NOVEMBER 26, 2012
Operators, industrialists fault CBN’s monetary policy decision By PETER EGWUATU, FRANKLIN ALLI & NKIRUKA NNOROM
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he Lagos Chamber of Commerce and Industry, LCCI, and other operators in the financial sector have criticised the decision of the Central Bank of Nigeria CBN) to retain its policy which seeks to tighten money supply. The Monetary Policy Committee (MPC) of the apex bank after its meeting on Tuesday decided to retain its tight money supply policy by retaining the Monetary Policy Rate (MPR and the Cash Reserve Requirement (CRR) at 12 percent , while Liquidity Ratio was retained at 30 percent.
Prior to the MPC meeting, there have been widespread calls on the CBN to ease money supply by reducing the MPR, which is the benchmark for interest rates in the economy. The CBN however dismissed these calls saying, “The Committee observed that while there were compelling arguments for monetary easing at this time based on the continuous moderation of core inflation, slowdown in Gross Domestic Products (GDP) growth and evidence of fiscal prudence,. the short-term gains may not be sufficiently adequate to overturn the long term implications of sending a wrong signal that the tightening cycle was permanently over. Economic experts, however, criticised the MPC decisions saying it is detrimental to business and
economy. Reacting to the decision, Muda Yusuf, LCCI Director General, warned that the continuation of a tight monetary regime by the CBN would have the following grave consequences on the economy: “Persistence of high interest rate, deepening of the unemployment crisis, stock market recovery would continue to be slow; the capacity of banks to support the economy would remain severely constrained while the recovery of the real economy will remain sluggish.” He said that the reality of the current economic and business conditions is a cause for concern, saying that “It causes escalating unemployment crisis, profit margins are declining; consumer demand is
weak; prohibitive interest rates; decelerating economic growth and high mortality rate of small businesses. “These conditions call for policy choices that would stimulate the economy, even at the risk of inflation. Boosting economic activities would increase output and invariably moderate inflation. The MPC decision to retain a regime of tightening is ill advised and insensitive. We appreciate the concern of the CBN about inflation, exchange rate stability and the preservation of foreign reserves. “However, given the present socio economic conditions, stimulating the economy should be paramount at this time. Monetary policy decision should ideally be situated in the context of
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148.20
-2.8
2,574.00
+43.00
19.2
-0.44
111.39
+0.84
88.26
+0.90
CURRENCY BUYING CENTRAL DOLLAR STERLING EURO FRANC YEN CFA WAUA RENMINBI
RIYAL KRONA SDR
Ag- Executive Chairman ,Federal Inland Revenue Service Alhaji Kabir Muhammed Mashi in handshake with Mrs Rekuya Yusuf Chairman
154.76 246.9196 199.2535 165.3595 1.8741 0.2831 235.327 24.8438 41.266 26.7141 236.0864
155.26 247.7173 199.8973 165.8938 1.8801 0.2931 236.0873 24.9245 41.3994 26.8004 236.8491
SELLING 155.76 248.5151 200.541 166.428 1.8862 0.3031 236.8476 25.0052 41.5327 26.8867 237.6119
CBN Exchange rate as at Friday 23/11/2012
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18 — Vanguard, MONDAY, NOVEMBER 26, 2012
Cover Story
The Basic Guide to Starting your Business Part 1
Bauchi State Governor, Malam Isa Yuguda (left), presenting the borrowing plan to the Chairman, House of Representatives Committee on Aids, Loans and Debt, Hon. Adeyinka Ajayi (right), with them is the Deputy Chairman of the Committee, Hon.Hassan Saleh, during the meeting with State Governors on 2012-2014 external borrowing plan, at the National Assembly in Abuja. Gbemiga Olamikan.
Operators, industrialists fault CBN’s monetary policy decision Continued from page 17 this reality; the interest of the larger economy and the welfare of the citizens. The ultimate aim of economic policy is to impact the lives of the people. Economic policies are not ends in themselves, but means to an end! The fiscal authorities also have a critical role to play in revamping the economy, but regrettably, the effectiveness of fiscal policy has been significantly weakened by corruption and pathetic institutional capacity,” said LCCI. In same vein, analysts at the Financial Derivatives Company Limited, FDC, also called on CBN to end its tight money supply policy in 2013 by allowing interest rate and exchange rate depreciate. “In 2013, the CBN will have to moderate its stance to allow the interest rate to decline and exchange rate depreciate,” they said in the company’s monthly economic publication released recently. Also, Mr Wale Oluwo, Managing Director, Investment Banking, BGL Securities, said “I believe CBN took a wrong decision by retaining the MPR at 12 per cent at a time when the general expectation amongst economists is for rates to start trending downwards, particularly when core inflation figures, as published by the Federal Bureau of Statistics, has been declining for the past four months. The CBN appeared to have based its decision on the increase in headline and food inflation without giving consideration to the steady decline in core inflation.” He noted that the decision by the CBN will stifle GDP growth and increase unemployment in the country, C M Y K
adding that general interest rate in the economy will also increase. He observed that the private sector, which is supposed to generate growth and employment will not have access to cheap funding to increase capacity utilisation and create more goods, services and jobs. “The CBN appears not to understand the fundamentals of the Nigerian economy; they should have commenced reducing the MPR by 0.25 percent every quarter since March 2012. If indeed they know what they are doing, I expect them to start reducing the MPR from their first MPC meeting in January since the meeting of November is the last for this year. Oluwo further sated that the policy will further depress the capital market as fund managers and banks will continue to invest in safe government instruments (Treasury Bills, Bonds etc) where they can make cheap double digit returns without taking any risks. Accordingly, funds will not get to the private sector and their financial performance with continue to dwindle, further depressing the prices of their shares on the Exchange. Individuals and Households will also not have access to funds which will make the Nigerian economy to continue shrinking,” he said. For David Adonri, Chief Executive Officer (CEO), Lambert Trust and Investment, “The implication of the retention of MPR at 12 percent for the capital market is that the fixed income market will continue to maintain its dominant position. He added that prevailing high interest rate on bank borrowing and increasing
public borrowing will continue to crowd out the real sector and the equities market. Responding to the decision, FDC analysts said the apex bank is over relying on interest rate to curb inflation, and this is affecting economic growth. Just last week, the Monetary Policy Committee (MPC) of the CBN in a bid to maintain effort to tighten money supply, decided to leave the MPR rate at 12 per cent, in spite of calls for a downward review of the benchmark interest rate. They said, “The Monetary Policy Committee, as anticipated, left its benchmark interest rate unchanged at 12 percent during its last meeting for this year. The decision was based on inflationary risks and uncertainties surrounding the weak global economy. Other policy instruments such as the Cash Reserve Ratio and Net Open Position were left unchanged at 12 per cent and 1 per cent respectively. “Nigeria’s annual inflation rate increased by 0.4 percent to 11.7 percent in October, primarily as a result of exceptional factors such as the flooding which resulted in an increase in food inflation to 11.1 percent. The impact of the flooding in 12 states of the country was immediate but was not as severe as expected. Core inflation declined for the 4th consecutive month to 12.4 percent. This according to the MPC has created some uncertainty as to the appropriate policy stance to apply. The fact that leading economic indicators have remained positive for two months and the GDP growth figure for Q3 came in lower than the previous year at 6.48
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becoming their own boss. Growing up for me wasn’t easy and I knew I didn’t want to end up that way, so the moment I discovered an opportunity, I did not hesitate to take advantage of it. I’m desirous for a transformation, which will catapult your life to that place God has predestined for you. Every business starts with an idea, so it is important to have the right kind of idea; this is because the wrong idea can lead to the failure of a business. Don’t forget that the first step is always crucial in the start of any journey in life. It is important that you Brace up for the challenges ahead, and do not let anyone fool you (don’t be deceived) that you won’t encounter obstacles. Nevertheless, the determination to succeed and go on will guarantee that you remain on top of your game; this is because the very existence of an idea in your mind
,
T
he term business denotes a particular trade or profession designed to provide goods and/or services to consumers. And in like vein, any organization which provides these services is also referred to as a ‘Business’. Businesses play a vital role in the life and culture of countries with capitalist and free-market economies. In free-market economies, businesses operate without government control in matters such as pricing and wage levels. While in capitalist economies, private individual and business firms carry on the production and exchange of goods and services through a complex network of prices and markets. The earliest known use of “business” is the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. It is of utmost importance that in starting a business, you need to be guided in your choice of bringing that lifelong dream of yours into fruition. By following the basic guides or rules, you can write a plan adequately that reflects your goals, your personal skills, needs, knowledge, leadership abilities, available resources, level of risk, and the nature of your business factor into the equation (the nature of your business). One of the most important aspects of starting your own business is that it gives you an opportunity to do what you enjoy. When starting a business, certain important points must come to mind your business must fit into your personality, passion, vision, strengths and other strong character traits. Never base your desire to start a business on what a friend has done, this is because the fact that it worked for another doesn’t necessarily mean it will work for you. Bear in mind that entrepreneurship is individualistic, and leadership is indivisible. Let me explain to you, why I decided to write this book. I am constantly pained by the alarming rate of unemployed youths in the society and the poverty level not only in our country, but also all over the world. The situation pulls at my heartstrings and I know and am convinced that we can change things for the better, if only people join in the entrepreneurial revolution by
Every business starts with an idea, so it is important to have the right kind of idea; this is because the wrong idea can lead to the failure of a business
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shows that you have within and around you, the capacity to turn it into reality. Generally, the size of business you want to embark on has to be thoroughly considered; this is because there is no maximum or minimum length for a business plan.
Vanguard, MONDAY, NOVEMBER 26, 2012 — 19
Governmental Affairs. The total budget estimate for the State House in 2013 is N14.715 billion. Ogbile explained that out of the N1.3
Is governance about food and drinks?
Set food table billion, “the Federal Executive Council (FEC) holds every Wednesday and we take care of them through this budget”. Take care of them how? Give them citing allowance or feed them? Have they no food at home? Don’t they eat before coming to meetings? Mr. President, can’t these ministers and others participating in the meeting go on break, eat their own food and return to the meeting? How long can we continue with a few Nigerians milking the nation blind? If this amount is properly utilized, will it not take some youths out of the nation’s street? Nigerians can now see why politics in Nigeria is a matter of life and death because once elected, it is bye to poverty for the occupant of the position and his entire siblings because
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so Rock, the seat of federal government, has become a fortress of all sorts. There, you have political power, position, influence and dishing out of largess to the favoured. One of the easiest ways of dishing out largess in Nigeria is through contract award. Food for instance can be supplied by anybody; so to help the girls who are close to the power that be, fruits and other food ingredients are supplied on contract. This is why the government can afford to vote N1.3 billion for feeding and refreshment at the seat of power. In a country where there is mass unemployment of the nation’s youth, poor infrastructure, irregular power supply, the federal government can afford to vote that huge sum for entertainment. The question is for whom? Most of the civil servants, government functionaries and political office holders are paid salaries. Their monthly take home package already has provision for entertainment allowance. In a period of economic difficulties, it is expected of leaders and citizenry to make sacrifice by forgoing certain privileges to move the economy forward. Nigerian leaders are known to ask citizens to make sacrifice without doing the same. The arrogance of federal civil servants makes it look as if they have conquered the rest of us and must lord over us. How can a handful of people in government spend this much, yet the Permanent Secretary in the State House, Mr Emmanuel Ogbile, will come out in the open to say that the N1.3 billion budgeted for refreshment, meals and other miscellaneous expenses in the 2013 budget is inadequate? Ogbile was quoted as saying this in Abuja on Tuesday while defending the State House’s 2013 budget estimates before the Senate Committee on Federal Character and Inter-
Most of the civil servants, government functionaries and political office holders are paid salaries. Their monthly take home package already has provision for entertainment allowance
they come to live in government quarters and eat free food, free transport, in fact, free every thing. Imagine Ogbile saying “I have taken pains to explain that this money is not just to fund the residence of the President and that of the Vice President. The experience I have had is that this fund is grossly
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insufficient. It’s not even enough.” He listed other expenses that were taken care of in the refreshment and meals vote to include National Economic Council, Council of States, Presidential retreats, National Merit Award, Children’s Day, and hosting of dignitaries. A breakdown of miscellaneous expenses in
the presidential budget showed that N203.7 million was allocated for refreshment and meals, N107.4 million for honorarium and sitting allowance, while N37.27 million was budgeted for publicity and advertisement. Others include: medical expenses of N50.3 million; postage and courier services, N10.03 million; welfare packages, N195.06 million; subscription to professional bodies, N4.58million, as well as sporting activities, N32.9 million. Meanwhile, feeding of animals, including animal supplements for the veterinary clinic had N30.58 million. Are we surprised that we are the way we are? That the economy has not moved as fast as desired is because of the fact that in Nigeria’s budgeting system, there is no value for money. All that we do is put figures together; so long as it satisfies the desire of those in position of authority that is all that matters. It is time this government faces reality and does away with provisions in the budget that add no value to the ordinary Nigerians. Those in government are not the only people that are entitled to enjoy the wealth of this nation. All Nigerians are. In a situation where about 70 percent of the population is officially said to be poor and live under $1.5 dollar a day, it is share madness for government to spend huge amount feeding themselves at meetings when the rest of the citizenry are hungry and dying of starvation.
