboration between the executive and legislative arms of government to achieve the Maputo Declaration.

The declaration was adopted by African leaders during their 2003 summit in Maputo and it recommends the allocation of 10 percent of individual countries’ budgets to agriculture.

NSIA appoints Goldman Sachs, Credit Suisse, UBS asset managers

By EMMA UJAH, Abuja Bureau Chief

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HE Nigeria Sovereign Investment Authority, NSIA, has appointed Goldman Sachs, Credit Suisse and UBS as asset managers for its Stabilisation Fund. A statement by the authority quoted the Managing Director, Mr. Uche Orji, as saying that UBS was selected to manage the US Treasury Bond portfolio, while

Goldman Sachs and Credit Suisse would manage the US corporate bond portfolio. ”The Stabilisation Fund is intended to act as a buffer against short-term macroeconomic instability.

As such, the Fund’s assets will be invested conservatively, with capital preservation in nominal terms being of primary importance.

Given the short- term nature of the Fund’s potential liabilities, the Fund is restricted to investing in

investment grade sovereign and corporate fixed income assets”, the MD said.

He explained that the initial Benchmark is a blend of 25 percent, Barclays 1-3 year US Treasury Bonds and 75 percent Barclays 1-3 year US Corporate Bond Index.

Mr. Orji added, “this marks another important milestone for NSIA and follows a comprehensive process of review and evaluation of world class candidates for this mandate."

26 — Vanguard, MONDAY, SEPTEMBER 2, 2013

Banking & Finance BRIEF Banks sign on iTeller, cheque truncation application

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S the Central Bank of Nigeria (CBN)’s cashless policy shifted to other parts of Nigeria, the banks have further articulated their readiness to work with the CBN to replicate the cashless regime across the country.

Some of the banks including Sterling Bank, FCMB, Access Bank and Mainstreet Bank had demonstrated this readiness recently when they signed on iTeller, an indigenous cheque truncation application.

The current cheque truncation regime is planned to reduce the cheque clearing cycle from T+2 to T+1, while the iTeller application is presently a T+0 ready system.

The system is an ultra violet cheque scanning ready solution. Cheque truncation is one of the instruments necessary for the actualisation of the cashless regime and it is just being implemented in Nigeria. iTeller application is a suite of integrated solutions that comprises ATM based selfservice cheque lodgement, cash lodgement/withdrawal and cashier’s desktop transport cheque scanning system for a state-of-the-art and an end-to-end branch level cheque truncation capability as well as a slip-free banking experience.

Recently, Nigeria InterBank Settlement Systems, NIBSS, and Nigeria’s leading financial services software provider, Precise Financial Systems, PFS, collaborated with the CBN to achieve the cheque truncation exercise across the 37 branches of the CBN in states capital in Nigeria including the federal capital territory, Abuja.

According to a statement emanating from PFS, the company behind the iTeller application, which was signed by its Managing Director, Yele Okeremi, the application provides an optimal mix of both hardware and software for capturing, through in-built scanner and processing of cheques presented by customers for lodgement. The design concept ensures a proper handshaking with the bank’s core banking application.

“The cheque truncation is already on. The latest and most remarkable achievement is the signing on of iTeller by the CBN, the regulatory agency behind the cheque truncation policy."

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Economic development: Rewane calls for restructuring of banking industry Stories by BABAJIDE KOMOLAFE

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anaging Director/ Chief Executive, Financial Derivatives Company Limited, Rewane Bismarck, has called for the restructuring of the nation’s

banking industry to facilitate economic development He made this call at the 2013 Lagos Bankers Nite organised by the Chartered Institute of Bankers of Nigeria, CIBN, Lagos Chapter, while presenting a guest lecture titled, “Positioning Nigerian Banks

for National Economic Development and Global Competitiveness “.

According to Rewane, the nation’s banking industry is presently not structured to support development. He noted that while a development project takes between 10 to 15 years to

From left: Dr. Joseph Sanusi, former Central Bank of Nigeria (CBN) Governor; Dr. Kingsley Moghalu, CBN Deputy Governor in charge of Financial System Stability; Mr. Segun Aina, President and Chairman of Council, Chartered Institute of Bankers of Nigeria (CIBN); and Otunba (Mrs.) ‘Debola Osibogun, CIBN 1st Vice President, at the 2013 investiture of the Institute in Lagos.

Reforms will address challenge of manpower development — Moghalu

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HE challenge of inadequate manpower in the banking industry will be addressed in the next phase of reforms, said Mr. Kingsley Moghalu, Deputy Governor, Financial Sector Stability, Central Bank of Nigeria, He spoke after his investiture as a Honourary Fellow of the Chartered Institute of Bankers of Nigeria, CIBN, at the 2013 Awards and Investiture of the Institute.

Moghalu said, “I think that is the next phase of reform in the banking profession and we in the CBN have led that reform process. As you know, one of the major reform pillars of the CBN have been to enhance the quality of banks and so the whole question of the quality of manpower of banks is critical to improving the quality of banks. So, a few months ago, we issued a competency framework for the banking industry to make sure that for certain groups of professionals and duties in

the bank, people have the right qualification.”

Managing Director/Chief Executive, First City Management Bank, FCMB, who was also invested as a Honourary Fellow of the institute said that the solution is for banks to continue to train their staff. “I think it is really about training and development of your staff, making sure that they have the competencies and the scale to serve. We continue to recruit hundreds of Nigerians every year and we will continue to train them and hopefully lead by example so that they can also learn by doing and watching.

I enjoin all banking professionals to uphold ethical standards to make our customers very proud and happy.”

In addition to Moghalu and Balogun, five other bank chief executives were invested as honourary fellow of the institute. These are Mr. Emeka Emuwa of Union

Bank of Nigeria Plc, Mr. Segun Oloketuyi of Wema Bank Plc, Mrs. Bola Adesola of Standard Chartered Bank Ltd, Mrs. Sola David-Borha of Stanbic IBTC Holding Plc and Mr. Jubril Aku of Ecobank Nigeria Ltd. The Institute also conferred honourary fellowship on Mr. Ayorinde, Olabode, Pro Chancellor, Achiever University and Mr. Rewane Bismarck, Managing Director/Chief Executive, Financial Derivatives Company Limited.

In his welcome remarks, President, Chairman of Council, CIBN, Mr. Segun Aina, charged the awardees to increase their level of support for the institute, the financial services sector and Nigeria. "I enjoin you all to support the execution of the key mandates of the Institute in promoting education, professionalism and ethical conduct in the banking and finance industry.

execute, 97 percent of deposit of Nigerian banks has maturity profile of less than one year. He said that among other things, the country needs financial institutions that will offer long term funding to support development project, while banks in the country should partner with foreign financial institutions to attract long term funding into the country.

He said, “The Nigerian banking systems deposit liabilities was about N13 trillion in 2012 and is growing.

The deposit profile shows short term deposit outranks long term deposit. The CBN half year 2012 report shows short term deposits with one to 365 days tenor at 97.3 percent of total deposits, while long term deposits with three to five years tenor is 2.4 per cent. It is obvious that the ability of banks to fund developmental projects is greatly constrained. The banking industry in Nigeria is not structured to support national development.

“Our banking system needs to be more efficient in other to play the role of financial intermediation and support the nation’s developmental agenda. The panacea to the problems cannot be achieved by mere thought or wave of a wand. It requires a careful, conscientious, detailed and holistic approach to formulate the right policies and agenda.

This will require participation from all relevant stakeholders to address the structural gaps in the system. The following are some of the steps to be considered in formulation of such a programme: Provision of long term funding – Sovereign Wealth Fund; Offering of real interest rates to boost savings; Effective use of Pension assets; Structural changes; Partnerships with in multinational agencies; ADB, World Bank etc; Raising of equity to boost funding ability; and Improvement of staff capacity through trainings The implementation of some or all of the above will help position Nigerian banks to support economic development and to compete globally.

“National development occurs based on the ability of nations’ public and private institutions to utilize resources effectively to form a basis of competitive advantage. For financial resources to be made available for optimum use, the intermediating institutions need to function effectively."

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 27

Banking & Finance

Consolidated Discount predicts 100% CRR on public sector deposit

BY BABAJIDE KOMOLAFE

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From Left: Founder, CEO Konga.com Sim Shagaya, Founder/Former CEO, Diamond Bank Plc, Dr. Pascal G. Dozie, Managing Director, M-Net Africa Biola Adekanbi-Alabi, Managing Director and Chief Executive, Guinness Nigeria Plc, Mr. Seni Adetu, Governor Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi and President and Chairman, African Export-Import Bank JeanLouis Ekra at the Johnnie Walker Blue Label CNBC Africa All Africa Business Leader Award for West Africa held at the Intercontinental Hotel, Victoria Island...Wednesday 28-8-2013, Night. PHOTO; Kehinde Gbadamosi

onsolidated Discount House Limited has predicted that the Central Bank of Nigeria would increase cash reserve requirement (CRR) on public sector deposit (PSD) to prevent further pressure on the exchange rate of the naira.

This prediction was contained in a report titled, “Inflation in July

2013 and Review of Fixed Income market.

The CRR is the portion of deposits banks are mandated to keep as cash, and hence cannot be lent to customers.

The report among other things reviewed the impact of the recent hike in CRR on public sector deposit by the CBN to 50 per cent, as well as the implications of the increase in inflation rate to 8.7 per cent in July, announced by the National Bureau of Statistics (NBS) on Monday.

FirstBank, NLI partner to promote leadership development F irst Bank has pledged to continue to work with Nigeria Leadership

Initiative (NLI) to promote leadership development in the country.

Managing Director/ Chief Executive, FirstBank Nigeria Limited, Mr. Adebisi

Onasanya said this at the Guest Speaker’s Forum of the NLI on Tuesday.

Represented by the the Head, corporate Social Responsibility, FirstBank, Mr. Ismail Omamegbe, Onasanya noted that the NLI’s mission of bridging the knowledge gap between NLI Fellows and the young associates of the Future Leaders programme buttresses a core focus area of FirstBank’s corporate responsibility programme, namely, youth empowerment.

“We have partnered with the Nigerian Leadership Initiative since 2008 and are proud of our association with patriotic Nigerians who are committed to drive positive changes in Nigeria as well as promote the development and sustenance of value based leadership among Our Nigerians. partnership with NLI is geared towards promoting leadership development and supporting emerging young leaders in Nigeria as well as Nigerians in the Diaspora.

We trust that this forum will enable NLI Associates who have exhibited outstanding leadership skills in their various professions to be better prepared to lead in every capacity, while they imbibe a

deeper understanding of the necessary but rewarding sacrifices and qualities of great leadership.”

The forum featured the Governor of Katsina State, Dr. Ibrahim Shema as Guest Speaker. Shema, who was represented by the Head of Service of the state, Alhaji Ali Muhammed, presented a paper titled, “The Challenges of Political Leadership.”

In his opening remarks, Chief Executive Officer, NLI, Mr. Yinka Oyinlola said the choice of Katsina State governor as guest speaker for the August forum was due to the performance of the state’s government.

“Governance in ability to respond to needs of the people, and this is what is observed in activities of the state government.” He noted that the Katsina state government is the only government in the country that spends 70 per cent of its annual budget on capital expenditure, while 30 per cent goes into recurrent expenditure.

He said in addition to this the government does not have any public debt, while its capital projects are based on recommendations of C o m m u n i t y D e v e l o p m e n t Committees (CDC).

“We believe that even with the 50% cash reserve ratio (CRR) on public sector deposits, a policy aimed at increasing the scarcity of the naira, the local currency remains v u l n e r a b l e .

Government revenue still remains susceptible to output leakages which would affect the accretion to the Foreign Reserves.

“We believe the naira will still remain under pressure despite the scarcity of the currency.

