financial 01092014

CMYK

SEPTEMBER 1, 2014

NSPECTION - From left: Director-General, ICRC, Aminu Dikko; Chairman,Governing Board, ICRC, Senator Ken Nnamani and Member of ICRC GoverningBoard, Janet Adeyemi, on an inspection tour of facilities at the Uyo TownshipStadium, Uyo, Akwa Ibom State, as part of a familiarisation tour of infrastructureprojects in the state.

THE African Development Bank(AfDB) has said that more than57 per cent of the people in West

Africa are without access to electricity.The bank stated this in its “West AfricaMonitor Quarterly”, for the secondquarter of 2014 report. It said that thepercentage approximated the averagefor sub-Saharan Africa,” but extremelylow compared with 23 per cent in thedeveloping world and 18 per cent glo-bally.”

According to the report, with inade-quate generation capacity, low electri-fication, and sporadic, unreliable andexpensive service, energy is at the topof questions requiring adequate policyintervention.

It explained that access rates variedfrom country to country, with eight percent in Niger and 15 per cent in Burki-na Faso, Liberia, Guinea, Sierra Leoneand Guinea Bissau. The report addedthat about 70 per cent of the populationin Ghana had access to electricity while87 per cent were hooked to supply inCape Verde. It also said that there weredisparities in access to electricity be-tween rural areas and urban centres inthe sub-region, with urban dwellershaving more access than rural people.

According to the bank, the trend ismore glaring in Ghana where 87 percent of urban dwellers have access toelectricity, compared with the five percent in rural areas.

It disclosed that West African coun-

Over 57% of W-Africans lackaccess to electricity — AfDB

tries had joined the Sustainable Ener-gy for All Initiative towards achievinguniversal energy access by 2030, withrenewable energy shared improvementand efficiency.

It pointed out that the sub-region hadgreat potential to expand its use of re-newable energy sources, which includ-ed modern biomass, hydropower, solar,and wind and had remained untapped.

“Using such sources would help toexpand access while reducing relianceon traditional biomass, increase relia-bility and affordability, and contributeto climate change mitigation. Hydropower in West Africa has an estimatedpotential of 25,000 megawatts, yet only16 per cent has been exploited and de-spite its wealth in waterways, it onlyholds 214 dams out of 1,282 dams inAfrica. In addition, several in-countrylakes and dams hold promise for renew-able energy development,” it said.

The report said that the Volta Riverheld great potential for Burkina Faso,Ghana, and Togo while Lake Chadcould be used to serve Niger, Nigeria,Cameroun and Chad.

It acknowledged that solar powerprojects were spreading across the sub-region, including the 155 MW Nzemasolar power plants in Ghana, one of thelargest in Africa.

The bank revealed that Burkina Faso,Ghana and Guinea had potential for

Continues on page 19

CMYK

18 — Vanguard, MONDAY, SEPTEMBER 1, 2014

Cover Story

The focus is on the roles oftechnology and vocational

education in enhancingentrepreneurial skills that willequip students forentrepreneurship education inInformation and CommunicationTechnology (ICT.) driventechnological environment. Theworld has become globalizedand the future prosperitydepends on comparativeadvantage. This comparativeadvantage hinges on peopleand their technical ortechnological sophistication.Towards this, some crucialentrepreneurial and technicalskills needed by the students incolleges of education (technical),polytechnics and universities tomeet the trends in a globaleconomy is analyzed.

Technology education is to beconsidered as the key agent oftechnology development, eitheras a way of developing humancapacity, increasing the shieldwork force for modernization,industrialization, environmentaldevelopment or as a matter ofpersonnel freedom, developingcapability and empowerment.Technology education isincreasingly recognized to becentral to both the origins oftechnological development andchallenges and to the prospectsfor successfully dealing withthem (Alam, 2009). Decisionmakers at all levels, need timely,reliable access to knowledgegenerated by technology andtechnical education to introducerational policies that reflect abetter global understanding ofcomplex technical, economic,social, cultural and article issuesconcerning the society, and ourenvironment. Technical decisionmaking and priority setting is anintegral part of overalldevelopment planning andformation of technologydevelopment strategies. Aboveall, technology education is ahuman right and, as such,should receive priority in theallocation of national resources.

It has become very necessarynot to only keep technologyeducation bound to the role ofmanufacturing skilledmanpower but also to economicdevelopment and globaleconomy. In Nigeria, technologyeducation was previously notseen as fundamental for nationaldevelopment, or for the

Vocation and technical education– a key to improving Nigeria’sdevelopment. (4)

,

,

economic development, butfor the school dropouts, andother social and politicaldevelopment within thenation and for individuals.Hallak (1990) argues thattechnology education is alsolinked to human resourcesdevelopment and that this hasan impact on more than justeconomic growth, but also animpact on the widerdevelopment of individualsand societies. According tohim, it contributes to:

(a). Individual creativity,improved participation in theeconomic, social and culturalroles in society.

(b). Improvedunderstanding of anindividual and heir respectfor others, thus promotingsocial cohesion and materialunderstanding

(c) Improvement in health

and nutrition.(d) Improved chances of

economic development.(e) Improved

technological development.(f) Socio-cultural change.(g) Democracy and

equality(h) Ecological development/

quality of life (increasingpeople’s awareness of theirenvironments).

From our analysis so far, itis clear that modernizationand economic developmentdepend on investment andappreciation of moderntrends in technologyeducation. According toWoodhall (1997) investmentin technological educationand training producesbenefits for the individualand for society as whole.

AKWA Ibom governmenthas disclosed plan to build adeep water seaport throughPublic Private PartnershipPPP. The government said ithas acquired 14, 900 hectaresof land for the take-off ofIbaka Deep Seaport in MboLocal Government Area of thestate. The state governor,Chief Godswill Akpabio,made this known in Uyowhen the chairman ofInfrastructure ConcessionRegulatory Commission(ICRC), Sen. Ken Nnamani,visited him.

Akpabio said that thedevelopment of the seaportwould be done throughPublic-Private-Partnership(PPP), and therefore solicitedthe involvement of ICRC inthe project.

“We have worked reallyhard to fast-track theemergence of Ibaka DeepSeaport, which has a freetrade zone. We have alsoreceived a license from theFederal Government for thecommencement of the project.

The Ibaka Deep Seaportwould change the matrix ofthe unemployed in thecountry; it will attractinvestors to the state,” hesaid.

He restated that hisadministration was committedto building a sustainableeconomy throughinfrastructure development inthe state.

Akpabio thanked thechairman of ICRC and histeam for the presentationmade on the development ofthe Ibaka Deep Seaport. Hesaid that their visit hadrekindled the hope that theseaport project would berealised through PPP. He alsocalled on the commission topartner the state governmenton the construction of dual-carriage way on Uyo-AbaRoad, saying that the roadwould have a toll gate asapproved by the FederalGovernment.

Earlier, Sen. Nnamani saidthat the team was in the stateto “share current issues in the

commission with the stategovernment.” Nnamani,who is a former Presidentof the Senate, commendedAkpabio for promoting theconcept of uncommontransformation of the statethrough infrastructuraldevelopment. He notedthat the state had hadinfrastructural developmentand that the next phase wasindustrialisation.

He also said that thegovernor had laidfoundation for investmentin the state and assuredthat the commission wouldencourage him to do more.In his presentation, MrChidi Izuwah, theExecutive Director, PublicPrivate Partnership, ICRC,said that the visit was todiscuss how to sustain theinfrastructure developmentin the state. Izuwah saidthat the projects executedby Akpabio’sadministration needed aframework to be developedfor them for sustainability.

Akwa Ibom govt seeks ICRCbacking for seaport project

THE Fashion Designers’ Association of Nigeria (FADAN), Lagos Chapter, on

Thursday said that they needed about N150million to build a production hub in Lagos.

Mr Kolawole Kuddus, the State Coordinatorof the association, made this known in Lagos.

He said that the production hub would alsoinclude a retail store that would displayfinished clothing items and accessories madeby Nigerian fashion designers and patternmakers.

“The association has proposed a productionhub and a retail store where items from thehub would be displayed; it is going to be like ameeting point for key players.

The hub is a child of necessity because itwould serve as a breeding ground for buddingfashion designers, reduce the high productioncosts in fashioning and also boost productivity.Here is an industry that employs about 70 percent of the graduates in the last three years infashion photography, magazine production,pattern making, styling and wardrobeconsultancy.

“The investment in the hub is nothing less

than N150 million, and we are looking up tothe government at all levels and investors tolend their support to this viable cause.

With the scourge of unemployment, ourindustry has become a solace to so manyunemployed people, and so any investmentin this sector can never be in vain,” he said.

Kuddus also said that FADAN had begun amonthly programme tagged “Designers’Mart’ where young fashion designers gatherto display their latest products.

He said that the programme kicked off inJune 2014 and has since attracted so manyfashion lovers and yielded a lot of profit forthe fashion designers.

He urged upcoming fashion designers toregister with the association in order to pullresources together, maintain standards andalso build stronger companies withpartnership. Kuddus also urged FederalGovernment to revive the textile companiesas it would reduce the cost of raw materialsfor the fashion and design sector, and alsoboost value addition to Nigerian clothingproducts.

Fashion designers seek N150mto build production hub, retail store

In Nigeria,technology

education waspreviously not

seen asfundamental for

nationaldevelopment

*SEMINAR -From left: GroupHead, NorthCentral, FirstBank, Baba A.Wakili ; MD,AB Ramis BDCLtd, AlhajiMuktar Nayaya;and GroupExecutive, RetailBanking North,First Bank,Abdullahi M.Ibrahim at theFirst Bank, SMEC o n n e c tseminar in Jos,Plateau State.

CMYK

Vanguard, MONDAY, SEPTEMBER 1, 2014 — 19

Cover Story,

,

LIVING IN SELF-DELUSION:Who controls Africa's economy—Nigeria or South Africa?

and not too long after, what wasa noble idea fizzled out. Thedream was stillborn.

Japan, unlike Nigeria, whenit started its post-war economicreconstruction, put in placeappropriate economic policiesto support the development ofthe private sector. Over theyears, it was the dynamism ofthe Japanese private sector thatsaw a country without naturalendowment emerging in thelate 70s as world economicpower house.

Looking at the example of theeconomy of South Korea, it isthe same dynamism of privatesector companies that hasbrought the country to itspresent status as one of theAsian tigers. You can easilycount the companies makingwave in South Korea — KiaMotors, Daewoo, LGElectronics, Hyundai etc.

Nigeria today prides itself asthe leading economy in Africaby gross domestic productmeasure. That is all there is toit. The question to ask is whoare those making it happen inthe Africa continent? How manyNigeria-owned companies ofnote are global players inAfrica's economic scenario? Thefact on ground has reduced theNigeria euphoria to mere cheaptalk, fantasy and day-dreaming.Apart from Dangote Cement,perhaps UBA, Zenith, GTbankand few others which havepresence in some Africancountries, though not in SouthAfrica and North Africa; thereis no visible presence ofNigerian businesses elsewhere.

But South Africa whichNigeria with fanfare celebratedit took over from as the leadingeconomy in Africa, is

everywhere in Nigeria and otherAfrican countries.

A global bank ranking by TheBanker in 2014 has shown thatSouth Africa dominates bankingindustry by assets in Africa. Theassets of Standard Bank aloneis more than that of the fiveleading banks in Nigeria despitethe 2004 banking consolidation.Financial industry report alsoshowed that ETI is the largestbank in Africa by spread andmajority of its staff areNigerians. Indications are thatSouth Africa’s fourth largestbank, Nedbank will by the endof 2014 own 20 per cent of ETI. Simply put, a South African bankwill be the largest bank in Africaby assets and one of its otherbank is about to own 20 per centof Africa’s largest bank byspread. Funny enough, ETI isnot even headquartered inNigeria but is depending onNigeria to drive its earnings. Sowho is the leader? Nigeriansshould please think and answerthe simple question.