Cover Cont.
Operators, industrialists fault CBN’s monetary policy decision Continued from page 18 percent, sends mixed signals on the direction of the Nigerian economy. In addition to this, the government is resolute in its pursuit for fiscal prudence as reiterated by the Federal Minister of Finance. “All pointers are in favour of an end to the CBN’s tight monetary policy stance and the need to boost growth and lending to the real sector. The current contractionary policy stance has been in play since October 2011 when the MPR
was raised by 275bps. The sustainability of a contractionary stance and its stifling impact on growth and the economy justifies the need for a change in policy direction. Our view is that the overdependence on interest rates as a tool for adjustment is precarious”. Also commenting on the retention of the MPR at 12 per cent, the Vetiva Capital Management Research unit said, “At 12.4 percent yearon-year (YoY) in October, core inflation is still elevated.
Clearly, the MPC was not entirely impressed with the downtrend in core inflation, despite reaching the lowest in eight months. Continuing, it said, “All Items less Farm Produce” components in the October inflation figures, somewhat mirrors our reasoning on the possible resurgence of demand side pressures. Like we stated in our November 18 Inflation notes, inflationary pressures on food prices are likely to rise from the lingering effects of the floods; nonetheless we expect the
impact to fizzle out by the end of the first quarter in 2013. Having nursed all these concerns, we note that statistically, headline inflation should be in single digits in first quarter of 2012 and eventually average 10 percent owing to favourable base effects - this should offer some temporary comfort to the MPC. “We however see two upside risks to inflation in 2013. First, is the pressure from imported food inflation as food commodity prices
trend north (though we expect some of these impacts will be somewhat offset by a stable exchange rate). Second, is the probable reduction of fuel subsidies in 2013 – whilst we note that the 2013 budget makes “some” provision for financing this line item, the amount appropriated is unclear, as such, it may be safe to assume a portion of the subsidies may be cut. Nonetheless, we do not expect these factors to significantly derail the positive inflation outlook.” C M Y K
20 — Vanguard, MONDAY, NOVEMBER 26, 2012
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Vanguard, MONDAY, NOVEMBER 26, 2012 — 21
Business & Economy BRIEFS Mashi tasks ANAN on professionalism
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he Acting Executive Chairman, Federal Inland Revenue Service (FIRS), Alhaji Kabir Mashi, has called on members of the Association of National Accountants of Nigeria (ANAN) to ensure due diligence and professionalism in their carrier. Mashi, who made the call when the Abuja chapter of ANAN visited him in his office, said accounting profession requires such virtue in order to keep with the global best practices. The Acting Executive Chairman said the association should not only seek members, but ensure appropriate training programme that would enhance skill acquisition that would in turn put members on vantage position in the accounting profession. Mashi pledged continued support in the area of training, both locally and internationally for more than 350 ANAN members who are staff of the FIRS and urged them to encourage other staff to join the professional body. He also pledged support to ANAN as a body as part of an effort to deepen knowledge of Nigerian accountants that would assist the Service in its core mandate of tax revenue collection and accounting for the country.
Lagos raises N80bn bond to complete ongoing projects
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ov. Babatunde Fashola of Lagos State has signed a deal with an investment company, Chapel Hill Ltd., to raise N80 billion bonds to complete ongoing projects. Fashola signed the deal at the Completion Board Meeting held in his office, Ikeja. He said that government explored the option to fund the infrastructure needs of the state in the face of limited funds. Some of the ongoing projects included the expansion and reconstruction of the Lagos-Badagry expressway, the light rail and ferry terminals across the state. The others are construction and completion of health institutions such as Ayinke House at the Lagos State University Teaching Hospital and Maternal Healthcare Centers across local governments.
FG is committed to self-sufficiency in rice production by 2015, says Tijjani
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he Minister of State for Agriculture and Rural Development, Dr Bukar Tijjani, has said that the Federal Government is committed to ensuring selfsufficiency in rice production by 2015. “It is only when that is ensured that there will be a total ban on the importation of rice. It has to be a gradual process,” he said in Sokoto. Tijjani made this known at the ministry’s meeting with stakeholders involved in special intervention on dry season paddy production. According to him, "Nigerians have grown to like rice. President Goodluck Jonathan has taken a decision to ensure that the nation becomes self-sufficient in rice production. “As at now, the federal government has put a 30 percent tariff on imported rice. Nigeria seems to be a dumping ground for bad rice. This is to discourage massive importation. By 2015, we should have a total ban. Nigerian should be patriotic enough to use Nigerian grown rice.” Tijjani further said that 230,000 hectares were to be utilised across the country under the accelerated paddy production in the current dry season farming season. He said under the scheme, the Federal Government would provide fertilisers to farmers at 50 per cent subsidy. “Seeds for the 230,000 hectares are also available. The roll out starts now. An action plan would be drawn today. “The funds to pay for all services to be rendered under the scheme have also been made available by the Federal Government. Jonathan and all the cabinet members are committed to ensuring food sufficiency in Nigeria to preserve our sovereignty.” Dr Jabbi Kilgori, the state
L-R: Anthony Olukoju, enterprise risk services leader, Deliotte West and Central Africa, Lara Nwokedi, head, information security, First Bank of Nigeria Plc, Mitchell Elegbe, managing director, Interswitch, and Tope Aladenusi, head, security privacy resiliency, Akintola Williams Deloitte, at CISO roundtable 2012 organised by Akintola Williams Deloitte in Lagos. Commissioner for Agriculture, commended the Federal Government for all its interventions to transform agriculture through its various
programmes. Kilgori said that for Nigeria to achieve selfsufficiency in food production agriculture should be returned as the mainstay of
Nigeria, Pakistan to collaborate on sugar, textile & SMEs financing —Aganga T
he Minister of Trade and Investment, Dr. Olusegun Aganga, has said that Pakistan and Nigeria will work together to develop the sugar and textile sectors of the Nigerian economy. Aganga disclosed this to newsmen on the sidelines of the ongoing summit of Eight Developing Nations (D-8) in Islamabad,
Pakistan. Aganga said that the Pakistani authorities also agreed to collaborate with Nigeria in the area of Small and Medium Scale Enterprise financing. He said the agreement was reached at a meeting with his Pakistani counterpart, Mr Munir Qureshi, and the deputy governor of the Pakistani
Nigeria short of 6,000 seafarers in cabotage —PCC Chairman
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hairman, National Seafarers Welfare Board, Chief Kunle Folarin, has said that Nigeria needs about 6,000 seafarers to work in the cabotage area (coastal and inland shipping). Folarin, who said in Lagos, stated that the number of seafarers presently working under the cabotage shipping regime was far less than what the nation needs. He said that the
the nation’s economy. He also stressed the need to provide soft loans to farmers as well as infrastructure, machinery and agricultural inputs
total demand for all categories of seafarers was actually over 12,000 seafarers, but the supply was 3,000. Folarin, who is also the Chairman, Port Consultative Council (PCC), said that the maritime industry should be given the same attention like the oil and gas sector in terms of training. “Indeed, Nigeria has a potential to become a world power, a maritime
nation, if we harness all the opportunities in the sector. ” He suggested that the Federal Government must project on the number of people that could be trained overtime. “ we can project that in the next two years, we shall have this number of seafarers along the projected demand for seafarers.
Central Bank, Mr Kazi Muktadir. Aganga was part of the team led by President Goodluck Jonathan to the summit. “There are four areas we have agreed to work together. One area is the financing of SMEs in the country. They have a system here which they use mobile phones and which has worked well and which they share risk and profit with SMEs of the country. “That has proved to be successful in some areas. We are trying to look at that and see how that can be applied to Nigeria quickly because we have a very big SMEs sector. “The other area of collaboration is sugar. Recently, we approved the government policy on sugar. Pakistanis are exporters of sugar and it is sugarcane to sugar, the kind we are trying to encourage. “As of today, we only produce two per cent of the sugar we consume in the country. 98 per cent of that is brown sugar that we import into the country and refine. C M Y K
22 — Vanguard, MONDAY, NOVEMBER 26, 2012
Business & Economy
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he Federal Capital Ter ritory Administration (FCTA) has began the process of tracking infrastructural facilities and social amenities in the six Area Councils and Satellite Towns in the Territory. The Administration has established a Ministerial Committee on Baseline Data Surveys for the Planning and Development of the Area Councils and Satellite Towns in the FCT. The Honourable Minister of State for FCT, Oloye Olajumoke Akinjide, who inaugurated the Committee, said several efforts had been geared towards the provision of infrastructural facilities and social amenities in the Area Councils and Satellite Towns by the Administration and other developmental agencies. “The FCT Administration has observed that various developmental efforts and provision of social amenities are becoming difficult to measure due to the lack of community baseline data to form the benchmark for tracking growth and developmental progress over time. The lack of coordination in the provision of facilities and amenities by the various developmental stakeholders has also contributed to the inability to properly measure the developmental efforts. These have resulted in the concentration of services/facilities in certain areas while some have grossly been neglected,” she stated. The Ministerial Committee is chaired by the Special Adviser (Lands) to Permanent Secretary, FCT, Chief Steven Awoniyi and has as members Chairman of Abuja Municipal Area Council (AMAC), Hon. Micah Jiba, who is representing all the six Area Councils chairmen; Senior Special Assistant (Special Duties) to the Minister of State, Mrs. Jummai Kwanashie; Senior Spe-
BRIEFS Nigeria sells N50bn 7-, 10-yr bonds, yields fall
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L G Electronics Nigeria Plc Launch of Anti Mosquito Air Conditionerheld at Lagos Oriental Hotel Lagos Pix L- R Mr. Young Ik Lee vice President Room Air Conditioning L. G Electronic s Korea , Dr ( Mrs) Nnenna Ezeigwe , Representing the Minister of Heath l handshake with Mr Mohammed Fouani, MD Fouani Ltd after unveiling Anti Mosquito Air conditioner Photo By Diran Oshe
FCTA to track infrastructural devt, social amenities in area councils cial Assistant (Technical) to the Minister of State, Engr. Kunle Mokuolu; Director of Satellite Towns Development Agency, Alhaji Tukur Bakori, and Director of Economic Planning, Research & Statistics, FCTA, Alhaji Ari Isa Mohammed. Other members include: Director of Monitoring, Area Councils Service Secretariat, Architect Joshua Kaura; Director, Abuja Geographic Information System, Alhaji Mohammed Isah Jalo; Special
Assistant (Projects) to the FCT Minister, Prince Ajah Nwabueze Igwe; Special Assistant on Area Councils to the Minister of State, Alhaji Ibraheem Ibraheem, and Principal Consultant of Fola Consult Limited, Alhaji S.A. Olajide. The minister listed the terms of reference of the Committee to include: to identify all development agencies responsible for the provision of facilities and services in the Area Councils and Satellite Towns; to profile infrastructural facilities and amenities available, stage of utilisation,
FG pegs 4th quarter benchmark for rice import at $673 T
he Federal Government has set a new benchmark price for all types of imported rice at 673 dollars per tonne for the fourth quarter of 2012, beginning from October. A statement posted on the Nigeria Customs Service (NCS) website said the directive was issued in a circular signed by the Minister of Finance, Dr. Ngozi Okonjo-Iweala. It quoted the minister as saying that the benchmark price for all consignments of rice during the quarter be fixed at 613 dollars for the Free on Board (FOB) price and a freight charge of 60 dollars. This brings the total C M Y K
price of each tonne of rice imported into the country to 673 dollars. The circular further stated that the price was arrived at based on the advice of an Inter-Ministerial Committee. The committee comprised the Presidential Committee on Trade Malpractices (PCTM), Federal Ministry of Agriculture and NCS. Others are the Federal Ministry of Trade and Investment, Budget Office of the Federation and Rice Millers, Importers and Distributors Association of Nigeria (RIMIDAN). The Federal Government reviews quarterly the benchmark price of all types of imported rice.