Output leakages leading to a shortfall in government revenues, increased demand for US dollars by importers building stock for the yuletide season and fuel imports will serve as pressure points for the naira. But the CBN has demonstrated that it has options. We believe the 50per cent CRR on PSD is a stop-gap measure on the International Monetary Fund (IMF) prescribed Single Treasury Account (STA) – a tool for consolidating and managing governments’ cash resources, thus minimizing borrowing costs. If the pressure on the naira persists, we believe the CBN can increase the CRR on PSDs even to 100% which would ultimately mean it has achieved the objectives of the STA.” Review the impact of the 50 per cent CRR policy of the CBN on the banking industry, the reported stated, “The 50% CRR on PSDs has started to yield expected results. Prior to the maintenance period of August 7th, the market was logically jittery, which reflected in the interbank market. Banks have reacted in typical expectations. Interest rates on deposits have been on the rise and the deposit wars reminiscent of the pre2009 banking reforms have resurfaced. Even banks perceived as fairly liquid have hiked deposit rates by as much as 200 – 400 basis points to augment for the shortfall in deposits and also safeguard existing deposits from being prised away.

28 — Vanguard, MONDAY, SEPTEMBER 2, 2013

Corporate Finance BRIEFS FCMB earnings outperforms estimates on improved funding — Vetiva Capital

F

CMB’S reported earnings largely outperformed our estimates, with annualised gross earnings and profit-after-tax beating forecasts by seven percent and 17 percent respectively.

Interest expense (up 10 percent Year on Year, YoY) lagged interest income (up 16 percent YoY) whilst non-interest income rose 21 percent YoY. FCMB’s half year result was boosted by improved funding mix and growth in risk assets.

FCMB has been offloading expensive deposits with low cost deposits constituting 73 percent of total deposits as at second quarter (Q2) 2013, up from 54 percent in Q2’ 2012.

As a result of this move, Net Interest Margin (NIM) improved to 8.4 percent in Q2 2013, up from 8.2 percent in first quarter (Q1) 2013 and 6.6 percent in Q2 2012, as slight decline in asset yield (down 10 basis points (bps) QoQ) was accompanied by a faster decline in cost of funds (down 90bps QoQ).

FCMB’s NIM came in quite strong compared to an average of 7.4 percent reported by our coverage banks.

Total’s PAT misses forecast by 15% — FBN Capital

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OTAL Nigeria Plc second quarter( Q2) 2013 Profit After Tax (PAT) missed forecast by 15 percent, says FBN Capital.

This followed a weaker-thanexpected start to the year in first quarter (Q1 )2013. Lower import volumes in Q2 compared with a year ago weighed on sales, but substantial increases in operating expenses (opex ) and finance costs contributed also.

"Given the negative surprises over the last six months, we have reduced our 2013-14 EPS forecasts by an average of 6 percent.

Nonetheless, our new price target of N212.1, which implies 36.8 percent upside potential upside from current levels, is 7.3 percent higher than our previous estimate because we have rolled over our valuation to 2014E. year to date (Ytd) , Total shares have gained 28.6 percent ( All Share Index, ASI: 30.5 percent)."

From left: Managing Partner, Francis Okereke and Co., Mr. Okereke Francis; a legal practitioner at Owoyele Dada and Co. Solicitors London, Mr. Ojukotola Oluwole; Executive Director, Skye Bank Plc, Mr. Timothy Oguntayo; and Senior Manager, Trust Adjusters Nigeria Limited, Mr. Ogra Omakpokpose, at the investiture of the Chartered Institute of Bankers of Nigeria’s 2013 Elected Fellows in Lagos.

FBN’s shareholders, stockbrokers seek higher returns … Gross earnings hit N194.9bn in 6 months Stories by PETER EGWUATU

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HAREHOLDERS of First Bank of Nigeria, FBN, Holdings Plc and stockbrokers have tasked its Board of Directors to ensure that the company ’s overall performance for the financial year 2013 is enhanced in order to bring higher return for stakeholders.

The remark is coming after the FBN Holdings released its half year result for 2013. When the news of the result reached the Nigerian Stock Exchange, NSE, last week , some of the stockbrokers and shareholders who spoke with Vanguard, said “ We don’t expect less than what FBN has released. We hope that the full year performance will be greater as we have known them in the past.”

According to Afrinvest, “ FBN is still the elephant as total assets hits N3.4trillion. As expected, no corporate action was announced. However, the “Elephant” maintained its size, with the largest balance sheet in the industry (N3.4trilion, compared to N2.4trillion tier1 average), while recording a 7.7 percent growth in gross earnings. The price of the stock has continued to trade below N17.00 for the past 17 trading days, reinforcing the upside potential on the bank’s stock, as expressed in our 2013 Banking Report, “Standing on the 4th Pillar”. Consequently, we maintain our BUY recommendation on First Bank.”

Specifically, FBN declared N194.9 billion gross earnings for the half year unaudited International Financial Reporting Standards, IFRS results ended June 30, 2013, representing an increase of 7.7 percent from N180.9 billion recorded in the corresponding period of 2012.

According to the result released on the NSE, the company recorded a net interest income of N112.7 billion, up 3.6 percent year-onyear from N108.9 billion recorded in June 2012.

It also recorded an operating income of N156.9 billion, up by 3.2 percent year-on-year from N152.0 billion in 2012. Profit Before Tax (PBT) went up by 3.2 percent year-on-year to close at N55.1 billion from N53.5 billion in 2012. Profit After Tax (PAT) improved marginally by N429 million to N46.1 billion from N45.4 billion.

A review of the balance sheet shows that total assets of the company stood at N3.4 trillion, down by 2.3 percent quarteron-quarter from N3.5 trillion

in march 2013 but went up by 6.1percent year-to-date close at N3.2 trillion in December 2012.

FBN recorded a total customer deposits of N2.6 trillion, an increase of 0.9 percent quarter-on-quarter from N2.5 trillion in Mar 2013 and 6.4 percent year to date to close at N2.4 trillion in Dec 2012. Total customer loans and advances (net) was N1.5 trillion, down 1.4 percent quarter-on-quarter and 1.2 percent year to date in December to close at N1.5

Oando explains drop in half year profit

O

ANDO Plc has explained that the decline in its profit for the half year was as a result of a reduction in downstream importation due to substantial unpaid outstanding subsidy obligations by the Federal Government.

The company recorded a profit after tax of N4.3 billion for the half year period ended June 30, 2013, indicating a decrease of 35.5 percent when compared to N6.6 billion recorded in the corresponding period of 2012.

Oando is currently the largest indigenous supply and trading player in the subSaharan region, and has a 15 percent market share in Premium Motor Spirit, PMS importation.

Commenting on the result, Mr. Wale Tinubu, Group Chief Executive, Oando, said: “We remain steadfast in our

commitment to developing the higher margin mid-upstream operations, which have performed creditably as opposed to our downstream where we have had to reduce our imports by over 30 percent as a result of delays in the payment of our FGN guaranteed subsidy payments due, thus directly affecting our revenue and net profit. We, however, continue to explore efficiency plays to increase our margins and add value to the sector.”

The company ’s current assets grew by 26.68 percent to N185,013 billion from N146 billion in 2012. Retained earnings stood at N41.483 billion for the six months period of 2013 as against N37.147 billion in 2012. Total equity stood at N161.6 billion as against N105.354 billion in the corresponding period of 2012.

Earlier this year, shareholders received a substantial dividend payout of N5.1 billion, a 61 percent increase from the last dividend payments given out by the company. While it delighted its shareholders with the disbursement, Oando has indicated a strong desire to significantly increase its activities in the Upstream sector, and the company successfully completed a N62.6 billion oversubscribed rights issue earlier in the year as part of its efforts to complete its ongoing acquisition of ConoPhillips’ Nigerian assets and operations.

Once completed, the purchase will substantially increase crude oil market share and strengthen white products market position by leveraging new import infrastructure.

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 29

Corporate Finance BRIEFS

Forte Oil eyes offshore markets

By NKIRUKA NNOROM

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ORTE Oil Plc has disclosed plans to expand its operation beyond the shores of Nigeria to other West African countries.

The company also said that it has set strategic plans that will guarantee its ride to the number one position as energy solution provider in sub-Saharan Africa in the next two years.

Speaking at the facts behind the figure presentation on the Nigerian Stock Exchange, NSE, the Managing Director, Forte Oil, Mr. Akin Akinfemiwa, explained that already, the company has presence in Ghana through APOG, its fully-owned marketing subsidiary, and it hoped to expand to countries like Liberia, Togo, Sierre Leone, Chad and Niger Republic.th Akinfemiwa explained that the transformation agenda was hinged on three pillars, which include building a long term yet successful company, enhancing shareholders’ value through robust returns and boosting investors’ confidence.

According to him, “the hallmarks of our transformation strategy include: strong corporate governance, business ethics, compliance and controls at all levels, coupled with enhanced safety, health and environment practices across our value-chain.”

He listed other strategic plans to include diversification of the group earnings across the energy value chain, restructuring of Geregu Power Generating Plant, as well as expansion into alternative energy & midstream oil and gas through joint ventures, strategic alliance and acquisitions.

He noted that Forte Oil also plans to diversify into refining and petrochemicals business, expansion into upstream oil and gas through participating in government bids round and diversification of undeveloped fields from IOCs, saying that all these will result in increased dividend year-onyear for the shareholders.

He further stated that todate, Forte Oil is the second best performing share in the NSE All Share Index and the best performing stock in oil and gas sub-sector of the NSE. The Forte Oil boss noted that the company recorded 63 percent increase in profit after

tax to N1.39 billion from N855.64 million in 2012 for half year ended 30 th June, 2013, while revenue for the same period rose by 21 percent to N59.69 billion as against N49.7 million in the same period of 2012, attributing the increase in revenue to rise in supplies and depot expansion activities.

“However, gross profit declined by 14 percent due to demurrage and other unavailable import related

charges and reduction in lubes sales,” he stated.

“The visible growth in our figures showed that the turn around programmes we initiated have started yielding results,” he added.

Meanwhile, the company has said that it has completed acquisition of the Geregu Power Plant under the recent privatisation exercise carried out by the Bureau of Public Enterprise.

The purchase, according to the comoany, was done

through its subsidiary, Amperion Power Distribution Company, made up of a consortium of Forte Oil Plc as majority holder, BSG Resources Limited and Shanghai Municipal Electric Power Company.

“Forte Oil Plc is expected to take full control of the power Plant (Geregu Power Plant) on the 21st of September when the formal handing over ceremony will take place,” it said.

From left: Head, Main Board, Listings Sales & Retension, the Nigerian Stock Exchange, NSE, Mrs Cynthia Akpomudiare; Doyen, Sam Willie Ndata; Executive Director, Business Development, NSE, Mr. Haruna Jalo-Waziri; Executive Director, Market Operations and Technology, NSE, Mr. Ade Bajomo; Group Chief Executive Officer, Forte Oil Plc, Mr. Akin Akinfemiwa; Group Chief Financial Officer, Forte oil Plc, Mr. Julius Owodayo-Owotuga; Head, Human Resources, Mr. Oludare Arinde; Company Secretary, Akinleye Olagbende and Head, Operations, Forte oil Plc, Mr. Olatunji Rabiu at the Facts Behind the Figures presentation at the NSE in Lagos.

NSIA appoints Stanbic IBTC as local custodian T

he Nigeria Sovereign Investment Authority, NSIA has appointed Stanbic IBTC as its local custodian.

According to a statement by the authority at the weekend, Stanbic IBTC would work alongside JP Morgan, NSIA’s global custodian.

The NSIA said that Stanbic IBTC was chosen due to its experience as “a provider of integrated financial services including custody, asset management, corporate banking and risk products and services, amongst others”.

NSIA had at the middle of last week announced Goldman Sachs, Credit Suisse and UBS as asset managers for its Stabilization Fund.

The Managing Director, Mr. Uche Orji, explained that

UBS was selected to manage the US Treasur y Bond portfolio, while Goldman Sachs and Credit Suisse would manage the US corporate bond portfolio.

“The Stabilisation Fund is intended to act as a buffer against short-term macroeconomic instability.