Another South African bank,Standard Bank, bought overIBTC/Chartered Bank which, forpurpose of identity, is calledStanbic/IBTC. This Nigerian armof the South Africa bank is thelargest equity trader by value inNigeria, largest portfoliomanager and is represented onthe council of the Nigerian Stock

Exchange. It has also beenselected as the sole broker forthe Federal Government ofNigeria and was picked by thegovernment to be thesettlement bank for the

electronic warehouse receiptsystem introduced by theNigerian CommodityExchange. Its founder andboard chairman of theNigerian arm of StandardBank, Mr. Atedo Peterside ison Nigeria’s EconomicManagement Team. The poserto this government is: whichNigerian bank has made anyinroads worth mentioning intoSouth Africa? How manyNigerian corporate entities areoperating in South Africaprofitably? No thanks to

haphazard economic policies ofgovernment.

According to Jude Fejokwu,Principal Analyst, ThaddeusAfrica Research, Templeton hasits African investments office inSouth Africa but its emergingmarket star manager is moreexcited about Nigeria thanSouth Africa. RenaissanceAsset Management, hedisclosed, has a pure Nigerianfund and so does SustainableCapital. Both companies run thefunds out of South Africa. It isnow obvious MTN Nigeriagenerated 37 per cent of totalrevenue for the MTN Groupworldwide as at first half of2014. The Nigerian arm’srevenue was 41.5 per centhigher than that of the homecountry, South Africa. TheNigerian arm increasedrevenue by 21.5 per cent whilethe South African arm had adecline in revenue of 7 per cent.MTN has been in Nigeria for13 years and Nigeriacontributes more than a third ofthe revenue for the whole MTNGroup worldwide. Meanwhile, MTN Nigeria isnot listed here, where it ridesthe wave of profitability andrepatriates the funds backhome.

DSTV will be no different fromMTN in terms of where majorityof its revenue comes from. Itincreases its subscription fees

every 15 months on average. It is also not listed in Nigeria. China’s National Development& Reform Commission handlesissues of pricing in China inconjunction with two others. The organisation recently forcedautomakers like Mercedes toreduce their prices which theChinese said were selling inexcess of their home markets. The same thing that the Chineseauthorities kicked against ishappening here in Nigeria,Africa’s most populous nationand no one is talking of doinganything about it. The peoplewho are in position to dosomething about this are busydiscussing how to embezzlemore money to afford theseexorbitant prices instead ofprotecting the populace.

Tiger Brands, a South Africancompany has bought a majoritystake in UAC Foods andDangote Flour in its quest todrive earnings which havestagnated in its homecountry. Shoprite, anotherSouth African firm is workingon its 10th shop in Nigeriapresently. It does not discloseits profit margins and is listedin its home country and not inNigeria where it is making a lotmore money than it envisagedand continues to have increasesin headline earnings.

I cannot but agree with JudeFajokwu, Principal analystThaddeus Africa Researchthat Nigeria may be the largesteconomy overnight but it isdefinitely not seen as the wifeof African financial servicesindustry. It remains abachelorette that no one isinterested in marrying becausethey are getting so much milk andhoney pie without commitment, sowhy proceed further.

When in 2004 President Olusegun Obasanjo muted the idea of a state-backed Nigerian company that can compete favourably withmultinational companies, Nigerians partially bought into the idea. This

led to the setting up of Transnational Company of Nigeria otherwise called Transcorp.It was meant to be private sector-driven but has the stamp and backing of the state.As soon as the company started, insinuations and condemnation trailed its take off

hydro-power while Mali and Niger had for solar energy, andCape Verde, Gambia and Senegal for wind resources.

Earlier in June, Minister of Power, Professor Chinedu Nebo,had disclosed that less than fifty per cent of Nigerians currentlyhave access to electricity, a whole seven per cent lower than thewest African average reported by AfDB.

Prof. Nebo disclosed this at the 15th Herbert Macaulay lectureorganised by the Engineering Faculty of the University of Niger-ia, Nsukka, adding that the Federal Government was, however,working hard to raise access to 75 per cent by 2020.

He said government was also looking at the possibility of ex-ploiting the country’s untapped coal resource, currently estimat-ed to be in excess of three billion tons in reserve, to power elec-tricity in the country.

He explained that coal production declined in Nigeria duemainly to the discovery of oil and the perception that coal was adirty energy, adding that a large quality of coal deposits waswasting away in such states as Enugu, Benue, Kogi and Gombe.

The minister noted that with the current shortages of gas, thefederal government was pursuing coal development as new fron-tier in the country.

Continues from page 17

THE Managing Director,Nigeria Export Import

Bank (NEXIM), Mr RobertOrya has said that Nigeria hadshifted from exporting rawmaterials to exporting finishedproducts.

Orya made this known inAbuja at a conference of theCoalition of Civil SocietyGroups which had WealthCreation through Non-OilEntrepreneurship, as theme.

He said that the developmentwas made possible by FederalGovernment’s resolve to shiftattention from the oil sector toother sectors with hugeeconomic potentials.

“Now we are exporting moreof processed and manufacturedproducts and I think that is avery good start,” he said.

“This step is paying off as mostNigerians are seizing theopportunity to tap into theabundant natural resources thecountry possesses. The kind ofeffort government is making indiversification in terms of themanagement of our ownresources is commendable. A lotof money is now being put intocapital projects rather thanrecurrent expenditure,” he said.

Orya stressed that there wasneed for more Nigerians to directattention to the opportunitiesmade possible by thediversification of the economy,adding that it is theresponsibility of all citizens todevelop the economy. “Nigeriabelongs to all of us and nobodywill come and restructure it forus; it is a collective responsibility

Nigeria no longer exports rawmaterials, says Orya

of citizens to implementgovernment policies and thatis patriotism,” he stated. In hisspeech, the Auditor-General ofthe Federation, Mr SamuelUkura, lauded the role of civilsociety at promoting goodgovernance and contributingto the growth of the democraticprocess in the country.

“We are in the same businessof promoting goodgovernance, be assured of oursupport and partnership forthe benefit of everybody,”Ukura said. On his part, thePresident, Coalition of CivilSocieties, Mr Bassey Etuk, saidthat the conference wasconvened to outline the role ofcivil society in promotinginvestment and financialgrowth in Nigeria.

He said that theorganisations came together toexplore alternative means ofdeveloping the country ’seconomic sector outside oil.

OvOvOvOvOver 5er 5er 5er 5er 57% of W7% of W7% of W7% of W7% of W-----Africans lacAfricans lacAfricans lacAfricans lacAfricans lackkkkkelectricityelectricityelectricityelectricityelectricity

The people who arein position to dosomething about

this are busydiscussing how to

embezzle moremoney to affordthese exorbitantprices instead ofprotecting the

populace


CMYK

Business & Economy

Investors in gypsum assured of duty-freeequipment importation

Efforts by the FederalGovernment can becomplemented by Nigerians

to eradicate poverty in country by2020, Director-General, NationalOffice for Technology Acquisition andPromotion, NOTAP, Dr. Umar Bindirhas said.

Speaking at the 2014 EngineeringWeek and annual general meeting ofAbuja branch of the Nigerian Society ofEngineers, NSE, in Abuja, Bindir saidthe nation was blessed with most of theneeded resources,

The NOTAP boss who stressed theimportance of networking and generallyharnessing and improving thoseinherent skills for the good of all, alsooutlined how the country canindustrialise within the shortest possibletime. He called on the government todeclare Agbara Industrial Layout inOgun State, the petrochemical complexat Eleme, Rivers State, and other similargroups of technologically-driven setups as industrial parks.

Explaining how the country can be ridof poverty, he said it is by using whatwe have to get what we need, andassured that all Nigerians could havethree square meals daily, have accessto quality healthcare and education,among others.

Bindir said since doctors werewarning against fatty foods, the hide ofcattle, commonly called ponmo, couldbe properly processed to the point that

Nigeria can eradicate povertyby 2020 — NOTAP boss

By FAVOUR NNABUGWU

By GABRIEL EWEPU

THE federalgovernment hasassured investors of

gypsum resource developmentin the mining sector of duty-free import on equipment. Thiswas disclosed by the Ministerof Mines and SteelDevelopment, Mr. Musa Sada,during the visit of themanagement of Ojim RoyalInvestment and PropertyLimited and a foreign technicalpartner from Israel led by theChairman, Chukus Chilaka tohis office.

Sada stated that it was part ofgovernment’s effort to providea conducive environment forthe exploration andexploitation of the nation’smineral resources for socio-economic development in thecountry.

Sada said: “The FederalGovernment had reaffirmed itsreadiness to grant a duty- freeimportation of equipment forthe development of theGypsum resource. I can assureyou that if you are setting up aprocessing plant for Gypsumresource, I can get you a duty-free import of all equipment youcan bring into this country.”The Minister also revealed that

currently the country has areserve of 12.5 million metrictones of gypsum resourcesspread across different locationsin the country, adding that,most mining operations in the

country were being carried outby artisanal and small scaleminers who had formedthemselves into cooperativegroups.

He explained further that the

cooperative groups were beingcoordinated by the departmentof artisanal and small scalemining in the ministry’ andassured the delegation of theministry ’s support and

partnership. Earlier in hisremarks, Chairman, Ojim RoyalInvestment and PropertyLimited, and leader ofdelegation, Chuks Chilaka,said the purpose of the visit wasto explore areas of collaborationwith the ministry for thedevelopment of gypsumresource.

Chilaka said his organisationwith foreign technical partnerswere partnering with theFederal Ministry of Lands,Housing and UrbanDevelopment to build 20million housing units forNigerians, which wouldrequire gypsum resource asone of the major raw materialsfor the project. Meanwhile, theforeign technical partner fromIsrael, Mr. Joseph Raz said hiscompany was in partnershipwith Ojim Royal Investmentand Property Limited todevelop 20 million housingunits across the country at thecost of$100 million. Raz saidthe project has six plants withthe capacity of 600-700 tonnesof gypsum per annum that willmeet the demand of the project.

it would appeal to Japanese and otherforeigners.

That way, he said, it would become aglobal franchise, one of the hallmarksof an industrialised nation. He also saidNigerians could beat the ebola viruswithout compromising our love forbush meat by domesticating theanimals such as grasscutters.

According to him, “this was essentialso as not to jeopardise the livelihood ofhunters whose businesses arethreatened by the hue and cry ofavoiding bush meat following the ebolavirus disease outbreak. Every productthat is not well-branded, wellpackaged, well managed and wellmarketed cannot sell,” he said.

“All I am saying is that in Africa, wehave over 30 million people who are inlove with bush meat and grasscutter isone of them. Nigeria should not lose that kind of market and industry justbecause somebody has brought adisease that we have managed now tocontrol. We have the techology todomesticate grasscutters. This meanswe can control the production ofgrasscutters or bush meat.”

Still on poverty, Bindir explained:“There are two levels of poverty -absolute poverty, meaning childrenhaving access to basic education,mothers having access to basichealthcare, people drinking clean waterand living in decent houses. “These areeradicable. What you can’t eradicate isnot absolute poverty but relativepoverty.”

PROMO: From left, Mr Tam Tamunokenbia, Head, Consumer Protection Council, LagosOffice; Mr Johnson Agbo, Winner of Hewlett Packard HP promo star prize 'Trip to Seychellesfor two'; Mr Tolulope Lawani, Marketing Manager, Printing and Personal Systems WA, HewlettPackard and Mr Kingsley Ogude, Assistant Manager, National Lottery Regulatory Commis-sion during the presentation of gifts to winners of HP promo held in Lagos.


Business & Economy

United CementCompany of NigeriaLimited (UniCem),

Nigeria’s third largest cementmanufacturers has educatedcustomers and end users ofcement in Akwa-Ibom on theuse of the recently promoted42.5R cement grade in themarket.