The import duty is calculated based on this benchmark price regardless of the actual FOB price. The per metric tonne benchmark price was fixed at 699 dollars for the 2nd and 3rd quarters but dropped to 673 dollars since October. Dr Abdulwahab Tijjani, Chairman of the North-East Chapter of the Rice Farmers Association of Nigeria (RIFAN) said continued rice importation was discouraging local production. He said that local rice farmers were unable to produce enough due to the lack of credit facilities and low investments in the sector.
challenges and potentials in FCT; and to x-ray all services available and identify service gaps in the areas of Agriculture, Education, Health, Transport Water, Sanitation, and Parks & Recreation. Other terms of reference are: to provide guidance on analysis and documentation of the overall information generated from the field into the data base; to produce the map of each of the Area Councils, indexing the location and distribution of the existing facilities and services; and to work with the FCT Boundary Committee to ensure proper physical demarcation of the Area Council Boundaries. She reaffirmed the FCT Administration’s commitment to serve the FCT residents and Nigerians by ensuring a balance growth and quality service delivery throughout the FCT. She disclosed that the Baseline Data Survey would be consultancy based and spread over three major areas of developmental consultancy services, map production and facility indexing consultancy services, and Area Councils boundary demarcation consultancy services. Akinjide explained, “The Developmental Consultancy Services will involve facility inventory and assessment surveys which are aimed at providing information on the stage of infrastructural services and social amenities within the six Area Councils in terms of usage and functionality.
igeria sold N50 billion worth of 7-year and 10year sovereign bonds maturing in 2019 and 2022 at an auction, with yields falling more than 100 basis points on both. Nigeria sold N25 billion apiece in the 7-year and 10year bond at 12.49 percent and 12.01 percent each, compared with 13.74 percent and 13.5 percent respectively at the last auction. Total subscription for the notes stood at N121.01 billion compared with N144.32 billion at the last auction. Nigeria was included in the JP Morgan’s Government Bond Index for emerging markets (GBI-EM) on Oct. 1, spurring a fall in local bond yields that has steadily continued. The inclusion in the JP Morgan index is expected to attract about $1.5 billion in offshore investment in the local bond market, the bank says. Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit. Alleged N1.3b subsidy fraud: 2 oil marketers challenge court jurisdiction Two oil marketers, Aro Bamidele and Abiodun Bankole, on Thursday challenged the jurisdiction of a Lagos High Court in Ikeja to hear the alleged theft of N1.3 billion fuel subsidy charge against them.
India export promotion council to visit Nigeria
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13-member delegation o f the Electronics and Computer Software Export Promotion Council of India will visit Nigeria from Nov.26 to Nov.27, according to a statement by the High Commission of India, in Lagos. A copy of the statement, signed by the high commission’s First Commercial Secretary, Mr Kurma Sharma, was made available to the News Agency of Nigeria (NAN) in Lagos. It said that the delegation would visit Lagos and Abuja and expressed belief that it would help to enhance bilateral relations between India and Nigeria. The statement said that the visit would afford opportunities to businessmen and entrepreneurs from both countries to fine-tune business transactions in areas of electronics and Information Technology.
Vanguard, MONDAY, NOVEMBER 26, 2012 — 23
Banking & Finance BRIEFS Foundation, Western Union seek increased funding for SMEs
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he Tony Elumelu Foun dation, an Africanfounded, African-funded philanthropic institution committed to enhancing the competitiveness of the African private sector, recently hosted the African Diaspora Marketplace (ADM) Investment Event in partnership with Western Union Money Transfer, a global leader in payment services, and the United States Agency for International Development (USAID). The two-day event gave small and medium-sized enterprises (SMEs), representing businesses in multiple sectors from Nigeria, Ethiopia, Ghana, Liberia, Tanzania, South Africa, Kenya and Uganda the unique opportunity to pitch to a group of select impact investors for equity and debt financing in the range of $100,000 to $300,000. Each of the nearly 20 entrepreneurs had 10 minutes to present to the investors who had access to their company profiles and information prior to the event. After the pitches were completed, the parties had the opportunity to follow up with one another in the hopes of reaching a funding agreement.
Mobil declares “Force Majeure” on Qua Iboe stream
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obil Producing Nigeria (MPN) said it could not meet its contractual obligations to crude oil buyers due to the Nov. 9th oil spill in its field. Mobil is the operator at the Qua Iboe oil terminal where the Nov. 9th oil spill discharged heavy volumes of oil into the Atlantic Ocean creating serious environmental discomfort. A statement from the oil firm in Eket, said that the oil firm had declared a ‘Force Majeure’ on its Qua Iboe crude streams. The statement signed by Mr Paul Arinze, the company’s General Manager, Public and Government Relation, apologised for the inconvenience caused by the incident. Force Majeure frees a company from legal liabilities caused by circumstances beyond its control.
From Rright: Abiola Popoola, President/Chairman of Council of Chartered Institute of Personnel Management of Nigeria(CIPM), Sunday Korode, Vice-President, Sunday Adeyemi, Registrar/CEO, Adesua Atanda, Chairman, Learning & Development Committee, Toyin Ojudun, Head, Consultancy & Research and Sola Joseph, Director, Membership Services at the formal commissioning of CIPM’s new Learning Centre in Lagos last week.
NeFF set to aggregate statistics on electronic fraud By NKIRUKA NNOROM The Nigerian Electronic Fraud Forum, NeFF, has said that it is working on developing a data base that will accommodate statistics on electronic fraud, e-fraud, in the country, which will be ready before the end of 2013. Speaking at a workshop organised by the Forum, co-
sponsored by Fidelity Bank and Wema Bank, the chairman of NeFF, Mr Emmanuel Obaigbona, who also doubles as Deputy Director/Head, Domestic Payment Division, Central Bank of Nigeria, CBN, said the Forum is working in conjunction with Electronic Payment Provider Association of Nigeria, EPPAN, to aggregate the statistics on e-fraud and other related is-
sues with a view to combating the increasing rate of e-fraud in the banking sphere. Arguing that as e-payment space evolves, e-fraud also grows with, Obaigbona said, “For now we don’t really have the accurate statistics, but we are trying to develop a data base for this purpose and that is one of the main reasons why we have this particular forum. “We are working to put things in order and sometime next
year, we should achieve this objective, but I cannot give you a specific date since I am not an IT man but I know that the work has gone to an advanced stage. EPAN is already developing the portal for that so that we can get something very shortly.” He noted that no country would lay claim to having achieved high level of industrialisation without effective e-payment system, adding that one of the objectives of the forum is to bring industry stakeholders together to rub mind on how to mitigate incidences of efraud in the country. Speaking on behalf of CEO/ GMD Fidelity Bank at the event, Mrs Chijioke Ugochukwu, ED, Shared Services, said that the forum would further deepen financial institutions’ appreciation of the opportunities that could be leveraged via e-banking solutions and better position them to provide cost-effective, easy and accessible alternative service delivery channels to their customers. She said that any financial institution that aims to be relevant and profitable in the long run must harness the opportunities provided by the e-banking platform to offer value to customers, adding that any payment system that rides on electronic platform is highly susceptible to fraud. “In this sense, your decision to organise this e-fraud forum is proactive and most commendable as creating awareness and effective communication of subject matter is paramount to its success. “The increasing uptake being recorded in the electronic payment platform, of course, will present its own challenge, particularly from the standpoint of security.
CBN monetary tightening poses some challenges for banks —FBN Capital By PETER EGWUATU
T
he Central Bank of Ni geria (CBN)’s recent monetary tightening poses some challenges for the banking sector, FBN Capital has said. In its review of the banking sector for the third quarter of 2012, FBN Capital Research Team said, “There are growing concerns about aggressive loan growth, banks’ exposure to very low quality borrowing borrowers in the Small and Medium Enterprises (SMEs)/ Retail and the downstream oil and gas sectors,
and that the high interest rate environment could lead to a faster than expected rise in Non Performing Loans (NPLs).” Continuing, FBN Research Team, stated “We do not expect earnings growth for the banking sector to be dampened significantly as a result of the CBN’s measures. The larger banks are likely to fare better in this environment in our own view, given their ample liquidity (Access Bank, UBA, and Zenith) and/ or relatively low cost funds (GTBank). “As for loan growth, we are not alarmed by the 50 per cent year on year average
growth in credit to the private sector in first half 2012 because this figure is significantly distorted by base effects, i.e. AMCON transactions. As of June 2012, credit to the private sector had grown over December 2011 levels by just 3.3 per cent. Our universe appears to be gaining share, having recorded around 10 per cent growth in net loans and advances on average. With respect to downstream oil and gas, our banks’ exposure to the most at-risk names is limited and their capital ratios are robust.”Meanwhile, Dr. Doyin Salami, an economist and
Senior Lecturer at Lagos Business School, while speaking at the FBN Capital Second Investor Conference at the weekend, decried the crowding out of private sector of funds by the government, saying, “governments cannot be borrowing at this rate they are doing and we expect the interest rate to come down.” According to him,“ It is not even advisable to fix interest. Interest will come down gradually on its own when other factors are properly in place. Inflation rate is at somewhere 11.3per cent, so I cannot advise government to fix interest rate. C M Y K
24 — Vanguard, MONDAY, NOVEMBER 26, 2012
Coporate Finance BRIEF Multiverse secures FGN approval for mining lease By NKIRUKA NNOROM
M
ultiverse Plc, a natural resources company, listed on the nonmetallic mineral mining subsector of the Nigerian Stock Exchange, NSE, said that it has secured approval from the federal government to commence operation in mining lease. The mining License with registration No ML14646 will cover 14 cadastre units within the company’s exploration License 3187. The mining lease, according to the company, in a notice to the NSE, will be subject to renewal over a 25 year period. According to Multiverse, the approval given by the federal government over the weekend represents significant milestone in its quest to position itself as a leading mining firm in Nigeria. “It prospects that this will lead to a sustained and world class returns on investment (ROI) for our shareholders in the medium and long term,” Multiverse said. The company had earlier in the year notified the NSE of the acquisition of Exploration License (EL) 3187, saying that the mining lease was an outcome of an extensive exploration exercise and geographical study that confirmed economic quantity of Lead/Zinc Ore in the Mining Area. The company further stated that presentation of the licence proper will be conducted by the Minister of Mines & Steel Development in an event scheduled to take place later in the year. It would be recalled that Multiverse has over the last financial year taken steps to expand its operations into the mining of solid minerals with a promise to deliver high returns to shareholders in the nearest future. The company, which is a leader in the production of granite stones, has expanded into the solid minerals mining with focus on Lead Ore, Barite Ore and Copper Ore. Speaking recently at the ninth annual general meeting in Lagos, Ayedun Fasina, Managing Director/CEO, Multiverse, said that given the bright prospects in the solid minerals industry and the investment the company was making, investors would reap improved benefits in the C M Y K
Market value drops by N32bn …as Stanbic IBTC Holdings lists shares By CHINEDU IBEABUCHI
T
he value of listed equities on the Nigerian Stock Exchange, NSE, continued on a downward trend last week, as price losses in highly capitalised stocks resulted in N32 .62 billion depreciation. Specifically, the NSE AllShare Index dropped by 0.30 percent to close at 26,322.18 points down from 26,400.94 points. Also, Market Capitalisation of the listed equities dropped by 0.39 percent or N32.620 billion, from N8.413 trillion recorded in the preceding week to N8.381 trillion. Meanwhile, Stanbic IBTC Holdings listed 10 million shares of N0.50 each at N13.03 per share on the Daily Official Listing on Friday, under the Other Financial Institutions subsector. This replaced the shares of Stanbic IBTC Bank Plc. The erstwhile bank (Stanbic IBTC Bank Plc) transformed into a holding company (Hold Co). Consequently, Stanbic IBTC Bank Plc was delisted from the Daily official List of the Exchange last Friday. Analysis of the equity price movements indicated that twenty-six equities gained while forty- three equities recorded price declines, while prices of 129 equities remained constant. When compared with the preceding week, twenty-three gained as forty- three recorded price declines, while prices of 132 equities remained constant. Guinness Nigeria Plc recorded the highest share price loss in the week under review, dipping by N21.85 to close at N230.00 per share from N251.85 per share, followed by Total Nigeria Plc losing N6.25 to close at N118.75 per share and Glaxo Smithkline Consumer Nigeria Plc lost N 3.34 to close at N37.51 Other share price losers in the top ten category include: Nestle Nigeria Plc N2.39, Mrs Oil Nigeria Plc N1.45, UACN Property Development
Company Limited N1.39, N Nig. Flour Mills Plc N1.02, Academy Press Plc N0.90, Zenith Bank Plc N0.8, and Forte Oil N0.46. On the other hand, Flour Mills Nigeria Plc recorded the highest share price gain, appreciating by N 3.40 to close at N66.50 per share from N63.10 per share, followed by Unilever Nigeria Plc gaining N2.70 to close at N44.30 per share and Nigerian Breweries Plc garnered N 2.56 to close at N138.06. Other share price gainers include Julius Berger Nigeria Plc N2.40, U A C N Plc N1.60, and Cadbury Nigeria Plc N1.41, among others. Meanwhile, a turnover of 1.178 billion shares valued at
N9.279 billion in 18,621 deals was recorded last week in contrast to a total of 1.293 billion shares valued at N9.414 billion in 19,825 deals in the penultimate week. The Financial Services sector was the most active
during the week contributing 74.64 per cent to the total turnover volume with 879.335 million shares valued at N5.574 billion exchanged by investors in 10,900 deals. Similarly, the Banking subsector of the Financial Services sector was the most active during the week (measured by turnover volume); with 639.990 million shares worth N5.400 billion traded in 10,184 deals.