“As such, the Fund’s assets will be invested conservatively, with capital preservation in nominal terms being of primary importance.

Given the short- term nature of the Fund’s potential liabilities, the Fund is restricted to investing in investment grade sovereign and corporate fixed income assets”, the MD said.

He explained that the initial Benchmark is a blend of 25%, Barclays 1-3 year US Treasury

Bonds and 75% Barclays 1-3 year US Corporate Bond Index.

Mr. Orji added, “this marks another important milestone for NSIA and follows a comprehensive process of review and evaluation of world class candidates for this mandate. The appointment of three leading global investment banks to assist with the management of the Stabilization Fund – drawing on the particular expertise of each to match our investment management requirements will help us achieve the economic policy objectives set for NSIA and attain the highest standards of financial stewardship to which NSIA aspires .”

Heirs Holdings acquires Seadrill Mobil

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eirs Holdings has announced a substantial investment in Seadrill Mobil Units (Nigeria) Limited, an affiliate of one of the world’s leading offshore deepwater drilling companies, Seadrill.

Also, Tony Elumelu has been appointed as chairman of the Board of Seadrill Mobil Units.

The investment is further evidence of Elumelu’s strategy of increasing African business participation across the oil and gas value chain, and complement existing interests in oil and gas production and exploration.

Seadrill, the world’s leading offshore driller is listed on both the New York and Oslo stock exchanges, operating the second largest ultradeepwater fleet and largest premium jackup fleet in the industry with 7,500 staff in 15 countries.

Commenting on the investment, Elumelu said, “Seadrill is a significant player in the oil and gas space, with a strong track record and one of the most respected names in the industry.

Thai, Indonesia stocks fall the most since 2001

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TOCKS in Southeast Asia are tumbling at the fastest pace in 12 years relative to global equities, sending the regional benchmark index into a bear market as foreign investors cut holdings for a third month.

The MSCI Southeast Asia Index has dropped 11 percent this month and is down 21 percent from this year’s peak on May 8. The gauge’s August retreat is 9.1 percentage points bigger than that of the MSCI AllCountry World Index, the widest gap since April 2001.

The Asian measure is valued at 1.8 times net assets, falling below the global index’s multiple of 1.9 for the first time since at least 2009, data compiled by Bloomberg show.

Foreign investors have sold a net $2.2 billion of Thai, Indonesian and Philippine shares this month amid signs of slowing regional economic growth and speculation that the U.S. Federal Reserve will soon cut stimulus.

C M Y K

C M Y K

37.80 62.00

10.70 6.24 14.60 2.61 4.75 25.13 3.92 2.57 7.50 10.38 0.51 1.04 19.60

0.50 1.00 1.23 0.50 0.50 1.47 0.50 0.50 0.50 0.50 1.20 0.50 0.50 0.50 0.50 2.30 0.50 0.71 0.50 0.50 0.60 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.81

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

FINANCIAL SERVICES Banking Access Bank Plc Diamond Bank Nigeria Plc Ecobank Transnational Incorporated Fidelity Bank Plc First City Monument Bank Plc Guaranty Trust Bank Plc Skye Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc

Insurance Carriers, Brokers and Sector African Alliance Insurance AIICO Insurance Plc Continental Reinsurance Plc Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guinea Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mansard Insurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Unity Kapital Plc Universal Insurance Plc Wapic Insurance Plc

Other Financial Institutions Africa Prudential Plc Crusader (Nigeria) Plc Deap Capital Management & Trust Plc FBN Holdings Plc Nigeria Energy Sector Fund Royal Exchange Assurance

0.50 0.94 1.22 0.50 0.50 1.46 0.50 0.54 0.50 0.50 1.08 0.50 0.50 0.50 0.50 2.20 0.50 0.69 0.50 0.50 0.66 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.82

10.80 6.00 14.64 2.77 4.75 25.53 4.00 2.55 7.33 10.30 0.52 1.04 19.71

37.80 57.70

32.27 3.99 0.97

2.00 0.50 1.21 15.50 552.20 0.55

2.00 0.50 1.09 16.00 552.20 0.55

6.00 0.79

32.27 3.90 0.89

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

52.85 935.00

1.53 0.50 0.50 0.50

52.85 934.97

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

9.01 10.90 83.78 3.18 10.95 0.63

1.53 0.50 0.50 0.50

9.00 10.90 83.78 3.05 11.00 0.65

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

72.00

17.03 255.00 20.62 165.00 0.75

0.50

100.00 50.00

16.18

74.71 10.07

5.60 1.17

1.70 4.41 1.26 5.32 1.40 55.00

4.28

0.50 46.00 37.39

0.50

Closing Price (N)

6.60 0.78

72.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

Microfinance Banks Fortis Micro-Finance Bank Plc NPF Micro-Finance Bank Plc Mortgage Carrier, Broker and Sector Abbey Building SOC Aso Savings and Loans Plc Resort Savings & Loans Plc Union Homes Savings Plc

17.03 255.00 20.62 167.99 0.68

0.50

100.00 50.00

16.18

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

Real Estate Investment Trusts Skye Shelter Funds Union Homes Real Estate Investment CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc

Real Estate Development UACN Property Development

74.71 9.06

CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc Chellarams Plc John Holt Plc SCOA Nigeria Plc Transnational Corporation UACN Plc

CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc

4.01

1.70 4.41 1.26 5.32 1.37 58.15

Livestock/Animal Specialities Livestock Feeds Plc

5.60 1.30

0.50 46.00 35.11

1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc

CONSTRUCTION/REAL ESTATE Building Construction/Structure ARBICO Plc Constain (WA) Plc

0.50

Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc

Company

Opening Price (N)

Capital Market

125,043

151,627 22,000 140,000 8,560,950

1,000,000 1,000,000 80,000 70,000

3,000 100,000

1,200 5,133,551 20,052,000 429,600 10,000 762,616 120,000 62,500 30,953 200,000 825,600 1,670,890 2,000,000 2,000 500 332,000 500 4,069,660 10,000 3,410 3,888,856 3,500 50,000 200 1,050,500 3,722 100 300,000 1,792,219

14,039,915 1,118,907 945,862 3,951,011 865,336 10,453,817 2,025,286 1,580,309 8,813,466 353,823 7,589,034 939,817 6,861,100

167,735 1,117,213

60 445,000 141,252

134,676 198,685

975,365 232,640 126,031 1,014,993 609,017 147,793

61,892

95,155 44,250 116,715 735,900 20,000

520,000

13,400 -

53,250

42,235 1,000

4 580,550

434,878 1,000 33,816 10,000 17,960,671 1,005,205

1,356,200

100,000 706,395 287,600

20,000

Quantity Traded

0.75 0.50 2.02 20.00 552.20 0.78

1.57 0.50 0.50 0.50

6.00 1.18

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

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

41.02 47.39

36.19 5.54 2.88

37.27 840.10

19.90 16.20 95.00 6.60 6.70 0.88

51.49

4.63 255.00 7.10 100.00 1.01

0.50

100.00 -

20.15

62.26 8.28

4 2,720,390.38

2.54 7.60 8.82 8.28 1.82 42.50

0.66

0.50 24.58 8.30

0.50

Year High

0.00 0.50 2.02 8.57 552.20 0.50

1.37 0.50 0.50 0.50

0.00 0.92

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

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

21.02 27.60

33.96 2.91 2.88

8.33 400.00

4.31 4.02 57.00 2.31 3.80 0.50

,39.00

2.23 186.00 5.23 72.50 0.93

0.50

97.00 -

11.59

32.96 3.01

20

1.45 6.43 5.89 5.52 0.50 28.70

0.48

0.50 14.53 6.40

0.50

Year Low

0.19 0.00 0.00 2.03 12.68 0.13

0.19 0.02 0.00 0.00

0.04 0.92

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

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

0.82 1.44

13.89 0.61 0.00

1.35 25.43

0.00 0.91 4.09 0.39 1.01 1.13

2.69

0.00 9.95 0.41 5.08 0.00

0.00

11.75 -

1.69

4.11 4.73

0.16 0.31 0.00 0.35 0.24 6.89

0.11

0.10 7.33 2.75

0.09

E.P.S.

9.16 0.00 0.00 9.85 43.55 6.00

47.6 7 25.00 0.00 0.00

150.00 10.56

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

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

4.39 32.91

2.44 7.07 0.00

27.61 32.84

16.91 14.38 16.89 16.92 5.75 8.83

13.92

0.00 19.98 16.29 22.22 0.00

0.00

8.51 -

7.33

10.11 2.26

5.18 20.74 0.00 15.77 3.64 4.14

15.00

50.00 2.77 4.37

P.E. Ratio

0.81 1.86 0.50

Paper/Forest Products Thomas Wyatt Nig. Plc Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

Intergrated Oil and Gas Services Oando Plc

0.50

4.90 3.82 6.20

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

0.79

Road Transportation Associated Bus Company Plc Speciality Interlinked Technologies Plc

1.90 1.55 2.52 4.30

0.50

4.55 0.79

0.50

4.76

1.38

0.50

Printing & Publishing.

Academy Press Plc Learn Africa Plc Studio Press Nig. Plc University Press

Media/Entertainment Daar Communications Plc

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

Courier/Freight/Delivery Red Star Express Plc Trans-National Employment Solutions C & I LEASING PLC

SERVICES Afromedia Plc Automobile/Auto Part Retailers RT Briscoe Plc

Hospitality Tantalisers Plc

20.50 0.50 29.80 38.87 112.00 36.14 157.00

0.50 11.20

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

Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc

3.98 13.18 12.68 4.30 1.05 2.92 0.66

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

1.44

0.50

10.55

Metals Aluminium Extrusion Ind Plc Non-Metalic Mineral Mining Multiverse Plc

6.50

7.85

171 2.74

NATURAL RESOURCES Chemicals BOC Gases Plc

Tools and Machinery Nigerian Ropes Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

3.82 6.50

4.90

0.77

1.90 1.50 2.52 4.50

0.50

4.55 0.79

0.50

4.70 1.00

1.39

0.50

0.50

20.50 0.50 29.80 38.87 112.00 36.14 157.05

11.20

0.50

3.98 13.18 12.68 4.30 1.05 2.78 0.66

1.44

1.68 0.50

0.67

0.50

10.55

6.50

7.85

1.99 2.70

21.00 8.70 43.65 8.96 190.00 0.50 1.43 93.00 5.01 1.70 10.93

0.50

0.50

ICT Telecommunications Starcomms Plc

21.60 8.70 43.65 9.00 190.00 0.50 1.43 94.20 5.01 1.83 10.93

0.50

0.50

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

18.70 2.29

0.50

0.68

16.83 2.29

0.50

4.80 1.85 2.02 60.50 2.29 1.21 8.17 2.07

0.50

2.23

103.50 16.23 1.39

Closing Price N

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

0.67

Computers and Peripherals Omatek Ventures Plc

4.32 2.00 2.00 60.00 2.48 1.21 7.36 2.03

Pharmaceuticals Ekocorp Plc Evans Medical Plc Fidson Healthcare Plc Glaxo Smithkline Consumer Nig May & Baker Nigeria Plc Neimeth International Pharm Nigeria-German Chemicals Plc Pharma-Deko Plc ICT Computer Based Systems108 Courteville Investment Plc