UniCem in a trade forumheld in Uyo, the Akwa-IbomState capital had inattendance, the company’sproducts end users:(Customers, Contractors.Masons, and Block Makers) toshare information on product’sapplication.

According to the MarketingDirector of the Company, Mr.Vipul Agrawal, “Our objectiveis to reinforce good service,product quality andstrengthen relationship withour customers by educatingthem on the best way to usethe product to achieve goodresult.

“This event is one waythrough which we engage ourcustomers and part of our

UniCem sensitises customers onuse of 42.5R cement grade

By TOM MOSES strategy to reach 5,000 endusers this year withinformation on productapplication as well asstrengthening ourpartnerships in the South-South and South-east regions.

“This is part of the on-goingtraining of block makers,artisans and masons andengagement of businesspartners”, he said.

Speaking at the event, theTechnical Services Engineer of

UNICEM, Mr. Bukola Adebisiexplained that the companyhad since been producing the42.5 cement grade but wasonly available on demand tospecialists who understand itstechnical applications.

According to him, as aresponsible company withinternational best practices inthe industry and in order tomeet the new market demandin Nigeria, UniCem is set tomake available the 42.5grade

of cement in 50kg bags.“The 42.5 grade will be

available alongside the 32.5grade with detailedinstructions on the bags onhow to apply each”.

“There have beeninsinuations at recent oncollapsed buildings andcement products which shouldbe known that cement is neverthe cost of collapses buildingsbut the activities in the informalsector.

ICRC lists challenges facing infrastructure developmenthad the potential ofleapfrogging the country ’sinfrastructure potential butregretted that it was sufferingsome setback. “The approachhas some daunting but notinsurmountable challengessuch as acceptance of PPP as averitable procurementalternative, lack of continuityfollowing change in leadershipand inadequacy of budgetaryprovisions,” he said. Accordingto him, absence of a stable andaffordable long term financingis also another big challenge to

infrastructure development inthe country.

He called for long terminfrastructure fund sourcedfrom international and domesticmarkets to help attract moreinvestors. These assets can betapped domestically from fundsreposed in the country ’sbanking sector, sovereignwealth fund, pension funds,insurance funds and taxrevenue. “This will go a longway in ensuring the hugeopportunities for infrastructureinvestments in all sectors of the

economy are realized,” he said.Dikko said that the Federal

Government had demonstratedthe political will towardstransforming the infrastructurelandscape with the introductionof National IntegratedInfrastructure Master Plan(NIIMP) as primary source forPPP project development.

According to him, a lot ofsavings can also be madethrough efficiency gains in theutilization of existinginfrastructure, mainly throughmaintenance.

“Cement in itself does nottranslate to end product; it isjust the constituent part. Inessence, we are here to tell ourend users how to use theproduct to get the best out ofthe cement”, he stated

Adebisi corroborated thereport by the StandardOrganization of Nigeria(SON) that there was no sub-standard cement in Nigeria inthe market today noting thatthe product itself was not theproblem but the application ofthe product.

“If you try to cut corners bypatronizing unskilled peoplewithout technical know-howeventually, you will have topay for it.

Infrastructure Concessionand Regulatory

Commission (ICRC) said lackof continuity in governance andunacceptability of Public-Private-Partnership (PPP) asprocurement alternative weremajor challenges facinginfrastructure development inNigeria. The Director-General,ICRC, Alhaji Aminu Dikko,disclosed this in the 2013annual report of the commissionin Abuja.

The report quoted Dikko assaying that PPP arrangement


Banking & Finance

LAUNCH: From left, Mr. Olu Akanmu, Senior Vice President/Divisional Head of Retail, Mr.Lad Balogun, GMD/CEO, First City Monument Bank Limited, Olufemi Bakre, Executive Director,Lagos/South West, all of First City Monument Bank Limited, at the Launch of the Bank’s 30th

Anniversary Promo.

The cashless policyreceived a boost lastweek with the

announcement of apartnership between NationalIdentity ManagementCommission (NIMC) andUnified Payments forProcessing in the paymentapplication in the newNational Electronic ID Card(eID).

In a statement announcingthis development, UnifiedPayment said that, “With theeID card, citizens will have theability to deposit funds,receive social benefits, pay forgoods and services atMerchant locations within andoutside Nigeria as well asdraw cash from ATMs aroundthe world.

Under the processingarrangement, citizen’sidentity data will be hostedand managed exclusively byNIMC while payment datawill be hosted and managedby Nigerian banks andUnified Payments, a leadingpayment transactionprocessing company ownedby Nigerian banks.”

In his remark, Mr. AgadaApochi, Managing Directorand CEO of Unified Paymentscommended NIMC for thebold step and thetechnological achievement,saying that “this initiative willno doubt help to drivefinancial inclusion as well asfurther stimulate economic

Cashless: NIMC, UnifiedPayments partner onNational e-ID cards

Stories byBABAJIDE KOMOLAFE

activities in the country in linewith the Vision 2020 agenda”.

Barrister Chris ‘EOnyemenam, DirectorGeneral and CEO of NIMC,said: “Unified Payments waschosen as the pilot processorof the payment aspect of thecard based on its exceptionaltrack record. Being the firstProcessor in Nigeria certified

to process EMV chip cards,the first to achieve thePayment Card Industry DataSecurity Standard (PCI-DSS)certification as well as itsownership by Nigeria banks,it only made logical sense forus to entrust them withsecurely processing thepayment application in theNational Identity Card”.

Unified Payment ServicesLimited otherwise known asUnified Payments® is a card-neutral and option-neutralPayments Service Providerfounded in 1997 and ownedby a consortium of leadingNigerian banks. UnifiedPayments prides itself inLeadership & Innovations inPayments being the firstNigerian organization to (i) belicensed as Principal Memberof a global payment scheme(ii) Acquire EMV transactions(iii) be certified as EMV 3PPProcessor; and (iv) acquireand process transactionsbased on Near-Field-Communication (NFC)technology.

Unified Payments®operates as a sharedinfrastructure for the bankingcommunity in Nigeria andPayments Service Providerwithin and outside Nigeria,with a mission to be the mostpreferred e-payment serviceprovider in AfricaThe majorbusinesses of UnifiedPayments include (i)Processing (ii) Switching (iii)Acquiring (iii) PaymentTerminal Service Provider(PTSP); and (v) Value-AddedServices and Solutions. TheNational IdentityManagement Commission(NIMC) was established bythe NIMC Act No.23, 2007 asthe primary legal, regulatoryand institutional mechanismfor implementing a reliableand sustainable nationalidentity management systemthat will enable Nigeriancitizens and legal residentsassert their identity.

ACCA advocates collaboration to growaccountancy profession

Association of Chartered CertifiedAccountants (ACCA) has called for

collaboration among stakeholders toenhance the growth of the accountancyprofession in Nigeria.

Head of ACCA Nigeria, Mrs. ToyinAdemola made this call while addressingjournalists at the sidelines of a meetingof partner universities and tuitionproviders organised by ACCA.

She said that with a population of about177 million, the focus of accountancybodies in the country should becollaboration and not competition.

Ademola said “In a country of 177million people, it is not about competition,it is about growth, it is about deliveringvalue. After all in the UK you have severalaccounting bodies. And we can see whatthey are doing for the English economy.And it is the same thing in America, thesame thing in Australia.

“We at ACCA, we are not looking at itas competition, though we haveprofessional bodies, the same way we ask universities to collaborate with each other,the same way accounting bodies shouldcollaborate with each other. Each bodyshould be able to say these are our

weaknesses and strength, and the fact is with a 177 million people, there is a lotin the market to develop as accountingprofessionals”

Ademola said that the uniqueness ofACCA is that it is global accounting body,and its members can work in any countryin the world. She said that it is not truethat people with ACCA qualificationcannot work in Nigeria, or that they haveto write another ACCA exam in order towork anywhere in the world. People withACCA qualification can work asaccountant in Nigeria, and elsewhere inthe world. The same ACCA certificateissued to people in Nigeria is the samecertificate issued to people in othercountries. There is no ACCA Nigeriacertificate or ACCA West Africa certificate.This is because it is the same ACCAexamination that people write across theworld and at the same time.

Ademola said that ACCA Nigeriaorganised the forum so foster collaborationbetween its partner universities and itstuition providers. “The event today iscalled Key Decision Makers Mixer and itis a combination of our partner universitiesas well as our tuition providers.

FCMB rewardspromo reloadedw inne rs

First City MonumentBank (FCMB) Limited,

continues to keep its promiseto reward its customers throughits 30thAnniversary PromoReloaded activity after asuccessful 2ndpromo drawsheld across all its regional andzonal operations nationwide.FCMB has so far rewardedseveral customers with cashprizes, LCD TV sets, DVDs,GOtv decoders andgenerators,won in themonthlyelectronic selectionsahead of the grandpresentationof three brand newSUVs to lucky winners who willemerge at the end of the promoin September.

Meanwhile latest customersto win the monthly star prizesof N1, 000,000 are Mr. OseIdasho (Northern Region),Ekemini Moses (South east/South south) andHon.HamzatGaniyuOladunjoyefromthe Lagos and South westregion.

The Nigerian Institute ofManagement (NIM)

has urged its members newlyconferred with the prestigiousdesignation of Fellow ofNigerian Institute ofManagement (FNIM) tosustain the tradition ofuprightness and excellencewhich the institutionsymbolizes.

President and Chairman ofNIM Council, Dr. NelsonUwaga made the appealwhile conferring the honouron 48 new fellows during thisyear’s Awards, Fellows andSpouses’ Day Luncheon heldin Lagos, admonishing themto see the new designation asa call to deeper commitmentto service of the institute andsociety at large.

Uwaga who described thisas a privilege on the part ofthe new fellows also tasksthem not to see “thisdesignation as an end in itself,rather as a call to higherservice to the institute, themanagement profession andthe nation.

Speaking further he said, “Iimplore the recipients not tobe contended with justadding designation (FNIM)to their name but to see itfrom this day forward thattheir time, talent, treasureand thinking are requiredmore in service to theinstitute and mankind.”

NIM tasks newfellows on ethics

By WILLIAM JIMOH &LIGALI ABDUL-LATEEF

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Banking & Finance

over 17 years of cognatebanking experience androse to the position ofDeputy GeneralManager in Zenith BankPlc. Prior to hisappointment; he wasSpecial Assistant to theGovernor of the CentralBank of Nigeria.

Masanawa holds aBachelors Degree inAgricultural Economicsfrom Ahmadu BelloUniversity and an MBAin Finance from theUniversity of Maiduguri.He has also completedcourses and programmesfrom the HarvardBusiness School, LondonBusiness School, and theUniversity of Oxford.

THE Central Bank of Nigeria (CBN) ’s cashlessinitiative has received greater boost as a

Lagos based company, 03 Capital Nigeria Limitedintroduced the first non bank based credit card inthe country.

The launch of the scheme is historic as it led toNigeria’s commencement of credit card systemwithout linkage to any bank.

Chief Executive Officer, 03 Capital NigeriaLimited, Mr. Abimbola Pinhiero, while introducingthe cards, said “In Nigeria today we have about100,000 bank based credit cards. When we compareit with our population of over 160 million, you willagree that a lot more is still needed to capture theentire people. There is no risk without a reward. Ifwe as Nigerians don’t take risks, our economy willnot develop. It is our philosophy that every Nigerianwould have credit card in their wallets. We cannotdevelop without a credit card system.

He explained that “the credit card works on theInterswitch network which means they can be usedon all Automated Teller Machines, ATMs, Point ofSales Terminals, POS and Nigerian internetpayment sites in Nigeria. The main strategic thrustof the company is issue naira denominated creditcards with limits ranging from N100,000 toN1,500,000. Our mission is to ensure that theaverage Nigerian is not cash strapped but can haveaccess to funds to meet their day to day needs.”