Vanguard, MONDAY, NOVEMBER 26, 2012 — 25
C M Y K
C M Y K
1.34
1.35 5.52 0.98 5.81 41.60
29.10 10.60
Livestock/Animal Specialities Livestock Feeds Plc
CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc SCOA Nigeria Plc Transnational Corporation Chellarams Plc UACN Plc
CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc
10.03 34.39 3.70 2.88
28.07 41.60
8.56 0.64 0.57 4.05 11.01 2.18 0.50 15.05 3.25 19.90 1.07 0.70 1.15 4.05 0.88 7.30 1.54 4.80 7.67 0.58 0.50 17.95
0.58 0.80 0.50 0.50 0.50 1.17 0.50 0.50 0.50 1.55 0.50 0.61 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 0.50 0.50 0.50
0.50 0.50
0.50 2.02 0.50
Household Durables Beta Glass Co Plc Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc
Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc
FINANCIAL SERVICES Banking Access Bank Plc Afribank Nigeria Plc Bank PHB Plc Diamond Bank Nigeria Plc Ecobank TRANSNATIONAL INCORPORATION Fidelity Bank Plc FinBank Plc First Bank of Nig. Plc First City Monument Bank Plc Guaranty Trust Bank Plc NPF Micro-Finance Bank Plc Intercontinental Bank Plc Oceanic Bank International Plc Skye Bank Plc Spring Bank Plc Stanbic IBTC 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 AIICO Insurance Plc Continental Reinsurance Plc African Alliance Insurance Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guaranty Trust Assurance Plc Guinea Insurance Plc Intercontinental Wapic Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance 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 Universal Insurance Plc
Mortgage Carrier, Broker and Sector Aso Savings and Loans Plc Resort Savings & Loans Plc
Other Financial Institutions Crusader (Nigeria) Plc Deap Capital Management & Trust Plc Royal Exchange Assurance
0.50 2.02 0.50
0.50 0.50
0.57 0.79 0.50 0.50 0.50 1.19 0.50 0.54 0.50 1.60 0.50 0.61 0.50 0.50 0.50 0.50 0.50 0.50 0.51 0.50 0.50 0.52 0.50 0.50 0.50 0.50 0.50 0.50
9.01 0.64 0.55 4.15 11.15 2.14 0.50 15.08 3.36 19.85 1.07 0.70 1.15 3.96 0.88 7.30 1.55 4.52 7.30 0.52 0.50 17.14
28.00 44.30
10.03 34.39 3.85 2.88
27.30 598.11
0.50
25.89 600.50
Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc
8.00 5.75 66.50 1.98 6.20 0.67
0.50
7.81 5.45 63.10 2.19 6.47 0.67
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
40.00
4.70
40.00
Beverages-Non-Alcoholic 7-UP Bottling Company Plc
3.80 230.00 13.60 138.06 0.89
0.50
100.00
10.59
31.50 10.07
1.29 5.42 0.97 5.81 41.60
1.38
0.50 34.00 14.50
0.50
Closing Price (N)
5.19
3.80 251.85 13.30 135.50 0.89
HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers Union Diagnostics & Clinicals Services
0.50
Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc
100.00
Real Estate Investment Trusts Skye Shelter Funds CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc
11.98
0.50 34.00 14.45
1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc
Real Estate Development UACN Property Development
0.50
Oil and Gas and Products Petroleum Products Capital Oil Plc
Company
Opening Price (N)
Capital Market
100
3,011
1,100,000 60,000 10,660
4,000,500 1,000
1,424,512 48,785 12,500,000 7,100 200 2,274,000 500 62,500 2,000,000 1,698,475 72,700 1,172,778 1,062 1,670,890 20,000 1,000 1,541,134 4,000 1,874,789 36,000 40,000 166,589 6,066,500 30,000 220,000 115,000 1,000 100,000
15,077,666 646,608 13,287,533 7,551,165 800,080 12,058690 1,000 16,944,327 3,735,300 9,644,558 56,000 73,200 91,000 4,191,662 1,006,032 173,300 9,475,040 14,603,777 426,433 14,603,777 1,408,106 6,305,134
57,135 1,908,625
225 320 361,110 20,000
489,707 29,080
544,047 1,602,735 167,269 1,340,886 93,628 1,000
6,482
50,000 1,275,390 65,483 822,289 1,000
6,500
2,000,000
65,217
598,704 520
10,000 264 4,089,150 100 455,056
270,116
100,000 128,050 11,600
5,000
Quantity Traded
0.50
10.54
0.61 2.02 0.66
0.50 0.50
1.06 1.20 0.50 0.50 0.50 3.51 0.50 0.69 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.90 0.50 2.50 0.50 0.50 0.50 0.50 0.50 0.50
11.10 3.39 2.30 9.27 4.30 3.20 9.50 16.12 8.30 20.50 1.78 1.78 13.50 10.17 2.18 11.38 2.91 11.70 5.38 1.92 1.75 16.70
43.50 31.25
15.58 42.66 6.75 3.67
29.20 470.00
19.90 16.20 95.00 6.60 6.70 0.88
51.49
255.00 7.10 100.00 1.01
4.63
0.50
100.00
20.15
62.26 8.28
2.54 8.28 1.82 7.60 42.50
0.66
0.50 24.58 8.30
0.50
Year High
0.50
9.52
0.50 2.02 0.50
0.50 0.50
0.50 0.85 0.50 0.50 0.50 2.00 0.50 0.50 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.90 0.50 0.50 0.50 0.50 0.50 0.50
4.26 0.64 0.53 2.05 1.65 1.20 0.00 7.95 3.60 11.64 0.00 0.87 0.00 3.90 0.73 6.30 0.95 2.17 1.96 0.50 0.52 11.45
27.00 22.56
12.71 36.19 4.78 2.66
10.17 367.83
4.31 4.02 57.00 2.31 3.80 0.50
,39.00
186.00 5.23 72.50 0.93
2.23
0.50
97.00
11.59
32.96 3.01
1.45 5.52 0.50 6.43 28.70
0.48
0.50 14.53 6.40
0.50
Year Low
0.00
0.00
0.00 0.00 0.13
0.02 0.00
0.05 5.85 0.00 25.00 0.00 0.22 0.00 0.00 0.00 0.08 0.00 0.00 0.00 0.02 0.00 0.01 0.03 0.10 0.37 0.14 0.02 0.06 0.04 0.10 0.00 0.00 0.00 0.00
1.42 0.00 0.00 0.90 2.81 0.43 0.00 2.03 0.00 2.10 0.00 0.18 0.00 0.71 0.47 0.47 0.54 0.67 0.00 0.00 1.34 2.09
0.70 1.44
3.90 1.61 0.54 0.00
1.35 25.43
0.00 0.91 4.09 0.39 1.01 1.13
2.69
9.95 0.41 5.08 0.00
0.00
0.00
11.75
1.69
4.11 4.73
0.16 0.35 0.24 0.26 6.89
0.11
0.10 7.33 2.75
0.09
E.P.S.
0.00
0.00
0.00 0.00 16.67
0.00 0.00
5.56 10.20 0.00 0.00 8.33 4.88 0.00 0.00 0.00 17.25 0.00 0.00 0.00 25.00 8.33 5.00 0.00 1.39 1.39 50.00 50.00 6.43 16.67 7.14 0.00 0.00 0.00 0.00
5.83 0.00 0.00 0.00 25.91 6.68 0.00 6.96 6.20 8.74 0.00 5.44 0.00 5.07 5.44 14.81 4.68 19.23 0.28 4.82 0.43 7.83
20.93 20.46
3.26 22.48 7.34 0.00
37.57 27.96
16.91 14.38 16.89 16.92 5.75 8.83
13.92
19.98 16.29 22.22 0.00
0.00
0.00
8.51
7.33
10.11 2.26
5.18 15.77 3.64 20.74 4.14
15.00
50.00 2.77 4.37
P.E. Ratio
13.77 2.41
IT Services NCR (Nig) Plc Tripple Gee and Company Plc
0.50
Processing Sysetms Chams Nigeria Plc
0.50
4.90 2.62 5.75
Speciality Interlinked Technologies Plc Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company
0.50
4.10 2.00 4.20 4.16 Road Transportation Associated Bus Company Plc
0.50 Printing & Publishing. Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press
6.50 0.99
0.50
3.09
1.97 1.55
Media/Entertainment Daar Communications Plc
Hotels/Lodging Capital Hotel Ikeja Hotel Plc
Courier/Freight/Delivery Red Star Express Plc Employment Solutions C & I LEASING PLC
Automobile/Auto Part Retailers Incar Nig. Plc RT Briscoe Plc
Afromedia Plc
SERVICES
0.50
20.50 0.50 17.85 1.74 9.30 115.00 29.15 125.00
Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Eterna Oil and Gas Plc Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc Hospitality Tantalisers Plc
0.58 11.00
Intergrated Oil and Gas Services Oando Plc
3.98 10.50 13.28 4.30 1.05 2.92 0.66
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 OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service
1.44 0.50
Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans
1.52 0.50
1.38
Paper/Forest Products Thomas Wyatt Nig. Plc
Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc
0.50
10.55
Non-Metalic Mineral Mining Multiverse Plc
5.69
Metals Aluminium Extrusion Ind Plc
8.26
2.09 1.98
18.89 8.41 28.35 5.10 121.05 0.50 3.23 57.95 3.71 1.98 10.93
NATURAL RESOURCES Chemicals BOC Gases Plc
Tools and Machinery Nigerian Ropes Plc
Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company
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
0.50
0.50
ICT Telecommunications Starcomms Plc
0.50
Computers and Peripherals Omatek Ventures Plc
5.05 1.32 1.07 40.85 1.46 1.08 8.59 2.73
ICT Computer Based Systems108 Courteville Investment Plc
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
Opening Price N
2.50 5.71
4.90
0.50
2.43 1.90 4.20 4.19
0.50
6.60 0.98
0.50
2.82
1.97 1.42
0.50
0.50
20.50 0.50 16.96 1.52 8.84 115.00 27.70 118.75
11.34
0.55
3.98 10.50 12.98 4.30 1.05 2.78 0.66
1.44 0.50
1.52 0.58
0.50
1.38
0.50
10.55
5.69
7.85
1.99 2.31
18.80 8.41 28.35 5.10 121.05 0.50 3.45 58.10 3.71 1.89 10.93
0.50
14.40 2.41
0.50
0.50
5.05 1.26 1.01 37.51 1.45 0.98 8.17 2.73
Closing Price N
169,080 162,375
20
12,000
1,000 40,000 4,322 101,900
10,000
800 275,735
50,000
20,000
240 85,497
150,000
50
82,191 11,087,120 36,303 334,000 25,551 47,591 9,010 24,727
744,636
2,144,661
6,888 67,559 11,087 29,198 200 84,311 2,749,340
2,000 1,000
211,460 15,000
1,000
1,000
2,064,000
5,000
3,500
10,000
55,484 8,158,823
3,678,369 2,514 21,119 7,035 83,147 10,374 30,000 459,431 253,000 100,000 1,000
2,307,692
109,105 200
691,550
350,000
1,000 221,877 260,700 11,122 224,690 146,382 200 300
Quantity Traded
Stock Market Report
2.78 11.75
5.15
1.57 6.50
4.90
0.50
4.60 3.60
8.00 6.82 0.80
3.17
0.48
3.00 1.33
0.90
2.65
1.97 1.30
3.68
0.50
400 2.07
1.64
3.67
4.33 3.65
0.72
0.51
141.00 63.86 195.50
163.50 2,100 240.00 539,000
0.50 0.50 5.71 3.89
27.99
0.87
3.98 12.71 13.97 3.60 1.05 2.92 0.63
1.33 0.50
1.62 2.58
0.50
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
Year Low
37.10 0.70 32.60 5.59
78.97
0.97
3.98 15.58 15.03 4.30 1.86 2.92 0.63
1.51 0.99
2.50 2.58
0.50
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
9.31 3.59
0.50
0.52
5.31 1.45 3.20 23.11 5.61 1.96 12.91 200
Year High
0.60 12.53
0.00
0.00
0.25 0.30 0.00 0.54
0.00
0.34 0.92
0.04
0.60
0.00 0.21
0.00
0.01
6.11 2.98 14.63
4.93 0.00 4.25 0.61
1.73
0.19
0.00 3.90 0.90 1.22 0.30 0.07 0.00
0.03 0.00
0.11 0.00
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
E.P.S
4.22 8.75
0.00
0.00
0.00 27.69
12.19
0.00
34.09 2.12
11.25
4.91
0.00 8.19
12.75
11.11 19.23 17.07
6.99
7.40 0.00
4.17
6.06
0.00 3.26 0.00 3.52 6.18 41.71 0.00
28.80 0.00
13.15 0.00
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
P.E Ratio
as at Friday, November 23, 2012
26 — Vanguard, MONDAY, NOVEMBER 26, 2012
Vanguard, MONDAY, NOVEMBER 26, 2012 — 27
Insurance
N
ational Insurance Commission, NA ICOM, has warned insurance companies to speedily adopt the International Financial Reporting Standard, IFRS, as the Commission will not tolerate companies’ financial statements that fail to meet the required standard going forward. Deputy Commissioner Finance and Administration of NAICOM, Mr. George Onekhena, who disclosed this in Lagos, warned that weak insurance institutions must adopt a new approach and transform their operations if they are to remain afloat in the IFRS regime. Onekhena urged the auditors of insurance institutions to be careful and vigilant in the auditing of financial statements of their clients, noting that the credibility of the auditing firms is at stake when they compromise. “If you sign and affix your stamp on any account, it is taken that such an account should be credible, but anything contrary to this will impact negatively on your credibility and could put you in trouble,” he said. He noted that weak firms would find it difficult to survive the IFRS regime which entails total transparency, adding that NAICOM would not fail to sanction firms that are not ready to embrace change. He urged auditors to be professional in their duties as clients look up to them for quality advice, stressing that auditors are required to always advise their clients on doing the right thing. He urged auditors to report any firm that wants to subvert the auditing process to NAICOM for disciplining. Onekhena noted that auditors are required to play immense role in the industry’s transition and implementation of the IFRS, adding that insurance operators need to leverage on the professional competence of their external auditors. Speaking on efforts by NAICOM to ensure the actualisation of the IFRS initiative, Commissioner for Insurance Fola Daniel, said the commission has been engaging operators, auditors, directors and management of companies on how to seamlessly migrate to the initiative. He said two main outcomes have been reached by NAICOM and stakeholders on the initiative, adding that first, it was agreed that the market should adopt common approach to IFRS provided that such option will not place any individual company or the market at a competitive disadvantage domestically and internationally. Secondly, it was agreed that an accounting practices committee made up of the representative of NAICOM, insurers/rein-
BRIEF Standard Alliance to cover corps members’ laptops
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L-R Managing Director, Sovereign Trust Insurance Plc, Mr. Wale Onaolapo; President of the Chartered Insurance Institute of Nigeria, CIIN, Dr. Wole Adetimehin and Chief Ekine Harry during the 2012 education seminar of CIIN.