0.50

2.01

103.50 16.23 1.40

Opening Price N

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

Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

73,800 1,595,893

1,050

839,000

32,000 196,000 500 2,535,003

80,500

10,000 105,000

1,000

489,425 3,000

1,299,980

11,000,000

1,000

82,191 100 98,961 186,437 36,569 300 21,271

1,489,621

1,070,837

6,888 1,727 500 29,198 200 84,311 2,749,340

2,000

426,878 1,318,179

82,290

500

500

26,278

40

2,000 2,717,101

556,086 67,829 5,600 171,373 5,009,128 2,000 5,246 469,225 44,100 50,400 30

2,307,692

3,000

790 910

1,500,500

2,119,467

400 200,000 1,830,006 986,405 747,441 79,901 1,894 25,000

400,000

785

333,976 3,905,390

Quantity Traded

Year Low

2.78 11.75

5.15

0.80

0.00 6.82

3.68

0.50

400 2.07

1.64

3.67 247,420

3.65

0.72

1.57 6.50

4.90

0.50

3.17 0.30 0.00 3.60

0.48

3.00 1.33

0.90

2.65 0.25

1.30

0.51

141.00 63.86 195.50

163.50 2,100 240.00 200

0.50 0.50 3.89

27.99

0.87

3.98 12.71 13.97 3.60 1.05 2.92 0.63

1.33

1.62 2.58

1.38

0.50

10.70

6.80

8.26

5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

0.50

3.25 3.25

0.50

0.50

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

0.50

9.52

103.50 10.64 0.03

37.10 0.70 5.59

78.97

0.97

3.98 15.58 15.03 4.30 1.86 2.92 0.63

1.51

2.50 2.58

1.38

0.50

12.39

9.20

8.69

6.91 3.60

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

1.47

50,000

9.31 3.59

0.50

0.52

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

0.50

10.54

103.50 15.69 1.41

Year High

0.60 12.53

0.00

0.00

0.54

0.25

0.00

0.34 0.92

0.04

0.60 11.12

0.21

0.00

0.01

6.11 2.98 14.63

4.93 0.00 0.61

1.73

0.19

0.00 3.90 0.90 1.22 0.30 0.07 0.00

0.03

0.11 0.00

0.00

0.01

0.13

0.78

0.00

0.5 0.25

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00

0.00

0.00 0.01

0.00

0.10

0.19 0.44 2.62 0.20 0.09 0.00 0.00

0.00

0.00

10.56 0.87 0.21

E.P.S

4.22 8.75

0.00

0.00

27.69

12.19

0.00

34.09 2.12

11.25

4.91

8.19

12.75

11.11 19.23 17.07

7.40 0.00 6.99

4.17

6.06

0.00 3.26 0.00 3.52 6.18 41.71 0.00

28.80

13.15 0.00

0.00

0.00

85.77

7.37

0.00

39.60 9.16

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

0.00

1.43 0.00

12.50

10.00

9.05 14.13 0.00 0.00

88.50 0.00 3.07

0.00

0.00

9.71 18.03 6.71

P.E Ratio

Daily Stock Market Report as at Friday, August 30, 2013

30 —Vanguard, MONDAY, SEPTEMBER 2, 2013

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 31

Commodity Index Aug 23-Aug 29, 2013

1/2 FP FEDERAL MEDICAL

C M Y K

32 — Vanguard, MONDAY, SEPTEMBER 2, 2013

FP CITI BANK

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 33

FP SAMSUNG

34 — Vanguard, MONDAY, SEPTEMBER 2, 2013

Homes & Housing Finance BRIEFS ‘Building materials constitute 60% of housing delivery’

A

substantial portion of housing delivery cost is attributable to building materials, constituting up to 60 percent of total cost of building a house.

Managing Director, Federal Housing Authority (FHA), Mr. Terver Gemade, said this at th the 24 edition of ARCHIBUILT, an annual exhibition event of the Nigerian Institute of Architects (NIA). “Building materials constitute a significant cost in housing delivery, about 60 percent. The building materials and technology subsector is too sensitive to be left unattended to by construction professionals in a haphazard manner.

I commend the Nigerian Institute of Architects for the exposition success stories over the years especially that this year ’s exhibition is turning out to be a greater success,” he said.

Gemade called on the Institute to conclude work on its building materials policy documents. According to him, “the development of a viable building materials market will help the process of national industrial development while facilitating the expansion of local capabilities. This is a major way to stem the indiscriminate importation of foreign building materials.”

Also speaking at the occasion, Minister of Lands, Housing and Urban Development, Ms Ama Pepple, commended NIA for its consistency in organising the yearly event.

30-year mortgage rate declines to 4.51%

T

HE average rate for the 30-year fixed-rate mortgage declined to 4.51 percent in the week ended Aug. 29 from 4.58 percent in the prior week, which was the highest rate in two years, according to a report from Freddie Mac. “The 13.4 percent drop in new home sales in July led financial markets to speculate whether the Fed might delay reducing its bond purchases and allowed long-term bond yields and fixed mortgage rates to decline over the week,” said Frank Nothaft, Freddie’s chief economist.

Meanwhile, the 15-year fixedrate mortgage also declined from a two-year high, hitting 3.54 percent in the latest week, compared with 3.60 percent in the prior week.

Minister urges enforcement of national building code Stories by YINKA KOLAWOLE

M

INISTER of Lands, Housing and Urban Development, Ms. Ama Pepple, has called state governments and stakeholders in the built environment to ensure full compliance with the National Building Code (NBC) to help curb the spate of building collapse in the country.

Speaking at a two-day Stakeholders’ Validation Workshop on the on the Revised National Building

Code in Abuja, Pepple said that compliance with the code is key to attaining prescribed standards within the sector.

She said the scourge of building collapse in Nigeria is not due to lack of requisite laws, but ineffective enforcement of the laws, adding that the new revised National Building Code would help to address some of the identified lapses in the housing sector. “To curb the incidence of building collapse, there is no substitute for the immediate unmitigated and committed drive to legally address the root cause, human

error, by the implementation of the National Building Code,” she said.

The first edition of the NBC was published in 2006 with mandate for its review every three years and the current review was necessitated by the need to update the code in order to correct the lapses and omissions identified and align it with the current policy direction of government. The Revised Code has been updated to ensure conformity with the International Building Code, to emphasize the seriousness of fire hazards in buildings and has fully

•Mass housing development scheme

SON warns block makers on substandard materials S

TANDARDS Organization of Nigeria (SON) has warned block makers to desist from producing substandard products.

Director General, SON, Dr. Joseph Odumodu, who gave this warning at a one day sensitisation workshop on Sandcrete blocks manufacturing organised by the agency, said it would soon begin to prosecute offenders.

Odumodu said the move was part of the Federal Government’s zero tolerance campaign which is targeted at curbing the scourge of collapse building. According to him, SON had concluded plans to begin onsite factory inspection of Sandcrete producers with testing machines, which would determine the strength and composition of the blocks.

He added that local manufacturers of Sandcrete blocks would have to emboss their names on their products

so that they can be easily identified in case of collapse, adding that failure to comply with the directive will lead to closure of their factories.

The SON boss noted that Sandcrete blocks constitute about 80 to 90 per cent of the superstructure of any building and as such serious attention needs be paid to the production process to meet specified standards and quality to minimise the incessant cases of building collapse.

“We have agreed that all block molders and mixers will have to be part of an association which we can hold responsible as well organise capacity building seminars for.

Each group will liaise with SON for training whereby we will offer 20 members of the block moulders’ association free 90001 certification,” he stated.

Also speaking, Minister of

State, Ministry of Industry, Trade and Investment, Dr Samuel Ortom, advised builders in the construction industry on the need to begin certification of block makers with Mandatory Conformity Assessment Programme (MANCAP).

According to him, most of the collapsed buildings were either recently built or still under construction, adding that the use of substandard materials particularly Sandcrete blocks were the major causes of building collapse in the country. He urged the Sandcrete block makers to ensure that their products are of right quality as stipulated by SON. “The right application of specifications will ensure optimal use of resources, right quality and durability of Sandcrete blocks thus aligning with the government’s aspiration for affordable housing,” he said.

addressed the need for creating separate section for fire protection system in the Code.

Other key elements of the code include its enhanced provision on general building requirements, which has been expanded to include urban planning requirements, while there are additional provisions on green building initiatives and energy efficiency.

“If this revised NBC is to effectively serve as a mechanism to ensure the safety and protection of all of us from preventable hazards, which could be life threatening in the construction and housing industry, the state governments must lead the drive to institutionalise it through adaptation, legislation and enforcement.

“It is in this regard that I fervently hope that the 36 states of the federation and the Federal Capital Ter ritory Administration will ensure that the NBC is adapted and adopted by the executive arm of government as a regulatory tool in their spheres of influence. It should be enacted by their respective legislatures as part of their jurisdictional code after it has undergone the formal process of approval by the highest level of government.”

The minister stated that the NBC was a requirement for institutionalising a minimum acceptable level of safety in the construction of buildings in order to protect public health, ensure public safety and general wellbeing. She observed that it was by enforcing the provisions of the code that the safety of lives and property from all manner of hazards, particularly those relating to the occupancy of buildings, structures or premises could be assured without any inhibitions. She said if many countries were setting new benchmarks in prescribing, maintaining and enforcing their respective national minimum standards in building construction and building systems, Nigeria could not afford to be left behind.

“I am optimistic that after this validation exercise, the adoption of the revised NBC and its dissemination to the public as well as its effective implementation by all relevant stakeholders, our beloved nation will be greatly assisted in dealing with some of the perennial problems in the human settlement sector.

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 35

Insurance

Only one out of ten Nigerians has insurance — NOI Polls O

From left: Director, Network Engineering Etisalat Nigeria, Temi Ogunbambi; Etisalat customer, Awwal Mahmoud; Head, Customer Experience and Retention Management, Etisalat Nigeria, Biola Edun and another customer, Aisha Ishaku, during the Etisalat Customer Forum, held at Asaa Pyramid Hotel in Kaduna.

The poll states “According to a recent media report, the insurance culture in Nigeria can best be described as almost non-existent. Despite the fact that the Nigerian environment has a high and increasing level of risk, less than two per cent of insurable risks are covered by insurance. Previous studies have shown that low awareness and lack of knowledge about insurance

products characterize people’s opinions about the insurance sector. Apart from these, negative perceptions of Nigerians towards insurance have generally inhibited the growth of the sector. For instance many are of the opinion that insurance companies are more concerned in collecting premiums, than in settling claims thus affecting the general confidence in the

GCC insurance markets to maintain growth T

HE insurance markets’ growth within the Gulf Cooperation Council (GCC) will continue, albeit at a reduced pace, as gross domestic product (GDP) growth remains relatively modest in 2013, according to A.M Best.

According to A.M Best, all of the GCC countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) - experienced increases in Gross Premium Written (GPW) in 2012. Although total GPW for the six GCC countries reached USD 16.3 billion in 2012, depressed world financial markets have significantly dampened the region’s economic growth “The insurance markets have seen a material slowdown since 2008, when total premium grew by 25 per cent. Total premium rose by a relatively modest 10.4 per cent in 2012. Reduced growth in recent years is the result, in part, of the GCC insurance

US: Woman charged with insurance fraud

I

Stories by ROSEMARY ONUOHA NLY one out of ten Nigerians have any form of insurance cover, a recent poll has shown.

According to a poll results released by NOI Polls, it was revealed that almost nine in 10 Nigerians, which represents 86 percent, do not have any form of insurance cover.

The results also indicated that vehicle/car insurance, which represents 63 percent, is the most commonly purchased insurance cover while insurance companies, which represents 42 percent and agents, which represents 41 percent, are the key channels of insurance purchase.

The report also states that the major causes of the low market penetration and poor insurance culture are low awareness and poor enlightenment on the benefits of insurance and it stands at 40 percent.

The poll, however, reveals huge potentials for insurance companies and practitioners to design new products to target Nigeria’s bulging youth population.

BRIEFS

markets’ comparatively strong growth over the past decade from a low initial base,” A.M Best noted.

The company said that further - more, the GCC has not been immune to the economic downturn. “In the past few years, economies have expanded at a slower rate and there had been a significant reduction in government-sponsored engineering and infrastructure projects.

However, in 2012 and 2013, financing for major programmes resumed and stimulated insurance activity for commercial risks,” it stated.

“A.M. Best does not believe the GCC insurance landscape will change materially over the short term, but expects growth to continue at a good pace of between five per cent to 10 per cent in most markets.”