While also endorsing the product, Mr. TopeAdebayo, a representative of NIBBs, said “ NIBBshas been partner of progress with almost all thebanks in Nigeria. There have been collaboration withthe banks and other institutions to develop thisproduct. We need collaboration to make our systemwork well. This product is roburst and need thecollaboration of all stakeholders to make it succeed.”

The Chairman of 03 Capital Nigeria Limited, Mr.Bode Emmanuel at the official launch of the creditcards said “This is the first time the country willhave a proper credit card system, all other cards bybanks are not credit card in the real sense but debitcards. So, the 03 Credit Card is the real credit cardand has come to stay. Where ever a credit card hasstarted all over the world it began in a small waybefore spreading. This is the first time in Nigeriathat we are going to have a proper credit cardsystem. It is something that is going to develop theeconomy. I commend the management for theforesight especially the managing director.”

Speaking as well, Mr.Tunde Popoola , CRC CreditBureau Limited said “We congratulate Mr Abimbolaand his team for a job well done. It is on thresholdof history with the launch of credit card.

2009 to 2014, he wasGeneral Manager ofDangote Flour Mills Plcin Calabar. Mr. Ugboobtained his Bachelordegree in ChemicalEngineering fromUniversity of Lagos in1982 and an MBA fromthe Lagos StateUniversity in 1999. Hehas also completedextensive trainings inBanknote Production andSecurity Printing fromthe Royal Joh. Enschedein The Netherlands.

On the other hand,Alhaji Masanawa has

THE Board ofDirectors of the

Nigerian SecurityPrinting and MintingCompany, NSPM, Plc,yesterday, announcedthe dissolution of theExecutive Managementof the company anddirected the currentActing ManagingDirector and twoExecutive Directors toretire with effect from

Monday, September1,2014. The CompanySecretary/Legal Adviser,Mr. Lawal Adamu, whodisclosed this in astatement made availableto Vanguard said “TheBoard has approved theappointment of Mr.Joseph Ugbo assubstantive ManagingDirector/Chief ExecutiveOfficer and Alhaji UmarMasanawa as ExecutiveDirector in charge ofFinance and Strategy ofthe company.”

He stated that thechanges were in linewith the new strategicdirection of the companyaimed at repositioningthe NSPM Plc as anefficient and profit –oriented company thatwould serve, not only theBanknote and Securityneeds of the country, butalso those of West Africansub-region.

Profile of the newappointees show that Mr.Ugbo is a seasonedChemical Engineer, with

over 29 years ofengineering andmanagerial experienceand with internationalreputed manufacturingcompanies.

Prior to hisappointment, Mr. Ugbohad worked in variouslevels and countries ofUnilever Plc and rose tothe position of Head ofManufacturing, wherehe coordinated allGeneral Managers inManufacturing in theentire company. From

Board sacks MINT's executive management

First non-bankcredit card debutsin Nigeria

By PETEREGWUATU


Corporate Finance

MEETING: From left, Managing Director/CEO, Heritage Bank Plc, Ifie Sekibo; ChiefCompliance Officer (CCO), Standard Chartered Bank, Siji Adeyinka; CCO, Diamond Bank,Isioma Gogo-Anazodo; CCO, Heritage Bank, Prince Akamadu and CCO, First Bank of Nigeria,Uduak Nelson at the monthly meeting of Chief Compliance Officers of Banks in Nigeria hostedby Heritage Bank in Lagos.

N485.364 million or 1.97percent and N441.048 millionor 1.79 percent transactionvalue respectively.

On the other hand, the top10 dealing member firms alsoaccounted for 48.57 percentor 1.001 million units of thetotal volume traded withinthe same period with CSLStockbrokers topping otherwith 196.670 million units or9.54 percent of the totalvolume traded within theweek. Renacp Securitiesplaced second with 136.769million units or 6.64 percentof the total volume; StanbicIBTC Stockbrokers followedwith 118.867 million units;FBN Securities accounted for117.865 million shares;CardinalStone Securitiesaccounted for 102.586 millionunits, while Resort Securities& Trust accounted for 86.868million units.

The duo of Vetiva capitaland Chapel Hill Denhamwere responsible for 142.63million units traded withinthe week, while MarinaSecurities StockbrokingServices and MeristemSecurities Limited were thelast on the top 10 dealingfirms in volume terms with51.046 million units and48.051 million unitsrespectively.

However, there is a generalfeeling in the market thatmost of the stockbroking firmslisted by the NSE as top 10either value or volume termsare the ones that haveforeign affiliates and arefavoured by foreign andinstitutional investors.

10 stockbroking firms net N15.20bntransaction in one week

By NKIRUKA NNOROM

10 out of the 321stockbroking firmsoperating in the

Nigerian capital marketaccounted for N15.203 billionof total transactions valuecarried out in the market forthe week ended August 22,2014, data from the NigerianStock Exchange, NSE, hasshown.

According to the dataobtained by Vanguard, theircontribution represented61.59 percent of total valuetraded within the period.

Breakdown of theirindividual contributionsindicate that RencapSecurities (Nig.) Limitedpooled the highesttransaction, posting N4.74billion total transaction or19.20 percent of value tradedin the market.

CSL Stockbrokers followedwith N2.880 billion or 11.67percent; Stanbic IBTCStockbrokers was the nextwith N2.131 billiontransactions, whichrepresents 8.64 percent of thetotal value traded in theweek, while FBN Securitiesand Partnership Securities

accounted for N1.74 billion or7.06 percent and N768.501million or 3.11 percent of thetotal value respectively.

Others were Chapel HillDenham Mgt. Limited, whichposted N750.715 million or3.04 percent of thetransaction value; VetivaCapital Mgt. Ltd withN724.199 million emergedseventh on the list;Cardinalstone SecuritiesLimited pooled N538.336million, while MarinaSecurities Stockbroking ServLtd and Cordos Capitalemerged ninth and 10th inthe list, accounting for

Shareholders of LinkageAssurance Plc have appealed to

the management of the company toensure proactive measures in therunning of the company’s affair in abid to reposition the company forprofitability and deliver value to theshareholders.

The investors made this call at thecompany ’s 20th Annual GeneralMeeting, AGM, in Lagos, expressingdissatisfaction with the company’sinability to declare dividend over theyears, despite the huge working capitalit currently hold.

Chief Timothy Adesiyan of NationalSolidarity Shareholders Association,NSSA, Mr. Nona Awoh, Mrs. EasterAugustine and Mr. Michael Cole whospoke on behalf of the shareholders all

Linkage Assurance shareholders demanddividend payment

charged the Board of Directors toadjust its strategies, saying this alonewould enable it operate profitablyconsidering the level of competitionin the market.

According to Mr. Awoh, for acompany with financial assets ofN13.65 billion, total assets of N17.74billion to record a profit before tax ofN563.1 million without any dividenddeclaration is not a gooddevelopment.

According to him, “It is not that wedo not have the needed money tooperate, but what we are doing withthe money is what the shareholdersdo not know. If we continue to growat this pace, it will take us more thanfour years to attain a mega company,which is the only time we can declaredividend.

“We are not optimising our assetsand resources, making us to

underperform.“Somebody should be able to do

something to make sure that we getout of this. The sales that we madeduring the year under reviewdoubled the profit that was made.One tend to ask if we are looking atthe other insurance companies thatdo not have as much capital as wedo, but still declare dividend no materhow small. Why should ours be anexception?”

In his own view, Chief Adesiyanurged the Board of Directors to majoron the areas of its strength whichincludes oil and gas and do less ofaccident and fire insurance which arenot yielding result as expected.“Though the account we areconsidering today shows animprovement from what we had lastyear, it is still not good enough to giveuse returns,” he added.

By WILLIAM JIMOH

Ecobank unveilsdeposit promo

Ecobank Nigeria hasannounced thecommencement of a newdeposit promo, with millionsof naira as prizes for winners.Tagged “Giant Prize GiveAway” the promo is forcurrent and savingsaccounts holders and itruns from September 2014through February 2015.

The promo givesparticipating customers theopportunity to win over N10million cash prizes and otherrewards at both bi-monthlyregional draws and granddraws through to the end ofthe promotion in February2015.

Unveiling the promo inLagos, Deputy ManagingDirector, Ecobank Nigeria,Tony Okpanachi, said thebank decided to run thissecond edition of the GiantPrize Give Away promofollowing the success andtestimonials recorded in theprevious edition. He notedthat feedback fromcustomers was positive andimpressive, adding that thepromo is also the bank’scontribution towards thefinancial inclusion strategyof the Central Bank of Nigeria(CBN). “This is one of severalways to reward our loyalcustomers even as we offerthem the best of bankingservices. It is also toencourage savings culture inthe country. "

Former First Lady ofCross River State, Mrs.

Onari Duke, has admonishedwomen in Small and MediumEnterprises, SMEs acrossNigeria to embark on skillsdeveloping ventures, as a wayof deepening their businessportfolios.

Mrs. Duke made the callwhile addressing women at themaiden edition of GLEEHDWomen in Business andLeadership Summit in Lagos,where she acknowledgedcontinuous training andknowledge acquisition as corestrategy for businessdevelopment and growth.

Duke, who is also a memberof the foundation’s advisoryboard, said it is obvious that agreat chunk of Nigerian womencurrently have one microbusiness or the other, saying itis imperative for them toenlarge their structures andstrategise to enable them buildtheir business into a slightlybigger business portfolios.

“Nigeria is not devoid ofwomen in business, but whatwe are looking at now is a wayto help more women growtheir business skills."

Women taskedon developingSMEs skill

By WILLIAM JIMOH

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26 —Vanguard, MONDAY, SEPTEMBER 1, 2014

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Commodity Index Micro-Finance

The Institute ofC h a r t e r e dAccountants of

Nigeria (ICAN),engaged members ofaudit committee of quotedcompanies in Nigeria onmodern tools and skillsneeded to keep abreaston the workings ofInternational FinancialReporting Standards(IFRS), in order to buildcapacity.

Speaking at thecapacity buildingprogramme with thetheme: “Intensive IFRSTraining For Members ofAudit Committee ofQuoted Companies inNigeria,” President of theInstitute, Mr. ChidiAjaegbu, said that thetraining is part of effort toimpact on members andnon members, theparticipating audit firmsand the regulators on theability to dischargeeffectively their statutoryduties. He said, “It isinstructive to note that theworld is a global village

Stories byPROVIDENCEOBUH

IFRS: ICAN builds capacity ofaudit committee members

and globalization is atrend in business thatcannot be ignored.Consequently, theimportant ofimplementation of IFRScannot be overemphsised.”

In his presentation,Senior Manager, Ernst&Young, Mr. JamiuOlakisan, highlightedhow audit committeemembers can fulfil theirstatutory functions duringIFRS regime as follows: asfinancial reportingbecomes more complex,the audit committeedetermines whether thefinancial statements areunderstandable andtransparent; considerwhether the companyreports information that isreliable andunderstandable; reviewsignificant financialreporting and regulatorydevelopments, includingtheir effect on the financialstatements and on thecompany’s resources.

He added that the auditcommittee’s role is toreview and challenge,where appropriate, thecompany’s assessment of

its risk profile anddetermine that riskmanagement processesare in place.

He explained thatIFRS is a principles-based standards whichrequires estimate/judgment to include:Impairment of financialassets (Estimating futurecash flows arising fromimpaired financialassets); Impairment ofnon-financial assets(Estimating value in use,determining fair value ina market like Nigeria);Defined benefit plan andother long term planactuarial valuation(Assumptions used bythe actuary); Deferred taxasset recognition(Recoverability of thedeferred tax asset); Fairvalue measurement(Assumptions for assetsnot traded in activemarkets); Determinationof control for the purposeof consolidation (It ispossible for the partyhaving less than 50percent of the equityinterest in another entityto be the controllingparty).