NAICOM to sanction companies over IFRS surers and external auditors should be set up. The function of the committee is to address all accounting issues of concern to the industry including those emerging from IFRS standard setting process. He said board of directors of each company are responsible for the issuance of financial statements, and that consequently, both transition and sustenance of IFRS in accounting practices, should be a major item on directors’ agenda at this time.
Daniel noted that NAICOM’s decision to engage stakeholders was informed by the need not only to create awareness of the implication of IFRS for financial reporting responsibilities but also to acquaint them with the scale of change and the sense of urgency in the attention it deserves. “Our expectation is that at the end of our engagements, the stakeholders will have sufficient level of understanding as to know what critical questions to ask and what
steps to take in the bid to ensure that their companies successfully transit to and embed IFRS in their accounting practices within the timelines specified in the Nigerian Roadmap. While saying this, it is important to note that we are committed to supporting the stakeholders in the process. For this purpose, we have set up an IFRS help desk in the commission to address issues that companies may have in the process of transiting to IFRS.
You are threatening our businesses, Intermediaries tell insurers
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nsurance intermediaries in the country have ac cused underwriters of deliberately withholding some of their commissions thereby contributing to the slow growth of their businesses. The intermediaries include brokers, loss adjusters, agents, risk surveyors among others. President of Risk Surveyors Association of Nigeria, RISAN, Mr. Jacob Adeosun, who disclosed this in Lagos said he was not happy with the issue and called for an agreement on an equitable scale of fees, adding that the inappropriate remuneration of
surveyors would lead to exit of experienced practitioners from the industry. According to him, the intermediaries are being owed several commissions and fees for the project they executed, running into millions of naira coupled with the fact that the present fees and commission rates being paid by insurance operators are too meager, a development the intermediaries have always frowned at. Earlier in the year, it was learnt that brokers took their complaint on group life commission to the National Insurance Commission, NAICOM, demanding for an increase. The commission, in response
to the complaint asked the underwriters and brokers to agree on a fixed rate and intimate it in their resolution. The Nigerian Insurers Association, NIA, and Nigerian Council of Registered Insurance Brokers, NCRIB, were mandated to use a single letter headed paper to inform NAICOM on the agreed rate which the commission should adopt but efforts by the NCRIB to meet with NIA to finalise issues were unproductive as the NIA has dodged all meetings. The development compelled NAICOM to peg the commission rate at eight per cent which the brokers have not been comfortable with.
tandard Alliance Insur ance Plc said it has entered into a partnership with Veda Technologies to provide cover for all laptops which the information technology company has earmarked for the National Youth Service Corps’ members in a campaign slated to kick off in Abuja soon. This was disclosed by the company’s Group Executive Director, Mrs. Rhe EmerhorIwuagwu, during a chat with media men at a function in Lagos. Mrs. Iwuagwu who described the new policy as another pace-setting and innovative idea from Standard Alliance Insurance Plc explained that the insurance to be provided was against damages, noting that the company will play the key role of taking care of the bills for repairs of the lap tops or total replacement as the case may be. According to her, “We at
NCRIB admits Tinubu, Mimiko, others as fellows The Nigerian Council of Registered Insurance Brokers, NCRIB, has swelled its list of Fellows with the admission of some notable Nigerians into its membership. Those who were admitted into the Society of Fellows of the Council are Senator Oluremi Tinubu, representing the Lagos Senatorial District; Governors of Ondo and Osun States, Ogbeni Rauf Aregbesola and Dr. Olusegun Mimiko, respectively, as well as the Commissioner for Insurance, Mr. Fola Daniel. Conferring the honourary Fellowships as part of activities to mark the 50th Anniversary of the Council, President of the NCRIB, Barrister Laide Osijo said the award was being conferred on them based on their favourable disposition to the promotion of professionalism in Nigeria and their sterling support for the Council. Osijo noted that with the newly inducted Fellows, the number of professionals in that category had gone up to 48 and charged the new inductees to be good ambassadors of the insurance broking profession by upholding the ethics of the profession and excelling more brilliantly in their chosen avocations. C M Y K
28 — Vanguard, MONDAY, NOVEMBER 26, 2012
Interview
PIB will enhance revenue base, c building for local industry BY PETER EGWUATU
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he Group Managing Director, Geo Fluids Plc, Mr. Ala Ibanibo, in an interview with Vanguard spoke on the importance of PIB to local industry in the country. He said that when the PIB is passed into law, it will create a robust revenue base for the industry and enhance capacity building amongst others. He further assured shareholders and other stakeholders of the company of continuously adding value to them as the entity joins the league of quoted companies on the Exchange. He disclosed that the company will strive to eliminate insider dealings and also adhere to post listing requirements of the NSE. Excerpts:
As you await the passage of PIB bill, how do you think your organisation can benefit from the provisions of the law? Does it portend any good for the sector? he PIB when enacted to law will result to huge capacity building in technical, economic and management terms with robust revenue base for local service industry as well as giving birth to poly-focal skills development, as well as enhance local content. When is the company going to transit to the IFRS reporting procedure? The Law requires companies rendering returns to statutory bodies other than IFRS and CAC to convert by 2013 -2014 and for listed companies to convert by 2012. Geo-Fluids has trained her staff on IFRS and is already transiting. Hence, the year end 2012 financial statement will be fully IFRS compliant. Why has it taken the company long time to come for listing at the stock exchange after its private placement exercise? The delay in the listing of the company’s shares on the Nigerian Stock Exchange is as a result of some factors which are beyond our control. They are external factors such as the global economic meltdown and the escalation of violence in Niger Delta. These elements have affected exploration development activities of the oil companies. At that time we wanted to list after the
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private placement, but these factors came up and were basically un- anticipated. Also, when we put all of these together, we find out that the capital market also collapsed worldwide in late 2008 up to this point, so there was need for us to be a little bit conscious in order to preserve the investors’ value. That is, the money they put into the company, because there was no point going to the market when you know that immediately, you are going to lose value. So, the strategy basically is to preserve values for the shareholders and the company in general. What measure have you put in place this time to ensure that the value of your share is not eroded? We believe that with the trend of the market today and the level of enlightenment of the investors today, insider dealings is going to be very minimal because no matter
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how much you try to influence the number and value of your share, the market will react because of the transparency in the market. We believe that our shareholders will hold on to
The future is great and very promising and I encourage our shareholders to hold on just a little longer and they will reap huge returns from their investments,.
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their shares because of the value attached to it. So that is going to make us the biggest company in our sector with the strongest fundamentals. It is our belief that insider dealings at this moment in the market will be very minimal. We are also working very comfortably with the stakeholders to ensure that we minimize this physical elements and especially as a young company just coming up into the market, we want to ensure that people enjoy the actual value and not the interest value which has been the bases of all these manipulations in the market. We are going to do every thing possible to fight against that.
How much are you looking at in your listing? e are having four billion units of our shares but the total unit of shares we will make available for trading starting from the first day of listing is 100 million units. It is going to be just about a hundred million and we are going to sell at N5 which is what the regulator approved for us and we think that this company’s share is far more than that, but that is the very realistic value at this time.
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How prepared are you to open your books to every investor now as you get listed on the Nigerian Stock Exchange. Once you get listed, you are no longer
Vanguard, MONDAY, NOVEMBER 26, 2012 — 29
Interview
capacity accountable to just the board and limited number of shareholders. You would be experiencing a surge in your shareholders’ value and base. What efforts are you making to ensure that the company provides adequate return on investment to shareholders at the end of the 2012 financial year? We are open and transparent for examination by not only shareholders, but also regulators and indeed all stakeholders at all times. We are going to pay dividend in this financial year. I see the final result very good and positive. What moves are you making to ensure that your shares are not subjected to insider-dealings on the NSE? It is my personal belief that given our experiences of the past three years, as far as insider-dealing is concerned, shares laundering, manipulations, etc will have little effect, if any at all, in determining the value delivery based upon the fact that investors are more discerning as well as cautious in taking investment decisions today even in companies with the strongest fundamentals. How prepared is your company in terms of meeting the post listing requirement of the NSE We have the human resources to handle the post listing requirements and to provide solution to those challenges as they arise. We are ready to meet the post listing requirements. Very soon, our third quarter result will be made public and it is quite good. We will be making full disclosure of our activities because we are very transparent in the business we do. Give us a brief performance of your company for the past three years. e have clearly articulated the challenges that we had in the company in the last three years and so, the company has been making very good profits in the past years, from 2001 to 2007 and of
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course, before the challenges of the global meltdown in 2008. This year, we are doing well, we believe that baring every other unforeseen external factors coming globally or nationally and with this kind of atmosphere today -very friendly and peaceful - we will continue to move forward because the first three months, the result havs been good and we are going to publish those account of ours in the next few days and also the result will speak for itself. We think it is also relatively encouraging compared to the last few years’ trading. What advice do you have for your shareholders as you list on the NSE We want to encourage Nigerian shareholders to have confidence in this company, to patronise us and to buy and keep our shares because they have hidden value. Also going forward,
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•Oil refinery appreciated and we want to emphasise this point - we are not like some other companies which are products of merger, we
Geo-Fluids has trained her staff on IFRS and is already transiting. Hence, the year end 2012 financial statement will be fully IFRS compliant.