The company said that compulsory lines generally involve liability cover, for example, motor third-party

liability, adding that these lines have been a major growth contributor over the last decade. “However, in recent years, the introduction of compulsory medical schemes has been the most significant driver. Medical now stands as the most significant business line within the GCC insurance markets.

The GCC’s two dominant insurance markets by a considerable margin, the UAE and Saudi Arabia, have both benefited from mandatory medical insurance. In the UAE, the insurance sector has been buoyed by compulsory medical cover in Abu Dhabi, although the planned roll-out of this line of business in Dubai was delayed due to the depressed financial environment and possible social implications.

The implementation of compulsory medical insurance in Dubai would provide another stimulus for growth, and it is likely that the remaining emirates in the UAE would follow suit.”

insurance companies.

“There are also cultural and religious factors associated with the slow growth of the insurance sector. Anecdotal evidences suggest that the demand for insurance cover in Nigeria may be affected by various cultural and religious beliefs in the country in a way that it affects people’s perceptions on risk aversion.

For instance, some religions have created a strong disapproval to life insurance, declaring that dependence on life insurance brings about a distrust of God‘s protecting care,” the poll revealed.

While stressing that overall the majority of Nigerians do not have any form of insurance cover, the Poll states that analysis across geo-political zones reveal that the South-West zone had the highest number of Nigerians that have insurance with 34 per cent, while the North-East with 96 per cent and NorthWest with 81 per cent both accounted for the highest proportion that indicated they have no insurance of any form.

Analysis based on age group showed that the highest proportion of insured Nigerians are within the age category of 45-54 years (34 per cent); followed by people within the 55-65 years age group with 26 per cent, and 65+ group with 22 per cent.

On the other hand, there’s very low insurance penetration for youths within the ages of 18-21 (0 per cent) and 22-34 (four per cent); signaling huge market potentials for insurance companies and practitioners who can design products to target this market segment.

N the United States, the Maryland Attorney General, Douglas F. Gansler has announced that Carolyn Yvonne Nowicki, 43, of Pasadena, was charged with 87 counts of insurance fraud and felony theft and one count of theft scheme over $100,000. An arraignment date in Anne Arundel County Circuit Court has not yet been scheduled.

The indictment alleges that from June 22, 2009 through May 13, 2011, Nowicki stole a total of $117,150.59 in insurance premium funds from 57 individuals and businesses. At the time of the theft, Nowicki was working as an insurance agent at Main Street Insurance, an independent insurance agency located in Pasadena.

Her scheme targeted customers of Main Street Insurance and involved numerous insurance companies.

A fraudulent insurance claim having a value of $300 or more is a felony and is punishable by a maximum sentence of 15 years’ incarceration and a $10,000 fine. A theft scheme involving $100,000 or more is a felony punishable by a maximum sentence of 25 years’ incarceration and a $25,000 fine.

Zurich Insurance chairman resigns after CFO suicide

Z

URICH Insurance Group said its chairman Josef Ackermann had resigned with immediate effect following the suspected suicide death of the company’s financial chief last week. Pierre Wauthier, who had served as the company’s chief financial officer since 2011, was found dead at his home on Monday and police have said that he probably committed suicide.

“The unexpected death of Pierre Wauthier has deeply shocked me,” explained exiting board chairman Josef Ackermann, a former head of Deutsche Bank.

“I have reasons to believe that the family is of the opinion that I should take my share of responsibility, as unfounded as any allegations might be,” he said in a statement.

Therefore, he had decided to resign “to avoid any damage to Zurich’s reputation,” he said.

36 — Vanguard, MONDAY, SEPTEMBER 2, 2013

T

HIS is a government that signed an agreement with us on January 24, 2012, to the effect that they would inject N100 bn as funding into the universities in the first month; and that before the end of 2012, they would inject another N300 bn.”

Dr Olusegun Ajiboye, ASUU University of Ibadan branch chairman, August 14, 2013.

Dr Ngozi OkonjoIweala increasingly is cutting a sorry figure as Finance Minister. And nothing has demonstrated this fact more than her utterances on the strike by the Academic Staff Union of Universities, ASUU. To start with, she announced, as if it was true, that government cannot pay the N92 billion causing the present palaver. She turned out to be wrong on

ASUU STRIKE: Blame finance minister three counts at least – none of which does her reputation as a global financial expert any good. It was poor defence and exposed her as someone who did not do her homework very well before commenting on a vital national issue.

First, as Dr Ajiboye pointed out, N92 billion represented a figment of the imagination of the former World Bank Managing Director.

Ajiboye, a valid representative of all the ASUU creditors, told us that the amount due to them was N87 billion; not N92 billion. Even for a wasteful administration, overpaying by N5 billion would have been reprehensible. There is a lot of good work which government can do with N5 billion instead of throwing it away carelessly. Throwing public money away carelessly was what led to

the fuel subsidy scam which tarnished her reputation in 2011/2012 when she jumped into the fray without checking her facts properly.

Second, her statement about government’s

,

“

Any financial officer, involved in budgeting, knows that when planning the budget for any year, you must take into account all the bills past due as well as those likely to fall due during the year

,

inability to pay lacked credibility and was soon discredited by the President. There is a distinct difference

between “can’t pay” and “won’t pay”. The former admits of financial weakness or destitution; the latter connotes willful refusal to honour an agreement into which government voluntarily entered. For the Minister of a government which allowed the country to be defrauded of over N1 trillion to claim that government cannot pay N92 billion or less than one per cent, is an insult to the intelligence of Nigerians and discredit to government itself. As if to prove that the Minister spoke, not for government but herself, the President a few days after ordered that more than N92 billion be released to the universities. That order by Jonathan had elevated Okonjo-Iweala’s claim from the realm of the incredible to a colossal lie.

Where will government find N100 billion to carry out the President’s instructions if it cannot afford N92 billion?

But, all those pale by comparison with Dr Okonjo-Iweala’s real contribution to this awful national calamity. Read Dr Ajiboye’s assertions again and the astute reader can readily see the genesis of this whole mess. In January last year, long after the 2013 budget had been presented to the National Assembly, obviously with no provisions for paying the N87 billion owed to ASUU, the President, who at that time was facing a national revolt on account of fuel price increase from N65 per litre to N141 did not want another ASUU strike to add to the uprising. So, government, perhaps illadvisedly and hastily promised ASUU N400 billion additional money; that brought the total debt payable in 2013 to N487 billion.

Call it incompetence or lack of courage and/or integrity, but given a 2012 budget, from which any provisions for ASUU had been excluded, promising eleven per cent of last year’s budget to the academic staff of universities was fraudulent.

When Jonathan Swift, 16671745, wrote that, “Promises, like pie-crusts, are made to be broken”, (VANGUARD BOOK OF QUOTATIONS p203), he must have had a government like the present one in mind. It is one government on whose promises nobody

should rely. So 2012 ended without government honouring its agreements. That was bad enough.

Any financial officer, involved in budgeting, knows that when planning the budget for any year, you must take into account all the bills past due as well as those likely to fall due during the year – if the decision is to pay. They can only be ignored if there is a willful and conscious decision not to pay and to damn the consequences. The fiasco this time around has occurred because the Finance Minister either forgot to make provisions for paying the N487 billion, not even N92 billion as she claimed, or because she deliberately excluded those outstanding bills.

Forgetting such a huge liability demonstrates incompetence and gross negligence – for which the nation is now paying dearly. Remembering that the debts are long overdue and deliberately ignoring them is proof beyond reasonable doubt of lack of budgetary integrity. It does not require the towering intelligence of a Harvard graduate to predict the outcome of that benign neglect of government’s obligations.

Unfortunately for the government, for the Minister and all the other stakeholders, “All things do help the unhappy man to fall”, according to Shakespeare, 1564-1616, this years budget is in shreds. The same Finance Minister has been leading the government officials telling us about the shortfall in revenue on account of alleged crude oil theft. As much as 400,000 barrels a day is stolen – apparently with government helpless to check the pillage. A recent report estimated that oil revenue in July of this year dropped by 42% compared to the same period last year. By a cruel twist of fate, the country had moved from won’t pay closer to can’t pay. There is no money in the budget to pay ASUU N487 billion; that is certain. Just as sure is the fact that, even if Okonjo-Iweala had not been careless, there probably would have been no money to pay the entire bill.

Realising the government’s partly selfimposed predicament, Jonathan had approved

part payment of the outstanding debts.

Ordinarily, that should have induced Nigerians to rise up and urge ASUU to accept the halfloaf and wait till next year for the balance. However, given government’s reputation as a dead-beat, on whose words nobody can rely, there has been no outcry against ASUU for refusing the offer. This is the closest thing to an economic Mexican standoff that anyone can imagine and only divine intervention can resolve the mess – thanks to the Finance Minister; who should know better.

Nobody, with the minutest experience in drawing up budgets should have made that mistake.

The most important question now is: will the 2014 budget reflect the payment due to ASUU – even if the lecturers accept the offered halfloaf? If it does not, ASUU’s return to the campuses will be shortlived. They will be out again in 2014.

Finally, the Finance Minister has probably antagonized the one group every public office holder should avoid at all costs. University dons are not only articulate, they are the most vocal group in the country and the most influential opinion molders. Henceforth, they will cease every opportunity to cut her down to size. This episode, however it ends, has once again raised the possibility that Ngozi Okonjo-Iweala might not be around much longer.

She was recruited to build confidence in the government’s economic policy team. Starting with her staunch defence of the subsidy removal, based on falsified data, she had stumbled from one controversy to another. Instead of offering solutions, she is increasingly perceived as part of the problem. She probably has not come across that famous statement by Arthur Dewing in the Harvard Business Review, October 1923. “Behind the facts of economics are the facts of p s y c h o l o g y. . t h e emotions of fear and confidence…”. A lot of people are losing, or have lost confidence in the Minister. That’s bad for her and bad for Nigeria.

V i s i t : www.Delesobowale.com

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 37

Agric

Cotton glut causes record global inventories

Demand Expands Cotton rose 11 percent this year to 83.75 cents yesterday on ICE Futures U.S. in New York as improving yields reduced concern about drought that had driven prices as much as 25 percent higher. The price was at 83.73 cents as of 10:15 a.m. The Standard & Poor's GSCI Spot Index of 24 commodities advanced 3 percent since the end of December, and the MSCI All-Country World Index of equities added 7.4 percent. The Bloomberg Treasury Bond Index lost 3.3 percent. Global production will drop 3.9 percent to 116.38 million bales in the 12 months that began Aug. 1 as demand expands 2.3 percent to 109.85 million bales, the USDA says.

A bale weighs 480 pounds (218 kilograms). China's stockpiles will surge 16 percent to 58.26 million bales, more than five times what it held in 2011 and 62 percent of estimated world inventory.

The glut emerged after

prices almost doubled in 2010 and reached an all-time high of $2.197 in March 2011.

Production expanded to a record 125.14 million bales the following year. Demand fell 11 percent since peaking in 2007 as the global recession curbed sales of clothing, bedding and

September through March 2014 and pays 20,400 yuan ($3,332) a metric ton, the China Cotton Association said in April. That's about $1.51 a pound, or 80 percent more than New York futures. While the government may halt purchases in favor of direct subsidies to farmers, that

received more than 4 inches (10.2 centimeters), hampering fieldwork and hurting crops, according to the USDA. While the region is dry now, rain will return Sept. 2 to Sept. 6, according to Commodity Weather Group LLC. About 47 percent of the U.S. crop was in good or excellent condition

won't occur until at least the middle of next year, Robert Yang, assistant president of the China National Textile & Apparel Council, said June 28. China's imports, which accounted for 43 percent of global purchases last year, fell 21 percent in the first seven months to 2.74 million tons, from 3.46 million a year earlier, customs data show.

Hedge funds and other large speculators more than doubled their net-long position, or bets on higher prices, since early June and are the most bullish since the U.S. government began tracking the data in 2006.