The Commerce andI n d u s t r y

C o r r e s p o n d e n t sAssociation of Nigeria(CICAN), is set tobrainstorm on thepotentials of Small andMedium Enterprises(SMEs) as engine ofgrowth and development.

Meanwhile, Minister ofIndustry, Trade andI n v e s t m e n t , D r .Olusegun Aganga is to begiven a Life timeAchievement Award forhis commitment toenterprise developmentin Nigeria. Otherawardees include: theMinister of Agricultureand Rural Development,Dr Akinwunmi Adesina,Executive Governor ofKatsina State, AlhajiIbrahim Shema andSpecial Adviser onMedia to the Minister ofIndustry, Trade andInvestment, Mrs. YemiKolapo.

In a statement signedby the Chairman of theAssociation, MrOloruntoba Agboola, he

CICAN to brainstorm onSMEs development

said that despite theimportance of SMEs asengine of growth anddevelopment, they areconstrained by somechallenges such as lack ofinfrastructure, weakoperating capacities interms of skills, knowledgeand attitude, inaccessibleto finance, poorinformation technology,lack of safeguards againstoccupational health andenvironmental hazards,multiple taxation, just tomention a few.

Agboola said that theevent will also feature the4th Edition of CICANNite of Excellence wherethose who have made aremarkable impactstoward the growth anddevelopment of theeconomy will be will behonoured.

Aganga will give thekeynote address at Gala/Award Nite while the leadspeaker at the workshopis the Managing Director,Bank of Industry (BOI),Mr Rasheed Olaoluwa.

Other speakers include,

Director- General;Industrial Training Fund(ITF), Mrs. JulietC h u k k a s - O n a e k oDirector General,SMEDAN, Alhaji MasariBature.

Shema is the SpecialGuest of Honour , otherspecial guests areD i r e c t o r - G e n e r a l ,M a n u f a c t u r e r sAssociation of Nigeria(MAN), Mr RemiOgunmefun; President,National Association ofChambers of Commerce,Industry, Mines &A g r i c u l t u r e(NACCIMA), AlhajiMohammed Abubakar, President, LCCI, MrRemi Bello, FormerMinister of Commerceand Industry, Mrs NikeAkande, DirectorGeneral, NACCIMA, DrJoseph Isemede;Director- General,Standard Organisation ofNigeria (SON),DrJoseph Odumodu,Director General, LCCI,Mr Muda Yusuf, amongothers.

Aug 22 - Aug 28, 2014

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28 —Vanguard, MONDAY, SEPTEMBER 1, 2014


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Homes & Housing Finance

The FederalGovernment hasinvited developers

and investors interested inbeing considered for thedevelopment of the pilot10,000 housing project underthe mortgage refinancescheme of the NigeriaMortgage RefinanceCompany (NMRC) to presenttheir technologies to enablethem participate.

The Ministerial Committeeon Presidential Initiative onDelivery of 10,000 HousingUnits said that interestedparties are expected to applyon or before September 3,2014. This was stated in anadvertorial signed by thePermanent Secretary, FederalMinistry of Lands, Housingand Urban Development.

“Expression of interest(EOI) is hereby requestedfrom developers, investorsand companies with specialbuilding products, forpresentation of theirtechnologies to enable themparticipate in the provision ofaffordable 10,000 housingunits under the MortgageRefinance Scheme of theNigeria Mortgage RefinanceCompany (NMRC).

“Interested entities will beconsidered based on preferredtechnologies/new buildingsystems that are: sustainable;cost effective; durable;e n v i r o n m e n t - f r i e n d l y ;adaptable and in compliancewith global standards/bestpractices; amenable to locallabour and appreciable localcontent; and with low post-construction maintenancecost. Other eligibility criteriafor the participation ofdevelopers, investors and

•Compact and functional housing

10,000 MORTGAGES:FG invites developers withspecial technologies

By YINKA KOLAWOLE

manufacturers/suppliers ofspecial building productsinclude: ownership of thetechnology or being itsaccredited agent; technicalcapacity to execute the project;financial capacity to executethe project on off-takeagreement; evidence ofsuccessful execution of similarprojects in the past and

location of the projects;readiness to participate withindigenous developers anddomesticate technology, in thecase of foreign-based entities;and evidence of incorporation,”it stated.

Membership of theMinisterial Committeeincludes representatives ofFederal Ministry of Finance,Federal Ministry of Lands,Housing and Urban

Development, CBN andNMRC.

Recall that the FederalGovernment recently launchedthe 10,000 mortgages schemein partnership with the privatesector operators - commercialand mortgage banks - who aremembers of NMRC to assistNigerians acquire their homesthrough well priced and longterm mortgage finance. Thescheme is meant to makemortgage more affordable dueto a longer tenor of up to 20years and convenient due tothe more economically viableinterest rate being targeted. Itis currently aimed at low tomedium income earners whowant to buy owner- occupierhomes of no more than N20million in value.

Eligibility criteria forregistration in the schemeinclude: must be a Nigeriancitizen; must be an owner-occupier property (that is mustlive in the property); must be aleast 21years old; must earnregular income; must be taxcompliant and; must be able topay a minimum down paymentof 20 percent of the value of theproperty being bought.

The Senior StaffAssociation of

Communications, Transportand Corporations, SSACTAC,has declared support forongoing moves to fullycommercialise the FederalHousing Authority, FHA, toenable the agency deliver onits mandate in the housingsector.

It also called on the FederalGovernment to adequatelyfund the housing authority toensure effective sustenanceand boost housing delivery inthe country.

SSACTAC President,Muhammad Yinusa, whospoke to Vanguard after theassociations’ nationalexecutive council meeting inAbuja, urged the governmentto free its hands from theoperations of the agency and

Group backs commercialisation,recapitalisation of FHABy FAVOUR NNABUGWU allow it to function like a private

enterprise. He noted that FHAhad failed to deliver on its coremandate of housing provisionfor the low income earners inthe country because ofinadequate funding andunnecessary interference fromthe nation’s successivegovernment.

Yinusa asserted thatrecapitalising the agencywould enable it provide housesfor the low income earners whocannot afford to buy houses inthe open market. “The bane ofthe FHA has been governmentinterference and lack ofadequate funding. Forinstance, from the inception ofthe agency till date, thefunding has been so poor suchthat it has stagnated most of itshousing projects across thecountry. While we support theongoing process of a fullcommercialisation, we also

urge the federal governmentto provide it with the neededfunds to carry out itsprogramme in the housingsector,” he noted.

Minister for Lands, Housingand Urban Development, Mrs.Akon Eyakenyi, recently hintedthat FHA would soon becommercialised, noting thatthe move is to strengthen theauthority so that it would beable to live up to itsresponsibility.

RBS fined £14.5mfor bad mortgageadvice

Royal Bank of Scotlandhas been fined

£14.5million for givingunsuitable mortgage advice totens of thousands of itscustomers.

The Financial ConductAuthority (FCA) said the salesprocesses of RBS andsubsidiary NatWest were not ‘fitfor purpose’ and listed a seriesof astonishing failings thatlasted until March 2013.

FCA said that about 30,000customers were exposed tounsuitable advice. RBS hasagreed to contact them to askthem if they have anyconcerns.

In one case an adviser told acustomer interest rates could hit5.5 percent and recommendedthey lock into a more expensivefixed-rate loan for five years.

Advisers also routinely failedto check whether householdscould afford to repay theirloans. This included oldercustomers who were set toretire before the end of the termof the mortgage.

Russian bankoffers ‘free cat formortgage’

In what has all the marksof a publicity stunt,

Sberbank, one of Russia’slargest banks, says every newmortgage customer can choosethe cat they want, and it willbe delivered in time for theirhousewarming party, theTJournal website reports. Thebank’s website gives a choiceof 10 breeds, and features avideo showing the first happyclients receiving their cats. It’san advertising campaignthought up by a local agency,and reportedly featuresdelivery vans with cat logoscruising the streets of Moscow.

The bad news for customersis that they won’t be able tokeep their feline. Terms of theoffer say that the animal is onlygiven so that it is the first tocross the threshold of theproperty - many Russians saya cat is sign of good luck tothose moving into a new home- and is only available for twohours so the home-owners cantake photos.

The Road Transport EmployersAssociation of Nigeria (RTEAN) is set

to collaborate with foreign partners to buildover 185,000 housing units across thecountry for its members.

To this end, RTEAN has already workedout modality for funding the project, whichis expected to be undertaken through direct

RTEAN, foreign firms partner to build 185,000 houseslabour within a year from the date of takeoff.

The project which is estimated to cost $1.5billion (about N240 billion) is to be executedin collaboration with Havit Incorporated ofthe United States of America and JSNeoplans, working with Artemis AngelsGlobal Limited.


Tax Matters

Risk profil ing can be defined asan evaluation of an individualor organization’s willingness to take risks, as

well as the threats to which a company or organizationis exposed. The risk profile will outline the number ofrisks, type of risks, and potential effect of the risks.This outline allows a business to anticipate additionalcosts or disruptions to operations. It also describes howthose risks will affect the operational strategy of acompany.

TAX RISK MANAGEMENTRisk has been defined in the European Commission’s

guide on risk management for tax administration (fiscalguide) as: “Anything negative that can affect theorganization’s ability to achieve its objectives.” On thisbasis, ascertaining the objectives of the organization inquestion is critical to the question of risk management.The objectives of taxpayers and the tax administrationwill not be identical and will sometimes conflict, althoughat other times they may overlap.

Corporate taxpayers may have a range of tax strategiesdepending on their tax philosophy. Most largecorporations will want to balance profit maximizationwith other objectives, which include the reduction ofrisks such as unsatisfactory compliance which mightretain reputation and the cost of dispute to the revenueauthorities. They will also want to steer clear of toomuch volatility a reported profit, since this is dislikedby the market. What they consider to be the correctbalance between these factors will depend on the overallbusiness and risk philosophy of the board of directorsas filtered through to the tax department. The riskoutlined will be dealt with by internal risk managementand control of decision making within the context ofbroader controls exercised by the company.

From the perspective of tax administrators, the relevantrisk is the institutional risk of the revenue authority notachieving its objective of tax collection. Four broadcategories of risk for the revenue authorities andgovernment have been identified. These are unrelatedto the risk that the expected level of revenue will not becollected. They have been identified as: i. Register riskthe risk that tax yield is reduced by inaccuracies in taxregistration; ii. Filling risk - the risk that the tax yield willbe reduced by failure of taxpayers to file their returns;iii. Payment risk - failure to pay amount due; and iv.Declaration risk - where returns are incorrect due toerrors or a deliberate act. All these risks have to betackled with limited resources so those resources mustbe allocated efficiently to where they will have the bestimpact.

It is the last of these risks which is of greatestimportance in relation to large corporate taxpayers. Thevast majority of corporations will wish to ensure thatthey have good systems in place for reporting andpaying the tax which they believe is properly due withinthe law. The key risk for the tax authority lies in systemfailures and also in the areas of uncertainty and lack ofagreement in relation to the amount tax payable. In thiscontext, the risk borne by the tax authorities may beconsidered by them to include the risk of what the fiscalguides calls “barely legitimate tax avoidance.” Therewill be grey areas where the corporate taxpayer maybelieve that its actions are within the law but where therevenue authority takes a different view. There is a riskto revenue authorities of collecting less tax than theyexpected on their interpretation of the law, even if theirinterpretation comes out to be incorrect according tothe court. It may be seen by the tax authority as creatinga tax gap.

COMPONENT OF RISK PROFILING FOR ACOMPANY TO BE OBSERVED BY THE TAXOFFICER.