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we believe we are going to maintain the atmosphere as it is now. With this kind of political environment in the next couple of years, Nigerians are going to get a very huge profit from their investment in the company and of course part of the high selling point of our company is that this is not a company that emerged as a result of any merger, it is a company that was built from the cradle and with nothing. Over the 12 years, with a very little capital of less than N1 million, we have grown now and diversified into this huge portfolio of assets with so much billion in balance sheet size . We think such is a company that needs to be respected, it needs to be
started as a Nigerian company from the cradle up to this day. Consequently, we believe that if we keep doing those things that have delivered these values to us in the last 12 years, in the next 5 years, we should be able to deliver more values. We want to let our shareholders know that buying our shares, they have made no mistake. The advantage that anybody buying our share has is that we have a diversified revenue base, we are not a mono product company; that is the huge advantage that we have and over the last couple of years, we have restructured the company and diversified our revenue base into marine
asset which is basically what we do. We have gone beyond marine services. We also provide logistic service, we are doing specialised products. Our logistic, though just starting, is doing very well. So, we believe that by the time we aggregate the revenue of all of these companies in the next five years, it is going to be very robust. So, you cannot compare the share of our company to that of any other company in our category. What is the prospect of this company? ll I have said is that the prospect is great. The future is bright for us and we will keep rewarding our shareholders once the outfit is doing well barring unfavourable policy from the government. The future is great and very promising and I encourage our shareholders to hold on just a little longer and they will reap huge returns from their investments, bearing in mind that we have considerably re-structured our business into several value added and income generating units, as well as considerable expansion of our Liquid Mud Plant at Onne from 24,000 barrels to 50,000 mud processing and storage capacity. The effects of these re-engineering will be felt soon through the bottom line.
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Let us know how the company started and how it has grown The history of Geo-Fluids is replete with tremendous challenges from the inception of the mother company (Geo-Fluids Limited) in October 1994, however like a little mustard seed, it has grown into a “giant oak tree” made up of: Geo-Fluids Ltd: A mud Engineering and Drilling/ Completion products M a r k e t i n g company, Vimatech Ltd: Well-Heads, Xmas Tree, Rock bits and engineering services. From an annual turnover of less than N3 million and a balance sheet size below N 5 million in 1994, the group today boasts of an annual turnover in excess of N1.5 billion with a balance sheet of over N3.5 billion in 2007. However, in the face of the general challenges of skepticism and acceptability, due to the prejudices of the Nigeria oil industry against locally owned and managed service firms and their ability to deliver, the company commenced effective operations only in December 2000. The group has however remained focused and determined not only to harness the potentials of a very rich national resource base, but also prove to the world the i n g e n u i t y , entrepreneurship, creativity and resilience of which Nigerians are known for.
30 —Vanguard, MONDAY, NOVEMBER 26, 2012
C M Y K
Vanguard, MONDAY, NOVEMBER 26, 2012 — 31
Homes, Housing Finance BRIEF
Stories by MIKE EFFIONG
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ingdom Realties, one the operator in the Mortgage sector of the economy said it is out to help junior staff of companies across the country to meet their housing needs. The Chief Executive Officer of the company, Richard Uwagie, who disclosed this, said, that they have meeting with companies co-operative heads across the country to discuss with them how they can key into the scheme and solve the challenges of housing being faced by most junior staff in their company. “Most co-operative have acquire d landed properties which have been allocated to their members, what members needs now is not land but a decent home, but unfortunately most members cannot afford the lump sum to build on their allocated land.” Noting that those members, who are now land owners cannot afford borrowing because banks would not lend them all the funds needed or the interest payable is usually heavy for their salaries to carry. He noted that, loan facility and proper land documentation are usually a slow process, hence may not get the requested facility because banks will request for c o m p l e t e documentation.”Employees, co-operative members will welcome any structure put in place that will provide a roof over their heads now and repay from their salaries conveniently for as long as their salaries can carry.” Uwagie pointed out that, kingdom Realties Ltd has put a structure in place that will help every member own a home they can move into
Resort Savings launches new housing packages for FRSC BY EBUN SESSOU
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•Low cost housing development
Mortgage firm targets companies’ junior staff to meet housing needs within three months of contract approval. And the home owners can pay interestfree over a period of up to 15 years. Where every member will contribute between 25-45 per cent equity and even nothing and pay instalment over 15 years of as low N12, 950 per month.” He stressed, that 85 per cent will include lay and complete foundation for a threebedroom bungalow, with the master bedroom, a large living room, a dinning, a kitchen and a second bedroom, roofed,
furnished with electrical and plumbing fixtures, and the keys handed over to the owners, while the remaining parts of the foundation will bear one other room(Ensuite). “The twobedroom bungalow can now be expanded later by owners at their convenience and time to full large three-bedrooms all en suite bungalow fully completed and painted an affordable cost,” He called on interested cooperative members to register on the company website
emphasising that the company in line with the Federal Government’s Transformation agenda has the vision to provide two million functional homes/housing units for two million families and over 10million people by 2022,” Our strategy is to construct the houses on the co-operatives members, allotted plots to an 85 per cent completion stage. The 85 per per cent stage will be a bungalow on their plots of land that will be immediately habitable”. He stated
UNILag medical hostel gutted by fire P
roperty worth million of naira were destroyed in a fire incident which gutted the male hostel of the college of medicine, University of Lagos Teaching Hospital, IdiAraba. The fire which started at about 10.am on Wednesday from room 648 spread to room 647 on the third floor of Block6, Alliakilu Hostel. One of the occupants of the room 648 who said that he was not able to save their property, stated that around 10.am,he was playing football when he saw some students running all over the place. "On getting there, I noticed that it was, my room that was on fire, I tried to put out the fire, but it was
so intense that it soon spread to the next room. The fire was raging because we couldn’t get fire extinguisher which was in the hostel manager ’s room. “Also, there was no water on the floor ,so we had to go down stairs to get water which we used in putting off the fire. The student added that some minutes later, they were able to get fire extinguishers and attempted to put off the fire.” It was gathered that a commercial motorcycle operator, who had come to assist in dousing the flames sustained eye injury and was immediately rushed to LUTH which is within the premises. Fire service men arrived about
an hour after the students had almost quenched the fire. Henry who is another occupant of room 648 said, that this was the third time there has been fire incident. He noted that, although the immediate cause could not be ascertained, it could likely be due to power fluctuation. “According to him, there were electric sparks in the room sometime early this year (April) while we were attempting to install a ceiling fan. Some wire got burnt in the process, a few months back, a socket in the room sparked and it caused a blackout on the whole floor. After that incident, engineers came to repair it but since then, no permanent
solution has been found. The engineers demanded money for the repair from us and after giving them they did not solve the problem”. He blamed the school authorities for not providing enough fire fighting equipment; he stressed that, the occupants of room 607were a bid lucky to salvage their personal effects. “My SSSCE Certificate, my N25, ooo, Lapton and other valuables were consumed in the inferno”. Mr.Olusesan Odejimi, Public Relations Officer (PRO) of the college said “only two rooms were affected and not the entire building, there was no form casualty.” He stated.
esorts Savings and Loans has launched a new year package for members of the Federal Road Safety Corps, FRSC who is willing to own properties and also benefit from a number of products in the kitty of the bank. The packages as disclosed include being enrolled into the National Housing Trust Fund, NHTF, scheme where contributors can access maximum of N15million at the rate of 6 per cent per annum for a maximum period of 30 years through the Resort Savings and Loans Plc. Members of the FRSC is expected to contribute 2.5 per cent of his or her monthly basic salary and remit it to FMBN through a primary Mortgage Bank (Resort Savings and Loans Plc) as the most affordable source of mortgage finance in Nigeria.” As well as Resort Investment and Mortgage Plan, RIMPLAN, the product which has been put together to encourage savings towards home ownership and to facilitate timely and favourably priced mortgage delivery to the subscriber. This product offers customers access to a maximum of N20million at the rate of 18 per cent per annum for a maximum of 20 years with a free personal insurance Policy of N2million.” The Managing Director of Resort Savings and Loans, Mr. Abimbola Olayinka who gave an insight into how customers can own properties and also benefit from a number of products in the kitty of the bank, said, the mass housing scheme for the Federal Road Safety Corps ,FRSC, is in partnership with Resort Savings and Loans Plc which held in Ekiti recently. While disclosing that the bank is one of the most capitalized mortgage banks in Nigeria and has been in existence for the past 18 years he said, the bank’s unique products and commitment to seamless service delivery over the years has earned it a remarkable customer patronage and loyalty.” Giving insight into how customers can benefit from the products of the bank and thereby enhance their status, he said “an organization like this is in the business of ensuring housing provision for organizations’ employees through partnership,” adding that the packages is capable of ensuring that customers especially staff of organizations can benefit from it.
32— Vanguard, MONDAY, NOVEMBER 26, 2012
Vanguard, MONDAY, NOVEMBER 26, 2012 — 33
Appointments & Promotions vicahiyoung@yahoo.com 08033348923
Mansard Insurance Plc names Adeleye Head Marketing M
ANSARD Insurance Plc, formerly Guaranty Assurance Plc, has named Mr. Taiwo Adeleye as head of its marketing and communications. The board and management of Mansard which confirmed the appointment on Adeleye as Assistant General Manager, Marketing and Communications said he brings to bear his over 15 years experience in brand management and marketing communications. With this appointment, Adeleye will continue to provide strategic leadership for the marketing team as well as manage the corporate communications of Mansard Insurance Plc. On assumption of office, he led the project team that midwifed the recent rebranding of GTAssur to Mansard Insurance plc. Adeleye began his marketing career at Cadbury Nigeria Plc (now Kraft Foods) where he started as a management trainee. Upon completion of the 18
month trainee period, he pioneered the ‘Bournvita sampling and schools’ events sponsorship team’. This team has grown to become the consumer contact unit within the marketing department of the company. Between January 2001 and July 2008, he managed all flagship brands of Cadbury Nigeria Plc, including Bournvita, Cadbury Richoco, Trebor Buttermint and TomTom. As manager on Cadbury Richoco,he staged a brand packaging and recipe relaunch which resulted in 86 percent volume growth and
8 percent point’s appreciation in the brands market share. A graduate of Mathematics and Statistics from the University of Lagos, Akoka,and an MBA (Marketing) from the same University, he is also a full member of the National Institute of Marketing in Nigeria (NIMN) and an associate of the Nigeria Institute of Management (NIM) as well as the Advertisers Association of Nigeria (ADVAN), where he plays an active membership role. Until his new appointment, Taiwo was Marketing Manager – Households, PZ Cussons.
African countries’ operations. Based in Lagos, the new GM oversaw the launch of the airline’s first service in West Africa, linking Nigeria and the United Arab Emirates, in July
Caretaker committee for Ika South inaugurated
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EMBERS of the Caretaker Committee in Ika South Local Government area of Delta State have been inaugurated with a call to key into the developmental vision of the state governor, Dr. Emmanuel Uduaghan. Chairman of the Caretaker Committee, Andrew Obiazi, made the call while inaugurating the Vice Chairman, Secretary and other members of the Transition Committee at the Legislative Chamber of the local government council secretariat in Agbor. Obiazi explained that the call became necessary as it would enable members of the Caretaker Committee to justify their appointment, urging them to promote the developmental vision of the state governor which is encapsulated in his three point agenda. According to him, the appointment of members of the committee was a challenge which they must shoulder with care, love and affection for the general good of the people, adding that they should take their job seriously with high level of honesty and accountability. “In the task ahead, all hands must be on deck as
governance is a collective responsibility”, Obiazi said said just as he assured the people in the area that members of the Caretaker Committee would be fair and transparent in all their activities.
He urged all stakeholders in Ika South politics to put sentiments behind them and join him in making the local government a better place for all “ where peace and security is enshrine and environmental cleanliness will be observed for
Ikeja City Mall appoints EXP Marketing consultant
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keja City Mall, ICM, housing International and local brands, has appointed EXP Marketing Nigeria Limited as its marketing consultant. The shopping center which opened in December 2011 offers 22,000 square metre of retail and entertainment space. The Agency has been in Nigeria for the past 16 years. According to Mr. Wole Olagundoye, Managing
Mr. Wole Olagundoye
Director, EXP Marketing Nigeria, “As a pioneer experiential agency, EXP has been activating demand for Companies and Brands through unique solutions that personally and emotively connect with targeted consumers, enhancing their Brand experience and deepening their relationship
Olawale-Cole bags Rotary Award
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•Adeleye
Etihad Airways appoints Phohleli GM Nigeria, West Africa ETIHAD Airways, has appointed Mr. Maurice Phohleli, a German of African descent, as its General Manager, GM, to oversee its Nigeria and other West
BRIEF
2012 Phohleli joined Etihad Airways in 2009 as the General Manager, North & West Africa, where he was responsible for the cross border management of the airline’s offices in Morocco, Egypt and Sudan. In 2010 he was appointed General Manager, Southern Africa, with overall responsibility for managing and developing sales strategies for Etihad Airways in South Africa, and in further building and expanding its business and in reinforcing its presence as a major quality brand in the market. Prior to joining Etihad Airways, Maurice spent two years as a Regional Representative for the International Air Transport Association, IATA, responsible for their industry affairs in 15 countries. Earlier, he spent 10 years with South African Airways, SAA, where he rose to the position of Regional General Manager for Africa & Middle East, managing all SAA Country and Regional Managers in Africa and the Middle East.