Long positions outnumbered

by Aug. 25, from 46 percent a week earlier, the government says. In India, the secondlargest exporter, rainfall has boosted the outlook for the domestic crop, which the Cotton Association of India estimated Aug. 20 would reach 37.2 million bales, or 3.6 percent more than the USDA forecast this month. A bale in India weighs 170 kilograms.

Cotton plantation

textiles.

Lower Costs "The market cannot ignore the fact that huge stocks exist," said Jordan Lea, the chairman of Eastern Trading Co., an exporter in Greenville, South Carolina. The inventories "will come to the market at some time, at some price," he said.

"That is how they will threaten a rally." Hanesbrands Inc. (HBI), the Winston Salem, North Carolina-based maker of Hanes underwear and Playtex bras, said July 30 that its cotton costs dropped 49 percent in the second quarter. The company raised its full-year earnings-per-

,

T

he fourth straight year of surplus cotton output and the biggest drop in Chinese imports since 2000 are creating record global inventories, signaling higher profits for the makers of Hanes under wear.

Stockpiles will jump 8.6 percent to 93.765 million bales in the 12 months ending in July, the US Department of Agriculture said in an Aug. 12 report. There are enough inventories to make three pairs of jeans for every person in the world and reserves doubled since reaching a 13year low in 2010. Prices may fall 8.8 percent to 76.6 cents a pound by the end of 2013, according to the average of 16 analyst estimates compiled by Bloomberg.

China, which uses about a third of the world's cotton, will reduce imports by 46 percent, or 9.33 million bales, from last year as it focuses on supporting local producers. It is accumulating the biggest stockpiles ever after the government bought supply to aid farmers as economic growth slowed. The USDA's prediction for Chinese imports is about twice the drop it expects in global output, at a time when crops are improving across the U.S., India, Brazil and Australia.

"We expect weak Chinese demand and high global production to continue weighing on prices," said Paul Christopher, the St. Louisbased chief international strategist at Wells Fargo Advisors, which oversees about $1.3 trillion of assets.

"The Chinese economy is slowing and export growth has been weaker than we expected for textile mills and other manufacturers."

There are enough inventories to make three pairs of jeans for every person in the world and reserves doubled since reaching a 13-year low in 2010

share forecast to $3.50 to $3.65, from $3.25 to $3.40.

Net income at Levi Strauss & Co., the San Francisco-based maker of Levi's jeans and Dockers apparel, more than tripled to $48 million in the second quarter, "mainly due to lower cotton costs," along with higher sales and moreprofitable products, Chief Financial Officer Harmit J. Singh said on a July 9 conference call.

China Buying The predicted drop in prices may be curbed by China, where the government plans to buy from farmers for a third year. The program runs from

,

shorts by 82,715 futures and options contracts as of Aug. 20, U.S. Commodity Futures Trading Commission data show. A contract represents 50,000 pounds.

The outlook for the U.S. harvest has worsened. On Aug. 12, the government said that production will drop 25 percent to a four-year low of 13.05 million bales. In May, it forecast 14 million. Drought in Texas, the biggest grower, will reduce the state's crop by 18 percent to 4.12 million bales, the USDA says.

Heavy showers returned to parts of the Southeast in the week ended Aug. 25 and some of the wettest areas

Selling Reserves While China is buying from farmers, it is unloading government-owned inventories that the International Cotton Advisory Committee estimated at 7.8 million tons as of July 31, or almost as much as the nation consumes in a year. The state sold 2 million tons from reserves this year through June 6, according to the China National Cotton Reserves Corp. That's reducing the need for mills to import from foreign suppliers.

Australia, the third-largest exporter, may reap as much as 5.5 million bales this year, more than the 4.5 million forecast by the USDA, Rabobank International said Aug. 8. Production also will rise in Pakistan and Brazil, the biggest producers behind China, India and the U.S., according to Cotlook Ltd., the publisher of a benchmark cotton index.

"The world has too much cotton and not enough demand," said John Flanagan, the president of Flanagan Trading in Fuquay-Varina, North Carolina. "Only lower prices can shut acres enough so that we can start seeing a multi year reduction in inventories, which are huge."

BRIEFS FEC approves N32bn credit facility for FADAMA 3

T

he Federal Executive Council (FEC) has approved 200 million dollar (about N32 billion) World Bank, International Development Association (IDA) credit facility for the National FADAMA III Development project.

Minister of State for Finance, Dr Yerima Ngama, made this known when he briefed State House correspondents on the outcome of the council meeting presided over by President Goodluck Jonathan.

Ngama said the budget for the FADAMA III was 250 million dollars out of which the 200 million dollar would be sourced through the IDA. He said in sourcing the balance of the fund, 7.95 million dollar would be provided by the three tiers of government, while the balance 0f 42.05 million dollars would be provided in kind by the benefitting communities.

The minister said that the loan would be negotiated and signed by the Federal Government, while participating states - Lagos, Niger, Anambra, Enugu, Kano and Kogi would enter into subsidiary agreement with the Federal Government.

According to him, the terms of the loan includes zero per cent interest rate, 0.75 per cent service charge and 0.5 per cent commitment charge on the available balance not utilised.

Farmers seek NAFDAC collaboration on Agric improvement

T

he All Farmers Association of Nigeria (AFAN) on Thursday urged the National Agency for Food, Drug Administration and Control (NAFDAC) to partner with the association for agricultural improvement.

Mr Daniel Ajiboye, a member of AFAN stated this in Abuja at the Sensitisation on Aflatoxin management in Nigeria, with no fewer than 100 participants in attendance.

According to him, the farmers need close supervision from organisations such as NAFDAC to enable them to farm with ease. He said that expected results would not be got from researches if farmers were not given adequate attention. "If farmers are well supervised and financed, there will be groundnut pyramids in Nigeria again, but if we continue to count on only oil, we are deceiving ourselves."

38 — Vanguard, MONDAY, SEPTEMBER 2, 2013

People in Business

By EBELE ORAKPO

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Becoming a septuagenarian: “Well, the most important thing is the grace of God. There is no magic about it. You devote your life to doing the right things and pray to God to keep you going. So it is with great joy and pleasure that I testify that God kept me going despite all the challenges. I feel so happy and grateful to God. When I look back nearly 50 years ago when I started my banking career and where God has taken me, I feel fulfilled and very joyful.

Most important attribute: Trust in God and confidence in self. With these two, there is nothing you cannot surmount.

Business ethics that ensured you kept your integrity intact: The most important business ethic is honesty. If you deal with people and they perceive you as an honest person, you find out they will have trust in you and they will help to market your business. In the end, one success will lead to another and you will have no limit.

S

uccess despite humble background: I think it is entirely God’s grace and one being focused.

Luckily for me also, God gave me above average intelligence and brain which enabled me to excel in my studies. Everything still boils down to God’s grace.

God has been there for me and that is why my book is entitled; Testimony of Divine Grace.

Advice to the youth: My advice to them is to be focused, honest and also to appreciate God because the more you appreciate what God has done for you, the more you will cause more •Dr. Raymond Obieri blessings to and wif come your way. former Governor of CBN, Jos e, Lady Betty Obieri flanked by eph Sanusi and wife San usi. Photo: Biodun Og , Mrs Abigail It is not by unleye. your might, it is by the special grace of God. On the direction Nigeria is going: There are two ways to look at it. When I was 20 years old, the country had made tremendous progress because with my community as a reference point, we didn’t have means of transportation but now, we have access roads and you can move easily from one location to another. When I started secondary school, I used to trek six miles to get transport to Enugu but now, I get transport right in front of my house. So in that aspect, we have made progress. But when you compare our progress to other countries that were on the same level with us some 50 years ago, then we have a lot of catching up to do.

Job creation/Privatisation "This is one area that government should focus on.

Youth unemployment is one of the easiest ways of creating youths with poisoned minds and that is why there is insecurity all over the place.

Having said that, the entire world is going through global economic crisis. You can see the situation in Greece and Cyprus, it is not limited to Nigeria but ours is worse than theirs. I believe the government is paying attention because they are seeing the figures and I don’t think they will allow it to continue like this.

,

R Raymond Chukwugozie Obieri, a consummate banker who has traversed the financial sector of the economy for nearly 50 years, last weekend celebrated his 70 th birthday with thanksgiving service at Our Saviour's Church, TBS and launch of his autobiography Testimony of Divine Grace at the MUSON Centre, Lagos.

After the well attended ceremonies graced by the Living Fountain Orphanage established by the celebrant’s family and eminent Nigerians from various sectors of the economy such as Dr Alex Ekwueme, Admiral Allison Madueke, Justice George Oguntade, Chief Emeka Anyaoku, Prof. Anya O. Anya, Igwe Laz Ekwueme, Apostle Hayford Alile and Dr Joseph Sanusi among others, who showered tributes on him and urged Nigerians to emulate his virtues, Obieri spoke with journalists, saying his trust and confidence in God got him this far. Excerpts:

We’re on the right track with privatisation of sensitive industries

,

I think privatisation, for instance, of the former NEPA, is in the right direction because any private investor will like to run it profitably and he will put money into it. Now, we have GSM, people can call from anywhere. When Nigeria Airways died, many private airlines came on board so we do not queue again or run to catch a plane as if you were running to catch a bus. I think they are moving in the right direction by privatizing some of those sensitive industries that will create employment.

Nigeria’s education sector: "Because there were not as many institutions as we have now, generally, the standard of education has been very low and continues to be low but the private schools are keeping up standard. In our days, there was nothing like private schools. We had only three universities when I left secondary school in 1960. So

•Dr Raymond Obieri

you can imagine that only the best got in there. The teachers and all the employees were committed.

ASUU/FG face-off: "I will not delve into what government is doing or not doing because I am not part of government but I am sure they are fully aware of the impact on the community and I think they are talking. They will resolve it.

I

think in the last few years, there has been lowering of standard of integrity. During our time, the purchasing power of our currency was high. If what we pay the teachers is enough for them to sustain themselves, they will not resort to all these. So the low value of the currency vis-a-vis purchasing power is what causes all this. But I believe staying focused on the part of government; will help surmount all these problems.

Nigeria will not break up "I think God brought us together. When you hear of this break up, it is from politicians who want to score a political point. Average Nigerians from different tribes live in peace so I don’t think it is going to

matera isile.

It is politicians that are fanning the embers of division instead of unity.

Secret of y o u r youthfulness: "It is by the grace of God, but having said that, there is nothing like aging gracefully.

When you are aging, your body tells you you are aging no matter your look, so don’t be deceived.

Traits that helped in the past that are lacking today: "As we started progressing, competition and the rush to get rich quick set in, that, I believe, was part of the things that eroded honesty and being modest and I am sure with government doing the right thing, the youths will eventually imbibe the spirit of being honest, focused and not running a rat race."

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 39

Appointment and Promotions vicahiyoung@yahoo.com 08033348923

APM Terminals names Dawes interim Managing Director A PM Terminals, Apapa, has named Mr. Andrew Dawes Interim Managing Director of APM Terminals Apapa Limited.

He takes over from Mr. Dallas Hampton whose three years contract with the company ended August 31, 2013.

Dawes brings 18 years of experience in port operation to his new job.

He has served as the Chief Operating Officer, COO, of APM Terminals Apapa before he moved to work at the AfricaMiddle East Regional office in Dubai, United Arab Emirates, as COO and has also worked in other countries including Canada, United Kingdom, India and China, to name a few.

“My last three years in Nigeria has been immensely satisfying in spite of many challenges the terminal encountered. It is fair to say that it is much better in shape than when I arrived in July 2010 and the ongoing terminal redevelopment has a solid future. I would like to urge you all to continue to strive to make APMT the number one Terminal Operator in Nigeria and thank you for the support you have provided me during the last three years”, the outgoing Managing Director, Hampton, said in his farewell speech to the staff.