1.0 Background information; This is the basicinformation considered by the tax officer.

Tin Number e.g. 00000001-00Name of Company e.g International Nigeria LimitedTurnover e.g N42,373,115,000Registered Address e.g. Km 16, Yasmin road/

Halifa Express Way, Dutse, JIgawa.Date of Incorporation e.g. 29th August 1995Date of commencement e.g. 1st November 1995Nature of Business e.g. Provision of oil field

transit and supply base facilities to the oil and gas

Effective strategies and techniquesof risk profiling of a company

due.9. Result of previous tax audit exercise (additional

taxes):- this means to indicate whether a tax audit exercisewas taken in previous years or not.

10. (I) Cost of sales =opening stock + purchase –closing stock or cost of sales = purchases. Therefore, cost of saleturnover= Cost of sales/turnover x 100/1 = %

(II) Tax assessed Turnover = Tax assessed/Turnover x 100/1 = %

(III) Equity Debt Ratio = equity/debt X 100/1 = %Equity: - means anything belonging to owners of the businessTotal Debt: - long time liability + current liability(IV) Net profit Turnover = net profit/turnover x 100/1 = %(v) Current asset/Current liability = current assets/current

liabilities X 100/1 =%

(VI) Liquid Assets ratio or acid test ratio = current assets-stock/current liabilities x 100 /1 = %(VII) Gearing Ratio = Equity Ratio. Therefore, Gearing Ratio

= Equity/Assets x 100/1 = %

TurnoverThis is to ascertain whether there is a change in the level

of turnover between the last year and the year under review;and to determine the level of changes thereon inpercentages. Also compare the business turnover with theindustrial average.

Cost of Sales/Direct CostThis is to ascertain whether there is a change in the level

of cost of sales between the previous year and the currentyear and the level of changes thereon. Also to comparethe business cost of sales and that of industrial average.

Admin/ Operating ExpensesThis is to identify the changes in the admin/operating

expenses of the years and make comparism between thecurrent year and industrial average.

Operating expenses:-(a) Total operating expenses to line of industry

average: - This is to make comprises with that of industryaverage.

(b) Salary and wages to line of industry average: -This is to make comprises with that of industry average.

(c) Interest on loan/Bank charges to line of industryaverage: - This is to make comprises with that of industryaverage.

(d) Repairs and maintenance to line of industryaverage: - This is to make comprises with that of industryaverage.

11. Debtors & CreditorsDoes the company have high amounts of debtors and

creditors in it accounts for the period under review? Thegross amounts may increased by some % of the previousyears’ figure.

• Related Party TransactionDoes the company have huge amounts stated in the

debtor and creditors figure as amounts owing and due toassociated company. If yes the figures should be criticallyreviewed as this might be a means to transfer fund toassociated companies.

Level Gearing PositionGearing ratio for the company should be computed to

discover whether the debt/ liabilities owed by thecompany far exceeds the capital employed for the allyears in the period under review.

This might indicates that the company rely on hugeborrowings or advances from third parties or relatedparties to carry out its operation. This might spell doomto the company in future and also loss of revenue to theFIRS if outstanding taxes are not collected soonest.

12. Company management•Mgt by owners: - this is to indicate whether the company

is managed by owners of the business or not.•Mgt by others: - this is to indicate whether the company

is managed by others or not.? Change in mgt: - this is to indicate whether there

is change in management of the company who manage theactivities of the company.

Industry.Accounting Date e.g. 31st DecemberAccounting Year e.g. 1st January – 31st

DecemberShare Capital (Authorized and Issued)YOA e.g. 2012 2011Director’s Report Attached YesAuditors Report Attached YesLast Tax Audit e.g. 2008 – 2010YOA (Criminal Investigation)

1.1 Auditor & Tax ConsultantsAuditor: Khairat Muhd & Co.Address: 6th Floor, Sadiq House, 15b MuhdAbubakar Street, Gwarmai.Phone234 (1) 22222222Email [email protected] of Auditor NoOld Auditor NoDate of Change NoTax Consultant Khairat Muhd & Co.Address: 6th Floor, Sadiq House, 15b MuhdAbubakar Street, Gwarmai.Phone 234 (1) 22222222Email: [email protected] of tax consultant No.Old Tax Consultant No.

RISK ITEMS1. Date of commencement of business:- This means,

the date the company started operations2. Size of business:- This means the capacity of the

business in terms of turnover, level of tax assessed,number of staff, number of branches and or subsidiaries

3. Change in tax consultant: - This means whether acompany has changed the existing tax consultant toanother one e.g. from Muhd & Co. to Abba & Co.

4. Change in auditors: - This means whether acompany has changed the existing auditor to anotherone e.g. From Zarewa & Co. To Yesmin & Co.

5. Qualification in audit report: - Any report calledqualified audit report means that the report is notacceptable for tax return purposes. Therefore, theanalysis should indicate the qualification or otherwiseof the report.

6. Accounting system computerized:- This is toindicate whether the company is using of computerizedsystem of accounting records or not

7. Accounting system manual:- This is to indicatewhether the accounting system of the company ismanually computed or not

8. Taxpayer’s compliance submission of returns(timeliness):- this is to indicate whether the taxpayer iscomplying with submission of tax returns as and when


CMYK

People in Business

ACCORDING to Engr.Rufus Olopade, a

Mechanical Engineer, they gotinto fish feed business becauseof their love for country andpeople. “We realised that anation that cannot feed itselfis dead so, we went to theUniversity of Ibadan to learnmore about feed productionbusiness and how we canmanage it properly becausewhen you don’t have theknowledge, it will be verydifficult to succeed. So we didagric management. We gotinto fish feed production in1989. At inception, we wereinto local feeds but wediscovered that Nigeriansneeded more, especially fishand poultry farmers so wedecided it was better for us togo into floating feedproduction instead ofimporting because withimportation and payment ofduty, there is no much profitfor the customers.

"After production, there aredistributors and marketers.We looked at that andconcluded that it will help thenation instead of just thinkingof profit alone, you think ofothers and that was the majorreason we dabbled into thebusiness."

Said Mrs Olopade: "The busi-ness was named after me. Weboth agreed that the nameshould be Sabina Pad, ie Sabi-na Olopade. I am a trainedteacher but I have special in-terest in agriculture so I start-ed on a small scale and then Itold my husband to join mewhen he retired. We startedsince 1994, selling agric rawmaterials and in 1999, we reg-istered the company as Sabi-na Pad Enterprises Limited sowe started selling all the rawmaterials and producing feedlocally.

"We do feed milling for peo-ple too. If anybody who wantsto go into small farming comesto us with his formulation, wedo the formulation for them."

Going into production: "We graduated to selling

imported feed but whenpeople started complainingthat they were not makingprofit, we began producingpelletized feed. When thecomplaints of not making gainscontinued, we decided that weshould buy the floating feedextruder. We took a bank loanto do that but the interest ratewas so high that we wereunable to meet demands andthat loan nearly destroyed us.Thank God we got somebodythat helped us at Stanbic IBTCwith small loan for theinstallation of the machine andother things. At the end of theday, we had no money to buyraw materials for production,"said Mrs Olopade.

Added Engr. Olopade: "Wefelt that the raw materials areabundant in Nigeria so all weneeded was the machine. Sowe bought the extrudermachine and we have startedproduction."

Floating fish feed:"We are producing locally

now instead of importing fromUS or Europe. All we need nowis assistance in terms of fundsto be able to buy enough rawmaterials. So far, so good," hesaid, adding: "We are doing allthis so that we will haveenough food in Nigeria andalso create jobs. Many of ourgraduates are unemployedand agribusiness requireslarge number of workers –accountants, machineoperators, loaders, extruderoperators, distributors, etc.As at now, we run two shiftswith about 100 workers andalmost all of them aregraduates."

Challenges:Engr. Olopade said that

apart from paucity of fundsand high interest rate on bankloans, other challengesinclude dishonesty amongststaff and crisis in thenorth."Right now, we don’t

have enough raw materials toproduce because during theharvest period when the rawmaterials were relativelycheap, we needed a lot ofmoney to buy in bulk and storebut we could not do that sothere is no way we canproduce at a cheap rate.During the harvest, if you areable to get as much rawmaterials as possible andstore, you can produce at acheaper rate and sell at acheaper rate too. On the otherhand, if you are buying one ortwo trucks, there is no wayyou can produce at a cheaprate. That is why we needassistance from industrialistsin form of funding so that wewill be able to get the rawmaterials at very cheap rate."

"We lack materials, the ones

who are already wellestablished in the north. Theonly thing is that when you aresupposed to have the rawmaterials in two days, it takesabout three days somovement is slow; they areafraid and this has made theprices to go up. What we werebuying at N90,000 per ton isnow N150,000 per ton. As aresult, we no longer makeprofit but because we still wantto be in business, we havecontinued.

"Last year, a female staff in aauditing department colludedwith the salesgirl and theydefrauded the company ofabout N11.5 million. Forinstance, when they collectN100, 000 from a customer,they enter N50,000 and enterthe rest as pending so we did

shops being managed by theManaging Director. She is incharge of marketing ourproducts. We have trucks thatdo the supplies and somecustomers also bring theirtrucks to buy," he stated.

Training:"I went to Georgia University

in the US to acquire moreknowledge in the field. Lastyear, I went abroad to learnmore about the extruder sothat when problems arise, wewill be able to solve them.

"We requested for expertsfrom abroad and they camehere to train our staff for awhole year. It is moreexpensive to send themabroad. So once in a year, Itravel abroad to be trained innew technologies and thenpass it on to the staff so if anyof the machines breaks downnow, our people will repair it."

Division of labour:On whether they plan to

have their own farm, thechairman said: “When you goabroad, you see that thosewho are in charge of farmingare different from those whoare producing. If you want tofarm as well as produce, youmay not be able to cope. Weare trying to educate ourpeople to embrace theprinciple of division of labour.If I am a producer, you supplyme the raw materials likesoybeans, maize, palm kernelcake etc. They createemployment also and that iswhy we will not go intofarming. But we do small fishfarming to test our feed beforepushing it into the market.”

•Floating fish feed extruder for producing grains into high-grade aquatic feed pellets.

Engineer Rufus Olopade is the Chairman andChief Executive Officer of Sabina PadEnterprises Limited, a limited liability company

specialising in providing top quality livestock feeds,aquaculture feeds, poultry feeds, dog feeds, rawmaterials as well as sales of poultry and fisheryequipment. Sabina Pad was founded by Engr. Olopadeand his wife, Mrs Sabina Olopade, a trained teacherwho is the Managing Director in charge of sales,handling distributors around the country. In this chatwith Financial Vanguard, the duo spoke on whatmotivated them to go into the business, the challengesand more. Excerpts:

we are using now were boughtin the retail market; we couldnot buy in bulk due to paucityof funds. If we had enoughmoney, we would go up northand purchase in bulk duringharvest," added Mrs Olopade.Asked if the crisis in the northdoes not affect business, theChairman said: "It is affectingbusiness a little, not muchbecause we have customers

not notice on time until it waslate. We invited the EFCC andin the end, they were asked tobe paying N30,000 everymonth until they finishpaying."

Distribution:"We have our products in

almost every part of thecountry and recently, westarted producing dog feedwith the extruder. We have

,

,We got a loan from the bankbut the interest rate was sohigh that we were unable to

meet our demands on the feedand that loan nearly

destroyed us

A nation that can't feed itself is dead— RUFUS OLOPADE

Motivation:

•Pelletized aquatic feed

•Fish pond


a people like those who populate theNigerian media, print, electronic andsocial, in mind when he wrote that satirewhich a true reflection of the characterof brainless mobs. Twenty four hoursafter the report was published, themedia was awash with comments fromthose who, obviously, cannot, or refuseto differentiate fact from allegation oreven rumour. For some reason, it nevereven occurred to them that the CBNGovernor, another human being, couldbe wrong and might be raising a falsealarm. Like the mob pummeling the manaccused of making the male organ todisappear, they descended ongovernment officials. The primarytargets were the President, theMinisters of Petroleum Resources andFinance – none of whom is my favourite.But, irrespective of what one feels aboutany official, justice demands that theallegations made, against them, beevaluated on their merits and they, asthe other parties be given a fair hearing.This, the mob was not prepared to do.