RESIDENT and Chairman of Council, Nigerian Institute of Management (Chartered), Dr. Michael Olawale-Cole, has been honoured with the Service Above Self Award of the Rotary International. The Award, which is the highest honour for a Rotarian, recognises outstanding efforts in the promotion of Rotary International objectives and is usually given to individual Rotarians in good standing who have rendered exemplary humanitarian Rotary service in line with Rotary’s motto of “Service Above Self ”. Dr. Olawale-Cole, a Rotarian of national and International repute whose philanthropic activities are legendary, joined the Rotary Club of Isolo in 1980 as Charter Secretary. He later became the President of the Club in 1983 and District Governor of District 9110 in 2005-2006. Olawale-Cole’s commitment and devotion has seen him attending Rotary international conventions in all the continents of the world and he has facilitated in Rotary International institutes around the world. A major donor (level 3) of The Rotary Foundation of Rotary International who has devoted his time, treasure, talent and thinking to the service of the humanitarian and service organisation, Olawale-Cole has received the President Citation Award by President Bill Skelton, Rotary International President in 1983/84. It would be recalled that Olawale-Cole was, recently, conferred the national honours award of Member of the Order of the Federal Republic, MFR, by the President,Goodluck Jonathan, in recognition of his invaluable contributions to the management profession and nation building.
Minister of youth development gets award
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I N I S T E R of Youth Development, Inuwa Abdul-kadir, has been honoured with the Distinguished Mentor Award in recognition of his commitment to the advancement of judicial service. The award is also for his contributions to national development. The award was bestowed on the Minister in Abuja as part of the launch of a book titled
‘A Glory To The Bench’ written in honour of Honourable Justice Dalhatu Adamu; the Acting President of the Court of Appeal of the Federal Republic of Nigeria. A statement by the Assistant Director (Press and Public Relations) of the ministry, Mr Olusola Abiola, the Minister said that the award would galvanize him to do more for the development of the judiciary and indeed for the nation.
Abdulkadir equally used the occasion to extol the achievements of Justice Adamu whom he described as an eminent personality who has devoted his entire life to serving his fatherland and humanity in the judicial capacity culminating in his appointment to his present position as the Acting President of the Court of Appeal of the Federal Republic of Nigeria.
34 — Vanguard, MONDAY, NOVEMBER 26, 2012
Business & Economy
Citi sponsors 2012 European microfinance week
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iti Microfinance and Citi Luxembourg were the main sponsors of the 2012 European Microfinance Week organised by the European Microfinance Platform (e-MFP) that took place in Luxembourg on November 15-16, 2012. The European Microfinance Week is one of the largest microfinance conferences in Europe, engaging more than 110 speakers and 450 participants from leading European microfinance organizations working in developing countries. The topic for this year was focused on the capacity of the sector to “combine strengths and demonstrate results” for financially excluded populations. More than 24 workshops and conferences were organized over the two days on microfinance related topics such as regulation, governance, consumer protection, product and distribution innovation, as well as measuring impact and identifying outcomes. Opening the first plenary session, Bob Annibale, Global Head of Citi Microfinance and Citi Community Development, said, “The main difference in 2012 is that the current microfinance industry has brought together a much
wider range of organizations and stakeholders driving financial inclusion, from Mobile Network Operators (MNOs) to mainstream banks, postal savings banks, insurers, re-insurers and mbanking platforms. Financial inclusion becomes a defining goal, and microfinance, as Citi sees it, is one of the main tools for advancing inclusion but our remit has broadened - to agribusiness, value chain support, health and the like.”
R-L: Mrs. Elizabeth Amkpa, General Manager, GOtv Nigeria, presenting a GOtv decoder to HRH Igwe Anthony Ojukwu, Chinenyeze of Ogui Nike of Enugu State, during a courtesy visit to his palace.
2012 APEC SME Summit holds in Hainan in December
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he 2012 APEC SME Summit, co-hosted by the China Council for the Promotion of International Trade (CCPIT), the People’s Government of Hainan Province and APEC Business Advisory Council (ABAC), will take place on December 8-10 in Chengmai, Hainan Province, and the International Tourism Island. Coinciding with the “SMEs Service Year”, this year also marks the fifth anniversary of the APEC SME Summit in China. Being the top event of its kind relating to SMEs, the APEC SME Summit has proven to be a unique highprofile forum for business leaders. At the past four sessions of
the Summit, numerous distinguished business elites, stars and scholars were invited to the event. Jack Ma once said, “Anyone who turns a blind eye to SMEs will surely lose his future career.”
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In addition, “The Internet Theme Day-2012 Asia Internet Conference” will be held concurrently with the APEC SME Summit. Several Internet elites from the APEC region will get together in Hainan. Partnering with Standard
Chartered Bank this year, the Summit Organizing Committee will host the “2012 China Growing Enterprise Value Award” to award prominent enterprises with outstanding performances in green growth, innovation and brand promotion.
SMEs: Govt must go beyond lip service
t is gratifying to note that our authorities are now going a tad beyond lip service in recognising the importance of small and medium enterprises (SMEs) in Zimbabwe for economic growth, Itai Masuku has said. Because of the numbers involved in the SMEs sector,
the temptation for politicians to want to be seen championing the cause of SMEs for political expediency is too great. Finance minister Tendai Biti pointed out the SMEs sector accounts for 60% of employment in the country. Looked at in another way,
they account for 60% of eligible voters, forming a strong constituency that lags only 5% behind the rural voter, again, using Biti’s figures. But the best is yet to come: SMEs, according to Finance ministry figures, account for 50 percent of our Gross Domestic Product.
Business & Economy
Lemo, First Bank, MasterCard, others nominated for FT Awards
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ajor financial institutions and electronic card payments in the country have been nominated for awards at the maiden edition of the Nigerian Financial Technology Awards to be hosted by FinancialTechnology Magazine. The award which is scheduled to hold on November 30 at the grand ballroom of Lekki Oriental Hotel, Lagos. Among the nominees are First Bank’s First Monie, MasterCard, Verve and Paga. Of the 26 nominees, 17 are in the product category while nine
are in the service category. First Monie, MasterCard, Verve, Paga and Federal Inland Revenue all emerged nominees in the service category while Computer Warehouse Group, Quickteller, Easy Wallet from Etisalat and others are in the product category. For championing the CBN’s Cashless Nigeria initiative, Tunde Lemo, Deputy Governor, Central Bank of Nigeria (CBN) in charge of operations would be giving Special Recognition Awards. This award goes to an individual who has made transformational contributions
to the growth and development of e-transactions in Nigeria The management of eMaginations, publishers of financialtechnology magazine, in a press statement signed by the Managing Director/Chief Executive Officer, Mr. Sola Fanawopo said members of the awards jury have gone through a rigorous process to picking products and services that met the criteria set by the jury. The awards would honour individuals, firms, vendors and institutions that have distinguished themselves in the provision of financial services via the use of technology would be honoured and celebrated at
the awards. Specifically, the awards would reward and recognize innovations and excellence in IT activities in the financial banking, insurance, microfinance industry and capital market and this is to commemorate the fifth year anniversary of financialtechnology magazine. According to Fanawopo who doubles as the editor-in-chief of the magazine, the publication is committed to hosting the most credible and prestigious Awards in the financial services technology industry in Nigeria. “As a pointer, we have constituted credible members of jury to decide and chose
the nominees. Some of them would emerge winners and would be honoured on that day. The process of selection is quite through rigorous. The seven members jury is headed by the MD/CEO of Nextzon Limited, Mac Atasie”, he said. Fanawopo informed that before deciding eventual winners in the product and service categories, the jury would meet this week and collate the nominee, which would be the final sitting before the awards on November 30. “The Nigerian Financial Technology Awards 2012 would ginger stakeholders in the epayments industry to continually strive for excellence,” he said.
Vanguard, MONDAY, NOVEMBER 26, 2012 — 35
36 — Vanguard, MONDAY, NOVEMBER 26, 2012
Vanguard, MONDAY, NOVEMBER 26, 2012 — 37
Micro Finance Skills acquisition, entrepreneurship, tools for national development – CIPM Stories by PROVIDENCE OBUH
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he Chartered Institute of Personnel Management of Nigeria (CIPM) has said that skills acquisition and entrepreneurship are necessary tools for any economy seeking national development. Erstwhile Chief Executive Officer of the Niger Delta Development Commission (NDDC) Engr. Godwin Omene, made this statement in his lecture during the 16th annual public lecture organised by CIPM with theme: 'Skills Acquisition & Entrepreneurship, Prerequisite for National Development, held in Lagos. Omene urged participants on reliance on the principle of “selfdetermination,” saying “young graduates and non- graduates should therefore practice skills Acquisition.” He listed such skills acquisition to include but not limited to Agriculture, computer training, Wood Technology, Poultry, Fish farming, Hair Salons, Pedicure/Manicure Services, Barbing
Salons, Tailoring, among others. According to him, “Successful entrepreneurs seem to be scarce commodities today and most people are too scared to take risks. They would rather be in the comfort zone of salary earning, as they want to be sure of their regular income/salary at the end of every month or period. Entrepreneurs are the prime initiators of all economic activities in a mixed economic system.” To the participants, he advised that they emulate successful Nigerians in Entrepreneurship and Skills Acquisition, stating, “We should follow their examples. I can assure you that Nigeria is full of potentials but a few are spoiling our names and damaging the image of the Country. Let us therefore play more on the side of our Entrepreneurial knowledge, and showcase our potentials to the world. Then you can find out that these qualities are indeed prerequisite for National Development.”
Poor financial management killing SMEs – Olakunri A
past President of the Institute of Chartered Accountants of Nigeria (ICAN), Mrs Toyin Olakunri, has raised alarm that most Small and Medium Enterprises (SMEs) do no last long as a result of poor financial management, linked to lack of accountability. Olakunrin, who doubles as Africa’s first female chartered accountant, lamented that despite the SMEs role in revitalising the economy, yet, many of these organisations have not benefited maximally from the accounting profession. She noted that despite the challenging economic environment of the country, the wave of entrepreneurship sweeping across the nation is as a result of the resilience and survival instinct of the Nigeria spirit, adding “While some of them do not even have a proper accounting system, others have Accountants who are just engaged in the routine tasks of record keeping and financial statements. Yet, as a result of poor financial management which is linked to lack of accountability and informed business decisions, most of these businesses don’t last long. “I am often asked about the role of the Accounting profession in curbing corruption. Over the years, accountants have earned a reputation for “creative dishonesty”. We have been implicated in several scandals and cases of financial misappropriation, which has created a general perception in the society that we are accomplices with evil. Most times, we dance to the tune of management, government officials and so on to aid them in unethical and corrupt practices.” To this end, ICAN in collaboration with the Lagos State Government (LASG) brought together functionaries in the public sector to train them in line with the transition arrangement, in which the three tiers of government
will base their financial statements on IPSAS modified cash basis of financial reporting from year 2013, IPSAS modified accrual basis in 2014 and full IPSAS accrual basis in 2015.”
NDIC, NAMB seek more MFBs, as CBN plans un-banked education
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ith over 70 percent of poor persons accessing fund from Microfinance Banks (MfBs), the Nigeria Deposit Insurance Corporation (NDIC) and the National Association of Microfinance Banks (NAMB) are seeking for the establishment of more Microfinance Institutions in some parts of the country. This is just as the CBN pledged to implement a Financial Literacy Framework in the first quarter of year 2013 to enhance financial inclusion of the un-banked. Giving a breakdown estimation of the number of MfBs in the country to be 869 MFBs in existence, 346 (39.81 per cent) are located in the South-west, 162 (18.64 per cent) in the South-east, 158 (18.8 per cent) in the North Central, while only 63 (7.5 per cent) and 32 (3.68 per cent) are located in the North-west and North-east respectively, Managing Director/CEO NDIC, Mr. Umaru Ibrahim said that the uneven distribution of MFBs in the country is frustrating the country’s financial inclusion strategy. On its part, NAMB bemoaned the absence of microfinance banks in the rural areas, especially in the hinterlands were access to fund is critical.