Andrew Dawes has promised to consolidate on the gains recorded in over seven years of APM Terminal’s operation in Apapa. At the flag-off of the evacuation of containers by rail from APM Terminals, Dawes said: “We are very excited about this

•Andrew Dawes project because it will enable APM Terminals Apapa to grow and to fulfil its plans and the plan of the Nigerian government. It is essential that this rail operation is successful so we are excited and on behalf of APM Terminals Apapa, we

fully support this and we will commit our resources and finances to make this a success.”

Dawes said Phase 3 of the modernization and upgrading of the terminal, which commenced in February this year, is fully on course. The project, which covers terminal yard redevelopment and expansion, also includes building of new staff amenities and customer service building; acquisition of container handling equipment, implementation of new terminal operating systems and a new Customs container inspection facility. APM Terminals Apapa commenced operation in 2006 and has since invested over $300 million in the modernisation and upgrading of West Africa’s largest container terminal.

S part of events to mark the 2013 Edo Technology Day, the State will officially launch its Open Data Portal on the 12th of September, 2013 The day will also enable major global and local technology venders and solution providers exhibit their products and services.

Tagged “Fostering Governance with Technology” the annual event which began in 2010 in the State, promises to be uniquely different from previous years as galaxy of IT consultants, vendors and solution experts would be in attendance from international communities.

This would enable them analyze, diagnose and proffer

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O ensure that beneficiaries of the Community Services Women and Youths Employment Project of SURE-P do not relapse to their pre-engagement economic conditions, the Federal Government has outlined specific actions on successful exit of beneficiaries from the project.

Speaking through the Minister of Labour and Productivity, Chief Emeka Wogu, at the meeting of the Inter-Ministerial Consultative Committee, IMCC, which is charged with the responsibilities of assessing the activities of the CSWYE, of SURE-P, Chief Wogu, who is also the Chairman of the Committee said “Effective exit of beneficiaries is key to the overall success of the project.

The danger of ineffective exit

Yuguda, Ndukwe for Business Journal's anniversary lecture/awards

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allam Isa Yuguda, Executive Governor of Bauchi State and Engr. Ernest Ndukwe, immediate past Executive Vice-Chairman, Nigerian Communications Commission (NCC) are set to grace the 5th Anniversary Lecture/Awards of Business Journal magazine scheduled for Friday, September 6, 2013 at Sheraton Hotel, Ikeja.

In a chat with Vanguard, the Publisher/Editor-in-Chief, Prince Cookey said; “Given the mortality rate of small businesses especially in the first five years, (a recent

study had it that 80 per cent of small businesses collapse in the first five years especially in the media industry), we felt that it is a good idea to celebrate five years in the market. We will also look at organisations and individuals that have done very well and appreciate them.”

Cookey said that Yuguda

Edo Technology Day 2013, state to launch Open Data Portal

A

FG outlines exit strategies for CSWY employment project

solutions to IT challenges with particular attention being paid to Broadband Delivery and Management in Nigeria.

Other areas of focus would include education at the Brink of Digital Revolution as well as security implications of Big Data and Actualizing a Workable National IT policy.

The 2013 Edo Technology Day which would parade notable speakers including Mrs. Omobola Johnson, Honourable Minister of Communication Technology and Hakeem Bello-Osagie, Chairman, Etisalat and several stake holders who have accepted to be discussants at the event.

*Prince Cookey,Publisher/ Editor-in-Chief, Business Journal would be the Special Guest of Honour and will also receive the “Champion of Good Governance & Sustainable Development award in recognition of his sterling qualities in promoting the tenets of good governance in Nigeria and embarking on sustainable developmental strides in Bauchi State while Ndukwe who will chair the

event will be honoured with Telecom Life Achievement award in recognition of his decades of achievements and commitment to the telecom industry in Nigeria.”

He said the anniversary lecture which has as theme: Is Nigeria Growing Forward or Developing Backward? “is designed to provide a platform for stakeholders in critical sectors of the economy to review the state of the media industry and national economy, and draw a roadmap for sustainable future,” adding that “the theme is apt given the inability of the economy to create jobs and reduce high level of poverty in the country despite Gross Domestic Product (GDP) growth of between six and eight per cent per annum, according to latest figures from the government and various international financial institutions.”

The event which is supported by the NCC, National Insurance Commission, Nigerian Export-Import Bank, IGI Plc, NICON Insurance Limited, Royal Exchange Plc, NEM Insurance Plc, STACO Insurance Plc, Anchor Insurance Company Limited etc., will have as guest speakers Mr. Roberts Orya, Managing Director/ CEO, Nigerian Export-Import Bank (NEXIM) and Mr. Chike Mokwunye, Group Managing Director/CEO, Royal Exchange Plc.

•Wogu is the relapse of the beneficiaries to their preengagement conditions which would have negative effect on their standard of living and overall national development.”

The Minister noted that the Project Implementation Unit had carried out “specific actions on exit of beneficiaries among which are : Collaboration with the Federal Ministry of Youths Development to train 24 beneficiaries from each 36 states of the federation and the Federal Capital Territory for two weeks, with provision of starter packs to participants to commence micro enterprises in the areas of the training.

Memorandum of understanding is also being drawn up between the Railway Corporation and the SURE-P on the permanent engagement of CSWYE beneficiaries in states and communities along KanoLagos and other Rail corridor.

A proposal for production of briquettes from waste materials which has capacity to employ 84 beneficiaries, produce 720 bags of briquettes per day, and yield monthly returns of N1,267,200 is also being reviewed.”

Chief Wogu urged members of the Inter-ministerial Consultative Committee and the public to partner with the project towards ensuring successful exit of the 119,170 beneficiaries and create space for more unemployed women, youths and disabled persons to benefit from the CSWYE project.

In her remarks, the Minister of Women Affairs Hajia Zainab Maina, charged beneficiaries to make best use of the opportunity afforded them by this project to be better citizens.

She thanked Mr. President for this stop gap employment creation opportunity while appreciating the Minister of Labour and Productivity for successes recorded since his taking over of the project

40 — Vanguard, MONDAY, SEPTEMBER 2, 2013

Aviation

FAAN to erect observation posts at all airports

By LAWANI MIKAIRU & DANIEL ETEGHE

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R-L, Managing Director, Med-View Airline, Alhaji Muneer Bankole, Senior Flight Officer, Ademulegun Adebayo Jonathan, Head, Flight Operations, Capt.

Wale Oke, Head of Engineering Engr. Lookman Animashaun Capt. Ndubisi Ekwempu during the arrival of Med-View Airline's Aircraft Boeing 737-500 from France yesterday at the Murtala Mohammed Airport, Ikeja, Lagos.

HE Federal Airports Authority of Nigeria, FAAN, has said all the 22 federal airports in Nigeria will soon have static observation posts erected at strategic locations within the perimeter fence of the airports to forestall premeditated and

inadvertent unauthorized access to the airside. This will be complemented by motorized and foot patrols.

This is part of the new security measures introduced by FAAN in all the nation’s airport in order to prevent the reoccurrence of runway incursions at all airports in the country, especially those without perimeter fences.

It will be recalled that a teenage boy beat security checks at the Benin Airport and subsequently sneaked into the main wheel of an Arik aircraft from Benin airport to the Murtala Muhammed Airport, MMA2, Lagos.

Disclosing this development to newsmen, General Manager, Corporate Communications, FAAN, Mr. Yakubu Dati said that “static observation posts will be erected at strategic locations within the perimeter fence of all airports to forestall premeditated and inadvertent unauthorized access to the airside. This will be complemented by motorized and foot

patrols.” He also said henceforth, a security vehicle would be deployed to a point within full view of the aircraft as it taxies out to take-off at the airports as the aim was to maintain visual scrutiny to any situation until every departing aircraft was safely airborne.

Mr. Dati further pointed out that the another measure was to ensure that all bushes at the airports across the country were cleared to ensure full view of the perimeter fence, to allow both the control tower, FAAN Fire and Rescue observation posts and aviation security patrol teams have a sweeping view of the entire perimeter of an airport from their duty posts.

“The absence of perimeter fences at most of our airports had always posed a challenge to FAAN because of the huge capital outlay required in constructing perimeter fences, some of which are as long as 40 kilometres, across the 22 network of airports across the country”he added.

NAMA MD charges Servicom to deliver effective service

By LAWANI MIKAIRU

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HE Managing Director of the Nigerian Airspace Management Agency, NAMA, Engr Mazi Nnamdi Udoh has charged Servicom officers in the aviation industry to ensure quality service delivery to airlines and the travelling public.

According to Supo Atobatele, General Manager, Public Affairs “ the managing director who lauded the recently introduced passengers’ bill of right by the regulatory agency – NCAA, frowned at the shoddy handling of passengers by the airlines in terms of late departures and cancellations of flights at the airports and charged the industry Servicom team to brace up.”

Atobatele said Engr Udoh made this remark at NAMA headquarters during the quarterly Servicom Networking meeting of all agencies

in the Ministry of Aviation. He further said NAMA has already keyed into the Zero Complain principle where the customer is the focal point of the agency’s operations. He stressed that for effective service delivery among the different agencies of the sector, there was the need for peer review mechanism among the agencies.

According to Udoh,” this system would further ensure that the various agencies apply checks and balances among themselves, ensuring customer satisfaction, which is the ultimate goal of all service organizations.”

Earlier in an address, the Chief Servicom Officer in the Presidency, Ms. Nnenna Akajemeli noted that the meeting is essentially critical as it was bound to yield very useful outcomes at the end of the day.She explained “ that Servicom officers in the various agencies have an onerous duty of not only reminding staff about their service

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 41

FPA

42 — Vanguard, MONDAY, SEPTEMBER 2, 2013

FPA

Vanguard, MONDAY, SEPTEMBER 2, 2013 — 43

Advertising, Media & Marketing

Juice market:

Too Big for Customers?

Battle of wits & control of consumers mind … Fumman, others launch onslaught Stories by PRINCEWILL EKWUJURU

A

cursory look into the fruit juice market and activities of fruit juice manufacturers’ tactics to control the market is become visionary. Today, revelation had shown that there appears to be a new frenzy marketing tool, eliciting what may be termed a rallying point where fruit juices intend to win and control consumers mind.

Brands like Chivita, from Chi Limited, which recently activated the 100 percent pure juice content tagline, 5Alive, from Coca-cola, La Casera, Viva and others, have keyed into the 100 percent natural juice content campaign to drive sales, as well as rejuvenating activities in the juice market.

Today ’s consumers are dynamic and vibrant, all they want is a brand that can fit into their lifestyle and make them have worthwhile experiences.

In fact, now, consumers want to create the brand and own the brand. Consumers want offerings that meet their desired taste and the brand they can use as a means of self expression.

Consequently, all these brands in a bid to establish a top-of-the-mind-awareness will have to align with the aspiration of consumers, their lifestyles has invariably become a basic imperative, as consumers yearn for brands that fit into their lifestyle, the need to create unique and compelling brand experience can never be overlooked by any serious minded brand.

The deployment of various campaign trends by brands to project unique selling point brings to fore the extent they have gone to bring consumers close to their brand.

Fumman fruit juice which has consistently pride itself on quality and guaranteed customer satisfaction, invoked a strong focus on consumer healthy habits, when it reeled out its 100 percent pure fruit juice campaign recently.

The brand differentiates itself from the pack through its strong focus on quality and natural blend of fruit juices. The brand believes it offers what consumers cannot obtain elsewhere in terms of value and quality.

The Managing Director of

From Left:Group Head, Brands and Communications, Philly & Mools Group, operators of Metro Taxis, Rotimi Wusu, Chief Executive Officer, BBDO West Africa, Demola Olusunmade, Managing Director, Spronks Creations Limited, organisers of the Nigeria International Wine & Spirits Fair, Aderonke Sobodu and General Manager, Best Trade Nigeria Limited, Vanna Adami at the World Media Conference to unveil activities lined up for the Fair 2013 in Lagos.

Fumman Agricultural Products Industries Plc, Mr. Layi Adeyemi, said Fumman has adopted strategies to continuously engage consumers and meet their yearnings and aspirations. “It is the desire of Fumman to make the consumers experience innovation combined with value and top class quality.”