On my part, the operating principleremains the same for “friend” or “foe”and they were enunciated by MalvinKalb who wrote as follows. “A journalistshould be pursuing a fair rendition oftruth without regard to popularmoods…” Journalism and the practiceof it should never be a popular contest;otherwise the media people becomepartisan purveyors of falsehood – whichis not in society’s interest; irrespectiveof any other interests they serve.

The $49.8b story was a hoax fromthe start and that was the main,

and, only reason, there was no commenton it from me till now. And, it was aterrible error for which the formerGovernor of Central Bank should beheld primarily responsible and othercommentators, who first believed the$49.8b story as accessories to thehysteria which followed on the media.Let me quickly point out the dangersignals which individuals, whose brainswere not missing, should have observedwhen the first story broke in December2011.

Even the village idiot now knows thatNigeria is heavily dependent on therevenue from crude oil. In fact, thisnation is on a life line tagged CRUDEOIL REVENUE. Sever that life line forone month and the nation willexperience high fever; for two months,and the nation is in comma. Thus whenthe report mentioned that the $49.8brepresented 76% of the crude oil liftingfor nineteen months, it was clearsomebody or a lot of people had losttheir brains when making thatallegation. There is simply no wayNigeria would mot miss 76% of therevenue from its crude oil lifted in onemonth – let alone nineteen. From theoutset, I knew that the former Governorof Central Bank had made a grievousand unpardonable mistake and had setin motion mob hysteria – which remainsunabated till today; long after the $49.8bstory had proved to be just that — ahoax.

Visit: www.delesobowale.com or Visit:www.facebook.com/biolasobowale

“It is better sometimes not to followgreat reformers of abuses beyond thethreshold of their homes.” George Eliot,1819-1880.

(VANGUARD BOOK OFQUOTATIONS p 210.

“As American as apple pie” is acommon expression when referring tosomething uniquely American. “AsNigerian as jungle justice” would haveto be one of the expressions which canbe applied to us. The easiest way to geta man beaten to a stupor, or death, isfor another man, in a crowded place, toraise alarm that his male organ haddisappeared after the other man shookhands with him. Several men havesuffered the fate of being descendedupon by a mob, defined here as amonster without a brain — a criticalorgan to human beings.

Unfortunately, mob jungle justice, inNigeria, is not limited to physicalviolence. In these days of social media,it has taken a new dimension – makingthe atrocities of the past, by mobs,appear like innocent past times. Today,anybody, government or organisation,can find itself the victim of mob attackbased on defamation – deliberate orinadvertent.

What is even more disturbing is thefact that even when the facts arepresented, the mob still refuses toapologise to the victim(s) or to turn itsvenom on the person(s) who misledthem in the first instance. Nigerians arerapidly losing one vital organ, whendiscussing issues of nationalimportance. It is not the male organ,whose “disappearance” had led to thelost of several lives. It is the brain –without which all other organs areabsolutely useless. Let me quicklyexplain – with reference to a most vitalnational issue which should have beenlaid to rest, but, which is still beingflogged by the mob.

A long tern reader of my columns inVanguard Newspapers called me, theday after the news broke that the formerGovernor of Central Bank, SanusiLamido, had made the allegation thatthe NNPC had failed to remit $49.8billion to the Federation Account. Hewanted me to make a comment. Myreaction was simple. “I cannot commenton any unsubstantiated rumour orallegation.” The man was livid with rage– the normal reaction of those whobelieve in jungle justice – physical orverbal.

As many of those who have not losttheir own vital organ will recollect, thenation was startled when theLEADERSHIP NEWSPAPER, ONDecember 11, 2013 reported that$449.8b of crude oil lifted from January2012 to July 2013, representing 76% wasnot remitted to the Federation Account.The report itself was based on a letterwritten by the former CBN Governor toPresident Jonathan, earlier on, whichwas leaked to the media for reasons nottoo difficult to understand – to generatemob reaction.

“Are you going to hang him anyhowand try him afterward?” Mark Twain,1835-1910. Mark Twain must have had

“Missing $49.8/20bn and missingorgan in the Nigerian economy —1


CMYK

Compliance risk hasbeen identified asthreat to stakeholders’

value in the Nigeria Bankingsector.

Mr. Ifie Sekibo, ManagingDirector of Heritage Bank, in agoodwill address to membersof the Committee of ChiefCompliance Officers of Banksin Nigeria (CCCOBIN) at theAugust edition of their monthlymeeting hosted by the bank inLagos said that compliancefunction has been elevated toplay a pivotal role in thesustenance of stakeholdervalue in the nation’s bankingsector because compliance riskhas become a core risk inbanking business and everytime a bank pays a penalty forcompliance infraction andvalue is destroyed.

According to him “Thebusiness, regulatory and legallandscape around the globe isincreasing in complexity whilethe scrutiny by the bankingpublic, law enforcement agentsand regulatory bodies isintensifying. Meanwhile,Financial Institutions now haveto grapple with the rising costof compliance breaches and theunderlying risk of reputationdamage. Banks in particularalso have to navigate the

Compliance risk poses threat tostakeholder value in banking sector

Following Access Bank’sfirst half results 2014,

FBN Capital has said “Wecontinue to believe that thebank will expand its Returnoon Earnings , ROE by over 400basis points, bps to around 19.0per cent in 2014.Management’s reiteratedguidance of a 20 per cent ROEimplies a slightly strongeroutlook.

Drivers behind the improved2014 earnings outlook include

Econm

By PETER EGWUATU

proliferation of new regulatoryrequirements and addressstakeholder expectations”.

Sekibo commendedCCCOBIN’s past and on-going efforts at ensuring ahealthy banking sector in thecountry through its numerousinterventions and tasked thebody not to relent in getting thesector off to a healthier state.

He said, “I congratulate youon the success of the 2014Compliance Conference thatHeritage Bank proudly co-

sponsored. I am also notunaware of the giant stridesthat CCCOBIN has made inassisting to get Nigeria off theFinancial Action Task Force(FATF) Grey List, theintroduction of UniformAccount Opening Forms incollaboration with the CentralBank of Nigeria and othercontributions to policydevelopment especially in thearea of AML/CFT; but, thereare operational issues thatcompliance officers need to

handle to get us to thepromised land”.

While identifying internalstakeholder knowledge gapas a great problem besettingthe banking sector, theHeritage Bank helmsmancalled on Compliancepractitioners in the sector tore-examine their relationshipwith other staff within theirjurisdiction who viewcompliance professionals andtheir activities as a pain ratherthan a value enhancer.

Rencap maintains"BUY" rating forGTBank One of the key drags on

Guaranty Trust Bank Plc,GTBank’s half year 2014results was a higher-than-expected impairment charge forthe quarter, as RenaissanceCapital , Rencap maintainsBUY rating for the bank.

According to Rencap “Assetquality – impairments to beflat-to-lower. In anenvironment where deliveringrevenue growth was alreadyoperationally constrained, webelieve a shock to theimpairments line is the lastthing investors would havewanted to see. The charge waslargely driven by one asset –Lister Flour Mills. Weunderstand management hadobserved signs of stress in therepayments and wascontemplating classifying theloan as substandard. The loanhas now been classified asdoubtful and a 50 per centprovision taken, following thedeath of the promoter. Aninterim audit also triggered thefront-loading of impairments.Management expects theimpairment charge to flattenout over the second half 2014or to be lower than in first half2014, depending on its successwith recoveries.

Access Bank’s earnings growth toaccelerate in second half

net interest margin expansionto close to 7% from around 6%in 2013, over 20 per cent loangrowth in 2014 and double-digit growth in non-interestincome. Y/y improvements in2015 earnings are unlikely tobe as strong as 2014.

Nonetheless, with the sharesstill trading on a 2014 E P/Bmultiple of 0.8x, we do notbelieve the market has fullypriced in the improvements weare seeing. As we roll over our

valuation to 2015, we haveincreased our price target toN12.3 (N10.5 previously.). Weretain our Outperform rating.”

According to FBN report “Firsthalf 2014 results in line; double-digit growth in underlyingearnings: Access Bank’s first half2014 net interest income and non-interest income grew strongly, by16 per cent yearly and 45 percent yearly to N24.4billion andN16.6billion respectively. As suchprofit before provisions increased26 per cent yearly to N41billion.


Interview

You recent won an award fromthe Institute of RiskManagement. Why is winning

this award important to you?Thank you and I have to say it is

something we are very proud of. Thetruth is that, any organisation that wantsto compete on the world’s stage mustensure that it has robust and effectiverisk and governance structures and forus being part of the wider global networkthat is Diageo and being listed on theUS and UK exchanges means that wehave to hold ourselves to thosestandards in addition to what mightobtain locally. The impact of non-compliant behaviors or not havingeffective compliance structures in placecan be disastrous for a company just likeours, with operations in about 180countries. The recent high profile GSKbribery allegation is a life example onwhat noncompliance to internal policiesas well as external regulations can doto a company’s reputation. Othercompanies like Danone, HSBC,Barclays Bank, Tesco, etc, have also hadtheir share of public and regulatoryscrutiny on various issues bothering ongood corporate governance, which hasin one way or the other affected theircorporate reputation. Reputation is keyto the success of any businessenterprise. Which is why at GuinnessNigeria Plc., we strive to demonstratethe highest standards of integrity in theway we behave towards each other andto those outside of the company. Ouractions and interactions with ourconsumers, customers, employees,public officials, suppliers, shareholdersand other stakeholders clearly reflect ourcommitment to doing the right thing.Reputation is critical to our commercialsuccess and can only be enhanced bybehaviors of which we can all be proud.

How is your organisation structuredto cope with the increasing globaldemands for ethical business practices?

We have a Code of Business Conductand Ethics which applies to everyoneworking for Diageo (our parentcompany) worldwide regardless oflocation, role or level of seniority. Weexpect those who work with us and forus to act in accordance with theprinciples of the Code and relevantpolicies and standards. The Code setsout our commitment to conductingbusiness in accordance with ourpurpose and values, all relevant lawsand regulations and industry standards.It provides guidance on what isexpected of each stakeholder andreferences other policies and standards.Failure to comply with the Code,policies or standards is treated veryseriously and may result in disciplinaryaction, up to and including dismissal.

We have a fully resourced complianceand ethics office whose mainresponsibilities are the inculcating of ourvalues, Code of Business Conduct andGlobal Policies in the organization. Theyhave different strategies that theydeploy to ensure that compliance andethics remains in the front of mind ofall employees, because as you may beaware a well-executed ethics andcompliance program can eliminate asignificant amount of improper behavior.We walk the talk in terms of ourcompliance programme. Within twomonths of joining the organizationemployees have a one on one formalcompliance and ethics induction. As astop gap between when they resumeand when they have their induction, a

Facing thechallenges ofethical businessPractice inNigeria— Seni Adetu

,

,

responsibilities. The 2014 edition wasrecently concluded in April 2014. Wehave 15 global policies which all Diageocompanies are expected to comply with.Some of these policies include: Antimoney Laundering Policy, Anti-corruption Policy, Anti-discrimination &Human rights policy, Employee AlcoholPolicy, Quality Policy, EnvironmentalHealth and Safety Policy etc.

We also have an annual certificationof compliance which is a platform onwhich employees are tested on theirappreciation of our code of businessconduct and our global polices.

How do you influence your businesspartners and how do you ensure thatthey imbibe your values?

We have a robust Know Your Customerand Know Your Business PartnersProgramme. Before we engage theservices of any business partner it ismandatory to conduct comprehensivedue diligence on them, in addition tothis, each vendor has to providecomprehensive information about thecompany in the procurement VendorEducation Package, and a mandatorycertification of compliance with ourCode of Business Conduct and allapplicable laws including the Foreignand Corrupt Practices Act (FCPA). Wealso periodically conduct trainings forour business partners on our Code ofBusiness Conduct and other salientpolicies. Our business partners areaware that we have a zero tolerance toall forms of unethical behaviours/activities in relation to our business. Weare constantly reviewing our businessrelationships to be sure we are engagingin business relations with like-mindedcompanies/individuals.