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Vanguard, MONDAY, NOVEMBER 26, 2012 — 39
Advertising, Media & Marketing
BrandPower Awards & promise of difference in aspects Stories by PRINCEWILL EKWUJURU
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t’s entry into the specia lised publication media ‘market’ was splendid and it got readers wondering what the magazine was all about. The reason for this question was not far-fetched. BrandPower, a monthly allcolour specialised brand journal, deals with every issue from the brand perspective, and has remained faithful to this editorial slant almost one and half years it hit the newsstand. The publisher of the magazine, Nnanke Harry Willie, told Vanguard that the magazine was not the regular archetypal brand magazine that targets only those who are into brand management. He said the target of the magazine from inception was the A and B brand category and those who aspire to them. He said that is why you only see the magazine on the desks of decision makers in blue chip companies, top political leaders as well as captains of industry. He, however, added that this does not relegate the magazine from its primary constituency, the marketing and advertising industry, into the background. “We are not just your regular brand journal,” Willie, who was the pioneer advertising and promotions manager of Globacom, explained. “We deal with every issue under the sun but from the brand management point of view. If you see our current edition, it is on floods. It is the kind of story you don’t see on your regular brand publication but we did a story on it but from the brand point of view.” Not done, he explained further: “We appeal to people who desire to be able to live life from the brand management point of view which generally is every discerning person. There is no brand that is too small to be properly managed and of course to be able to manage a good brand, you must be a good brand manager. The idea here is we try to look at people from different facets. For instance, the same person who is a doctor in a clinic is also a father, a friend to someone and also a son to someone. You will agree that this person is a brand of many parts. He is a doctor when it comes to his profession, a father when it comes to his relationship.” He added that the feedbacks the magazine gets have convinced him that the publicaC M Y K
BRIEFS Unilever relaunches Vaseline in 4 variants
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From Left: Managing Director, Schneider International, Mr. Christian Schneider, Managing Director, Jolaj Office Products Limited, Mrs. Jolaade Ajumobi, Export Manager, Schneider International Mr. Klaus Baumgartner and Mr. Pierre Lantejuol of Schneider global operations during a facility visit to the company’s factory in Nigeria.
tion is on the right track in terms of delivering what readers want. “We have been excited and humbled by the kind of feedback we receive from our readers and this gives us the strength to go on. And because of this feedback, we are challenged and at the same
time empowered to give more to our readership which keeps expanding every month.” Perhaps, the modest success of the magazine recorded has prompted the institution of the BrandPower Awards for distinction. The event, a highoctane one will hold at Civic Centre, Victoria Island, Lagos
on 7th December 2012. As part of efforts to ensure that the awards would not be like others, the editorial team of the magazine recently took a Citizen Impact Assessment tour of Katsina State, one of the states nominated in the political brand category.
Ecobank, Western Union to strengthen money transfer service
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cobank Transnational In corporated (Ecobank) in partnership with Western Union said its going to strengthen its relationship with customers by offering over 2,600 agent locations in the coming months with an electronic banking channel; Account Based Money transfer service (ABMT). The bank said its ABMT will allow customers convenient access to the Western Union service via internet banking and through any of the Automated Teller Machines (ATMs) and kiosks in the Ecobank network, enabling them to receive money in their accounts anytime from approximately 510,000 Western Union agent locations worldwide. Speaking, Western Union’s Senior Vice President, Middle East7AFrica, Mr. Jean Claude Farah, said Western Union is pleased to strengthen rela-
tionship with the inclusion of electronic banking channels that are customer-centric and technologically advanced. According to him, Today’s Africa diaspora consists of approximately 30 million adults, who send around US40 billion annually to their families and local communities. Continuing, he stated, last year this accounted for an average of 2.3 percent of national Gross domestic product (GDP) in Africa and in some markets this year was as high as 10-20 percent. Speaking further he said, western Union believes that its task is not to merely think of new products channels and advances in related technologies into its product and service portfolio. Farah went on to say that through innovative agreements with agents like Ecobank, “ we aim to further encourage remittance flows and
deepen our contribution to financial inclusion. The stability of remittance flows, despite financial crises and economic downturns, make them a reliable financial resource for many countries.” The extension of our partnership is a clear example of two leading companies collaborating to meet the fast -evolving needs of consumers for technology -driven innovations and services in money movement.” Mr. Patrick Akinwuntan, Group Executive Director, Domestic Banking, Ecobank, said that to Ecobank making its services more convenient and accessible to its customers is a worthy goal which is more than that. “We are a mission-driven brand. We have higher purpose. To us , serving the underserved is not just an opportunity. It is a privilege. To us access to financial services isn’t a luxury-it’s a a necessity. It is a right.” He pointed out.
nilever Nigeria Plc has unveiled its new Vaseline petroleum jelly range in four variants into the Market with a stage play ‘As Pure as a Mother ’s Love.’ The variants include; Original, aloe Vera, Cocoa butter and Baby. The stage play brought together dignitaries including Her Excellency, First Lady of Lagos State, Abimbola Fashola who was represented by Mrs. Mosunmola Junaid. The Managing Director, Unilever Nigeria, Thabo Mabe, said at the event that the play is symbolic to Unilever’s commitment to making the lives of its consumers more beautiful, enriching their lives, while also showcasing the high purity standards of the New Vaseline Petroleum Jelly. “Just as a mothers love is pure, so is the gentle, yet strong nature of Vaseline providing purity like no other to all our consumers,” Mabe said. Mabe stated that the relaunch of Vaseline showcased the company’s dedication and connection to mothers and families across Nigeria.
Evans bemoans products faking
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vans Industries Limited, makers of Eva soap has raised the alarm over the faking of its products in the market as it unveils new variants. The variants are; Eva classic,Gold,Ivory, Herbal, Pearl and Forever. The company who complained of the activities of fakers said its afraid of the consequences of the faked soap, but noted that in modern times, scientific research has made beauty enhancement through skin protection easier, thus while stressing that the easiest ways to protecting the skin is through the use of beauty soaps- for this reason, Engr. Dan Nwaiwu, General Manager, Evans Industries Limited, said the company is skeptic of the activities of fakers.
Differentiating the products, Nwaiwu said the faked Eva soaps do not have National Food and Drug Administration and Control (NAFDAC) registration numbers and does not have the name of the company- Evans Industries inscribed on the soaps pack, whilst he stated that the company is focusing on producing a beauty soap that will meet the beauty needs of young Nigerians (women and ladies).
40 — Vanguard, MONDAY, NOVEMBER 26, 2012
Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com
Tel:0817 002 3569
“RETENTION OF 12% MPR INSENSITIVE” SAYS CHAMBER OF COMMERCE
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he continuation of a tight monetary regime would have the following outcomes: persistence of high interest rate, deepening of the unemployment crisis, financial intermediation role of the banks will continue to be undermined, recovery of the real economy will remain sluggish, capacity of enterprises to create jobs would continue to be inhibited, stock market recovery would continue to be slow and the capacity of banks to support the economy would remain severely constrained.” The above is an excerpt from the response of Nigeria’s oldest Chamber of Commerce to Central Bank’s Monetary Policy Committee (MPC) decision to retain its Monetary Policy Rate (MPR), i.e. its benchmark lending rate, at 12%. Incidentally, the MPR is the rate at which banks borrow from the CBN to cover their immediate cash shortfalls from time to time; thus, the higher the cost of such borrowing, the higher also will be the rate at which banks advance credit to the real sector. For example, CBN’s lending rate of 12% to commercial banks instigates current borrowing cost of 20 – 28% to the real sector. High cost of borrowing
increases production cost and makes made-in-Nigeria products uncompetitive against imported substitutes, which are generally aggressively supported with conversely lower single digit interest rates in their home economies. The Lagos Chamber of Commerce is evidently not alone in its blunt condemnation of CBN’s retention of 12% MPR. Speaking on the negative impact of this development on micro-businesses, the President, Association of Micro-entrepreneurs of Nigeria, Saviour Iche, noted that CBN’s benchmark lending rate had been “highly unfavourable and destructive to indigenous businesses as some deposit money banks charge as high as 19 to 25% interest rates on loans given to MSMEs.” The Manufacturers’ Association of Nigeria (MAN) has also decried the high cost of doing business in Nigeria. At its recent 45th Annual General Meeting, Rev. Isaac Agoye, Chairman of the over 600-member strong Ikeja Branch of MAN, called on government to reduce inflation and interest rates by formulating good monetary policies. In the light of the above it is pertinent to ask why CBN’s MPC appears to have turned
deaf ears to demands for reduced cost of funds to the real sector. On its side, the CBN has explained that “the MPC was faced with three choices: namely increase in interest rates in response to the uptick in headline and food inflation; a reduction in interest rates in view of declining core inflation and Gross Domestic Growth (GDP), and retaining current monetary policy stance in
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Regrettably, CBN appears unable to formulate a model that would reduce high rates of interest and inflation or strengthen the naira rate of exchange, as demanded by the real sector.
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view of conflicting price signals and global uncertainties.” MPC apparently “considered and rejected option one, as being potentially pro-cyclical considering the structural nature of recent inflationary pressures. While
untamed so long as CBN impulsively expands money supply, whenever it unconstitutionally substitutes naira allocations for export dollar-derived revenue. This obtuse monetary payments model is poisonous to our economy. Ultimately, excess liquidity begets high MPR, which in turn increases cost of funds to the real sector, and inevitably fuels spiralling inflation, as it pitches increasing naira balances against fewer goods and services. Excess liquidity also pitches bloated naira sums against auctions of limited dollar sums in the market, thus instigating a weaker naira with less purchasing power and lower aggregate consumer demand, which ultimately leads to, industrial contraction and increasing rate of unemployment. Conversely, the plague of excess liquidity would be dispelled by reduction of money supply; fortunately, this will be possible if CBN adopts non-negotiable dollar certificates for the payment of monthly allocations of dollarderived revenue. Lower interest and inflation rates and stronger naira will become realisable with such a payments model, and regenerate industrial and economic welfare rapidly. S AVE THE NAIRA, SAVE NIGERIANS!!
acknowledging the merit of the arguments in favour of option two; it was also rejected as likely to send wrong signals of a premature termination of an ‘appropriately’ tight monetary stance.” Therefore, “MPC resolved to retain the MPR which determines the rate at which banks lend to their customers at 12%”. Regrettably, CBN appears unable to formulate a model that would reduce high rates of interest and inflation or strengthen the naira rate of exchange, as demanded by the real sector. In reality, however, these critical variables are not mutually exclusive, as the apex bank would want us to believe. The common causative factor to these variables is the burden of excess liquidity; in other words, if we could cure the systemic disease of too much cash, the variables of interest and inflation rates would fall to levels that support industrial regeneration; exchange rate would also become stronger and induce increasing purchasing power of income earners. This would in turn stimulate aggregate consumer demand and ultimately positively drive industrial and economic growth and employment. Instructively, however, excess liquidity will remain
Business Economy resilient, providing a vital lifeline to not only poor families but a steady and reliable source of foreign currency in many poor remittances recipient countries,” said Hans Timmer, Director of the Bank’s Development Prospects Group.
Nigerians abroad to send N3.27 trillion home in 2012 —World Bank report By CHINEDU IBEABUCHI
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igerian workers worldwide are expected to remit N3.27 trillion ($21 billion) back home in 2012, almost a 100 per cent increase above N1.65 trillion ($10.6 billion) recorded in 2011, according to a new World Bank brief on global migration and remittances. Nigeria is ranked the fifth among the top recipients of remittances this year. The report stated that the top recipients of officially recorded remittances for 2012 are India ($70 billion), China ($66 billion), the Philippines and Mexico ($24 billion each), and Nigeria ($21 billion). Other large recipients include Egypt, Pakistan, Bangladesh, Vietnam, and C M Y K
Lebanon. Nigeria has a strong and growing Diaspora community, especially in the US, Europe and Asia, many of whom are responsible for this remittance flows. As a percentage of GDP, the top recipients of remittances, in 2011, were Tajikistan (47 percent), Liberia (31 percent), Kyrgyz Republic (29 percent), Lesotho (27 percent), Moldova (23 percent), Nepal (22 percent), and Samoa (21 percent). In a whole, the report said that remittance flows to the developing world are expected to exceed earlier estimates and total $406 billion this year, an increase of 6.5 percent over the previous year, the report said. Remittances to developing
countries are projected to grow by 7.9 percent in 2013, 10.1 percent in 2014 and 10.7 percent in 2015 to reach $534 billion in 2015. Worldwide remittances, including those to highincome countries, are expected to total $534 billion in 2012, and projected to grow to $685 billion in 2015, the report stated. However, despite the growth in remittance flows overall to developing countries, the report said that the continuing global economic crisis is dampening remittance flows to some regions, with Europe and Central Asia and SubSaharan Africa especially affected, while South Asia and the Middle East and North Africa (MENA) are expected to fare much better
than previously estimated. “Although migrant workers are, to a large extent, adversely affected by the slow growth in the global economy, remittance volumes have remained remarkably
Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Michael Eboh Yemi Adeoye Oscarline Onwuemenyi Franklin Alli Amaka Abayomi Ebele Orakpo Ifeyinwa Obi
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Group Business Editor Acting Finance Editor Energy Editor Head, Capital Market Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Capital Market Reporter Capital Market Reporter Energy Reporter Industry/Agric. Reporter Money market Reporter Energy Reporter Maritime Reporter
CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT
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Media/Marketing Industry Micro Finance Graphics Department