The lifestyle of the consumers needs to be accorded utmost priority in delivering service, as brand offerings should indeed be one that meets the yearnings and aspirations of the consumer, he continued.

Fumman realises the imperatives of natural blend of fruit juice and it ensures a quality centric process to enhance consumer satisfaction. It should be stated that our juices offer natural nutrients that give our consumers healthy lifestyle, said the Managing Director.

Unilever reformulates Omo U NILEVER Nigeria Plc, manufacturers of Omo multi active detergent has reformulated the brand, enhancing its aroma with new fragrance.

During the launch in Lagos, the company reinstated its commitment to innovation, saying that with this improvement it believes the consumer experience will be a delight.

Speaking, Vice President, Operations, Unilever Nigeria Plc, Anil Gupalan said: “Our business initiatives are hinged on consumer satisfaction and innovation is the driving force in our quest to meet consumer expectations. Innovation is what we know how to do best.

Omo as a brand has evolved through the years with our philosophy to make child development possible without limitations. With the new improved Omo Multi Active detergent we would continue to support parents reduce the challenge of fabric cleaning.

Anil further explained that

Omo multi active detergent is also embracing a new thrust to promoting ‘Peace’ in Nigeria. “Omo multi active detergent appreciates how kids learn, express their creativity and even bolster their immune systems. Unilever, thus, urges people to stand up for peace and show lovefor OMO detergent”. He said.

Anil added: “Peace is a state of harmonious relations between people, allowing fordevelopment that meets human and environmental needs. Peace can be accomplished by building institutions of law that promote justice andnon-violence.

Without people like our consumers, none of this would bepossible.”

Brand Building Director, Unilever Nigeria, David Okeme said: “The new OMO Multi Active detergent contains Max Clean particles, which penetrates deeper to tackle even the most stubborn stains, to deliver the best results.” “Over the years, Omo Multi Active detergent has been the detergent of choice for generations of Nigerian families,” noted the Brand Building Director. “We are proud of this special innovation in OMO Multi Active detergent’s history and will continue to enhance OMO Multi Active detergent’s cleaning capability through innovation, to ensure it consistently delivers the best results for now and the future,”he added.

S

ome time ago, a customer to one of the first generation banks had a proposal that would generate business for his organisation and the bank. After discussing the proposal with the relationship officer, the customer was told he needed to meet with the Regional Manager (RM).

So he frantically tried to reach the RM. After two days, the customer was lucky enough to speak with the top guy who had, understandably, been in a series of meetings.

Naturally, the RM apologised for not returning the customer’s calls (you wonder why he didn’t).

Not too pleased, the customer casually wondered how the RM managed to have time for his customers since he was in meetings most of the time.

The RM smiled and told the customer that at his level, he was expected to attend to “strategic” matters – not meeting customers. A very instructive response, you may say. But it sounded quite strange to the customer who had always thought that deposit mobilization was one of the most important criteria for assessing performance in the Nigerian banking industry today. And we all know that deposits don’t grow on trees; they come from people – that is, customers. So, if the source of deposits is not “strategic” to a top bank executive, what is?

Mindset Anyway, this mindset is not unusual this side of the globe. Most times, service providers grow too big to attend to customers. Indeed, if they had their way, customers ought to be serving them.

True, top guys ought to spend a lot of their time doing strategic stuff and I won’t advocate that they spend their day working the shop floor always. But they do need to face the customer sometimes – at least to appreciate first-hand what their frontline hear, feel and see all the time. Even CEOs need to see customers some of the time. The payoff could be enormous.

Growing too big for customers is not a problem that is peculiar to the banking industry. In fact, there seems to be a pervasive display of professional snobbery toward customers among employees in high-paying industries such as banking, telecommunications, oil and gas, aviation, etc. While at the top levels this hubris manifests in executives being inaccessible to customers, at lower levels it shows up as a tendency to treat customers anyhow. Thus, the average teller or customer service staff in a bank talks to customers as if she was doing them a great favour by serving them. Of course, there are always some exceptions.

Reality Check Here’s a quick reality check to be sure we aren’t getting too big for customers. How do you respond to each of these questions – Yes or No? § Are you most times so busy that you can’t spare five minutes to speak with a customer? § Do you sometimes complain that customers won’t allow you to rest? § Are there times you would rather do any other thing than see a customer? § Are you sometimes so busy with your computer that you can’t look up to acknowledge the customer standing before you? § Do you routinely expect customers to greet you first (after all, they came to your office)? § Do you sometimes relate to customers as your inferiors because some of them address you as Sir, Oga or Madam? § Are you tempted to compel a customer to acknowledge that she was wrong? § Is it sometimes difficult to get up from your seat to help or greet a customer? § Do you find yourself dominating discussions with customers as if it were a contest of wits? § Are you comfortable with sending customers to go and get this or that document, even when you ought to do so yourself? § Is it difficult for you to see even your top customers to the door? § Are you so that busy you don’t remember to return customer calls or reply their text messages?

If you answered “yes” to most of these questions, I’m afraid you are already getting too big for your customers.

Comments are welcome.

44 — Vanguard, MONDAY, SEPTEMBER 2, 2013

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

CBN as misguided Father Christmas nation’s six geopolitical zones for its intervention in 2013".

The criteria for selecting beneficiary institutions from each geopolitical zones are probably only known to CBN. Nonetheless, some observers may be concerned that the establishment of a “project and planning services department in the CBN may also be another wasteful duplication of the existing primed capacity and manpower structures of the Ministry of Education”.

,

I

n view of the apparently ‘boundless’ funds at the disposal of Nigeria’s Central Bank for its independent interventions, observers, including the National Assembly have frowned at the proprietary and the shrouded protocol surrounding the values and the choice of beneficiaries of the apex bank’s bonanza.

The CBN, however, insists that these interventions are in consonance with its enabling Act, and therefore distinguishes its cash gifts as Corporate Social Responsibility (CSR), in furtherance of its primary mandate for “price stability” to drive real economic growth.

The following examples of CBN interventions in some sectors are by no means exhaustive; for example, Bayero University, Kano, has so far collected N1bn out of a projected N4bn donation; the University of Benin similarly got an ‘awoof’ of N500m a few months after Lamido Sanusi received an honourary award from that university. Lately, the media reported CBN’s donation of N10bn for infrastructure capacity and manpower development at Uthman Dan Fodio University, Sokoto.

The Vice Chancellor of University of Lagos, Prof.

Rahman Bello, had earlier also confirmed a N10bn project intervention from the CBN! Accordingly, Mr. Kabir Nuhu Koko, CBN Deputy Director for Project and Planning similarly confirmed that the CBN has selected “six secondary schools, six tertiary institutions and six public sector institutions across the

by AMCON to recapitalize the three bridge banks in 2011, while about N1.725tn was also spent by AMCON to acquire the non-performing loans of banks. Nonetheless, CBN management insists that the interventions in the banking sector are loans and not expenditure; besides, according to the Governor, CBN is “empowered by its enabling Act to invest in debentures”, in institutions such as Bank of Industry,

Thus, despite over N2tn cash ‘loans’ for banks’ support, the apex bank simultaneously also inexplicably borrowed trillions of naira of government deposits from the same banks!!

In similar vein, CBN’s donation of N100m to victims of Boko Haram menace in Kano and the apparent afterthought of extending similar financial assistance to victims of the bomb attack at the Catholic Church, Madalla, Niger State, appear to also duplicate the functions of the National Emergency Management Agency. The value of the above social interventions, however, pale into insignificance in comparison with the trillions of naira empowerment to prop up banks and grow the economy with onward low cost loans to the real sector.

The intervention funds of well over N3tn in the banking sector include the initial N620bn injected to rescue 10 banks in 2009; additionally, over N600bn was expended

,

where it intervened in sectors such as aviation, agriculture and small and Medium Enterprises. According to the Governor “as long as loans are not expenditure and we are empowered to grant loans, then the legality of our action… is not questionable”.

Furthermore, according to Sanusi, CBN’s spending does not require appropriation since it is provisioned for outside the nation’s consolidated revenue fund, as “its expenditure provisions derive from the proceeds of its investments and loans or printing money, both of which are covered by the CBN Act.” In other words, the funding for CBN’s various CSR interventions are sourced from its profits; nevertheless, the investment portfolios that generate the

the funds borrowed by the apex bank are simply sequestered (kept idle)to reduce money supply and the threat of inflation rather than a strategic application to any interest-yielding or capacitybuilding investment.

Evidently, the current balance of over $40bn self titled ‘CBN own reserves’ could never have been accumulated from such an impractical business model; the awkward reality, of course, is that, while CBN’s dollar reserves keep increasing with minimal yield and impact, the government still goes cap in hand (till date) to seek domestic and external loans at oppressive rates of interest. Instructively, the more CBN substitutes naira for dollar revenue in monthly allocations, the higher will be CBN’s reserves, while the burden of surplus naira will similarly increase to instigate the ‘curse’ of high interest rates and government borrowing back its own funds.

Regrettably, however, the CBN has failed to achieve its constitutional mandate for price stability while the banks remain resistant to supporting the real economy. The impacts of bailout packages in the US have since repositioned both the automobile and mortgage subsectors; curiously, however, CBN’s sectoral interventions have failed to produce the desired impact; for example, the N35bn to Air Nigeria may have become money down the drains!

Worse still, the CBN continues to borrow back government deposits at double-digit interest rates, even as you read this article.

funding of CBN’s huge CSR interventions may still need clarification!

Sanusi also claims that CBN’s intervention in the rescued banks was defined by “its statutory role as the lender of last resort, in the context of providing liquidity in the system when banks face liquidity challenges in meeting their obligations”; Consequently, “if CBN does not lend money to banks or government, then you don’t need a Central Bank; to lend money is why we exist”.

The preceding may sound economically bizarre in the light of the recent belated recognition by the same CBN Governor that the unyielding pressure of surplus cash in the system induces the aberrant reality of government impulsively borrowing back its own funds from banks at rates of interest between 13 and 14%.

Thus, despite over N2tn cash ‘loans’ for banks’ support, the apex bank simultaneously also inexplicably borrowed trillions of naira of government deposits from the same banks!! The CBN claims that the bailout funds were strictly loans to the banks, but pray, what rates of interest did the banks pay in comparison to the cost of government’s borrowing from those same banks, which also have custody of government’s interest-free deposits? It would require super-human creativity to make such a business model profitable enough to sustain CBN’s liberal largesse to its beneficiaries, especially when

SAVE THE NAIRA, SAVE NIGERIANS

Business & Economy

Investment One acquires Fidelity Bank’s NIGFUND I

nvestment One Financial Services Ltd (formerly GTB Asset Management) says it has acquired the funds management rights of Nigeria International Growth Fund (NIGFUND) from Fidelity Bank Plc. In a statement on Friday in Lagos, the company said that the acquisition had been approved by the funds unitholders and ratified by the Securities and Exchange Commission (SEC).

NAN reports that NIGFUND is a balanced mutual fund launched in 2002 to satisfy investment objectives of individual and institutional investors.

Mrs Abimbola Afolabi-Ajayi, the company ’s Head of Corporate Services, said that the acquisition was geared towards fulfilling its desire to be one-stop shop for comprehensive investment services.

Afolabi-Ajayi said that the acquisition was in compliance with the CBN policy which directed all banks to divest from non-banking services.

She said that the company would bring on board its wealth of experience as a foremost asset management to ensure optimal and efficient services to unit-holders.

Afolabi-Ajayi said that the company would deploy

investment strategies to ensure long-term capital appreciation and regular dividend distribution to unitholders.

She called on retail investors to embrace the fund with balanced investment in equities, fixed income securities and real estate.

Afolabi-Ajayi said that the company would embark on massive investment education across the country to increase retail investors’ participation in the fund.

NAN reports that Investment One was licensed

by SEC to provide capital market services like funds management, trusteeship,

securities brokerage and

financial advisory.

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