How do you intend to shape theethical sphere in corporate Nigeria?

We are a member of the executive coregroup of the Convention of BusinessIntegrity (NGO), which is an NGO withthe key objective to provide analternative to the perceived all-encompassing culture of corruption,showing that there are other ways ofbehaving / doing business in such ahighly-corrupt environment. We wereplatinum sponsors of the FirstChristopher Kolade Lecture on BusinessIntegrity, we are also on the board ofthe Anti-Counterfeit Collaboration (ACC)- Nigeria’s flagship anti-counterfeitgroup, to mention a few.

We share our Code and theaccompanying policies with ourstakeholders, and do not compromiseon any of our values. We continuouslykeep focused on the high expectationswe have set and allow others tounderstand how we operate and howthey can adopt, refine or build on ourexperience. Our expectations are highbut with the right partners, we can

redefine the conventional. Together, wewill drive systemic change. We haveperiodic trainings with our businesspartners where we explain our code andour salient policies, and the reasons whywe cannot follow the “norm” in someinstances. They are encouraged tocascade these values to their ownbusiness partners and employees aswell. We endeavor to consistently walkthe talk and live our values in spite ofthe challenges of doing business in ourenvironment. Though, to be sincere, itcan be tough at times, but we arerelentless in our pursuit of conductingclean business in Nigeria.

How can your ethical culture be acompetitive advantage for businessesin Nigeria?

Employees are more satisfied atcompanies with reputations for ethicalbusiness practices and goodgovernance, and as such Guinnesscontinues to be an employer of choice.Investors are better educated now, andare actively seeking for ethicalcompanies where they can invest. Byacting ethically, we have a greateropportunity to outperform our peers andwin in the marketplace, whilst attractingtechnical partners who are seekingethical businesses to align with.Building positive reputation is strategicto any corporate organisation; especiallya global brand like Guinness, thesuccess of any business pretty muchdepends on its public image, which alsohelps to build consumer loyalty. Finally,our ethical stance, and compliancestructure will invariably build on ourreputation and our global ambition tocreate the Best Performing, MostTrusted, and Respected ConsumerProducts Company in The World.

mandatory onboarding is done within 7days of resumption, which is followed byan online Code of Business Conducttraining. The formal induction class is areassurance that the new employees areon the same page with rest of theorganization. The tone at the top is veryvital in the effective compliance programmein any organisation; as such we have a linemanager capability tool kit which invariablyenhances our line managers to respond tothe enquiries of their direct reports withagility. We also have an annual ethics andcompliance programme tagged “Pathwayof Pride” where we as a company dedicatea month to discuss issues bothering oncompliance and ethics, including ethicaldilemmas that we face every day in theperformance/execution of our job roles and

We share ourCode and theaccompanying

policies with ourstakeholders, and

do not compromiseon any of our

values

CMYK

Email:[email protected], [email protected] page:www.lesleba.com/blog2Website: www.lesleba.comTel:0805 220 1997


Omoh Gabriel - Group Business EditorBabajide Komolafe - Deputy Business EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Asst. Business EditorYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentMichael Eboh - Energy ReporterFranklin Alli - Industry/Agric. ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime ReporterRosemary Onuoha - Insurance Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNkiruka Nnorom - Capital MarketJonah Nwokpoku - E-CommerceNaomi Uzor - IndustryProvidence Obuh - Micro FinanceLAYOUT - Graphics Department

,

,

Business & Economy

MasterCard holders are now havingopportunity to get reward for using their

cards to do shopping both local andinternational. This is a way of encouragingcashless society as initiated by the Central Bankof Nigeria, CBN.

UBA in partnership with MasterCard hasembarked on an initiative to reward MasterCardcardholders tagged Priceless Holiday. Theobjective is to encourage international spendduring this summer season. UBA MasterCardis accepted in over 210 countries and at millionsof terminals across the world.

The reward scheme also encourages the useof the Card for local and domestic web and Pointof Sales, POS payments. Under thisarrangement, Cardholders who spend N50, 000and above using their Card on the ATM abroad,or on the Web and POS in local and internationaloutlets stand a chance to win shopping

vouchers, there are 750 shopping vouchersto be given out.

The grand reward is a breathtaking all-expense paid trip to Dubai which comprisesthe following- stay at underwater signaturesuite overlooking the Ambassador LagoonAquarium at Atlantis The Palm, helicoptertour of Dubai , guided tour of the world’slargest mall, luxury dinning at the worldfamous Nobu Restaurant, a visit to the top ofBurj Khalifa.

According to UBA’s Divisional Head of E-Banking, Dr. Yinka Adedeji, the promo endsSeptember 30, 2014.

On Card segmentation, UBA hasMasterCard cards for different segments.UBA Debit MasterCard is for all Cardholdersand like other MasterCard products, is widelyaccepted at all MasterCard locations acrossthe world.

UBA, MasterCard partner to reward card holders

Will dollar allocation induce capital flight?Will dollar allocation induce capital flight?Will dollar allocation induce capital flight?Will dollar allocation induce capital flight?Will dollar allocation induce capital flight?

Dealing with theexcess liquidityc h a l l e n g e

requires innovativeapproaches in view ofthe source of theproblem. Onepotentially enduringsolution, which wouldavoid the creation ofnew money and boostthe naira value in theforeign exchangemarket, relates to theallocation of foreignexchange earned fromoil to the three tiers ofgovernment rather thanmonetizing it. But thismay be a recipe forcapital flight. Therefore, the CentralBank would need todevelop capacity forliquidity forecastinga n dp r o g r a m m i n g . ” V i s i o n20:2020 ‘Monetary PolicyThrust’

In reality, the success or

failure of any economy isgenerally predicated on itsmonetary strategy; thus,abundant endowment ofmineral and agriculturalresources will notnecessarily deliver inclusiveeconomic growth, if thesystem is underpinned bymonetary strategies that areout of step with best practicemanagement. Consequently,the success of vision20:2020 may well rest on thestrength of its monetarypolicy thrust.

The following is a simpleEnglish translation whichshould facilitateunderstanding of Vision20:2020 monetary policythrust.

“We have failed over theyears to combat the unusualproblem of systemic surplusNaira which fuels inflationand instigates a weak Nairaand very high cost of funds;furthermore, systemic Nairasurplus, also sustains theanti-social and recklessstrategy of placinggovernment deposits at zeropercent while governmentsimultaneously, borrows

with double digit interestrates and crowd out the realsector from access to cheaploanable funds.

“Thus, the failure of oureconomy is rooted in ourreluctance to tackle thesource of unyielding Nairasurplus which results whenCBN creates/prints freshsupply of Naira as substitutefor distributable dollarrevenue. Nonetheless, werecognise that if we mustercourage to stop suchmonthly creation of NewNaira supply, the Naira valuewould be boosted in theforeign exchange market”.

“However, we recognisethat if dollar revenue isallocated in its pristine formwithout substituting Naira,such an arrangement willstop the creation ofdisenabling surplus Naira,but may inadvertentlyfacilitate stealing andspeculative repatriation ofNigeria’s dollar reserves.Consequently, in order toavert such “illegal” forexoutflow, we will continue tosubstitute fresh Naira supply,for dollar derived revenue!”

However, “if substitutionof New Naira supply issustained, the CBN will needto develop the capacity toforecast and programme theextent of Naira surplus thatis desirable in order tominimise an inflationaryspiral!”

The preceding is a simpletranslation of the Vision20:2020 monetary policythrust statement. Well, to theextent however, that sixyears after commencementof the Vision, inflation stillremains untamed, and costof funds to the real sectorremains over 20 percent,while government continuesto borrow money it intendsto keep idle at over 10percent, and the Nairaexchange rate continues todepreciate inspite ofincreasingly buoyantreserves, we mayconfidently conclude thatCBN’s strategy for liquidityforecasting andprogramming has failed.

Clearly, the Vision20:2020 economicblueprint rejected theobvious solution ofallocating dollar revenue inits original form because ofthe fear of unproductiveunsubstantiated hugeleakages from our reserves.In reality, in view of theabysmal level of greed, lackof patriotism, and ineffectivesanctions for treasurylooters, it is indeed likely,that raw dollar allocationsmay truly worsen theoutflow of our export dollarrevenue.

Nonetheless, it is equallytrue that if dollar certificatesrather than actual dollar cashserved as instruments forallocations of dollar revenue,the threat of capital flight will

definitely be minimised.In the rest of this article, we

shall examine whether theprocess of Naira substitutionfor dollar revenue ascurrently practised serves asbetter protection of thefederations dollar reservesthan an allocation processthat adopts dollar certificateswhich can only be availableas legal tender (for domesticspending) after thebeneficiaries haveexchanged their certificatesfor Naira sums at prevailingmarket exchange rates fromcommercial banks.

Thus, under thecurrent system, the CBNcaptures the dollars andcreates new Nairasupply as allocations,

while, the dollar valuesremain temporarilydomiciled with CBN.

* The constitutional

beneficiaries lodge theirhuge Naira allocationsin banks and therebyprovide the banks withthe leverage to instigatesurplus Naira andexpand their capacity tocreate credit andinstigate inflation.

*The CBN, with its

monopolistic ‘goodfortune’ as suppliers ofover 80% of the dollarmarket, auctions onlypart of its dollar cache tobanks and Bureau DeChange; thus, withsurplus Naira chasingrelatively limiteddollars, the Nairaexchange rate weakensas banks and BDCsspeculatively purchasedollars from CBNauctions. Ultimately,despite the anxiety oncapital flight, CBNimmediately transfersthe dollars purchaseddirectly into the custodyof beneficiary banks andBDCs; consequently, theCBN’s dollar balancesare reduceda c c o r d i n g l y .

* The banks and BDCs

in turn add theirmargins, which mayexceed the current N7/dollars before selling totheir customers, whomay be importers orindeed governmentparastatals andministries, who were theoriginal owners fromwhom the auctioneddollars were initiallyc a p t u r e d .

*The BDC allocationsbecome the primarysource of funding thenefarious activities oftreasury looters,currency traffickers andsmugglers despite thethreat to Nigeria’seconomic and industrialgrowth and security;

similarly, the banks canalso roundtrip orspeculatively hoardtheir dollar purchasesand create disenablingmarket distortions.

— Conversely, with dollar

certificate for allocations, theCBN does not create newNaira supply, with theattendant destabilisingeconomic consequences;furthermore, the dollar cashremain domiciled in the CBNinstead of dispersal to banksand BDCs.

— Governmentbeneficiaries of dollarcertificates approach banksto convert their dollars toNaira in a market where moredollars chase relatively staticNaira balances, as no newsupply is created by CBN;consequently, the Nairaexchange rate becomesstronger while CBN’s dollarreserves still remain stable.

—— The banks woulddomicile their dollarpurchases in domiciliaryaccounts with CBN, thuspreventing round trippingand such anti-socialtransfers.

——In case governmentsor its agencies requireimports, they simplysurrender their dollarcertificates through banks toCBN so that their domiciliaryaccounts with CBN can bedebited with the dollar valueof their imports immediatelyat sight of documentaryconfirmation of satisfactoryshipment of their orders.

——Private sectorimporters would buy dollarsat open market exchangerates from banks to covertheir invoice values. Thebanks would simply instructCBN to pay the overseassuppliers of their (banks)customers from theirdomiciliary accounts withthe CBN once the CBNreceives documentaryconfirmation that shipmentof imports has beensatisfactorily effected.

Save the Naira, Save

Nigerians.

The successor failure of

any economyis generally

predicated onits monetary

strategy

CMYK

financial 01092014

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